EXHIBIT 10(52)
HARRAH'S ENTERTAINMENT, INC.
EXECUTIVE DEFERRED COMPENSATION PLAN
Amended and Restated
October 27, 1995
TABLE OF CONTENTS
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ARTICLE I PURPOSE 1
ARTICLE II DEFINITIONS 1
2.1(a) Account 1
2.1(b) Pre-1996 Retirement Account 2
2.1(c) Post-1995 Retirement Account 2
2.1(d) Pre-1996 Termination Account 2
2.1(e) Post-1995 Termination Account 2
2.2 Beneficiary 2
2.3 Board 2
2.4 Change of Control 3
2.5 EDCP Committee 5
2.6 Compensation 6
2.7 Deferral Commitment 6
2.8 Deferral Period 6
2.9 Determination Date 6
2.10 Employer 7
2.11 Employment 7
2.12 Hardship 7
2.13 Interest 8
2.13(a) Termination Account Interest 8
2.13(b) Retirement Account Interest 8
2.14 Participant 10
2.15 Participation Agreement 10
2.16 Plan Benefit 10
2.17 Retirement 10
2.18 Total and Permanent Disability 10
ARTICLE III PARTICIPATION AND DEFERRAL COMMITMENTS 11
3.1 Eligibility and Participation 11
3.1(a) Eligibility 11
3.1(b) Participation 11
3.1(c) Salary Continuation 12
3.2 Form of Deferral; Maximum and Minimum
Deferral 12
3.2(a) Salary and Bonus Commitment 12
(i)
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3.2(b) Savings and Retirement Plan Exception 13
3.2(c) Fee Deferral Commitment 13
3.2(d) Other Deferral Provisions 14
3.3 Modification of Deferral Commitment 14
ARTICLE IV DEFERRED COMPENSATION ACCOUNTS 15
4.1 Elective Deferred Compensation 15
4.2 Types of Account 15
4.3 Matching Contributions 15
4.3(a) Eligibility 15
4.3(b) Amount 16
4.3(c) Time of Credit 16
4.4 Vesting of Accounts 16
4.4(a) Amounts Deferred 16
4.4(b) Employer Matching Contributions 17
4.4(c) Retirement, Disability or Death 17
4.5 Determination of Accounts 17
4.6 Statement of Accounts 18
ARTICLE V PLAN BENEFITS 18
5.1 Pre-Termination Withdrawals 18
5.1(a) Amount 18
5.1(b) Remaining Account Balance 18
5.2 Retirement Benefit 19
5.3 Termination Benefit 20
5.4 Death Benefit 20
5.5 Disability Benefits 22
5.6 Hardship Distributions 22
5.7 Form of Benefit Payment 22
5.8 Withholding; Payroll Taxes 23
5.9 Commencement of Payments 24
5.10 Full Payment of Benefits 24
5.11 Payment of Guardian 24
5.12 Spin-Off Transactions 24
ARTICLE VI BENEFICIARY DESIGNATION 26
6.1 Beneficiary Designation 26
6.2 Amendments 27
6.3 No Beneficiary Designation 27
6.4 Effect of Payment 27
(ii)
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ARTICLE VII ADMINISTRATION 28
7.1 Committee; Duties 28
7.2 Agents 28
7.3 Binding Effect of Decisions 28
7.4 Indemnity of EDCP Committee 28
ARTICLE VIII CLAIMS PROCEDURE 29
8.1 Claim 29
8.2 Denial of Claim 29
ARTICLE IX AMENDMENT AND TERMINATION OF PLAN 30
9.1 Amendment 30
9.2 Employer's Right to Terminate Future
Deferrals 31
ARTICLE X MISCELLANEOUS 31
10.1 Unfunded Plan 31
10.2 Unsecured General Creditor 32
10.3 Nonassignability 32
10.4 Not a Contract of Employment 33
10.5 Protective Provisions 33
10.6 Terms 33
10.7 Captions 34
10.8 Governing Law 34
10.9 Validity 34
10.10 Notice 34
10.11 Successors 34
(iii)
HARRAH'S ENTERTAINMENT, INC.
AMENDED AND RESTATED
EXECUTIVE DEFERRED COMPENSATION PLAN
ARTICLE I
PURPOSE
The purpose of this Executive Deferred Compensation Plan (hereinafter
referred to as the "Plan") is to provide supplemental funds for retirement
or death for nonmanagement directors ("director Participants") and key
management employees (and their beneficiaries) of Harrah's Entertainment,
Inc., (formerly named The Promus Companies Incorporated) (hereinafter
referred to as the "Company") and certain of its subsidiaries which elect
to participate in the Plan ("employee Participants"). It is intended that
the Plan will aid in retaining and attracting directors and employees of
exceptional ability by providing such individuals with these benefits.
This plan shall be effective as of November 5, 1989.
ARTICLE II
DEFINITIONS
For the purposes of this Plan, the following words and phrases shall
have the meanings indicated, unless the context clearly indicates
otherwise:
2.1 (a) Account. "Account" means the Retirement Account and the
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Termination Account maintained by the Employer with respect to
each Participant's deferred compensation pursuant to Article IV,
including
accounts transferred from the Holiday Corporation Executive
Deferred Compensation Plan. The existence of these accounts
shall not require any segregation of assets.
(b) Pre-1996 Retirement Account. "Pre-1996 Retirement Account"
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means the Retirement Account for deferrals of Compensation during
Plan years through 1995.
(c) Post-1995 Retirement Account. "Post-1995 Retirement
----------------------------
Account" means the Retirement Account for deferrals of
Compensation for Plan years after 1995.
(d) Pre-1996 Termination Account. "Pre-1996 Termination
----------------------------
Account" means the Termination Account for deferrals of
Compensation during Plan years through 1995.
(e) Post-1995 Termination Account. "Post-1995 Termination
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Account" means the Termination Account for deferrals of
Compensation during the Plan years after 1995.
2.2 Beneficiary. "Beneficiary" means the person, persons or entity
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designated by the Participant, or as provided in Article VI, to receive any
Plan benefits payable after the Participant's death.
2.3 Board. "Board" means the Board of Directors of the Company or
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the Human Resources Committee (or its successor committee) of such Board of
Directors, or any other Committee designated by the Board of Directors of
the Company.
2
2.4 Change of Control. A "Change of Control" shall be deemed to have
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occurred, subject to subparagraph (iv) hereof, if any of the events in
subparagraphs (i), (ii) or (iii) occur:
(i) Any "person" (as such term is used in Section
13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), other than an employee
benefit plan of the Company, or a trustee or other fiduciary
holding securities under an employee benefit plan of the
Company, is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly,
of 25% or more of the Company's then outstanding voting
securities carrying the right to vote in elections of
persons to the Board of Directors, regardless of comparative
voting power of such voting securities, and regardless of
whether or not the Board of Directors shall have approved
such Change in Control; or
(ii) During any period of two consecutive years,
individuals who at the beginning of such period constitute
the Board of Directors and any new director (other than a
director designated by a person who shall have entered into
an agreement with the Company to effect a transaction
described in subparagraphs (i) or (iii) of this paragraph)
whose election by the Board of Directors or nomination for
election by the Company's stockholders was approved by a
vote of at least two-thirds of
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the directors then still in office who either were directors
at the beginning of the period or whose election or
nomination for election was previously so approved, cease
for any reason to constitute a majority thereof; or
(iii) The holders of securities of the Company entitled
to vote thereon approve the following:
(A) A merger or consolidation of the Company with
any other corporation regardless of which entity
is the surviving company, other than a merger or
consolidation which would result in the voting
securities of the Company carrying the right to
vote in elections of persons to the Board of
Directors outstanding immediately prior thereto
continuing to represent (either by remaining
outstanding or by being converted into voting
securities of the surviving entity) at least 80%
of the Company's then outstanding voting
securities carrying the right to vote in elections
of persons to the Board of Directors, or such
securities of such surviving entity outstanding
immediately after such merger or consolidation, or
(B) A plan of complete liquidation of the Company
or an agreement for the sale or disposition by the
Company of all or substantially all of the
Company's assets.
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(iv) Notwithstanding the definition of a "Change in
Control" of the Company as set forth in this paragraph 2.4,
the Human Resources Committee of the Board of Directors (the
"Committee") shall have full and final authority, which
shall be exercised in its discretion, to determine
conclusively whether a Change in Control of the Company has
occurred, and the date of the occurrence of such Change in
Control and any incidental matters relating thereto, with
respect to a transaction or series of transactions which have
resulted or will result in a substantial portion of the assets
or business of the Company (as determined immediately prior to
the transaction or series of transactions by the Committee in
its sole discretion which determination shall be final and
conclusive) being held by a corporation at least 80% of
whose voting securities are held, immediately following such
transaction or series of transactions, by holders of the
voting securities of the Company (determined immediately
prior to such transaction or series of transactions). The
Committee may exercise such discretionary authority without
regard to whether one or more of the transactions in such
series of transactions would otherwise constitute a Change
in Control of the Company under the definition set forth in
this paragraph 2.4.
2.5 EDCP Committee. "EDCP Committee" means the Executive Deferred
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Compensation Committee appointed to administer the Plan pursuant to Article
VII.
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2.6 Compensation. "Compensation" means the base salary and annual
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bonus or director's fees paid to the Participant by the Employer during the
calendar year, before reduction for amounts deferred pursuant to this Plan
or any other Plan. Compensation does not include expense reimbursements,
or any form of non-cash compensation and benefits. For directors,
Compensation does not include fees payable for Board service after April
30, 1996.
2.7 Deferral Commitment.
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(a) "Deferral Commitment" means a Salary Deferral Commitment, a
Bonus Deferral Commitment, or a Fee Deferral Commitment made by
the Participant pursuant to Article III and for which a
Participation Agreement has been filed. A Deferral Commitment
shall include any deferral commitment made by a Participant for
1990 and years prior thereto under the predecessor Holiday
Corporation plan.
(b) Pre-1996 Deferrals means the deferral of Compensation during
Plan years through 1995.
(c) Post-1995 Deferrals means the deferral of Compensation
during Plan years after 1995.
2.8 Deferral Period. "Deferral Period" means the single calendar
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year for which the Participant has made a Deferral Commitment. The initial
Deferral Period shall commence as soon as administratively feasible after
the effective date of this Plan.
2.9 Determination Date. "Determination Date" means the last day of
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each calendar month.
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2.10 Employer. "Employer" means the Company, and directly or
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indirectly affiliated or subsidiary corporations, any other affiliate
designated by the Board, or any successors to the businesses thereof.
2.11 Employment. "Employment," in the case of an employee, means the
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period of time that a Participant is on the Employer's payroll. A leave of
absence approved by the Committee shall not be deemed a termination of
Employment. A Participant who enters salary continuation status shall not
be deemed to have terminated Employment. In the case of a director,
Employment means the active service on the Board by the Participant.
2.12 Hardship. "Hardship" means the immediate and heavy financial
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need of the Participant as determined by the EDCP Committee. Financial
needs shall be limited to the following situations:
(a) Financial obligations incurred by the Participant because of
sickness, accident, death, disability, or other medial need in
the Participant's immediate family which the Participant is not
able to pay out of liquid assets or current cash flow.
(b) Financial requirements to purchase necessary shelter and
related necessities for the Participant and the Participant's
immediate family which the Participant is unable to purchase out
of liquid assets or current cash flow or otherwise reasonably
finance.
(c) Financial requirements for education for the Participant or
a member of the Participant's immediate family which the
Participant is unable to pay out of liquid assets or current cash
flow.
7
For purposes of this definition, the term "immediate family" means
wife, husband, child, father, mother, or a related dependent residing with
the Participant.
2.13 Interest.
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(a) Termination Account Interest. (1) The interest rate applied
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to a Pre-1996 Termination Account on each monthly Determination
Date shall be the greater of one twelth (1/12) of 8.5% or one-
twelfth (1/12) of the rate announced by Citibank, N.A. as its
prime rate ("Citibank Prime Rate") at the beginning of each
calendar quarter during the Plan year. (2) The interest rate
applicable to a Post-1995 Termination Account on each monthly
Determination Date shall be the greater of one-twelfth (1/12) of
the rate approved by the Board prior to January 1 of each Plan
year or one-twelfth (1/12) of the Citibank Prime Rate at the
beginning of each calendar quarter during the Plan year. The
rate to be approved by the Board shall be submitted by Company
management to the Board for review and approval prior to January
1 of each Plan year.
If the Citibank Prime rate is no longer available, the
Committee shall select a substantially similar index.
(b) Retirement Account Interest. (1) For Plan years through
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1995, the effective annual yield applicable to a Pre-1996
Retirement Account shall be determined prior to January 1 of each
year and be effective for the calendar year following the date it
is determined; such rate
8
shall be submitted by Company management for review and approval
by the Board prior to January 1 each year. For all calendar
years after 1995, such rate shall be and is hereby fixed at 15.5%
for all Pre-1996 Retirement Accounts, provided that the annual
yield under this paragraph 2.13(b)(1) for each calendar year for
a Pre-1996 Retirement Account shall not be less than one hundred
fifty percent (150%) of the annual average of Moody's for such
year. If a Participant or Beneficiary receives payment in full
prior to a calendar year end, the foregoing minimum annual yield
for such year will be the Moody's average for the full months the
funds were held by the Plan during the calendar year (or during
the prior year if the payment occurs before one full month has
been calculated in a calendar year). The term "Moody's" refers
to Moody's Average Corporate Bond Yield as published by Moody's
Investors Service, Inc. (or any successor thereto) or, if such
index is no longer published, a substantially similar index
selected by the EDCP Committee.
(2) The effective annual yield applicable to a Post-
1995 Retirement Account shall be determined prior to January 1 of
each year and be effective for the calendar year following the
date it is determined; such rate shall be submitted by Company
management for review and approval by the Board prior to January
1 each year, provided that the annual yield under this paragraph
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2.13(b)(2) for each calendar year for a Post-1995 Retirement
Account shall not in any event be less than 150% of the annual
average of Moody's for such
9
year. If a Participant or Beneficiary receives payment in full
prior to a calendar year end, the foregoing minimum annual yield
for such year will be the Moody's average for the full months the
funds were held by the Plan during the calendar year (or during
the prior year if the payment occurs before one full month has
been calculated in a calendar year).
2.14 Participant. "Participant" means any individual who is
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participating or has participated in this Plan as provided in Article III
including a director Participant and employee Participant.
2.15 Participation Agreement. "Participation Agreement" means the
-----------------------
agreement filed by the Participant prior to the beginning of the Deferral
Period. A new Participation Agreement shall be filed by the Participant
for each Deferral Period.
2.16 Plan Benefit. "Plan Benefit" means the benefit payable to the
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Participant as calculated in Article V.
2.17 Retirement. "Retirement" for an employee Participant means
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termination of Employment with the Employer on or after the earlier of the
date the Participant attains age fifty five (55) with ten (10) years of
credited service or on or after the date the Participant attains age sixty
(60). For purposes of this definition, years of credited service will be
credited in accordance with the provisions of the Company's Savings and
Retirement Plan. The Board reserves the right to provide different
retirement requirements for different Participants.
2.18 Total and Permanent Disability. "Total and Permanent Disability"
------------------------------
means that due to sickness or accidental bodily injury the Participant is
completely
10
unable to perform any and every duty pertaining to his occupation with the
Employer, and such disability is expected to last at least 24 months.
For purposes of this Plan, the EDCP Committee shall determine whether
or not a condition renders the Participant to be Totally and Permanently
Disabled based on evidence satisfactory to the EDCP Committee. Such
determination by the EDCP Committee shall be final and binding.
ARTICLE III
PARTICIPATION AND DEFERRAL COMMITMENTS
3.1 Eligibility and Participation.
-----------------------------
(a) Eligibility. Eligibility to participate in the Plan is
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limited to directors of the Board for their fees payable through
April 30, 1996 and those employees of the Employer who are:
(i) in Job Grades 26 and above (or equivalent grades)
or in other Job Grades which may be declared eligible by the
Board's Human Resources Committee, and
(ii) designated as a Participant by the Chief Executive
Officer of the Company.
(b) Participation. An eligible employee or director may elect
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to participate in the Plan with respect to any Deferral Period by
filing a Participation Agreement with the Company by a date set
by the Company but not later than December 31 of the calendar
year immediately preceding the Deferral Period. In the event
that an
11
individual first becomes eligible to Participate during a
calendar year, a Participation Agreement must be filed no later
than thirty (30) days following notification of the individual by
the EDCP Committee or the Company of his eligibility to
Participate, and such Participation Agreement shall be effective
only with regard to Compensation earned and payable following the
filing of the Participation Agreement with the Company.
(c) Salary Continuation. Unless an exception is specifically
-------------------
made by the Committee, in its sole discretion, and except for the
purpose described in paragraph 5.4(b) below, a Participant shall
not be permitted to defer under this Plan amounts payable to the
Participant after (i) the Participant's death; or (ii) if a
Participant is placed on salary continuation during a Deferral
Period, the earlier of the date the Participant ceases to receive
a continuation of salary or the commencement of a new Deferral
Period; or (iii) the Employer has terminated future deferrals
pursuant to paragraph 9.2 of this Plan.
3.2 Form of Deferral; Maximum and Minimum Deferral. The Participant
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may elect in the Participation Agreement any of the following Deferral
Commitments:
(a) Salary and Bonus Commitment. For the Deferral Period
---------------------------
following the calendar year in which the Participation Agreement
is filed, the Participant may elect to defer, except as provided
in (b) below, (1) up to twenty-five percent (25%) of base salary
payable
12
during the Deferral Period, and (2) for Plan years through 1990,
up to one hundred per cent (100%) of bonus (fifty percent (50%)
of bonus for Job Grades 26-29 or equivalent grades) payable
during the Deferral Period. Commencing with the 1991 Deferral
Period with respect to bonus deferrals, all Participants will be
limited to deferring a maximum of 50% of bonus.
(b) Savings and Retirement Plan Exception. In addition to the
-------------------------------------
deferral permitted under (a) above, any Participant that
participates at the maximum before-tax percentage allowed by the
Employer's Savings and Retirement Plan maintained by the Employer
shall be deemed to have elected to defer under this Plan that
portion of eligible Savings and Retirement Plan earnings which
the Participant elected to defer under the Savings and Retirement
Plan, up to six percent (6%) (or such other maximum before-tax
percentage allowed by the Savings and Retirement Plan), which
could not be deferred on a before-tax basis under the Savings and
Retirement Plan due to any law or regulation as determined by the
EDCP Committee, but excluding any amount which was actually
deferred into the Savings and Retirement Plan but distributed
back to the employee in a following Plan year.
(c) Fee Deferral Commitment. A director Participant may elect
-----------------------
to defer a minimum of fifteen percent (15%) and up to a maximum
of one hundred percent (100%) of fees payable in the calendar
year following the calendar year in which the Participation
Agreement is
13
filed. For calendar year 1985, the maximum a director
Participant may elect to defer shall be one hundred percent
(100%) of remaining fees. For Plan years after 1995, a director
Participant may defer fees for services through April 30, 1996.
Fees payable to a director after April 30, 1996, will not be
deferrable under this Plan.
(d) Other Deferral Provisions. Notwithstanding anything herein,
-------------------------
for Plan years through 1995: (i) an employee who has five (5)
years of active deferrals of salary and/or bonus into this Plan
including deferrals under the predecessor Holiday Corporation
plan shall not be permitted to defer any further bonus into this
Plan payable in Plan years through 1995, and (ii) a director on
the Board of Directors of the Company who has ten (10) full years
of active deferrals of director's fees into this Plan including
deferrals under the predecessor Holiday Corporation plan shall
not be permitted to defer any further director's fees into this
Plan payable in Plan years through 1995. For Plan years after
1995, an employee Participant may defer up to 25% of base salary
and 50% of bonus payable during a Deferral Period, provided the
Board reserves the right to modify or terminate further deferrals
into the Plan for any Plan year.
3.3 Modification of Deferral Commitment. A Deferral Commitment shall
-----------------------------------
be irrevocable except that the EDCP Committee may reduce the amount to be
deferred or waive the remainder of the Deferral Commitment upon a finding,
based
14
upon the uniform standards established by the EDCP Committee, that the
Participant has suffered a Hardship or that a bona fide mistake occurred in
filling out a form or responding to instructions.
ARTICLE IV
DEFERRED COMPENSATION ACCOUNTS
4.1 Elective Deferred Compensation. The amount of Compensation that
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the Participant elects to defer shall be withheld and credited to the
Participant's Account as the Compensation becomes payable. Any withholding
of taxes or other amounts with respect to deferred Compensation which is
required by state, federal or local law may be withheld from the
Participant's non-deferred Compensation.
4.2 Types of Account. For record-keeping purposes only, the
----------------
following accounts shall be maintained for each Participant:
Pre-1996 Retirement Account
Pre-1996 Termination Account
Post-1995 Retirement Account
Post-1995 Termination Account
The amount of Compensation elected to be deferred shall be credited to both
the Retirement Accounts and the Termination Accounts subject to the
provisions of this Plan.
4.3 Matching Contributions.
----------------------
(a) Eligibility. Matching contributions shall be credited to
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Participants in this Plan who are eligible to participate in the
Employer's Savings and Retirement Plan and elect to make a Basic
15
Contribution equal to the maximum rate at which a Participant may
elect before-tax contributions under the Employer's Savings and
Retirement Plan and such before-tax contribution is limited due
to any law or regulation.
(b) Amount. The Employer shall credit to each employee
------
Participant's Account a matching contribution for each calendar
year equal to one hundred percent (100%) of the Participant's
Compensation elected to be deferred under this Plan for the year,
such Compensation being limited for purposes of this calculation
to a maximum of six percent (6%) of the Participant's eligible
Savings and Retirement Plan earnings (which shall for this
purpose include the Participant's salary deferrals but shall not
include bonus amounts or board fees). The matching contribution
amount shall be offset by the actual matching contribution
allocated to the Participant for the year under the Employer's
Savings and Retirement Plan.
(c) Time of Credit. The Employer matching contribution shall be
--------------
credited to a Participant's Account as of the last day of the
calendar year or the date the Participant's employment ends, if
earlier.
4.4 Vesting of Accounts. Each Participant shall be vested in the
-------------------
amounts credited to such Participant's Account and earnings thereon as
follows:
(a) Amounts Deferred. A Participant shall be one hundred
----------------
percent (100%) vested at all times in the amount of Compensation
elected to be deferred under this Plan and the earnings thereon
(either at the Termination Rate or Retirement Rate).
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(b) Employer Matching Contributions. A Participant who
-------------------------------
terminates Employment for reasons other than Retirement, Total
and Permanent Disability or Death shall be vested in the Employer
matching contributions (and earnings thereon) made for any
particular year in accordance with the vesting provisions in the
Employer's Savings and Retirement Plan and as it may be amended
from time to time.
(c) Retirement, Disability or Death. A Participant shall be one
-------------------------------
hundred percent (100%) vested in all amounts at Retirement or
upon Total and Permanent Disability or Death during employment
with the Company or its direct or indirect majority owned
subsidiaries. For this purpose, "during employment" includes
death or disability occurring after such employment termination
if the death or disability is primarily caused (as determined by
the EDCP Committee) by the sickness or injury that resulted in
the termination of employment.
4.5 Determination of Accounts. Each Participant's Retirement Account
-------------------------
(Pre-1996 and Post-1995) and Termination Account (Pre-1996 and Post-1995)
as of each Determination Date shall consist of the balance of the
Participant's Account as of the immediately preceding Determination Date,
plus the Participant's elective deferred Compensation credited, matching
contributions and Interest earned, minus the amount of any distributions
made since the immediately preceding Determination Date. Interest earned
shall be calculated as of each Determination Date based upon the average
daily balance of the account since the preceding Determination Date.
Interest earned on each of the Retirement Accounts shall be calculated so
as to achieve the annual yield provided by paragraph 2.13(b).
17
4.6 Statement of Accounts. The Company shall submit to each
---------------------
Participant, within one hundred twenty (120) days after the close of each
calendar year and at such other times as determined by the Company, a
statement setting forth the balance to the credit of each Account
maintained for the Participant.
ARTICLE V
PLAN BENEFITS
5.1 Pre-Termination Withdrawals.
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(a) Amount. At the time the Participation Agreement is filed,
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the Participant may elect to receive fifty percent (50%) of the
Deferral Commitment during each of the 8th, 9th, 10th and 11th
years prior to termination after the year during which the
Participation Agreement is filed. The total Pre-Termination
Withdrawal shall be limited to the Termination Account balance at
the time of the withdrawal.
(b) Remaining Account Balance. The amount of the withdrawal
-------------------------
shall reduce the respective Pre-1996 or Post-1995 Retirement
Account and respective Pre-1996 or Post-1995 Termination Account
balances. Any remaining account balances shall continue to be
credited with Interest in accordance with paragraph 4.5. Any
amounts remaining in the respective Pre-1996 or Post-1995 Retirement
Account or Termination Account after all Pre-Termination Withdrawals
shall be paid in accordance with this Article V.
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5.2 Retirement Benefit. The Employer shall pay a Plan Benefit equal
------------------
to the amount of the Participant's respective Pre-1996 and/or Post-1995
Retirement Account to each Participant who terminates Employment:
(a) by reason of Retirement,
(b) by reason of Total and Permanent Disability,
(c) within a twenty-four (24) month period after a Change in
Control,
(d) while participating as a director Participant and terminates
from Employment on the Employer's Board due to:
(i) not being re-elected as a director,
(ii) Total and Permanent Disability, or
(iii) termination within a twenty-four (24) month period
after a Change in Control.
(e) for Participants who are entitled to the Retirement Account
rate and who retired or terminated active service after October
29, 1992 and on or before December 31, 1992, such rate will be
locked-in at 16.5% until such Participant's account is fully
distributed.
(f) for Participants who are entitled to the Retirement Account
rate who retired or terminated active service during 1993, such
rate will be locked-in at 16% until such Participant's account is
fully distributed.
(g) for Participant's who are entitled to the Retirement Account
rate and who retired or terminated active service during 1994 or
1995, such rate will be locked-in at the retirement rate approved
for that year (15.5%) until such Participant's account is fully
distributed.
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(h) for Participants whose active service ceased before October
29, 1992, and at that time were already receiving the Retirement
Account rate, the rate each such Participant will receive in
1993, 1994 and 1995 will be the approved retirement rate for each
such year, provided that for years after 1995 the retirement rate
will be locked-in at the rate approved for 1995 (15.5%) until
such Participant's account is fully distributed.
5.3 Termination Benefit. The Employer shall pay a Plan Benefit equal
-------------------
to the amount of the Participant's Termination Account to each Participant
who terminates Employment for all reasons other than those for which a
Retirement Benefit or Death Benefit shall be paid.
A Participant or Beneficiary shall receive either the Termination
Account or Retirement Account as provided in this Plan but not both.
5.4 Death Benefit. Upon the death of the Participant, the Employer
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shall pay to the Participant's Beneficiary an amount determined as follows:
(a) If the Participant dies prior to termination of Employment
with the Employer, the amount payable under this paragraph shall
be in lieu of any other benefit payment under this Plan and shall
equal:
(i) the Participant's Retirement Account Balance, plus;
(ii) three (3) times the sum of all amounts deferred by
the Participant under this Plan (not including interest or
earnings thereon) until the date of death.
(b) For purposes of calculating the Death Benefit under
paragraph 5.4(a):
20
(i) "amounts deferred" shall include salary, bonus,
and any other Compensation that the Participant may be
permitted to defer hereunder which the Participant shall
have elected in writing to defer under this Plan from
inception of the Plan (including the predecessor Holiday
Corporation plan) to the date of death including any
deferred bonus or other deferred Compensation hereunder
which would be payable to the Participant or to the
Participant's estate or beneficiary after the Participant's
death, except that "amounts deferred" shall not include any
salary elected to be deferred under this Plan but not yet
payable at the time of the Participant's death.
(ii) the Participant's Retirement Account Balance shall
not include any Compensation which is not payable on the day
before the Participant's death even if such amounts become
payable on or after the Participant's death and even if the
Participant had elected in writing to defer such amounts
under this Plan.
(iii) the Plan's pre-termination death benefit of 3 x
deferrals under paragraph 5.4(a)(ii) will only be payable to
Participants whose death occurs during active employment (or
if such Participant's death occurs after active employment
has ceased by reason of a sickness or injury which
thereafter results in the Participant's death). The 3 x
deferrals Death Benefit under
21
paragraph 5.4(a)(ii) will not be payable to Participants who
commence salary continuation after October 29, 1992 (unless
such Participant's salary continuation commences in
connection with a sickness or injury which thereafter
results in the Participant's death).
(c) If the Participant dies after termination of Employment with
the Employer, the amount payable shall be equal to the remaining
unpaid balance of the Participant's appropriate Account.
5.5 Disability Benefits. If the Participant terminates Employment by
-------------------
reason of Total and Permanent Disability, the amount payable shall equal
the Retirement Account balance.
5.6 Hardship Distributions. Upon a finding that the Participant has
----------------------
suffered a Hardship, the EDCP Committee may, in its sole discretion, allow
distributions from the Participant's Account prior to the time otherwise
specified for payment of benefits under the Plan. The amount of such
distribution shall be limited to the amount reasonably necessary to meet
the Participant's requirements during the Hardship. The amount of such
distribution shall reduce the Termination Account balance and Retirement
Account balance.
5.7 Form of Benefit Payment. The Plan Death Benefit payable under
-----------------------
paragraph 5.4(a)(ii) of this Plan shall be paid within 90 days of death in
a lump sum with no interest accruing from the date of death until the date
of payment. The Plan Retirement Benefit, Death Benefit payable under
paragraph 5.4(a)(i) or 5.4(c), Disability Benefits, and Termination Benefit
shall be paid in one of the following forms as elected by the Participant
in the Participation Agreement:
22
(a) Installments. Equal monthly installments of the Account and
------------
Interest amortized over a period of time elected by the
Participant and approved by the Company. Interest shall be
credited to the remaining portion of the Account Balance in
accordance with paragraph 4.5. If the Participant is receiving a
Retirement Account, Interest shall be equal to an amount in
accordance with paragraph 2.13(b). If the Participant is
receiving the Termination Account, Interest shall be equal to an
amount in accordance with paragraph 2.13(a); and/or
(b) A lump sum payment.
(c) Any other form selected by the Participant, which has
written approval of the EDCP Committee.
(d) If the Participant fails to elect the form of benefit
payment, the benefits shall be paid in accordance with 5.7(a)
over a period of fifteen (15) years. However the EDCP Committee
may, in its sole discretion, provide for an alternate form of
benefit payment to the Participant, if payment is made pursuant
to paragraph 5.2(c) or 5.2(d)(iii).
(e) If a Plan Death Benefit is payable in installments under
paragraph 5.4(a)(i), the EDCP Committee may, in its sole
discretion, determine that payment of the Death Benefit shall be
accelerated and paid in a lump sum to the Beneficiary.
5.8 Withholding; Payroll Taxes. The Employer shall withhold from
--------------------------
payments made hereunder any taxes required to be withheld from the
Participant's wages for the federal or any state or local government.
23
5.9 Commencement of Payments. Payment shall commence at the
------------------------
discretion of the Company, but not later than sixty (60) days after the end
of the month in which the Participant Retires, dies, becomes Totally and
Permanently Disabled or otherwise terminates Employment with the Employer
and is entitled to payment pursuant to his or her Participation Agreement.
For purposes of this paragraph 5.9, termination of Employment shall include
when a Participant is no longer entitled to any payments of salary or
salary continuation.
5.10 Full Payment of Benefits. Notwithstanding any other provision of
------------------------
this Plan, all benefits shall be paid no later than the date the
Participant attains age eight five (85).
5.11 Payment to Guardian. If a Plan benefit is payable to minor or a
-------------------
person declared incompetent or to a person incapable of handling the
disposition of property, the Company may direct payment of such Plan
benefit to the guardian, legal representative or person having the care and
custody of such minor or incompetent person. The Company may require proof
of incompetency, minority, incapacity or guardianship as it may deem
appropriate prior to distribution of the Plan benefit. Such distribution
shall completely discharge the EDCP Committee and the Employer from all
liability with respect to such benefit.
5.12 Spin-Off Transactions. Notwithstanding anything in the Plan to
---------------------
the contrary, in the event any business of the Company or its subsidiaries
is spun-off and a Participant becomes an employee or director of the
company owning the spun-off business (the "Spin-Off Company") which adopts
a deferred compensation
24
plan that is substantially the same as the Plan, then the Human Resources
Committee of the Board of Directors of the Company in its discretion may
determine as follows prior to the spin-off:
(a) any director Participant who resigns as a director of the
Company and who, within 90 days, commences service as a director
of the Spin-Off Company will not be treated as having terminated
service or employment as a director for purposes of paying Plan
benefits, and his or her entire Account balance and all
obligations associated therewith will be transferred to the
corresponding Plan of the Spin-Off Company;
(b) a transfer of employment of a Participant to the Spin-Off
Company in connection with the spin-off will not be considered a
termination of employment for purposes of paying Plan benefits or
of forfeiting matching contributions and interest thereon;
(c) a transferred Participant's Account balance as of the
effective date of the spin-off and all obligations related
thereto will be transferred to the corresponding plan of the
Spin-Off Company;
(d) any Participant who will immediately after the effective
date of the spin-off continue to be employed by the Company (or a
subsidiary thereof) and will also be employed by the Spin-Off
Company (or a subsidiary thereof) will have the right to
designate in writing (to be signed prior to the effective date of
the spin-off) a percentage (from zero to 100%) of his or her
Account Balance as of such effective date
25
that will be transferred to the Spin-Off Company (such percentage
being applied to the balances attributable to each year of
deferral) which transfer will include the transfer of all
obligations associated therewith. (To the extent such
designation is not made, the Participant's Account will remain in
the Plan pursuant to its terms.);
(e) Any employee or director transferring to the Spin-Off
Company will receive credit for and will be vested in the
Retirement Account Interest Rate under the Plan and under the
Spin-Off Company's corresponding plan if such Rate is earned or
otherwise vested or credited under the Plan on or prior to the
effective date of the spin-off; and
(f) Except to the extent related to that portion of a
Participant's Account balance that is retained in the Plan
pursuant to the above Section 5.12(d), no benefits will be
payable under the Plan to a Participant whose Account balance (or
portion thereof) is transferred to the Spin-Off Company.
ARTICLE VI
BENEFICIARY DESIGNATION
6.1 Beneficiary Designation. Each Participant shall have the right,
-----------------------
at any time, to designate any person or persons as his Beneficiary or
Beneficiaries (both principal or contingent) to whom payment under this
Plan shall be paid in the event of his death prior to complete distribution
to the Participant of the benefits due him
26
under the Plan. Each beneficiary designation shall be in a written form
prescribed by the Company and will be effective only when filed with the
Company during the Participant's lifetime. If the Participant's
Compensation is community property, any Beneficiary Designation shall be
valid or effective only as permitted under applicable law.
6.2 Amendments. Any Beneficiary designation may be changed by the
----------
Participant without the consent of any designated Beneficiary by the filing
of a new Beneficiary Designation with the Company. The filing of a new
Beneficiary Designation form will cancel all Beneficiary Designations
previously filed.
6.3 No Beneficiary Designation. If any Participant fails to
--------------------------
designate a Beneficiary in the manner provided above, or if the Beneficiary
designated by a deceased Participant dies before the Participant or before
complete distribution of the Participant's benefits, the Company, in its
discretion, may direct the Employer to distribute such Participant's
benefits (or the balance thereof) to either:
(a) The surviving spouse;
(b) The Participant's children, except that if any of the
children predecease the Participant but leave issue surviving,
then such issue shall take by right of representation the share
the parent would have taken if living;
(c) The Participant's estate.
6.4 Effect of Payment. The payment to the Beneficiary shall
-----------------
completely discharge the Employer's obligations under this Plan.
27
ARTICLE VII
ADMINISTRATION
7.1 Committee; Duties. This Plan shall be administered by the
-----------------
Employer's Executive Deferred Compensation Committee (EDCP Committee),
which shall consist of not less than three (3) individuals selected by the
Chief Executive Officer of the Company. Members of the EDCP Committee may
be Participants under this Plan.
7.2 Agents. The EDCP Committee shall appoint an individual to be the
------
Committee's agent with respect to the day-to-day administration of the
Plan. In addition, the EDCP Committee may, from time to time, employ other
agents and delegate to them such administrative duties as it sees fit, and
may from time to time consult with counsel who may be counsel to the
Employer.
7.3 Binding Effect of Decisions. The decision or action of the EDCP
---------------------------
Committee in respect of any question arising out of or in connection with
the administration, interpretation and application of the Plan and the
rules and regulations promulgated hereunder shall be final and conclusive
and binding upon all persons having any interest in the Plan.
7.4 Indemnity of EDCP Committee. The Employer shall indemnify and
---------------------------
hold harmless the members of the EDCP Committee or any agents or employees
of the Employer against any and all claims, loss, damage, expense, or
liability arising from any action or failure to act with respect to this
Plan, except in the case of willful misconduct by the EDCP Committee, EDCP
Committee member, or such agent or employee of the Employer.
28
ARTICLE VIII
CLAIMS PROCEDURE
8.1 Claim. Any Participant, former Participant, Beneficiary, or
-----
legal representative thereof, may file a claim for benefits under the Plan
by submitting to the EDCP Committee a written statement describing the
nature of the claim and requesting a determination of its validity under
the terms of the Plan. The EDCP Committee shall issue a ruling and written
notice with respect to the claim within 30 days after such claim is
received. If the claim is wholly or partially denied, written notice shall
be furnished to the claimant, which notice shall set forth in a manner
calculated to be understood by the claimant;
(a) the specific reason or reasons for denial;
(b) specific reference to pertinent Plan provisions on which the
denial is based;
(c) a description of any additional materials or information
necessary for the claimant to perfect the claim and an
explanation of why such material or information is necessary; and
(d) an explanation of the claims review procedures.
8.2 Denial of Claim. Any Participant, former Participant, or
---------------
Beneficiary (or their authorized representatives) whose claim for benefits
has been denied, may appeal such denial by resubmitting to the EDCP
Committee a written statement requesting a further review of the decision
within sixty (60) days of the date the claimant receives notice of such
denial. The statement shall set forth the reasons supporting the claim,
the reasons such claim should not have been denied, and any
29
other issues or comments which the claimant deems appropriate with respect
to the claim. The EDCP Committee shall, if requested, make copies of the
Plan documents available for examination by the claimant. The EDCP
Committee shall issue a ruling and written notice within sixty (60) days
after the date the claim is resubmitted. Such written notice shall include
specific reasons for the decision, written in a manner calculated to be
understood by the claimant, with specific references to the pertinent Plan
provisions on which the decision is based. The EDCP Committee's decision
of the appeal may be reviewed by the Board, which shall have the right to
overrule the EDCP Committee.
ARTICLE IX
AMENDMENT AND TERMINATION OF PLAN
9.1 Amendment.
---------
(a) The Board may at any time amend the Plan in whole or in
part, and may impose different requirements for different
Participants, provided, however, that (i) no amendment shall be
effective to decrease or restrict the amount accrued to that date
on any Account maintained pursuant to any existing Deferral
Commitment under the Plan; and (ii) on amounts that have been
deferred up to the date of amendment, no amendment shall be
effective to reduce the minimum interest credited or to be
credited to Termination Accounts until their payment date or
reduce the minimum interest credited or to be credited to
Retirement Accounts until their payment date as provided in
paragraph 2.13, without the consent of all Participants (or a
30
Beneficiary in case a Participant is then deceased ) who may be
affected by such change; and (iii) no amendment shall be
effective to alter the form of payment as elected by a
Participant in any Participation Agreement.
(b) The EDCP Committee may make administrative amendments to the
Plan including but not limited to amendments to clarify the Plan
language and to simplify and implement various administrative
procedures, including matters relating to the calculation of
death benefits and payments to Beneficiaries, which the EDCP
Committee determines are consistent with the purpose and intent
of the Plan.
9.2 Employer's Right to Terminate Future Deferrals. The Board may at
----------------------------------------------
any time terminate further deferrals into the Plan by any person and may
reject additional Participants in the Plan, if, in its sole judgment, such
termination would be in the best interest of the Employer. Benefits from
deferrals up to the point of termination of further deferrals shall be paid
in the form elected by the Participant in his or her Participation
Agreement and otherwise in accordance with this Plan, including crediting
of interest, until all payments are complete.
ARTICLE X
MISCELLANEOUS
10.1 Unfunded Plan. This Plan is an unfunded plan maintained
-------------
primarily to provide Deferred Compensation benefits for a select group of
management employees or highly compensated employees. This Plan is not
intended to create
31
an investment contract, but to provide tax planning opportunities and
retirement benefits to eligible individuals who have elected to participate
in the Plan. Eligible individuals are select members of management who, by
virtue of their position with the Employer, are uniquely informed as to the
Employer's operations and have the ability to materially affect the
Employer's profitability and operations.
10.2 Unsecured General Creditor. The Participants and their
--------------------------
Beneficiaries, heirs, successors, and assigns shall have no legal or
equitable rights, interest, or claims in any property or assets of the
Employer, nor shall they be Beneficiaries of, or have any rights, claims,
or interests in any life insurance policies, annuity contracts or the
proceeds therefrom owned or which may be acquired by the Employer
("Policies"). Such Policies or other assets of the Employer shall not be
held as collateral security for the fulfilling of the obligations of the
Employer under this Plan. The Policies shall be the general, unpledged,
unrestricted assets of the Employer, and the Employer may transfer, assign,
sell, or use such policies without restriction. The Employer's obligation
under the Plan shall be merely that of an unfunded and unsecured promise of
the Employer to pay money in the future. No Employer shall have any
obligation under this Plan with respect to individuals other than that of
the Employer's employees or directors or Beneficiaries thereof.
10.3 Nonassignability. Neither the Participant nor any other person
----------------
shall have any right to commute, sell, assign, transfer, pledge,
anticipate, mortgage, or otherwise encumber, transfer, hypothecate, or
convey in advance of actual receipt the amounts, if any, payable hereunder,
or any part thereof, which are, and all rights to which are, expressly
declared to be unassignable and non-transferable. No part of the amounts
payable shall, prior to actual payment, be subject to seizure
32
or sequestration for the payment of any debts, judgments, alimony, or
separate maintenance owed by the Participant or any other person, nor be
transferable by operation of law in the event of the Participant's or any
other person's bankruptcy or insolvency.
10.4 Not a Contract of Employment. The terms and conditions of this
----------------------------
Plan shall not be deemed to constitute a contract of employment between the
Employer and the Participant, and the Participant (or his Beneficiary)
shall have no rights against the Employer except as may otherwise be
specifically provided herein. Moreover, nothing in this Plan shall be
deemed to give the Participant the right to be retained in the service of
the Employer or to interfere with the right of the Employer to discipline
or discharge the Participant at any time.
10.5 Protective Provisions. The Participant will cooperate with the
---------------------
Employer by furnishing any and all information requested by the Employer,
in order to facilitate the payment of benefits hereunder, and by taking
such physical examinations as the Employer may deem necessary and taking
such other action as may be requested by the Employer. Notwithstanding the
other provisions of this Plan, no death benefits in excess of the
Retirement Account balance shall be paid if during the first two (2) years
of participation death occurs as a result of suicide. The EDCP Committee
shall have sole discretion to determine whether death occurs as a result of
suicide.
10.6 Terms. Whenever any words are used herein in the masculine, they
-----
shall be construed as through they were used in the feminine in all cases
where they would so apply; and wherever any words are used herein in the
singular or in
33
the plural, they shall be construed as through they were used in the plural
or the singular, as the case may be, in all cases where they would so
apply.
10.7 Captions. The captions of the articles, sections, and paragraphs
--------
of this Plan are for convenience only and shall not control or affect the
meaning or construction of any of its provisions.
10.8 Governing Law. The provisions of this Plan shall be construed
-------------
and interpreted according to the laws of the State of Tennessee.
10.9 Validity. In case any provision of this Plan shall be held
--------
illegal or invalid for any reason, said illegality or invalidity shall not
affect the remaining parts hereof, but this Plan shall be construed and
enforced as if such illegal and invalid provision had never been inserted
herein.
10.10 Notice. Any notice or filing required or permitted to be given
------
to the EDCP Committee or the Company under the Plan shall be sufficient if
in writing and hand delivered, or sent by registered or certified mail, to
any member of the EDCP Committee, the Chief Executive Officer of the
Employer, or the Employer's Statutory Agent. Such notice shall be deemed
given as of the date of delivery or, if delivery is made by mail, as of the
date shown on the postmark on the receipt for registration or
certification.
10.11 Successors. The provisions of this Plan shall bind and inure to
----------
the benefit of the Employer and its successors and assigns. The term
successors as used herein shall include any corporate or other business
entity which shall, whether by merger, consolidation, purchase or otherwise
acquire all or substantially all of the business and assets of the
Employer, and successors of any such corporation or other business entity.
34
IN WITNESS WHEREOF, and pursuant to resolution of the Board, this
instrument has been executed by its duly authorized officers.
HARRAH'S ENTERTAINMENT, INC.
By: ________________________________
Neil F. Barnhart
Vice President
________________________________
Title
Attest: ________________________________
_______________________________
Title
35