EXHIBIT 10(22)
EXECUTIVE FINANCIAL
COUNSELING
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PLAN HIGHLIGHTS
Harrah's & You:
A Winning Team
As an executive with Harrah's
Entertainment, Inc. or its subsidiaries
(the Company), you are now receiving
competitive compensation to match your
on-the-job responsibilities. If you do
not have a financial background,
however, you may not really know the
most effective ways to manage your
resources to achieve your financial
objectives, both now and for the future.
We are pleased to provide you with the
Harrah's Entertainment Executive
Financial Counseling Plan (the Plan)
detailed in this brochure--designed to
help you and your colleagues achieve
stability in personal and tax matters
through professional financial and tax
advice.
Eligibility
Persons eligible are a select group of management employees. These are
employees of the Company or its subsidiaries in grades 25 and above.
Statement of Policy
The Company or its subsidiary will pay directly to the service provider, or
reimburse you with documentation of payment, up to the following maximums for
covered services:
Grade Annual Amount
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35 and above $15,000
31-34 7,500
28-30 3,000
25-27 1,500
HOW THE PLAN WORKS
Plan years are calendar years, and all account balances renew on January 1
each year. Charges will normally be drawn out of your account based upon the
date the counseling was performed. Unused account balances cannot be carried
over to the next year. Prorated amounts will be available to new hires and to
persons promoted to eligible positions during the Plan year.
COVERED SERVICES
A covered service is any professional advice or professional service that
provides financial or tax assistance. The Company reserves the right to decide
whether a service is covered under the Plan. A sample list of current covered
services is included in this policy. In general, participants shall be
reimbursed only for expenses which are eligible to be included as miscellaneous
expenses for IRS itemizing purposes, except that expenses incurred for estate
planning including the preparation of wills shall also be covered. (See Tax
Effects at right.)
PAYMENT
Invoices should be made out to Harrah's Operating Company, Inc. and
must be approved by you prior to the Company's making payment to the
service provider. The invoice should describe the financial or tax services
that were rendered and should recite and identify that portion of the bill
which can be itemized as a miscellaneous expense for IRS purposes. (In
general, only counseling expenses relating to tax advice or production of
income are itemizable. See Tax Effects below.) You should initial the
invoice to indicate your approval, and you are encouraged to submit it to
the Harrah's Memphis Compensation Department within 10 days after you
receive it.
TAX EFFECTS
The costs paid by the Company or its subsidiary under the Plan are
taxable income to you and are subject to federal withholding at a 28
percent rate (plus FICA and any applicable state taxes). The withholding
tax will be deducted from regular salary after the reimbursement is paid.
However, you may be able to claim a portion of the costs as a tax deduction
on your federal income tax return.
According to current tax laws, there is a limit on the deductibility
of miscellaneous expenses which are itemized. These miscellaneous itemized
expenses, which include the cost of financial and tax planning services
provided under this policy, will only be deductible to the extent that they
exceed 2 percent of your adjusted gross income. The expense of a will and
estate planning is not eligible to be itemized as an expense for IRS
purposes except for the cost of tax advice given in connection with the
will. You should consult your personal tax adviser if you have any
questions regarding how these tax laws apply to you.
PRORATION GUIDELINES
Participants entering the Plan during a calendar year will be eligible
to use a prorated share of their account during the year of hire or date of
promotion to an eligible position based upon the quarter of the year hired
or promoted.
Hired/Promoted Pro Grades Grades Grades Grades
During the Qtr. Rata 35 and above 31-34 28-30 25-27
1/1 - 3/31 100% $15,000 $ 7,500 $ 3,000 $ 1,500
4/1 - 6/30 75% $11,250 $ 5,625 $ 2,250 $ 1,125
7/1 - 9/30 50% $ 7,500 $ 3,750 $ 1,500 $ 750
10/1 - 12/31 25% $ 3,750 $ 1,875 $ 750 $ 375
For those employees promoted from one eligible grade to another during
the year (i.e., from grade 26 to grade 28), their account balances will be
prorated for the time spent in each grade (i.e., one quarter of the year as
a grade 26 = $375 and three quarters of the year as a grade 28 = $2,250.
Total for the year is $2,625).
Charges will be drawn out of the employee's account based upon the
date the counseling was performed. The account balance will be left open
during the month of January and will be used to clear invoices of charges
incurred in the previous year. After January, only charges incurred in the
current year will be accepted and will be charged against your allowance
for the current year. Unused account balances are not carried over to the
next year.
SAMPLE LIST OF COVERED SERVICES
1. Preparation of tax returns.
2. Advice concerning taxes and tax planning including deductibility of
various items.
3. Advice and assistance on producing income.
4. Advice or counseling on investments in businesses, stocks, bonds, or
other securities.
5. Advice on tax consequences of divorce.
6. Tax advice and related assistance concerning trusts for children or
family members.
7. Responding to IRS audits.
8. Retirement income counseling and related tax advice.
9. Advice on business expenses, casualty losses and purchasing any
property for investment.
10. Advice regarding taxes on stock options and other benefit plans.
11. Advice and assistance on estate taxes and estate tax planning
including the preparation of wills.
Note: Travel and hotel expenses (e.g., to a tax planning seminar) are
not covered.
TERMINATION OR DEATH OF PARTICIPANT
Termination of the employee during the calendar year covered by the
Plan normally cancels the employee's eligibility and forfeits any remaining
allowance, unless salary continuation is offered in which case eligibility
to use the remainder of an existing allowance may be offered through the
salary continuation period.
In the event of death of the employee during a calendar year covered
by the Plan and if a balance remains in the employee's account, the total
balance will be assigned to the employee's beneficiary, executor or estate
for financial counseling covered services that are rendered during the
remainder of the covered calendar year.
Invoices for covered services performed prior to death, during a
salary continuation period, or before a termination date will be accepted
for payment to the extent covered by the account balance.
MISCELLANEOUS
Questions concerning application and interpretation of the Plan
may occur from time to time. The Company reserves the discretionary
right to decide questions and to interpret the Plan. The Company's
decisions on all questions and matters of application and
interpretation shall be binding on each participant.
This Plan replaces any prior policy or plan. The Plan is
discretionary and the Company may amend or terminate it at any time.
Payments under the Plan will be made by the participating subsidiary.
MOST COMMONLY ASKED QUESTIONS
Can I use any of my remaining balance in one year during the next year?
Only for bills that are received by the Company in January of the next
year, which relate to services given in the prior year. After January 31,
all fees will be applied to your current account balance.
HOW SHOULD THE COUNSELING SERVICE PREPARE THE INVOICE?
Invoices should be prepared as follows:
Billed To: Harrah's Operating Company, Inc.
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For Services Rendered To: (Participant's Name)
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Of: (Subsidiary's Name)
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WHAT SHOULD I DO WHEN I RECEIVE AN INVOICE?
You should review the charges, indicate your approval by initialing the
invoice, and mail the invoice within 10 days directly to:
Harrah's Memphis
Compensation Department
Harrah's Entertainment, Inc.
1023 Cherry Road
Memphis, TN 38117
HOW DO I KNOW WHEN THE INVOICE HAS BEEN PAID?
You will receive a confirmation memo from the Harrah's Memphis
Compensation Department after your invoice is processed. This memo will
include notification to your payroll manager to update your W-2 earnings by
the fees amount. You will also receive a statement of your account upon
each payment of fees.
IS THERE A DEADLINE FOR PROCESSING INVOICES?
Invoices for services rendered in the current year should be submitted
as early as possible to ensure that they will be properly reflected on your
W-2 earnings. You are encouraged to submit the invoice within 10 days of
receiving it in order to speed processing.
All invoices need to be processed by mid-December of a Plan year or
earlier in order for fees to be applied to your W-2 earnings for that year.
Invoices received after December 15 will not be processed until January.
The account balance will be left open during the month of January and will
be used to clear invoices or charges incurred in the previous year.
Payments in January of any year will be included in your W-2 earnings for
that year (not the previous year). After January, only charges incurred in
the current year will be accepted and will be charged against your
allowance for the current year. Unused account balances are not carried
over to the next year.
WHAT HAPPENS IF I EXCEED MY ACCOUNT BALANCE?
All fees exceeding individual account balances are paid by you.
Harrah's Entertainment, Inc.
Harrah's Memphis
Compensation Department
1023 Cherry Road
Memphis, TN 38117
901-762-8922
January 1996
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