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Exhibit 10.1    
    


As
of May 26, 2004 


Mr. Wallace
R. Barr

President and Chief Executive Officer

Caesars Entertainment, Inc.

3930 Howard Hughes Parkway

Las Vegas, NV 89109 


	Re:
	Employment
Agreement by and between Park Place Entertainment Corporation, a Delaware corporation, now known as Caesars Entertainment, Inc. (the "Company"), and Wallace R. Barr
(the "Executive"), dated as of November 19, 2002 ("the Employment Agreement"). 




Dear
Wally: 


The
Compensation Committee of the Company's Board of Directors has authorized certain technical amendment to the Employment Agreement as set forth in this letter. All capitalized terms have the
definitions assigned to them in the Employment Agreement. 


        1.     Subsection (h), Section 3 of the Employment Agreement is deleted in its entirety and is replaced with the
following:


        (h)    Stock Options and Stock Retention Units:    



        (i)    The
Executive has been granted non-statutory stock options (the "Incentive Options") under the Company's Stock Incentive Plan (the "Stock Plan") covering
1,450,000 shares of the Company's common stock. The exercise price of the shares subject to the Incentive Option shall be equal to the closing price of the Company's common shares on the New York
Stock Exchange on the date granted. The Incentive Options shall be exercisable for ten years after grant except as otherwise specifically provided in this Agreement. The Incentive Options shall vest
and become exercisable on a cumulative basis according to the following schedule if the Executive continues in the employment of the Company through the applicable vesting date(s): 



        (1)   25%
on the first anniversary of the grant date. 


        (2)   50%
on the second anniversary of the grant date. 


        (3)   75%
on the third anniversary of the grant date. 


        (4)   100%
on the fourth anniversary of the grant date. 





        The
Executive has been granted 635,000 Stock Retention Units, pursuant to the Company's Supplemental Retention Plan dated November 1, 2001. The Stock retention Units shall vest
and become exercisable on a cumulative basis according to the following schedule if the Executive continues in the employment of the Company through the applicable vesting dates: 




        (1)   20%
on the first anniversary of the grant date. 



        (2)   40%
on the second anniversary of the grant date. 


        (3)   70%
on the third anniversary of the grant date. 


        (4)   100%
on the fourth anniversary of the grant date. 





Executive
shall also be eligible to receive such other grants and awards available to senior executive officers of the Company (including grants of Incentive Options, Restricted Stock and Performance
Shares) in such amounts and subject to such terms as the Compensation Committee of the Board of Directors shall determine or as shall be provided in plans governing such grants or awards. 







 

        Notwithstanding
the foregoing paragraphs, all shares subject to the Incentive Options, the Stock Retention Units and any additional equity incentive vehicles shall vest and become
exercisable upon the occurrence of any of the following events (each of (A), (B), (C) and (D) below a "Triggering Event"): 





        (A)  termination
of the Executive's employment by the Company other than for Cause, as defined below; 


        (B)  termination
of the Executive's employment because of death or disability; 


        (C)  termination
of the Executive's employment by the Executive for Good Reason, as defined below; or 


        (D)  termination
of the Employment Period by the Executive or the Company pursuant to Section 1 of this Agreement after March 31, 2006. 


        (E)  termination
of Executive's employment by either the Executive or the Company for any or no reason (other than a termination for Cause by the Company) or upon mutual
agreement between the Executive and the Company following expiration of the Employment Period; this subsection (E) shall survive the expiration of this Employment Agreement. 





        (ii)   If
a Triggering Event occurs, any portion of the Incentive Options, the Stock Retention Units and any additional equity incentive vehicles that have become vested on or
before the date of such Event (including without limitation, any portion that becomes exercisable due to such Triggering Event and the Incentive Options) shall remain exercisable for the balance of
their term. 


        (iii)  The
Executive may assign the right to exercise the Incentive Options, the Stock Retention Units and any additional equity incentive vehicles to his spouse, children,
grandchi1dren or parents of a recipient, to trusts for the benefit of the Executive's immediate family, to a family partnership or limited liability company designated by the Executive in which the
Executive's family members are the only partners or shareholders or to an entity exempt from federal income tax under Section 501(C)(3) of the Code. 


        (iv)  All
Incentive Options and Stock Retention Units granted pursuant to the Prior Agreement shall continue to be governed by the Company's Stock Plan and the Supplemental
Retention Plan. 


        (v)   All
Incentive Options, Stock Retention Units and any additional equity incentive vehicles shall be subject to the terms of the Stock Plan and the Supplemental Retention
Plan in all respects not described herein but only to the extent not inconsistent with the terms of this Agreement, to the extent not inconsistent with the provisions of this Section 3(h). 




        2.     Subsection (i), Section 3 of the Employment Agreement is deleted in its entirety and is replaced with the
following:


        (i)    Temporary Living and Moving Expenses.    Executive acknowledges and agrees that he shall perform his duties
hereunder at the corporate headquarters of the Company in Las Vegas, NV and at the Company's east coast office located in Atlantic City, NJ, and such other locations as may be required by the nature
of Executive's responsibilities. It is understood that Executive maintains his primary residence in Las Vegas, NV and it is agreed that he shall not be required to relocate his primary residence to
any other location.    If the Executive decides, in his sole discretion, to relocate his residence from Las Vegas, Nevada, at any time with in twelve (12) months from the
termination of Executive's employment, the Company shall reimburse Executive for moving and home seeking and buying expenses incurred by Executive in accordance with its relocation policy for senior
level executives, including at least all brokerage commissions, transfer taxes and closing costs incurred in purchasing a new residence and/or selling the Executive's current residence. The Company
shall also 


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pay
Executive a tax equivalency bonus in an amount such that all federal, state and local income taxes (calculated at the highest marginal rate) which may be due by reason of any such expenses and the
tax equivalency bonus being included in Executive's taxable income will not reduce the net amount of reimbursement that Executive is to receive hereunder. 


        3.     Subsection (b), Section 13 of the Employment Agreement is deleted in its entirety and is replaced with the
following:



        (b)   All
notices and other communications under this Agreement shall be in writing and shall be given by hand to the other party or by registered or certified mail, return
receipt requested, postage prepaid, addressed as follows: 




If to the Executive:

9017 Opus Drive

Las Vegas, NV 89117 


If to the Company:

3930 Howard Hughes Parkway

Las Vegas. NY 89109

Attention: General Counsel 






or
to such other address as either party furnishes to the other in writing in accordance with this paragraph (b) of Section 13. Notices and communications shall be effective when
actually received by the addressee. 


All
other terms and conditions of the Employment Agreement consistent with the foregoing shall continue in full force and effect. Please indicate your agreement and acceptance of the foregoing
technical amendments by signing below. Please return a fully executed copy of this letter to the Company's General Counsel. 



	Very truly yours,	 	 
	

Steve Bell

Executive Vice President

Human Resources, West and Midsouth	
 	

 
	

Agreed and accepted as of May 26, 2004:	
 	

 
	

 Wallace R. Barr	
 	

 




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Exhibit 10.1