Exhibit
10.81


 


HARRAH’S
ENTERTAINMENT, INC.


 


AMENDED
AND RESTATED 2004 EQUITY INCENTIVE AWARD PLAN


 


STOCK
OPTION AWARD AGREEMENT


 


Unless
otherwise defined herein , the terms defined in the Harrah’s Entertainment,
Inc. Amended and Restated 2004 Equity Incentive Award Plan (the “Plan”)
shall have the same defined meanings in this Stock Option Award Agreement (this
“Award Agreement”).


 


1.             Grant of Option. 
The Company hereby grants to you this Option to purchase the shares of
Common Stock (the “Shares”) set forth in the Notice of Grant, at the
exercise price per Share set forth in the Notice of Grant (the “Exercise
Price”).  The grant of this Option
pursuant to this Award Agreement is subject to the terms, definitions and
provisions of the Plan adopted by the Company and any regulations governing the
administration of the Plan, each of which is incorporated herein by reference.


 


2.             Exercise of Option.  This Option is exercisable as follows:


 


(a)           Right to Exercise.  For purposes of this Award Agreement, Shares
subject to this Option shall vest based on your continued employment or
directorship with the Company or any Subsidiary.  Except as provided in Section 3, this Option
may not be exercised after the Expiration Date of this Option as set forth in
the Notice of Grant (the “Expiration Date”).


 


(b)           Method of Exercise.  This Option shall be exercisable by you in
accordance with the procedures established by the Company.  The Company shall provide you instructions
for exercising this Option.


 


No Shares shall be issued pursuant to the exercise of
this Option unless such issuance and such exercise comply with all relevant
provisions of law and the requirements of any stock exchange upon which the
Shares may then be listed.  Assuming such
compliance, for income tax purposes the Shares shall be considered transferred
to you on the date on which this Option is exercised with respect to such
Shares.


 


3.             Termination of Relationship.


 


(a)           Death or Disability.  Unless otherwise stipulated in a Severance
Agreement, if you cease to be a member of the Board, employee, officer or
executive of the Company or any Subsidiary (a “Service Provider”) as a
result of death or Disability (as defined below),  fifty percent (50%) of the unvested portion
of this Option shall automatically vest on the date of such termination (the “Termination
Date”), and you may exercise this Option to the extent then vested as
follows:


 




	
  Years of Service with the 

  Company or a Subsidiary

  	
   

  	
  Allowable
  Period to Exercise 

  Options Following Death or 

  Disability

  
	
  Less than 10

  	
   

  	
  one year

  
	
  10 but less than 20

  	
   

  	
  two years

  
	
  20 or more

  	
   

  	
  three years

  






 


The
Allowable Period to Exercise as described above shall not extend beyond the
Expiration Date, except in the event of your death in which case the Expiration
Date shall be extended for a period not to exceed one year to accommodate any
remaining exercise period after your death. 
To the extent that you were not vested in this Option on the Termination
Date, or if you do not exercise this Option within the time specified herein,
this Option shall terminate.


 


For
purposes of this Award Agreement,  “Disability”
means a determination while you are a Service Provider or on an authorized
leave of absence that you are disabled under the Company’s long term disability
plan.


 

















 


Upon
your death,  the vested portion of this
Option may be exercised by your proper legal representative or your legal
beneficiary subject to the Company being properly assured and legally advised
of the rights of such persons.


 


(b)           Retirement.  If you cease to be a Service Provider as a
result of Retirement (as defined below), you may exercise this Option to the
extent then vested until the earlier of (i) the Expiration Date or (ii) two (2)
years following the Termination Date if you have at least ten but less than 20
years of service with the Company or a Subsidiary or three (3) years following
the Termination Date if you have 20 or more years of service with the Company
or a Subsidiary. To the extent that you were not vested in this Option on the
Termination Date, or if you do not exercise this Option within the time
specified herein, this Option shall terminate. 
For purposes of this Award Agreement, “Retirement” means you cease to be
a Service Provider at or after age 55 with at least 10 years of service with the
Company or a Subsidiary.


 


(c)           Other.  If you cease to be a Service Provider for any
reason other than death, Disability or Retirement, you may exercise this Option
to the extent then vested until the earlier of the Expiration Date or thirty
(30) days following the Termination Date. To the extent that you were not
vested in this Option on the Termination Date, or if you do not exercise this
Option within the time specified herein, this Option shall terminate.


 


4.             Change in Control.  Unless otherwise stipulated in a Severance
Agreement, you shall have certain rights upon a Change in Control of the
Company as described in the Plan.


 


5.             Covenants.


 


(a)           If you (i) voluntarily terminate your
employment and within one year thereafter, directly or indirectly, without the
prior written consent of the Company, go to work for or provide services or
assistance (as an employee, partner, investor, consultant or in any other
capacity) to a competing business in the United States, or (ii) directly or
indirectly solicit or recruit to a competing business any employee (salary
grade 20 and higher) of the Company or a Subsidiary during the one year period
following the Termination Date, then you shall be obligated to repay to the
Company in cash any aggregate spread (less taxes paid by you thereon) realized
upon any exercise of the stock option that occurred during the last three
months of employment or thereafter.


 


(b)           For purposes of this Section 5, a “competing
business” is defined as any business that competes with any business operated
or managed by the Company or a Subsidiary in the United States at the time of
the employee’s termination of employment. 
Competition does not include an investment of 1% or less in the public
stock or public debt of a competing business.


 


(c)           The Chief Executive Officer shall
have authority on behalf of the Company to determine whether the provisions of
this Section 5 have been violated.  The
Human Resources Committee shall make this determination in regard to the Chief
Executive Officer.


 


(d)           The Company shall have the right of
set-off to collect the spread from any amounts owed to you including deferred
compensation.


 


(e)           This Section 5 shall not apply to you
if you cease to be a Service Provider as a result of a termination of your
employment without Cause within 18 months following the date of a Change in
Control of the Company as described in Section 4.


 


6.             Governing Law. 
The validity and enforceability of this Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware without
regard to otherwise governing principles of conflicts of law.


 


7.             Nontransferability of Option.  This Option is not assignable or transferable
other than by will or the laws of descent and distribution and is exercisable
during your lifetime only by you.


 


8.             Award Agreement Subject to Plan.  The grant of this Option evidenced by the
Award Agreement is made pursuant to all of the provisions of the Plan and the
Award Agreement is intended and shall be interpreted in a manner to comply with
the Plan.


 

















 


9.             No Employment or Directorship Rights.  Nothing in the Plan or the Award Agreement
shall be confer upon you any right with respect to continuation of employment
or directorship by the Company or a Subsidiary and it shall not interfere in
any way with the Company’s or a Subsidiary’s right to terminate your employment
or directorship at any time.


 


10.           Successors and Assigns.  The terms of this Option shall be binding
upon your executors, administrators, heirs, successors and assigns.