Document:

REGENCY REALTY CORPORATION
                           1993 LONG TERM OMNIBUS PLAN

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                           REGENCY REALTY CORPORATION
                           1993 LONG TERM OMNIBUS PLAN

                                Table of Contents

                                                                            Page

Article I.  Purpose..........................................................1
      1.1   Purpose..........................................................1
      1.2   Adoption.........................................................1

Article II. Definitions......................................................1
      2.1   Affiliate........................................................1
      2.2   Annual Retainer..................................................1
      2.3   Award............................................................1
      2.4   Award Agreement..................................................1
      2.5   Board............................................................1
      2.6   Code.............................................................1
      2.7   Committee........................................................1
      2.8   Company Matching Contribution....................................2
      2.9   DEU Option.......................................................2
      2.10  Dividend Equivalent Account......................................2
      2.11  Dividend Equivalent Units........................................2
      2.12  Exchange Act.....................................................2
      2.13  Fair Market Value................................................2
      2.14  Incentive Stock Option...........................................2
      2.15  Key Employee.....................................................2
      2.16  Net Dividend Rate................................................2
      2.17  Non-Employee Director............................................2
      2.18  Non-Qualified Stock Option.......................................3
      2.19  Option...........................................................3
      2.20  PRT Merger Agreement.............................................3
      2.21  Participant......................................................3
      2.22  Performance Award................................................3
      2.23  Plan.............................................................3
      2.24  Plan Year........................................................3
      2.25  Quarterly Period.................................................3
      2.26  Released Securities..............................................3
      2.27  Restricted Stock.................................................3
      2.28  Rule 16b-3.......................................................3
      2.29  Share Equivalents................................................3
      2.30  Shares...........................................................3
      2.31  Share Value......................................................3
      2.32  Stock Appreciation Rights........................................4
      2.33  Stock Purchase Award.............................................4

Article III.  Administration.................................................4
      3.1   Committee........................................................4
      3.2   Delegation of Authority..........................................4

Article IV. Shares...........................................................5
      4.1   Number of Shares Available.......................................5
      4.2   Shares Subject to Terminated Awards..............................5
      4.3   Adjustments......................................................5

Article V.  Participation....................................................6
      5.1   Eligible Participants............................................6

Article VI. Stock Options and Stock Appreciation Rights......................6
      6.1   Grant of Option..................................................6
      6.2   Award of Dividend Equivalent Units...............................7
      6.3   Stock Appreciation Rights........................................9
      6.4   Compliance With Code Section 162(m)..............................9

Article VII.  Restricted Stock...............................................9
      7.1   Restricted Stock Awards..........................................9

Article VIII. Stock Purchase Awards.........................................10
      8.1   Grant of Stock Purchase Award...................................10

Article IX. Performance Awards..............................................10
      9.1   Performance Awards..............................................10
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Article X.  Other Share-Based Awards........................................11
      10.1  Grant of Other Awards...........................................11
      10.2  Terms of Other Awards...........................................12

Article XI. Non-Employee Director Awards....................................12
      11.1  Automatic Grant of Non-Employee Director Option Awards..........12
      11.2  Payment of Annual Retainer......................................13

Article XII.  Non-Employee Director Share Purchase Rights...................14
      12.1  Share Purchase Rights...........................................14
      12.2  Company Matching Contribution...................................14
      12.3  Deferral Election...............................................15
      12.4  Termination of Participation....................................15
      12.5  Registration....................................................15

Article XIII. Terms Applicable to All Awards Granted Under the Plan.........15
      13.1  Award Agreement.................................................15
      13.2  No Consideration for Awards.....................................16
      13.3  Awards May Be Granted Separately or Together; No Limitations
            on Other Awards to Non-Employee Directors.......................16
      13.4  Limitations on Transfer of Awards...............................16
      13.5  Term............................................................16
      13.6  Taxes...........................................................16
      13.7  Rights and Status of Recipients.................................17
      13.8  Awards Not Includable for Benefit Purposes......................17
      13.9  Share Certificates; Representation by Key Employee Participants;
            Registration Requirements.......................................17
      13.10 Amendments to Awards............................................17
      13.11 Adjustment to Awards Upon Certain Acquisitions..................17
      13.12 Correction of Defects, Omissions, and Inconsistencies...........17

Article XIV.  Amendment and Termination.....................................18
      14.1  Amendment.......................................................18
      14.2  Termination.....................................................18

Article XV. General Provisions..............................................18
      15.1  Effective Date of the Plan......................................18
      15.2  Term of Plan....................................................18
      15.3  Governing Law...................................................18
      15.4  Unfunded Status of Plan.........................................18
      15.5  Headings........................................................19
      15.6  Severability....................................................19

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004.132335.5
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004.132335.5

                           REGENCY REALTY CORPORATION
                           1993 LONG TERM OMNIBUS PLAN

Article I.  Purpose

1.1  Purpose.  The  purpose of the  Regency  Realty  Corporation  1993 Long Term
Omnibus Plan, as amended (the "Plan"),  is to assist Regency Realty  Corporation
(the "Company"),  together with any successor  thereto,  and its Affiliates,  to
attract and retain highly competent individuals to serve as Key Employees and as
Non-Employee  Directors who will  contribute to the  Company's  success,  and to
motivate such  Non-Employee  Directors  and Key  Employees to achieve  long-term
objectives which will inure to the benefit of all shareholders of the Company.

1.2   Adoption.  The Plan has been  approved by the Board of  Directors of the
Company subject to the approval of the Company's shareholders.

Article II. Definitions

      For  purposes of this Plan,  capitalized  terms  shall have the  following
meanings:

2.1 Affiliate  means any entity of which shares (or other  ownership  interests)
having 50 percent or more of the voting power are owned or controlled,  directly
or  indirectly,  by the  Company.  "Affiliate"  also  includes,  other  than for
purposes of issuance of Incentive  Stock Option  Awards under the Plan,  Regency
Realty Group, Inc. and its wholly-owned subsidiaries.

2.2  Annual  Retainer  means the total  amount  each  Non-Employee  Director  is
entitled to receive as annual  director's  fees,  including  fees for service as
committee  member and chair,  for serving as a director of the Company,  and any
attendance  or  other  director  fees or  payments  for  other  services  of the
Non-Employee Director to the Company or its Affiliates, at the rate in effect on
the date an Award is granted to such  Non-Employee  Director pursuant to Article
XI.

2.3 Award means any  Non-Qualified  Stock  Options or Incentive  Stock  Options,
Stock Appreciation Rights, Restricted Stock, Stock Purchase Awards,  Performance
Awards,  or any other  award made under the terms of the Plan (other than Shares
acquired  by  Non-Employee  Directors  pursuant  to Article  XII),  or any Award
granted to a Non-Employee Director pursuant to Article XI.

2.4 Award Agreement means a written agreement,  contract, or other instrument or
document  specifically  setting  forth  the terms  and  conditions  of any Award
granted under the Plan.

2.5   Board means the Board of Directors of the Company.

2.6 Code means the Internal Revenue Code of 1986, as amended from time to time.

2.7  Committee  means a  committee  of the  Board  designated  by the  Board  to
administer the Plan and composed of not less than two directors.

2.8 Company Matching  Contribution  means the amount  contributed by the Company
pursuant to Section 12.2 based on the amount of a Non-Employee  Director's Total
Purchases.

2.9 DEU Option means an Option that also  carries the right to receive  Dividend
Equivalent Units.

2.10 Dividend  Equivalent Account means an account established for a Participant
pursuant to Section 6.2 to which there are credited  Dividend  Equivalent  Units
for any DEU Option held by the Participant.

2.11 Dividend  Equivalent  Units means the right to receive  additional  Shares,
based on dividends paid on Shares, which right may be awarded with respect to an
Option as described in Section 6.2.

2.12  Exchange Act means the Securities Exchange Act of 1934, as amended.

2.13 Fair Market Value means, with respect to any property  (including,  without
limitation,  any  Shares or other  securities),  the fair  market  value of such
property  determined by such methods or procedures as shall be established  from
time to time by the Committee.

2.14  Incentive  Stock Option means an Option  designated as an incentive  stock
option as defined in Code Section 422.
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2.15 Key  Employee  means any officer or other key employee of the Company or of
any Affiliate who is responsible for or contributes to the  management,  growth,
or  profitability  of the business of the Company or any Affiliate as determined
by the Committee.  For purposes of the grant of substitute  options  pursuant to
the PRT Merger Agreement,  each of Dennis H. Alberts, Jane E. Mody and Joshua M.
Brown shall be deemed to be a Key Employee  even though such person may not be a
Key Employee of the Company or of any Affiliate.  In connection with any merger,
acquisition or other business  combination to which the Company or any Affiliate
is a party, the Board is authorized to designate other persons who may be deemed
Key Employees for purposes of the Plan (other than the award of Incentive  Stock
Options)  where such persons are key  employees of another party to the business
combination  (or key employees of any affiliate of such party) but do not become
employees of the Company or any Affiliate  following  the business  combination,
provided that the Board  determines  that granting  substitute  Awards under the
Plan, in place of  outstanding  awards held by the  recipient  under one or more
plans  of  the   predecessor   employer,   constitutes   appropriate   severance
compensation.

2.16 Net Dividend Rate means as to any dividend record date the cash dividend in
question computed on an annualized  basis,  divided by the exercise price of the
DEU Option,  less the average  annual  dividend yield on the date the DEU Option
was awarded for the  companies  included in the Standard and Poors 500 Index (or
such other  similar  index  selected  by the  Committee),  as  determined  under
procedures established by the Committee.

2.17 Non-Employee Director means each member of the Board who is not an employee
of the Company or any Affiliate.

2.18  Non-Qualified  Stock Option means an Option that is not an Incentive Stock
Option as defined by Code Section 422.

2.19 Option means any option to purchase  Shares  granted  pursuant to the Plan,
including any reload feature which also may be awarded.

2.20 PRT Merger Agreement means the Agreement and Plan of Merger dated September
23, 1998 between the Company and Pacific Retail Trust.

2.21  Participant  shall mean any Key  Employee  (referred  to as a Key Employee
Participant)  or  any  Non-Employee  Director  (referred  to  as a  Non-Employee
Director Participant) receiving an Award under the Plan.

2.22  Performance  Award  means the right,  granted  pursuant  to Article IX, to
receive an Award,  payable in cash or Shares or a combination of both at the end
of a specified period for which performance goals have been established.

2.23 Plan means the Regency  Realty  Corporation  1993 Long Term Omnibus Plan as
set forth herein, and as the same may be amended from time to time.

2.24 Plan Year means the twelve month period ending on any December 31.

2.25 Quarterly Period means a consecutive  three month period  commencing on the
first day of each January, April, July and October.

2.26 Released  Securities mean Shares of Restricted  Stock with respect to which
all applicable restrictions have expired, lapsed, or been waived.

2.27 Restricted Stock means Shares subject to restrictions imposed in connection
with Awards granted under the Plan.

2.28 Rule 16b-3 means Rule 16b-3 as  promulgated  by the Securities and Exchange
Commission under Section 16 of the Exchange Act, as the same may be amended from
time to time, and any successor rule.

2.29 Share  Equivalents  means  securities of the Company or any Affiliate which
are  convertible  into or  exchangeable  for Shares,  including units of limited
partnership interest of Regency Centers, L.P. which are exchangeable for Shares,
but shall exclude  Options and any Shares of special common stock of the Company
counted as Shares.

2.30 Shares mean the shares of common stock of the  Company,  $.01 par value per
share,  and such other  securities  or property as may become  subject to Awards
pursuant to an adjustment made under Section 4.3 of the Plan.  Shares shall also
include shares of special common stock of the Company, $.01 par value per share,
except that if shares of special common stock are  convertible  into a different
number of shares of common stock,  such shares of special  common stock shall be
treated as Share Equivalents.

2.31 Share  Value means the value of a Share based on the average of the closing
prices of a Share, as determined by the Committee, during the Quarterly Period.

2.32 Stock  Appreciation  Rights mean awards granted in accordance  with Article
VI.

2.33 Stock  Purchase  Award means an Award,  granted in accordance  with Article
VIII, of the right to acquire Shares of the Company.
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Article III.......Administration

3.1  Committee.  The  Plan  will be  administered  by the  Committee;  provided,
however,  that if at any time  the  Committee  shall  not be in  existence,  the
functions of the Committee shall be exercised by the Board. Subject to the terms
of the Plan and  applicable  law,  the  Committee  shall  have  full  power  and
authority to: (i) designate Key Employees to be Participants; (ii) determine the
type or types of Awards to be granted  to Key  Employee  Participants  under the
Plan;  (iii) determine the number of Shares to be covered by (or with respect to
which  payments,  rights,  or other  matters are to be  calculated in connection
with) Awards granted to Key Employee Participants;  (iv) determine the terms and
conditions  of any Award  granted to a Key Employee  Participant;  (v) determine
whether,  to what extent,  and under what  circumstances  Awards  granted to Key
Employee  Participants  may be  settled  or  exercised  in cash,  Shares,  other
securities,  other  awards,  or  other  property,  or  canceled,  forfeited,  or
suspended to the extent permitted in Sections  13.10--13.12 of the Plan, and the
method  or  methods  by  which  Awards  may  be  settled,  exercised,  canceled,
forfeited, or suspended;  (vi) determine whether, to what extent, and under what
circumstances cash, Shares, other securities,  other Awards, other property, and
other  amounts  payable  with  respect  to an  Award  granted  to  Key  Employee
Participants  under the Plan shall be deferred  either  automatically  or at the
election of the holder thereof;  (vii) interpret and administer the Plan and any
instrument or agreement  relating to, or Award made under,  the Plan (including,
without limitation, any Award Agreement);  (viii) establish,  amend, suspend, or
waive  such  rules and  regulations  and  appoint  such  agents as it shall deem
appropriate for the proper  administration  of the Plan; and (ix) make any other
determination  and take any other action that the Committee  deems  necessary or
desirable  for  the  administration  of the  Plan.  Unless  otherwise  expressly
provided in the Plan, all  designations,  determinations,  interpretations,  and
other  decisions  under or with respect to the Plan or any Award shall be within
the  discretion of the  Committee,  may be made at any time, and shall be final,
conclusive,  and binding upon all persons, including the Company, any Affiliate,
any Key Employee Participant,  any Non-Employee Director Participant, any holder
or beneficiary of any Award, any shareholder, and any employee of the Company or
of any Affiliate.  Option Awards to Non-Employee Directors under Section 11.1 of
the Plan shall be  automatic  and the amount and terms of such  Awards  shall be
determined as provided in Article XI of the Plan.

      The Committee shall solicit and consider the  recommendations of the Chief
Executive  Officer of the  Company  with  regard to,  among  other  things,  the
designation of Key Employee Participants, the type of Awards to be granted under
the Plan to such Key  Employee  Participants  and the  number  of  Shares  to be
subject thereto, and the other terms and conditions of such Awards.

3.2  Delegation of  Authority.  To the extent  permitted by applicable  law, the
Board may, in its discretion,  delegate to another  committee of the Board or to
one  or  more  officers  of  the  Company  any  or  all  of  the  authority  and
responsibility  of  the  Committee  with  respect  to  awards  to  Key  Employee
Participants other than those who are subject to the provisions of Section 16 of
the Exchange Act at the time any such delegated  authority or  responsibility is
exercised. To the extent that the Board has delegated to such other committee or
one or more officers the  authority and  responsibility  of the  Committee,  all
references to the Committee  herein shall include such other committee or one or
more  officers.  In addition,  the  Committee  may appoint an  administrator  to
administer the Non-Employee Director Share purchase program set forth in Article
XII  and  assist  the  Committee  with  the  related   recordkeeping  and  other
ministerial type functions.

Article IV. Shares

4.1 Number of Shares Available. The maximum number of Shares which may be issued
under the Plan is the lesser of (1) 8,520,000  Shares,  or (2) 12 percent of all
Shares  and Share  Equivalents  then  outstanding,  except  that this 12 percent
limitation  shall not  invalidate  any Awards  made  prior to a decrease  in the
number of outstanding  Shares or Share  Equivalents even though such Awards have
resulted  or may  result in Shares  constituting  more  than 12  percent  of the
outstanding  Shares and Share Equivalents being available for issuance under the
Plan.  Shares  available  under the Plan which are not awarded in one particular
year may be awarded  in  subsequent  years.  Any and all Shares may be issued in
respect of any of the types of Awards.  The Shares to be offered  under the Plan
may be authorized and unissued Shares or treasury  Shares.  The number of Shares
covered by an Award  under the Plan,  or to which such Award  relates,  shall be
counted  on the  date of  grant of such  Award  against  the  number  of  Shares
available for granting Awards under the Plan.

4.2  Shares  Subject  to  Terminated  Awards.  The  (i)  Shares  covered  by any
unexercised  portions of terminated  Options,  (ii) Shares forfeited as provided
under the Plan,  and (iii)  Shares  subject  to any Awards  which are  otherwise
surrendered  by the  Participant  and as to  which  Shares  no  Participant  has
received any payment or other  benefit of ownership  with respect  thereto,  may
again be subject to new Awards under the Plan.  In the event the purchase  price
of an Option is paid in whole or in part  through the  delivery  of Shares,  the
gross number of Shares  issuable in  connection  with the exercise of the Option
shall not again be available for the grant of Awards under the Plan. Shares used
to  measure  the  amount  payable  to a  Participant  in  respect  of an  earned
Performance Award shall not again be available for the grant of Awards under the
Plan.  Shares issued in payment of Performance  Awards which are  denominated in
cash  amounts  shall not again be  available  for the grant of Awards  under the
Plan.
<PAGE>

4.3  Adjustments.  In the event  that the  Committee  shall  determine  that any
dividend  or other  distribution  (whether  in the form of cash,  Shares,  other
securities,  or other property),  recapitalization,  stock split,  reverse stock
split, reorganization,  merger, consolidation,  split-up, spin-off, combination,
repurchase, or exchange of securities of the Company, or other similar corporate
transaction or event affects the Shares such that an adjustment is determined by
the Committee to be appropriate  in order to prevent  dilution or enlargement of
the benefits or potential benefits intended to be made available under the Plan,
then the Committee may, in such manner as it may deem  equitable,  adjust any or
all of (i)  the  number  and  type of  Shares  subject  to the  Plan  and  which
thereafter  may be issued  under the Plan,  (ii) the  number  and type of Shares
subject to outstanding Awards, (iii) the grant, purchase, or exercise price with
respect to any  Award,  and (iv) the  number  and type of  outstanding  Dividend
Equivalent Units, or, if deemed appropriate,  make provisions for a cash payment
to the holder of an outstanding  Award;  provided,  however,  in each case, that
with respect to Awards of Incentive  Stock Options no such  adjustment  shall be
authorized  to the extent  that such  authority  would cause the Plan to violate
Section 422(b)(1) of the Code or any successor  provision thereto;  and provided
further,  however,  that the number of Shares  subject  to any Award  payable or
denominated  in Shares  shall  always  be a whole  number.  Notwithstanding  the
foregoing,  Nonqualified  Stock  Option  Awards  subject to grant or  previously
granted  to  Non-Employee  Directors  under  the Plan at the  time of any  event
described in the preceding  sentence shall be subject to only such adjustment as
shall be necessary to maintain  the  proportionate  interest of the optionee and
preserve, without exceeding, the value of such Option Awards.

Article V.  Participation

5.1 Eligible Participants.  Any Key Employee, including any executive officer or
employee-director  of the Company or of any  Affiliate,  shall be eligible to be
designated  a Key  Employee  Participant.  Key  Employees  who hold  unexercised
options  under the Pacific  Retail  Trust 1996 Share  Incentive  Plan and became
employees  of the  Company  or any of its  Affiliates  as a result of the merger
shall receive  substitute  options pursuant to and on the terms set forth in the
PRT Merger  Agreement.  All  Non-Employee  Directors shall be  Participants  and
receive  Awards as provided in Article XI of the Plan (the  provisions  of which
are  automatic  and  non-discretionary  in  operation),  shall have the right to
receive  Options under  Article VI, and shall have the right to purchase  Shares
from the Company pursuant to Article XII.

Article VI. Stock Options and Stock Appreciation Rights

6.1 Grant of Option.  The Committee is hereby authorized to grant Options to Key
Employee  Participants  as set forth  below and with such  additional  terms and
conditions,  in either case not inconsistent with the provisions of the Plan, as
the Committee shall determine.  The Board is hereby  authorized to grant Options
to  Non-Employee  Directors  as set forth below with such  additional  terms and
conditions,  in either case not inconsistent with the provisions of the Plan, as
the Board shall determine,  and any reference to the Committee in this Article V
shall mean the Board  with  reference  to any  Options  granted to  Non-Employee
Directors under this Article V.

(a) Exercise  Price.  The exercise price per Share  purchasable  under an Option
shall be  determined by the Committee at the time of grant but shall be not less
than  100% of the Fair  Market  Value of the  Share on the date of grant of such
Option, which shall not be earlier than the date on which the Committee approves
such grant.

(b)   Option Term.  The term of each Option  shall be fixed by the  Committee,
but no Incentive  Stock Option shall be exercisable  more than ten years after
the date of grant.

(c)  Exercisability  and Method of  Exercise.  An Option  Award may contain such
performance  targets and waiting periods,  and shall become  exercisable in such
manner and within such period or periods and in such  installments or otherwise,
as shall be  determined  by the  Committee at the time of grant.  The  Committee
shall also  determine  the  method or  methods by which,  and the form or forms,
including,  without limitation, cash, Shares, other securities, other Awards, or
other property,  or any combination  thereof,  having a Fair Market Value on the
exercise  date equal to the relevant  exercise  price,  in which  payment of the
exercise  price  with  respect  to any Option may be made or deemed to have been
made  (including  payment in accordance with a cashless  exercise  program under
which, if so instructed by the Participant, Shares may be issued directly to the
Participant's  broker or dealer upon receipt of the purchase  price in cash from
the broker or dealer).  No Shares  shall be issued  until  payment,  as provided
herein, therefor has been made. A Participant shall generally have the rights to
dividends or other rights of a shareholder with respect to Shares subject to the
Option when the  Participant  has given written  notice of exercise and has paid
for such Shares as provided herein. Notwithstanding the foregoing, if payment in
full or in part has been made in the form of  Restricted  Stock,  an  equivalent
number of Shares  issued on exercise of the Option  shall be subject to the same
restrictions and conditions for the remainder of the Award Period  applicable to
the  Restricted  Stock  surrendered  therefor.  In the case of  Incentive  Stock
Options the right to make  payment of the  purchase  price in the form of Shares
may be authorized only at the time of grant.
<PAGE>

(d) Incentive Stock Options.  The maximum number of Incentive  Options which may
be awarded under the Plan is 8,520,000.  The terms of any Incentive Stock Option
granted under the Plan shall comply in all respects with the  provisions of Code
Section 422, or any successor provision thereto, and any regulations promulgated
thereunder.

(e) Reload Feature.  The Committee  shall have the authority to specify,  at the
time of grant or, with respect to Non-qualified  Stock Options,  at or after the
time of grant, that a Key Employee  Participant's  Options, in part or in whole,
shall include a "reload  feature." The reload  feature is a provision  which the
Committee  may,  but is not required  to,  include in any Option  granted to Key
Employee  Participants  under this Plan to the  effect  that at such time as the
original Option is exercised,  the optionee shall automatically be granted a new
Option  pursuant  hereto to  purchase a number of Shares  equal to the number of
Shares utilized by the optionee to pay the option exercise price on the original
option.  A reload  Option shall have an exercise  price equal to the Fair Market
Value of the  Shares on the date it is  granted  and shall  expire on the stated
expiration date of the original Option. A reload Option shall contain such other
terms and conditions as the Committee, in its discretion, deems to be desirable.

6.2 Award of Dividend  Equivalent  Units.  If so specified by the  Committee,  a
Participant who is awarded an Option under the Plan shall also receive  Dividend
Equivalent  Units with respect to such Option ("DEU  Option"),  as follows,  and
each Non-Employee Director receiving an Option under Section 11.1(a) at any time
after the 1999 annual  meeting  shall  receive  Dividend  Equivalent  Units with
respect to such DEU Option, as follows:

(a) With  respect to the number of Shares  subject to a DEU  Option,  a notional
number of shares shall be credited to an account ("Dividend Equivalent Account")
to be  established  for the  Participant,  which  account  shall be unfunded and
unsecured  and shall be held with the general  assets of the Company.  Each such
credit shall be recorded as of the first  business  day of the calendar  quarter
immediately  following  each record date for a cash dividend  declared on Shares
for any DEU Option which is  outstanding on such record date. The notional share
amounts (such amounts,  together with any amounts  credited  pursuant to Section
6.2(b), the "Dividend Equivalent Units") credited to the Participant's  Dividend
Equivalent  Account  shall be the  aggregate  number of  Shares,  rounded to the
nearest whole Share, derived by (1) multiplying (x) the Net Dividend Rate by (y)
the exercise price of the DEU Option,  (2) dividing the product  thereof by four
(or whatever other  multiplier  was used in arriving at the annualized  dividend
rate), (3) multiplying the resultant quotient by the number of Shares subject to
the  unexercised  portion of the DEU Option as of the dividend  record date, and
(4) dividing the product  thereof by the average closing price of a Share during
the immediately  preceding  calendar quarter on the principal  exchange on which
the Shares  are  traded.  For  example,  assume  that (1) on January 1, 2000 the
Committee  awards a DEU  Option to a Key  Employee  for 1,000  Shares  having an
exercise  price of $25 per Share,  (2) on January 1, 2000,  the  average  annual
yield of the  Standard  and Poors 500 Index is 1.5%,  (3) the Board  declares  a
quarterly  dividend of $.50 for  shareholders of record as of February 10, 2000,
(4) the  Participant  has not  exercised the DEU Option as of February 10, 2000,
and (5) the  average  closing  price for Shares on the New York  Stock  Exchange
during the calendar  quarter ending March 31, 2000 is $26. The Net Dividend Rate
for the DEU Option is 4 times .$50 divided by $25,  i.e.,  8.0%,  less 1.5%,  or
6.5%. As of April 3, 2000, the first business day of the next calendar  quarter,
there would be credited to the  Participant's  Dividend  Equivalent  Account the
number of Dividend Equivalent Units as follows: First, 6.5% times $25 divided by
4 times 1,000 Shares equals $406.25.  Next, $406.25 divided by $26 equals 15.625
Shares, or 16 Dividend Equivalent Units, rounded to the nearest whole number.

(b) Dividend  Equivalent  Units shall be credited for each  Dividend  Equivalent
Unit on the same basis as on the Shares  subject to the  unexercised  portion of
the DEU  Option,  except that the actual  dividend  rate per Share shall be used
instead of the Net Dividend Rate.

(c) Unless  determined  otherwise by the  Committee  with respect to DEU Options
awarded  to  Key  Employees,   Dividend  Equivalent  Units  (including  Dividend
Equivalent Units paid on DEU Options issued to Non-Employee Director pursuant to
Section 11.1(a)) shall be subject to the following terms and conditions:

(1)   Dividend  Equivalent  Units  shall  vest in  accordance  with the  vesting
      schedule  applicable  to the DEU Option with respect to which the Dividend
      Equivalent Unit was awarded.

(2)   All Dividend  Equivalent Units which are not vested upon the Participant's
      date of  termination  of  employment  (or  termination  as a  Non-Employee
      Director, as the case may be) shall be forfeited.

(3)   At the election of the Participant,  any vested Dividend  Equivalent Units
      may be withdrawn from the Participant's  Dividend Equivalent Account, upon
      delivery of written  notice to the Committee  stating the number of vested
      Dividend  Equivalent  Units being  withdrawn.  As promptly as  practicable
      after receipt of written notice of withdrawal,  the Committee  shall cause
      one  whole  Share  to be  issued  for  each  Dividend  Equivalent  Unit so
      withdrawn.  Any fractional  Dividend  Equivalent  Units withdrawn from the
      Participant's  Dividend Equivalent Account shall be settled in cash, based
      on the  Fair  Market  Value  of a  Share  on the  date  of the  notice  of
      withdrawal.  The Participant  shall be deemed to have withdrawn all vested
      Dividend  Equivalent  Units on the date of  termination  of employment (or
      termination as a Non-Employee Director, as the case may be.
<PAGE>

(d) The Committee shall have sole and absolute authority to award other types of
Dividend  Equivalent  Units to Key Employees from time to time, and the Board of
Directors  shall  have  sole and  absolute  authority  to award  other  types of
Dividend  Equivalent  Units to  Non-Employee  Directors  from  time to time.  In
addition,  the  Committee  shall have sole and absolute  authority to revise the
procedure  for  determining  the value of Shares,  the Net Dividend Rate and the
crediting date for Dividend Equivalent Units if the Committee determines, in its
sole and  absolute  discretion,  that  such  revised  procedure  simplifies  the
administration  of Dividend  Equivalent Units or more fairly reflects the intent
of this  Section  6.2 and the  Committee  determines  that  the  impact  of such
revision  is not  significant  in terms of the amount to be credited to Dividend
Equivalent Accounts.

6.3 Stock Appreciation Rights. The Committee is hereby authorized to grant Stock
Appreciation  Rights to Key Employee  Participants.  Stock  Appreciation  Rights
granted  in  tandem   with   Incentive   Stock   Options  may  only  be  granted
simultaneously  with the grant of the  related  Incentive  Stock  Option to such
Participant. Subject to the terms of the Plan, the grant price, term, methods of
exercise,  methods of settlement  (including whether Stock  Appreciation  Rights
will be  settled in cash,  Shares,  other  securities,  other  Awards,  or other
property, or any combination thereof), and any other terms and conditions of any
Stock Appreciation Right shall be as determined by the Committee.  The Committee
may  impose  such  conditions  or  restrictions  on the  exercise  of any  Stock
Appreciation Right as it may deem appropriate.

6.4 Compliance With Code Section 162(m).  Notwithstanding any other provision of
the Plan, the maximum number of Options and Stock  Appreciation  Rights,  in the
aggregate,  which may be  awarded to any  individual  Key  Employee  Participant
during any calendar year under the Plan is 400,000 Shares and/or Rights.

Article VII.......Restricted Stock

7.1 Restricted Stock Awards.  The Committee is hereby authorized to grant Awards
of  Restricted  Stock to Key Employee  Participants  as set forth below and with
such additional terms and conditions,  in either case not inconsistent  with the
provisions of the Plan, as the Committee shall determine. Non-Employee Directors
shall not be eligible to be granted Restricted Stock under this Article VII.

(a)  Restrictions.  The  Committee  may  grant to any Key  Employee  an Award of
Restricted  Stock in such  number,  and  subject  to such  terms and  conditions
relating to forfeitability  (whether based on performance standards,  periods of
service  or  otherwise)  and  relating  to  restrictions   (including,   without
limitation,  any limitation on the right to vote a share of Restricted  Stock or
the  right  to  receive  any  dividend  or  other  right  or  property),   which
restrictions  may lapse  separately or in combination at such time or times,  in
such installments or otherwise, as the Committee may deem appropriate.

(b) Registration.  Any Restricted Stock granted under the Plan to a Key Employee
Participant  may  be  evidenced  in  such  manner  as  the  Committee  may  deem
appropriate,  including, without limitation, book-entry registration or issuance
of a stock  certificate or certificates.  In the event any stock  certificate is
issued in respect of Shares of Restricted  Stock granted under the Plan to a Key
Employee  Participant,  such certificate  shall be registered in the name of the
employee and shall bear an  appropriate  legend (as determined by the Committee)
referring  to  the  terms,  conditions,  and  restrictions  applicable  to  such
Restricted Stock.

(c) Shareholder Rights.  Unless otherwise provided by an Award Agreement,  a Key
Employee  Participant  shall become a shareholder of the Company with respect to
all Shares subject to the Award  Agreement and shall have all of the rights of a
shareholder,  including,  but not  limited to, the right to vote such Shares and
the right to receive  dividends (or dividend  equivalents);  provided,  however,
that any Shares  distributed  as a dividend  or  otherwise  with  respect to any
Restricted  Stock as to which  the  restrictions  have not yet  lapsed  shall be
subject to the same  restrictions,  and  evidenced in the same  manner,  as such
Restricted  Stock and shall be evidenced  in the same manner as such  Restricted
Stock.

(d) Payment of Restricted Stock. At the end of the applicable restriction period
relating to Restricted Stock granted to a Key Employee Participant,  one or more
stock certificates for the appropriate  number of Shares,  free of restrictions,
shall  be  delivered  to the  employee,  or,  if  the  employee  received  stock
certificates representing the Restricted Stock at the time of grant, the legends
placed on such certificates shall be removed.

(e)  Forfeiture.   Except  as  otherwise  determined  by  the  Committee,   upon
termination  of  employment  of a Key Employee  (as  determined  under  criteria
established by the  Committee) for any reason during the applicable  restriction
period,  all Shares of Restricted  Stock still subject to  restriction  shall be
forfeited by the employee and reacquired by the Company; provided, however, that
the Committee  may, when it finds that a waiver would be in the interests of the
Company,  waive  in  whole or in part  any or all  remaining  restrictions  with
respect to Shares of Restricted Stock held by a Key Employee Participant.
<PAGE>

Article VIII......Stock Purchase Awards

8.1 Grant of Stock Purchase Award.  The Committee is hereby  authorized to grant
Stock Purchase  Awards to Key Employee  Participants as set forth below and with
such additional terms and conditions,  in either case not inconsistent  with the
provisions of the Plan, as the Committee shall determine. Non-Employee Directors
shall not be eligible to be granted Stock Purchase Awards under the Plan.

(a)  Issuance.  A Stock  Purchase  Award shall  consist of the right to purchase
Shares of the Company and to pay for such Shares with a stock purchase loan, the
terms of which  shall be as set  forth in the  Award  Agreement  and  which  may
include  forgiveness by the Company of a portion of such  indebtedness over such
time,  or pursuant to such  schedule,  as is determined by the Committee and set
forth in such Award Agreement.  The Committee may, when it finds that additional
forgiveness by the Company of indebtedness under a stock purchase loan is in the
interest of the Company,  forgive any or all remaining indebtedness with respect
to Shares  covered by such Award  Agreement  whether or not such  forgiveness is
specifically provided for in such Award Agreement.

(b) Tax  Loan.  The  Committee  may also  provide a "tax  loan" to Key  Employee
Participants equal to a percentage of any federal,  state, and local taxes which
such Participant  incurs as a result of the forgiveness of the loan described in
(a), above.

Article IX. Performance Awards

9.1 Performance  Awards. The Committee is hereby authorized to grant Performance
Awards to Key Employee  Participants as set forth below and with such additional
terms and conditions, in either case not inconsistent with the provisions of the
Plan, as the Committee  shall  determine.  Non-Employee  Directors  shall not be
eligible to be granted Performance Awards under the Plan.

(a)  Issuance.  A  Performance  Award  shall  consist  of the right to receive a
payment  (measured by (i) the Fair Market Value of a specified  number of Shares
at the end of the Award  period or (ii) the increase in the Fair Market Value of
a  specified  number of Shares  during  the Award  period or (iii) a fixed  cash
amount  payable at the end of the Award  period)  contingent  upon the extent to
which certain  predetermined  performance  targets have been met during an Award
period.

(b)  Performance   Targets.  The  performance  targets  may  include  individual
performance standards or specified levels of funds from operations, earnings per
share,  return on  investment,  return on  shareholder  equity and/or such other
goals related to the  performance  of the Company as may be  established  by the
Committee in its sole discretion.  The Committee,  in its sole  discretion,  but
only  under  circumstances  when  events  or  transactions  occur to  cause  the
performance targets to be an inappropriate  measure of achievement as determined
by the Committee, may change the performance targets for any Award period at any
time prior to the final determination of the Award.

(c)  Earning  Performance  Awards.  The  Committee  at the date of  grant  shall
prescribe a formula to determine the percentage of the  Performance  Award to be
earned based upon the degree of attainment of performance targets. The degree of
attainment of performance  targets shall be determined as of the last day of the
Award period. In the event the minimum  performance  targets  established by the
Committee are not achieved, no payment shall be made to the Participant.

(d) Payment of Earned Performance Awards.  Payments of earned Performance Awards
shall be made in cash or Shares  (based on the Fair  Market  Value of a Share on
the last day of the Award  period),  or a combination  of cash and Shares at the
sole  discretion of the Committee.  Payment  normally will be made as soon as is
practicable  following the end of an Award period; the Committee,  however,  may
permit  deferral  of the  payment  of all or a portion  of a  Performance  Award
payable in cash upon the request of the  Participant  timely made in  accordance
with rules prescribed by the Committee.  Deferred amounts may generate  earnings
for the Participant under the conditions of a separate agreement approved by the
Committee  and  executed  by  the  Participant.   The  Committee,  in  its  sole
discretion,  may define in the Award Agreement such other  conditions of payment
of  earned  Performance  Awards as it may deem  desirable  in  carrying  out the
purposes of the Plan.

Article X.  Other Share-Based Awards

10.1  Grant  of  Other  Awards.  Other  Awards,  valued  in  whole or in part by
reference to, or otherwise  based on,  Shares may be granted  either alone or in
addition to or in conjunction  with other Awards under the Plan by the Committee
to Key Employee Participants or by the Board to Non-Employee Directors.  Subject
to the  provisions  of the Plan,  the  Committee (or the Board in the case of an
Award to a Non-Employee  Director) shall have authority to determine the persons
to whom and the time or times at which such Awards shall be made,  the number of
Shares to be granted  pursuant to such Awards,  and all other  conditions of the
Awards.  Any such Award shall be confirmed by an Award Agreement executed by the
Committee  and  the  Participant,  which  Award  Agreement  shall  contain  such
provisions  as the  Committee  (or  the  Board  in the  case  of an  Award  to a
Non-Employee  Director)  determines to be necessary or  appropriate to carry out
the intent of this Plan with respect to such Award.
<PAGE>

10.2 Terms of Other Awards. In addition to the terms and conditions specified in
the Award  Agreement,  Shares issued as a bonus pursuant to this Article X shall
be issued for such  consideration  as the Committee (or the Board in the case of
an Award to a Non-Employee  Director) shall  determine,  in its sole discretion,
but purchase  rights shall be priced at 100% of Fair Market Value on the date of
the Award.

Article XI. Non-Employee Director Awards

11.1  Automatic Grant of Non-Employee Director Option Awards.

(a) Periodic  Option Awards.  Each person serving as a Non-Employee  Director of
the Company on December  31,  1994,  and  December 31 of each  succeeding  year,
through and including December 31, 1998, shall, as of each such date, be granted
a  Nonqualified  Stock Option Award  consisting  of an option to purchase  1,000
Shares. Each person serving as a Non-Employee Director immediately following any
annual meeting of  shareholders  of the Company,  beginning with the 1999 annual
meeting,  and who is not  initially  elected to  membership  on the Board at the
annual meeting in question shall be granted on the date of such annual meeting a
Nonqualified Stock Option Award consisting of an option to purchase 5,000 Shares
and the right to receive Dividend  Equivalent  Units with respect  thereto.  The
exercise price for such Options shall be the greater of the Fair Market Value of
the Shares on the date of such grant or the  average  of the  closing  prices of
Shares,  as determined by the  Committee,  on the 20 business days preceding the
date of such  grant.  The  Dividend  Equivalent  Units  shall have the terms and
conditions set forth in Section 6.2.

(b) Initial Option Awards.  Upon initial election to membership on the Board, at
any time prior to January 1, 1999, each Non-Employee  Director joining the Board
for the first time shall receive a Nonqualified Stock Option Award consisting of
an Option to purchase 2,000 Shares,  with an exercise price equal to the greater
of the Fair Market  Value of the Shares on the date of such grant or the average
trading price of Shares, as determined by the Committee, on the 20 business days
preceding the date of such grant.  Non-Employee Directors who (1) were directors
of Pacific Retail Trust immediately prior to the effective time of the merger of
Pacific Retail Trust into the Company,  (2) hold  unexercised  options under the
Pacific  Retail Trust 1996 Share  Incentive  Plan,  and (3) become  non-employee
directors of the Company,  shall receive  substitute  options pursuant to and on
the terms set forth in the Merger Agreement.

(c)  Restrictions.   A  Non-Employee  Director  must  serve  continuously  as  a
Non-Employee  Director of the Company for a period of twelve  consecutive months
from the date of grant of an Option Award under this Article XI before he or she
can exercise any part of such Award.  On and after the first  anniversary of the
date of grant,  the  Non-Employee  Director may exercise an Award  granted under
this Article XI prior to the 1999 annual meeting of shareholders with respect to
any or all Shares covered  thereby,  at any time or from time to time before the
expiration of the stated term of the Award. Awards granted under this Article XI
after  the  1999  annual  meeting  of  shareholders  become  exercisable  in 25%
increments  on  each  anniversary  date  of  grant,  beginning  with  the  first
anniversary date and ending on the fourth  anniversary  date. Each Award granted
under this Article XI shall expire ten years (10) from the date of grant.

(d)   Termination.

(1)   If a Non-Employee Director's service with the Company terminates by reason
      of death or disability  (within the meaning of Code Section  22(a)(3)) any
      Option Award granted under this Article XI to such  Non-Employee  Director
      prior to the 1999 annual  meeting of  shareholders  may be exercised for a
      period of two (2)  years  from the date of such  termination  or until the
      expiration of the Award,  whichever is shorter, to the extent to which the
      individual  would on the date of exercise  have been  entitled to exercise
      the Award if such  individual  had  continued  to serve as a  Non-Employee
      Director. If a Non-Employee Director's service with the Company terminates
      other than by reason of death or disability,  under mutually  satisfactory
      conditions,  any such  Award  held by such  Non-Employee  Director  may be
      exercised for a period of two (2) years from the date of such termination,
      or until the  expiration  of the stated  term of the Award,  whichever  is
      shorter,  to the  extent  to  which  the  individual  would on the date of
      exercise have been entitled to exercise the Award if such  individual  had
      continued to serve as a Non-Employee Director.

(2)   If a Non Employee Director's service with the Company terminates by reason
      of death,  disability  (within the meaning of Code  Section  22(a)(3))  or
      involuntary  termination  for any other  reason,  any Option Award granted
      under this Article XI to such Non-Employee  Director after the 1999 annual
      meeting  shall  vest in full  upon  the  date  of  termination  and may be
      exercised for a period of two (2) years from the date of such termination,
      or until expiration of the Award, whichever is shorter.

(e)   Other   Provisions.   All   applicable   provisions   of  the  Plan  not
inconsistent  with this Section 11.1 shall apply to Option  Awards  granted to
Non-Employee Directors.
<PAGE>

11.2  Payment of Annual Retainer.

(a) Payment in Shares.  During the term of this Plan, each Non-Employee Director
shall receive his or her Annual Retainer,  in the form of quarterly  payments in
arrears,  in the form of Shares,  unless  the  Non-Employee  Director  elects to
receive such payment in cash in accordance with paragraph (b), below.  The total
number  of  Shares to be issued  to a  Non-Employee  Director  pursuant  to this
Section 11.2 shall be  determined  by dividing  the dollar  amount of the Annual
Retainer due for the payment  period  (which shall be prorated in the event that
the  Non-Employee  Director  serves  for less than a full  quarter  based on the
number of days of service) by the  average of the closing  prices of Shares,  as
determined by the Committee, during the quarter constituting the payment period.
In no event shall the Company be required to issue fractional  Shares.  Whenever
under the  terms of this  Section  the  issuance  of a  fractional  Share  would
otherwise  be required,  an amount in lieu  thereof  shall be paid in cash based
upon the Fair Market  Value of such  fractional  share.  The Shares  issuable to
Non-Employee  Directors hereunder shall be issued and any remaining cash portion
of the  Annual  Retainer  shall be paid on the first  business  day  immediately
following the payment period.  Shares issued pursuant to this Section 11.2 shall
not be  transferable  unless  registered  under the  Securities  Act of 1933, as
amended,  or in the opinion of counsel to the Company,  such registration is not
required.

(b) Optional Payment in Cash. Non-Employee Directors who would otherwise receive
payment of their Annual Retainer in Shares may make a written  election prior to
the payment  date,  in the manner and form  prescribed  for this  purpose by the
Committee, to receive payment in cash.

Article XII.......Non-Employee Director Share Purchase Rights

12.1  Share Purchase Rights.

(a) Annual Purchases.  Each Plan Year each Non-Employee  Director shall have the
right to purchase from the Company such number of Shares whose  aggregate  Share
Value  does  not  exceed  $20,000.  Subject  to the  limitations  in  the  Plan,
Non-Employee  Directors  may  exercise  their  rights to  purchase  Shares  each
Quarterly  Period by  completing  an  application  on a form  prescribed  by the
Committee.  The  application  must be  submitted  to the  Committee  by the last
business day of a Quarterly Period and accompanied by payment in full in cash or
its  equivalent  for the  aggregate  Share Value of Shares to be purchased  (the
"Purchase  Price").  The number of Shares to be purchased  will be determined by
dividing  the  Purchase  Price by the Share  Value of a Share for the  Quarterly
Period.   The  Committee  shall  establish  and  maintain  a  separate   account
("Account") for each participating  Non-Employee  Director. The number of Shares
purchased  during the  Quarterly  Period will be  credited  to the  Non-Employee
Directors'  Accounts.  No interest  will be paid on funds held by the  Committee
pending determination of the number of Shares to be purchased during a Quarterly
Period.

(b) Cash  Dividends.  All cash dividends paid by the Company on Shares held in a
Non-Employee  Director's  Account will be paid in cash,  unless the Non-Employee
Director  elects to have any such cash  dividends  automatically  reinvested  in
additional  Shares and  credited to his account.  The election  shall be made in
writing  in  accordance  with such rules and  procedures  as the  Committee  may
determine.

(c) Shareholder  Rights. A Non-Employee  Director will become a shareholder with
respect to all Shares  credited  to his Account and shall have all of the rights
of a shareholder,  including but not limited to the right to vote Shares and the
right to receive dividends.

12.2  Company Matching Contribution.

(a) Amount of Match.  The Company will  contribute to a Non-Employee  Director's
Account a Company Matching  Contribution equal to up to 50% of the amount of the
Non-Employee  Director's  Total  Purchases (as defined below) during a Quarterly
Period,  subject to a maximum Company Matching  Contribution of $10,000 per Plan
Year. The Company  Matching  Contribution  shall be paid to the Committee within
ten (10) business days  following the end of the  applicable  Quarterly  Period,
subject to deferral pursuant to Section 12.3. The number of Shares credited to a
Non-Employee  Director's  Account will equal the amount of the Company  Matching
Contribution divided by the Share Value of a Share for the Quarterly Period.

(b)  Total  Purchases.  A  Non-Employee  Director's  Total  Purchases  during  a
Quarterly  Period shall equal the sum of the  aggregate  Share Value of Director
Shares  purchased  by the  Non-Employee  Director  from the  Company  during the
Quarterly  Period pursuant to Section  12.1(a),  the dollar amount of any Shares
purchased by the Non-Employee Director under the Company's dividend reinvestment
plan  (including  purchases  with optional cash  payments)  during the Quarterly
Period,  and the  dollar  amount of any  Shares  purchased  by the  Non-Employee
Director  in the open  market  during the  Quarterly  Period,  as  evidenced  by
confirmation slips or other similar documentation provided to the Committee.
<PAGE>

12.3  Deferral Election.
(a) Deferral. Each Non-Employee Director may elect to defer receiving all or any
portion of the Company  Matching  Contribution or the Annual Retainer that would
otherwise be paid in Shares pursuant to Section 11.2. A deferral  election shall
be effective on the ____ day of the month that is  coincident  with or following
the date the election is delivered.  A deferral  election must be in writing and
delivered to the Committee.

(b)   Stock  Deferral Plan. All Shares  deferred  pursuant to Section  12.3(a)
shall be deferred  into and subject to all of the terms and  conditions of the
Company's Stock Deferral Plan.

12.4  Termination of Participation.

(a) Voluntary.  A participating  Non-Employee Director may terminate his Account
at any time by completing a form  authorized by the Committee and  delivering it
to the  Committee.  Promptly  after  receipt  of the form,  the  Committee  will
transfer  all  certificates   representing   full  Shares  in  the  Non-Employee
Director's  Account to the Non-Employee  Director and sell any fractional Shares
at the current market price. The Committee will remit the proceeds from the sale
of the fractional  Shares less  applicable  brokerage  fees to the  Non-Employee
Director  within a reasonable  period of time  thereafter.  No interest  will be
earned on the Account while it is awaiting payment.

(b) Termination of Director Status. Upon termination as a Non-Employee  Director
of the Company for any reason, the Non-Employee Director's  participation in the
Plan will cease. The former Non-Employee Director may either request the sale of
all  Shares in his  Account  at  current  market  price or the  transfer  of all
certificates  representing full Shares in the Account to the former Non-Employer
Director.  A former  Non-Employee  Director  who directs the  Committee  to sell
Shares will be charged for the fees,  commissions and other expenses incurred by
the  Committee  in  connection  with the sale.  No interest  will be paid on the
Account while it is awaiting payment.

12.5  Registration.  Shares  issued  pursuant  to this  Article XII shall not be
transferrable unless registered under the Securities Act of 1933, as amended, or
in the opinion of counsel to the Company, such registration is not required.

Article XIII......Terms Applicable to All Awards Granted Under the Plan

13.1 Award  Agreement.  No person shall have any rights under any Award  granted
under the Plan  unless and until the Company  and the  Participant  to whom such
Award  shall  have been  granted  shall have  executed  and  delivered  an Award
Agreement or received any other Award acknowledgment authorized by the Committee
expressly  granting the Award to such person and containing  provisions  setting
forth the terms of the Award. If there is any conflict between the provisions of
an Award  Agreement  and the  terms of the  Plan,  the  terms of the Plan  shall
control.

13.2 No  Consideration  for  Awards.  Awards  shall be granted  to Key  Employee
Participants  for no  cash  consideration  unless  otherwise  determined  by the
Committee. Non-Employee Director Awards under Article XI shall be granted for no
cash consideration unless otherwise required by law.

13.3 Awards May Be Granted  Separately  or  Together;  No  Limitations  on Other
Awards to  Non-Employee  Directors.  Subject to the  limitations of Section 6.2,
regarding Stock Appreciation Rights,  Awards to Key Employee  Participants under
the Plan may be granted  either alone or in addition  to, in tandem with,  or in
substitution  for any other Award or any award  granted  under any other plan of
the Company or any Affiliate  and the terms and  conditions of an Award need not
be the same with respect to each such Participant. Awards granted in addition to
or in tandem  with other  Awards,  or in  addition  to or in tandem  with awards
granted  under any other  plan of the  Company or any  Affiliate  may be granted
either at the same time as or at a  different  time from the grant of such other
Awards or awards.  Grants to the  Non-Employee  Directors  pursuant  to the Plan
shall not limit the rights of such  Non-Employee  Directors to receive awards or
other benefits provided under other plans of the Company or of any Affiliate.

13.4 Limitations on Transfer of Awards.  Awards granted under the Plan shall not
be  transferable  other  than by will or the laws of descent  and  distribution,
except that a Key Employee Participant or Non-Employee Director Participant may,
to  the  extent  allowed  by the  Committee  and in a  manner  specified  by the
Committee,  (a) designate in writing a  beneficiary  to exercise the Award after
the Key Employee  Participant's or Non-Employee Director Participant's death, as
the case may be, and (b)  transfer  any award.  No Award  (other  than  Released
Securities),  and no right  under any such  Award,  may be  pledged,  alienated,
attached,  or  otherwise  encumbered,  and  any  purported  pledge,  alienation,
attachment,  or encumbrance thereof shall be void and unenforceable  against the
Company or any Affiliate.

13.5 Term.  Except as  otherwise  provided  in the Plan,  the term of each Award
shall be for such period as may be determined by the Committee.
<PAGE>

13.6 Taxes.  The Company shall be entitled,  if the Committee deems it necessary
or desirable,  to withhold (or secure  payment from the  Participant  in lieu of
withholding)  the amount of any  withholding  or other tax required by law to be
withheld or paid by the Company with respect to any amount payable and/or Shares
issuable  to such  Participant  under the Plan,  or with  respect  to any income
recognized  upon the  lapse  of  restrictions  applicable  to an Award or upon a
disqualifying  disposition  of Shares  received  pursuant to the  exercise of an
Incentive  Stock  Option,  and the Company may defer  payment or issuance of the
cash  or  Shares  upon  the  grant,  exercise  or  vesting  of an  Award  unless
indemnified  to its  satisfaction  against any  liability  for any such tax. The
amount of such  withholding  or tax payment shall be determined by the Committee
and  shall  be  payable  by the  Participant  at  such  time  as  the  Committee
determines.  The  Committee  may  prescribe in each Award  Agreement one or more
methods by which the  Participant  will be  permitted  to satisfy his or her tax
withholding  obligation,  which  methods may include,  without  limitation,  the
payment of cash by the Participant to the Company and the  withholding  from the
Award, at the appropriate time, of a number of Shares sufficient, based upon the
Fair Market Value of such Shares, to satisfy such tax withholding  requirements.
The Committee  shall be authorized,  in its sole  discretion,  to establish such
rules  and  procedures  relating  to any such  withholding  methods  as it deems
necessary or appropriate.

13.7 Rights and Status of  Recipients.  No Employee,  Participant  (other than a
Non-Employee  Director  Participant  as provided in Article XI), or other person
shall have any claim or right to be granted  an Award  under this Plan.  Neither
the Plan nor any  action  taken  hereunder  shall be  construed  as  giving  any
employee any right to be retained in the employ of the Company or any Affiliate.
The grant of an Award to a Non-Employee  Director  pursuant to Article XI of the
Plan  shall  confer no right on such  Non-Employee  Director  to  continue  as a
director of the Company.

13.8  Awards  Not  Includable  for  Benefit  Purposes.  Income  recognized  by a
Participant  pursuant to the provisions of the Plan shall not be included in the
determination  of benefits under any employee pension benefit plan (as such term
is defined in Section 3(2) of the  Employee  Retirement  Income  Security Act of
1974, as amended) or group  insurance or other  benefit plans  applicable to the
Participant which are maintained by the Company, except as may be provided under
the terms of such plans or determined by resolution of the Board.

13.9  Share   Certificates;   Representation   by  Key  Employee   Participants;
Registration  Requirements.  In addition to the restrictions imposed pursuant to
Article  VII  hereof,  all  certificates  for Shares  delivered  under the Plan,
whether  pursuant to any Award or the exercise  thereof or  otherwise,  shall be
subject to such stop transfer orders and other restrictions as the Committee may
deem advisable under the Plan or the rules, regulations,  and other requirements
of the Securities Exchange  Commission,  any stock exchange or other market upon
which such Shares are then listed or traded, and any applicable federal or state
securities  laws,  and the  Committee may cause a legend or legends to be put on
any such certificates to make appropriate  reference to such  restrictions.  The
Committee may require each Key Employee Participant or other person who acquires
Shares  under the Plan by means of an Award  originally  made to a Key  Employee
Participant  to  represent  to the  Company  in writing  that such Key  Employee
Participant  or other  person  is  acquiring  the  Shares  without a view to the
distribution thereof.

13.10  Amendments to Awards.  The Committee may, in whole or in part,  waive any
conditions or other restrictions with respect to, and may amend, alter, suspend,
discontinue,  or terminate  any Award  granted  under the Plan to a Key Employee
Participant, prospectively or retroactively, but no such action shall impair the
rights of any Key  Employee  Participant  without his or her  consent  except as
provided in Sections 4.3, 9.1(b), and 13.11.

13.11 Adjustment to Awards Upon Certain Acquisitions.  In addition to and not in
lieu of the  authority  granted the Committee  under Section 4.3 hereof,  in the
event the Company or any Affiliate shall assume  outstanding  employee awards or
the right or obligation to make future awards in connection with the acquisition
of another business or another corporation or business entity, the Committee may
make such adjustments, not inconsistent with the terms of the Plan, in the terms
of Awards granted to Key Employee  Participants as it shall deem  appropriate in
order  to  achieve  reasonable  comparability  or other  equitable  relationship
between the assumed  awards and the Awards granted under the Plan granted to Key
Employees as so adjusted.

13.12 Correction of Defects,  Omissions, and Inconsistencies.  The Committee may
correct any defect,  supply any omission,  or reconcile any inconsistency in any
Award or Award Agreement in the manner and to the extent it shall deem desirable
to carry the Plan into effect.

Article XIV.......Amendment and Termination
<PAGE>

14.1 Amendment. The Board may amend, alter, suspend,  discontinue,  or terminate
the Plan or any part thereof at any time it is deemed  necessary or appropriate;
provided, however, that no amendment, alteration, suspension, discontinuation or
termination  of the Plan shall in any manner  (except as  otherwise  provided in
this Article XIV) adversely affect any Award granted and then outstanding  under
the Plan,  without the consent of the  respective  Key Employee or  Non-Employee
Director  Participant,   as  the  case  may  be;  and  provided,  further,  that
shareholder  approval  of any  amendment  of the Plan shall also be  obtained if
otherwise required by (i) the Code or any rules promulgated thereunder (in order
to allow for  Incentive  Stock Options to be granted under the Plan or to enable
the Company to comply with the  provisions of Section 162(m) of the Code so that
the  Company  can  deduct  compensation  in excess of the  limitation  set forth
therein),  or (ii) the listing requirements of the principal securities exchange
or market on which the Shares are then traded (in order to maintain  the listing
or quotation of the Shares thereon).

14.2 Termination.  The Board shall have the right and the power to terminate the
Plan at any time. No Award shall be granted under the Plan after the termination
of the Plan, but the termination of the Plan shall not have any other effect and
any  Award  outstanding  at the  time  of the  termination  of the  Plan  may be
exercised after termination of the Plan at any time prior to the expiration date
of such Award to the same extent such Award would have been  exercisable had the
Plan not terminated.

Article XV. General Provisions

15.1  Effective  Date  of  the  Plan.  The  Plan  shall  be  effective  as  of
September 23, 1993.

15.2  Term of Plan.  The term of the Plan  shall be  indefinite  except  that no
Incentive Stock Option Award shall be granted under the Plan after September 23,
2003.  However,  unless  otherwise  expressly  provided  in  the  Plan  or in an
applicable Award Agreement, any Incentive Stock Option Award theretofore granted
may extend  beyond  such  date,  and,  to the extent set forth in the Plan,  the
authority of the Committee to amend, alter,  adjust,  suspend,  discontinue,  or
terminate  any such  Award,  or to waive any  conditions  or  restrictions  with
respect to any such  Award,  and the  authority  of the Board to amend the Plan,
shall extend beyond such date.

15.3  Governing  Law. The Plan and all  determinations  made and actions taken
pursuant  to the Plan  shall be  governed  by the laws of the state of Florida
and applicable federal laws.

15.4 Unfunded Status of Plan. Unless otherwise determined by the Committee,  the
Plan shall be unfunded  and shall not create (or be construed to create) a trust
or a  separate  fund or  funds.  The Plan  shall  not  establish  any  fiduciary
relationship  between  the  Company  and  any  Key  Employee  Participant,   any
Non-Employee  Director  Participant,  or other person.  To the extent any person
holds  any  right by  virtue of a grant  under  the  Plan,  such  right  (unless
otherwise  determined by the Committee) shall be no greater than the right of an
unsecured general creditor of the Company.

15.5 Headings.  Section  headings are used in the Plan for convenience  only, do
not  constitute  a part of the  Plan,  and  shall not be deemed in any way to be
material or relevant to the  construction or  interpretation  of the Plan or any
provision thereof.

15.6 Severability. Whenever possible, each provision in the Plan and every Award
and right at any time granted under the Plan shall be interpreted in such manner
as to be effective and valid under  applicable  law, but if any provision of the
Plan or any  Award  at any  time  granted  under  the  Plan  shall be held to be
prohibited by or invalid under  applicable law, then (a) such provision shall be
deemed  amended to  accomplish  the  objectives  of the  provision as originally
written to the fullest extent  permitted by law and (b) all other  provisions of
the Plan and every other Award or right at any time granted under the Plan shall
remain in full force and effect.<PAGE>

                                   Exhibit 4.1

                          HARRAH'S ENTERTAINMENT, INC.

                       EXECUTIVE SUPPLEMENTAL SAVINGS PLAN

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                                                  PAGE
<S>                                                                               <C>
ARTICLE ONE       PREAMBLE..........................................................1

ARTICLE TWO       DEFINITIONS.......................................................1

         2.1      "Account" or "Accounts"...........................................1

         2.2      "Affiliate".......................................................1

         2.3      "Beneficiary".....................................................1

         2.4      "Board"...........................................................1

         2.5      "Bonus"...........................................................1

         2.6      "Change of Control"...............................................2

         2.7      "Code"............................................................3

         2.8      "Company".........................................................3

         2.9      "Compensation"....................................................3

         2.10     "DCP".............................................................3

         2.11     "Deferral Contribution"...........................................3

         2.12     "Deferral Contribution Account"...................................3

         2.13     "Deferral Period".................................................3

         2.14     "Disability" or "Disabled" .......................................3

         2.15     "EDCP"............................................................3

         2.16     "EDCP Committee"..................................................3

         2.17     "Effective Date" .................................................4

         2.18     "Employee"........................................................4

         2.19     "Employer"........................................................4

         2.20     "ERISA"...........................................................4

         2.21     "HRC".............................................................4

         2.22     "Investment Fund".................................................4

         2.23     "Matching Contribution"...........................................4

         2.24     "Matching Contribution Account"...................................4

         2.25     "Participant".....................................................4

         2.26     "Participation Agreement".........................................4

         2.27     "Plan"............................................................4

         2.28     "Salary"..........................................................4
</TABLE>

                                      -i-

<PAGE>

                               TABLE OF CONTENTS
                                  (CONTINUED)

<TABLE>
<CAPTION>
                                                                                  PAGE
<S>                                                                               <C>

         2.29     "Savings and Retirement Plan".....................................5

         2.30     "Trust Agreement".................................................5

         2.31     "Trustee".........................................................5

         2.32     "Trust Fund"......................................................5

         2.33     "Valuation Date"..................................................5

         2.34     "Years of Vesting Service"........................................5

ARTICLE THREE     ELIGIBILITY.......................................................5

         3.1      Selection Of Participants.........................................5

         3.2      Participation Agreement...........................................6

         3.3      Revised Participation Agreement...................................7

         3.4      Discontinuance Of Participation...................................7

         3.5      Reemployment......................................................7

         3.6      Adoption By Affiliates............................................7

ARTICLE FOUR      CONTRIBUTIONS.....................................................8

         4.1      Participant Contributions.........................................8

         4.2      Matching Contributions............................................8

         4.3      Change In Contributions...........................................8

         4.4      Suspension Of Contributions.......................................9

         4.5      Transferred Contributions.........................................9

ARTICLE FIVE      WITHDRAWALS......................................................10

         5.1      Acceleration Of Benefits.........................................10

         5.2      Account Adjustments..............................................10

         5.3      Limitation On Distributions......................................10

ARTICLE SIX       CREDITING OF CONTRIBUTIONS AND INCOME............................11

         6.1      Account Allocations..............................................11

         6.2      Subaccounts......................................................11

         6.3      Hypothetical Investment Funds....................................11

         6.4      Investment Direction.............................................11

         6.5      Rate of Return...................................................11
</TABLE>

                                      -ii-

<PAGE>

                               TABLE OF CONTENTS
                                  (CONTINUED)

<TABLE>
<CAPTION>
                                                                                  PAGE
<S>                                                                               <C>
ARTICLE SEVEN     VESTING..........................................................12

         7.1      Vesting Of Benefits..............................................12

         7.2      Changes In Vesting Schedule......................................13

ARTICLE EIGHT     PAYMENT OF BENEFITS..............................................13

         8.1      Time Of Payment..................................................13

         8.2      Method Of Payment................................................13

         8.3      Beneficiary Designations.........................................14

         8.4      Limitation On Distributions......................................14

         8.5      Withholding and Payroll Taxes....................................14

ARTICLE NINE      ADMINISTRATION OF THE PLAN.......................................15

         9.1      Adoption Of Trust................................................15

         9.2      Powers Of The EDCP Committee.....................................15

         9.3      Creation Of Committee............................................15

         9.4      Chairman And Secretary...........................................16

         9.5      Appointment Of Agents............................................16

         9.6      Majority Vote And Execution Of Instruments.......................16

         9.7      Allocation Of Responsibilities...................................16

         9.8      Conflict Of Interest.............................................16

         9.9      Indemnification of Committee.....................................16

         9.10     Action Taken By Employer.........................................16

         9.11     Fiduciary Authority..............................................16

         9.12     Participant Statements...........................................16

ARTICLE TEN       CLAIM REVIEW PROCEDURE...........................................17

         10.1     General..........................................................17

         10.2     Appeals..........................................................17

         10.3     Notice Of Denials................................................18

ARTICLE ELEVEN    LIMITATION ON ASSIGNMENT; PAYMENTS TO LEGALLY
                  INCOMPETENT DISTRIBUTEE..........................................18

         11.1     Anti-Alienation Clause...........................................18

         11.2     Permitted Arrangements...........................................18
</TABLE>

                                     -iii-

<PAGE>

                               TABLE OF CONTENTS
                                  (CONTINUED)

<TABLE>
<CAPTION>
                                                                                  PAGE
<S>                                                                               <C>
         11.3     Payment To Minor Or Incompetent..................................18

ARTICLE TWELVE    AMENDMENT, MERGER AND TERMINATION................................18

         12.1     Amendment........................................................18

         12.2     Merger Or Consolidation Of Company...............................19

         12.3     Termination Of Plan Or Discontinuance Of Contributions...........19

         12.4     Continuation of Plan Following A Change of Control...............19

         12.5     Limitation Of Company's Liability................................19

ARTICLE THIRTEEN  GENERAL PROVISIONS...............................................20

         13.1     Limitation Of Rights.............................................20

         13.2     Construction.....................................................20

         13.3     Status Of Participants As Unsecured Creditors....................20

         13.4     Status Of Trust Fund.............................................20

         13.5     Funding Upon A Change Of Control.................................20

         13.6     No Liability For Acceleration Of Payments........................20

         13.7     Uniform Administration...........................................21

         13.8     Heirs And Successors.............................................21
</TABLE>

<PAGE>

                          HARRAH'S ENTERTAINMENT, INC.
                       EXECUTIVE SUPPLEMENTAL SAVINGS PLAN

                                  ARTICLE ONE
                                    PREAMBLE

     HARRAH'S ENTERTAINMENT, INC., a corporation organized and existing under
the laws of the State of Delaware (the "Company"), hereby adopts the Harrah's
Entertainment, Inc. Executive Supplemental Savings Plan (the "Plan") in order to
provide its key executives with an opportunity and incentive to save for
retirement and other purposes.

     The purpose of this Plan is to provide a select group of management or
highly compensated employees of the Company and certain of its affiliates with
the opportunity to defer a portion of their compensation and to receive related
contributions from their employers. As a result, the Plan shall be considered a
"top hat plan", exempt from many of the requirements of the Employee Retirement
Income Security Act of 1974 ("ERISA"). This Plan is not intended to "qualify"
for favorable tax treatment pursuant to Section 401(a) of the Internal Revenue
Code of 1986 (the "Code") or any successor section or statute.

                                  ARTICLE TWO
                                   DEFINITIONS

     When a word or phrase appears in this Plan with the initial letter
capitalized, and the word or phrase does not begin a sentence, the word or
phrase shall generally be a term defined in this Article Two or in the Preamble.
The following words and phrases used in the Plan with the initial letter
capitalized shall have the meanings set forth in this Article Two, unless a
clearly different meaning is required by the context in which the word or phrase
is used:

     2.1 "ACCOUNT" OR "ACCOUNTS" means the accounts which may be maintained by
the EDCP Committee to reflect the interest of a Participant under the Plan.

     2.2 "AFFILIATE" means (a) a corporation which is a member of the same
controlled group of corporations (within the meaning of Section 414(b) of the
Code) as is the Company, (b) any other trade or business (whether or not
incorporated) controlling, controlled by, or under common control (within the
meaning of Section 414(c) of the Code) with the Company, and (c) any other
corporation, partnership, or other organization which is a member of an
affiliated service group (within the meaning of Section 414(m) of the Code) with
the Company or which is otherwise required to be aggregated with the Company
pursuant to Section 414(o) of the Code.

     2.3 "BENEFICIARY" means the person or trust that a Participant, in his most
recent written designation filed with the EDCP Committee, shall have designated
to receive his benefit under the Plan in the event of his death or, if
applicable, the person or entity determined in accordance with Section 8.3
(BENEFICIARY DESIGNATIONS).

     2.4 "BOARD" means the Board of Directors of the Company.

     2.5 "BONUS" means the incentive payment or payments earned by a Participant
during a Deferral Period pursuant to the Company's Annual Management Bonus Plan,
the

                                      -1-

<PAGE>

Company's Senior Executive Incentive Plan and/or the Company's Player
Development Bonus Program, as such plans may be amended from time to time.

     2.6 "CHANGE OF CONTROL" means and includes each of the following:

          (a) 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,
regardless of comparative voting power of such voting securities, and regardless
of whether or not the Board shall have approved the acquisition of such
securities by the acquiring person; or

          (b) During any period of two consecutive years, individuals who, at
the beginning of such period, constitute the Board together with any new
director(s) (other than a director designated by a person who shall have entered
into an agreement with the Company to effect a transaction described in clauses
(i) or (iii) of this Subsection) whose election by the Board or nomination for
election by the Company's stockholders was approved by a vote of at least
two-thirds of the directors then still in office who either were directors at
the beginning of the two year period or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority thereof; or

          (c) The holders of securities of the Company entitled to vote thereon
approve the following:

               (i) 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
     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 (a) the Company's then outstanding voting
     securities carrying the right to vote in elections of persons to the Board,
     or (b) the voting securities of such surviving entity outstanding
     immediately after such merger or consolidation, or

               (ii) 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.

          (d) Notwithstanding the definition of a "Change of Control" of the
Company as set forth in this Section 2.6, the HRC shall have full and final
authority, which shall be exercised in its discretion, to determine conclusively
whether a Change of Control of the Company has occurred, and the date of the
occurrence of such Change of 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, prior to the transaction or series of transactions,
by the HRC in its sole discretion

                                      -2-
<PAGE>

which determination as to whether a substantial portion is involved 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 (as determined
by the HRC in its sole discretion prior to such transaction or series of
transactions which determination as to whether the 80% amount will be satisfied
shall be final and conclusive). The HRC may exercise any 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 Section 2.6.

     2.7 "CODE" means the Internal Revenue Code of 1986, as amended.

     2.8 "COMPANY" means Harrah's Entertainment, Inc.

     2.9 "COMPENSATION" means, for each Deferral Period, the total Salary paid
to the Participant and the Bonus earned by the Participant.

     2.10 "DCP" means Harrah's Entertainment, Inc. Deferred Compensation Plan,
as it may be amended from time to time.

     2.11 "DEFERRAL CONTRIBUTION" means a contribution by a Participant pursuant
to Section 4.1 (PARTICIPANT CONTRIBUTIONS) of this Plan.

     2.12 "DEFERRAL CONTRIBUTION ACCOUNT" means the Account maintained to record
the Deferral Contributions made by a Participant pursuant to Section 4.1
(PARTICIPANT CONTRIBUTIONS), as adjusted to reflect the rate of return on the
hypothetical Investment Funds selected by the Participant in accordance with
Section 6.4 (INVESTMENT DIRECTION) and other credits or charges called for by
this Plan.

     2.13 "DEFERRAL PERIOD" means, generally, the 12 month period beginning on
each January 1 and ending on the next following December 31. The initial
Deferral Period shall commence as soon as administratively feasible after the
Effective Date and shall end on the next following December 31. With respect to
Participants who enter the Plan after the Effective Date, the initial Deferral
Period shall commence on the date the Participant is notified of his or her
eligibility to participate in the Plan in accordance with Section 3.1 (SELECTION
OF PARTICIPANTS) and shall end on the next following December 31.

     2.14 "DISABILITY" or "DISABLED" means, for purposes of this Plan, that the
Participant qualifies to receive long term disability payments under the
Employer's long term disability insurance program, as it may be amended from
time to time.

     2.15 "EDCP" means the Harrah's Entertainment, Inc. Executive Deferred
Compensation Plan, as it may be amended from time to time.

     2.16 "EDCP COMMITTEE" means the committee designated by the Company in
accordance with Section 9.3 (CREATION OF COMMITTEE) to carry out the
administrative responsibilities under the Plan.

                                      -3-
<PAGE>

     2.17 "EFFECTIVE DATE" means April 1, 2001. With respect to each Affiliate
that adopts this Plan after April 1, 2001, the term "Effective Date" means the
date designated by the adopting Affiliate.

     2.18 "EMPLOYEE" means any individual classified by an Employer as a common
law employee of the Employer. For this purpose, the classification that is
relevant is the classification in which such individual is placed by the
Employer for purposes of this Plan and the classification of such individual for
any other purpose (e.g., employment tax or withholding purposes) shall be
irrelevant. If an individual is characterized as a common law employee of the
Employer by a governmental agency or court but not by the Employer, such
individual shall be treated as an employee who has not been designated for
participation in this Plan.

     2.19 "EMPLOYER" means the Company and any Affiliate that has adopted this
Plan pursuant to Section 3.6 (ADOPTION BY AFFILIATES).

     2.20 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.

     2.21 "HRC" means the Human Resources Committee of the Board.

     2.22 "INVESTMENT FUND" means the hypothetical investment fund or funds
established by the EDCP Committee pursuant to Section 6.4 (INVESTMENT
DIRECTION).

     2.23 "MATCHING CONTRIBUTION" means an Employer contribution calculated in
accordance with Section 4.2 (MATCHING CONTRIBUTIONS) of this Plan, which may, in
the discretion of the Employer, be transferred to the Trust.

     2.24 "MATCHING CONTRIBUTION ACCOUNT" means the Account maintained to record
the Matching Contributions calculated in accordance with Section 4.2 (MATCHING
CONTRIBUTIONS) on behalf of a Participant, as adjusted to reflect the rate of
return on the hypothetical Investment Funds selected by the Participant in
accordance with Section 6.4 (INVESTMENT DIRECTION) and other credits or charges
called for by this Plan.

     2.25 "PARTICIPANT" means any Employee who has been selected for
participation in the Plan. The term "Participant" also shall include former
Participants whose benefits under the Plan have not been fully distributed
pursuant to the provisions of the Plan.

     2.26 "PARTICIPATION AGREEMENT" means the written agreement to defer Salary
and/or Bonus submitted by a Participant to the EDCP Committee in accordance with
Section 3.2 (PARTICIPATION AGREEMENT) or Section 3.3 (REVISED PARTICIPATION
AGREEMENT).

     2.27 "PLAN" means the Harrah's Entertainment, Inc. Executive Supplemental
Savings Plan, as it may be amended from time to time.

     2.28 "SALARY" means the annual base salary paid to the Participant by the
Employer during the Deferral Period, before reduction for amounts deferred
pursuant to this Plan, the Savings and Retirement Plan, any plan maintained
under Section 125 of the Code or any other

                                      -4-
<PAGE>

plan maintained by the Company or an Employer. Salary does not include expense
reimbursements, or any form of non-cash compensation and benefits.

     2.29 "SAVINGS AND RETIREMENT PLAN" means the Harrah's Entertainment, Inc.
Savings and Retirement Plan, as it may be amended from time to time.

     2.30 "TRUST AGREEMENT" means that certain trust agreement established
pursuant to the Plan between the Company and the Trustee or any trust agreement
hereafter established, the provisions of which are incorporated herein by
reference.

     2.31 "TRUSTEE" means the Trustee under the Trust Agreement.

     2.32 "TRUST FUND" means all assets of whatsoever kind or nature held from
time to time by the Trustee pursuant to the Trust Agreement and forming a part
of this Plan, without distinction as to income and principal and without regard
to source, I.E., Employer or Participant contributions or earnings.

     2.33 "VALUATION DATE" means the date for valuing the hypothetical
Investment Funds maintained under the Plan, which shall be each business day of
the Deferral Period.

     2.34 "YEARS OF VESTING SERVICE" means the years of service credited to an
individual for vesting purposes under the Savings and Retirement Plan,
determined in accordance will all applicable provisions of the Savings and
Retirement Plan.

                                 ARTICLE THREE
                                   ELIGIBILITY

     3.1 SELECTION OF PARTICIPANTS

          (a) GENERAL. For purposes of Title I of ERISA, the Plan is intended to
be an unfunded plan of deferred compensation covering a select group of
management or highly compensated employees. As a result, participation in the
Plan shall be limited to Employees employed in a position classified by the
Company as a Director-level position or above, and any other Employees employed
by an Employer who are selected for participation in the Plan by the EDCP
Committee. To further ensure compliance with the ERISA participation
requirements applicable to this Plan, the Company, in the exercise of its
discretion, may exclude from participation in the Plan an individual who
otherwise meets the requirements this Section 3.1(a) for any reason, or for no
reason, as the Company deems to be appropriate.

          (b) ENTRY INTO PLAN. Employees who are eligible to participate in the
Plan as of the initial Effective Date shall enter the Plan as soon as
administratively feasible following such Effective Date. Employees who become
eligible to participate in the Plan after the initial Effective Date shall enter
the Plan as of the first day of the first payroll period commencing in the
Deferral Period next following the Employee's notification of his or her
eligibility to participate in the Plan. Notwithstanding the foregoing, the EDCP
Committee may, in its discretion, waive the Plan entry provision set forth in
the preceding sentence and permit an Employee to enter the Plan as of the first
day of any payroll period commencing during a particular Deferral Period.

                                      -5-
<PAGE>

          (c) NO WAITING PERIODS. A Participant need not complete any particular
period of service in order to be eligible to make Deferral Contributions. In
order to receive Matching Contributions for a Deferral Period, however, a
Participant also must be eligible to receive matching contributions under the
Savings and Retirement Plan for that Deferral Period, as determined in
accordance with the provisions of the Savings and Retirement Plan.

     3.2 PARTICIPATION AGREEMENT.

          (a) CONTENT OF PARTICIPATION AGREEMENT. Each Participant shall execute
a Participation Agreement evidencing his or her election to participate in the
Plan in the manner and at such time as the EDCP Committee shall require. In the
Participation Agreement, the Participant shall select the amount or rate of
Deferral Contributions and authorize the reduction of the Participant's
Compensation in an amount equal to his Deferral Contributions. The Participant
also shall select in the Participation Agreement the form in which distributions
are to be made from the Participant's Deferral Contribution and Matching
Contribution Accounts (I.E., lump sums, installment payments). The Participation
Agreement also may set forth such other information as the EDCP Committee shall
require. The Participation Agreement made by the Participant shall remain in
full force and effect until such time as it is amended or replaced, or the
Participant's participation in this Plan terminates.

          (b) TIMING REQUIREMENTS.

               (1) ENTRY ON INITIAL EFFECTIVE DATE. If a Participant is eligible
to participate in the Plan as of the initial Effective Date and the
Participant's initial Participation Agreement is completed and delivered within
30 days of the Effective Date, the Participant's Deferral Contributions may be
determined with reference to Compensation earned on or after the first day of
the first full payroll period next following receipt of the Participation
Agreement by the EDCP Committee or as of such other uniform date (not earlier
than the first day of the next full payroll period) as may be designated by the
EDCP Committee.

               (2) ENTRY AFTER INITIAL EFFECTIVE DATE. If the Participant does
not execute and deliver a Participation Agreement within the initial 30 day
period, or the Participant is notified that he is eligible to participate in the
Plan as of the beginning of any Deferral Period commencing after the Effective
Date, the Participant's Deferral Contributions may be determined with reference
to Compensation earned on or after the first day of the first full payroll
period in any later Deferral Period if the Participant executes and delivers a
Participation Agreement to the EDCP Committee at least 30 days (or such other
period specified by the EDCP Committee pursuant to rules of uniform application)
prior to the first day of such Deferral Period.

               (3) EXCEPTIONS. If a Participant is permitted to enter the Plan
during a Deferral Period, his Participation Agreement must be completed and
delivered in accordance with the rules and procedures adopted by the EDCP
Committee for such purpose. Such Participation Agreement shall be effective with
reference to Compensation earned on or after the effective date of the
Participation Agreement, as determined by the EDCP Committee.

                                      -6-
<PAGE>

          (c) ELECTRONIC ADMINISTRATION. The EDCP Committee shall have the
     authority to employ alternative means (including, but not limited to,
     electronic, internet, intranet, voice response or telephonic) by which
     Participants may submit participation elections, directions, and forms
     required for participation in, and the administration of, this Plan. If the
     EDCP Committee chooses to use these alternative means, any elections,
     directions or forms submitted in accordance with the rules and procedures
     promulgated by the EDCP Committee will be deemed to satisfy any provision
     of this Plan calling for the submission of a written election, direction or
     form.

     3.3 REVISED PARTICIPATION AGREEMENT. A Participant may file a new
Participation Agreement to change a previously filed election. If the
Participant changes the amount of his Deferral Contributions, the new amount
will become effective in accordance with Section 4.3 (CHANGE IN CONTRIBUTIONS).
If the new Participation Agreement changes the form of payment, the benefit
payment provisions of the new Participation Agreement will be honored only if
payments commence at least thirteen months after the date on which the new
Participation Agreement is completed and delivered. In the exercise of its
discretion, the EDCP Committee may allow a Participant to make a modified
election in any manner prescribed by the EDCP Committee for that purpose.

     3.4 DISCONTINUANCE OF PARTICIPATION. Once an Employee is designated as a
Participant, he will continue as such for all future Deferral Periods unless and
until (a) the Participant terminates from employment with the Employer and all
Affiliates and receives a full distribution of his Accounts, (b) is no longer
categorized as an individual entitled to participate in the Plan pursuant to
Section 3.1 (SELECTION OF PARTICIPANTS) above, or (c) the HRC specifically acts
to discontinue the Participant's participation. The HRC may discontinue a
Participant's participation in the Plan at any time for any or no reason. If a
Participant's participation is discontinued, the Participant will no longer be
eligible to make Deferral Contributions. The Participant will not be entitled to
receive a distribution, however, until the occurrence of one of the events
listed in Article Five (WITHDRAWALS) or Article Eight (PAYMENT OF BENEFITS),
unless the HRC, in the exercise of its discretion, directs that a distribution
be made as of an earlier date in which case the Participant's Accounts shall be
distributed on the same basis as if the Participant's employment had been
terminated.

     3.5 REEMPLOYMENT. If a former Participant is rehired by an Employer and is
eligible to participate in the Plan, he shall reenter the Plan on the same basis
as a newly eligible Employee in accordance with the provisions of Section 3.1
(SELECTION OF PARTICIPANTS). Such Employee's reentry into the Plan shall have no
impact on any distributions that have been made or are being made in accordance
with Article Eight (PAYMENT OF BENEFITS). Any amounts previously forfeited from
the Participant's Accounts pursuant to Section 7.1 (VESTING OF BENEFITS) shall
not be restored or reinstated upon the Participant's subsequent reentry into the
Plan.

     3.6 ADOPTION BY AFFILIATES. Any Affiliate of the Company may adopt this
Plan with the approval of the EDCP Committee. Any Affiliate that permits an
individual to make Deferral Contributions pursuant to Section 4.1 (PARTICIPANT
CONTRIBUTIONS) shall be deemed to have adopted the Plan without any further
action. The EDCP Committee's acceptance of such Deferral Contributions shall
evidence the consent of the EDCP Committee to the adoption of the

                                      -7-
<PAGE>

Plan by the Affiliate. Notwithstanding the foregoing, at the request of the EDCP
Committee, the Affiliate shall evidence its adoption of the Plan by an
appropriate resolution of its Board of Directors or in such other manner as may
be authorized by the EDCP Committee. By adopting this Plan, the Affiliate shall
be deemed to have agreed to make the contributions called for by Article Four
(CONTRIBUTIONS), agreed to comply with all of the other terms and provisions of
this Plan, delegated to the EDCP Committee the power and responsibility to
administer this Plan with respect to the Affiliate's employees, and delegated to
the Company the full power to amend or terminate this Plan with respect to the
Affiliate's employees.

                                  ARTICLE FOUR
                                  CONTRIBUTIONS

     4.1 PARTICIPANT CONTRIBUTIONS. A Participant may elect to defer a maximum
of 16% of the Salary otherwise payable to him during the Deferral Period, or
such other maximum amount as may be prescribed by the EDCP Committee as the
Salary Deferral Contribution limit for all Participants. A Participant also may
elect to defer a maximum of 90% of any Bonus earned by him during the Deferral
Period (which may be paid during the applicable Deferral Period or after the
close of the applicable Deferral Period), or such other maximum amount as may be
prescribed by the EDCP Committee as the Bonus Deferral Contribution limit for
all Participants. Notwithstanding the foregoing, for purposes of calculating the
maximum Bonus Deferral Contributions for the initial Deferral Period beginning
on the Effective Date, the Bonus earned by the Participant during the entire
2001 calendar year shall be taken into account. The EDCP Committee may, in its
discretion, permit an individual Participant to make Deferral Contributions in
excess of the limitations set forth in or established in accordance with this
Section 4.1 or place additional restrictions on an individual Participant's
Deferral Contributions. All Deferral Contributions under this Plan shall be made
in accordance with such rules and procedures regarding Participant deferrals as
may be promulgated by the EDCP Committee from time to time. All Participant
elections are subject to the timing requirements set forth in Section 3.2(b)
(PARTICIPATION AGREEMENT - TIMING REQUIREMENTS) and shall remain in effect until
replaced or revised in accordance with Section 3.3 (REVISED PARTICIPATION
AGREEMENT).

     4.2 MATCHING CONTRIBUTIONS. Each Employer shall make a Matching
Contribution on behalf of each of its Participants who has elected to make
Salary Deferral Contributions during the Deferral Period under Section 4.1
(PARTICIPANT CONTRIBUTIONS) and is eligible to receive a matching contribution
under the Savings and Retirement Plan. The Matching Contribution for each
eligible Participant shall equal the difference between (i) 100% of the
Participant's Salary Deferral Contributions, up to a maximum of 6% of the
Participant's Salary and (ii) the Employer's matching contribution for such
eligible participant under the Savings and Retirement Plan. No Matching
Contributions shall be made with respect to Bonus Deferral Contributions. The
Matching Contribution shall be credited to each eligible Participant's Matching
Contribution Account as of the year-end Valuation Date.

     4.3 CHANGE IN CONTRIBUTIONS. A Participant may change the amount or
percentage of Salary Deferral Contributions under Section 4.1 (PARTICIPANT
CONTRIBUTIONS) prior to the beginning of any Deferral Period, with such change
to be effective with reference to Salary earned on or after the first day of the
first full payroll period of the next following Deferral Period. Any change in
the amount or percentage of the Deferral Contribution to be made from

                                      -8-
<PAGE>

any Bonus shall be effective for Bonuses earned in the first Deferral Period
immediately following the EDCP Committee's receipt of such revised Participation
Agreement. A Participant's election to make no Deferral Contributions to the
Plan during one or more Deferral Periods shall not affect his continued
participation in the Plan or his ability to resume his Deferral Contributions to
the Plan in the future. The EDCP Committee may, in its discretion, determine
that special circumstances exist and permit a Participant to change the amount
of his Bonus Deferral Contributions during the Deferral Period, but in no event
shall the change in the Bonus Deferral Contributions be made later than the last
day of the Deferral Period. Any and all changes in Deferral Contributions made
pursuant to this Section 4.3 shall be made in accordance with uniform rules
promulgated by the EDCP Committee.

     4.4 SUSPENSION OF CONTRIBUTIONS.

          (a) SUSPENSION. A Participant may suspend his contributions under
Section 4.1 as of the first day of any full payroll period in the Deferral
Period, by giving appropriate notice to the EDCP Committee at least 30 days (or
such other period specified by the EDCP Committee pursuant to rules of uniform
application) prior to the date on which the suspension shall become effective.
Any such suspension shall remain in effect for the remainder of the Deferral
Period during which the suspension begins and the entire next following Deferral
Period.

          (b) RESUMPTION OF CONTRIBUTIONS. A Participant who has suspended his
contributions pursuant to paragraph (a) above and who applies to the EDCP
Committee in a timely manner shall be entitled to resume his contributions with
respect to Compensation earned beginning on the first day of the first full
payroll period in the Deferral Period next following the expiration of the
suspension as set forth in paragraph (a) above. Any application to resume
contributions shall be made in the form of a revised Participation Agreement and
shall comply with all procedures promulgated by the EDCP Committee pursuant to
Section 3.3 (REVISED PARTICIPATION AGREEMENT).

     4.5 TRANSFERRED CONTRIBUTIONS. A Participant may make an irrevocable
election, with the consent of the EDCP Committee and in accordance with the
procedures promulgated by the EDCP Committee for such purpose, to transfer all
or a portion of his accumulated account balance under the EDCP or the DCP to
this Plan. Any account balance transfers to this Plan from either the EDCP or
the DCP shall include the vested and non-vested portions of the Participant's
account under such Plan. All amounts transferred to this Plan from the EDCP or
the DCP shall be subject to all of the terms and provisions of this Plan,
including, specifically, the vesting, earnings crediting and payment provisions
of this Plan. The elective deferral account balance and the employer matching
contribution account balance which are transferred from the EDCP and DCP
pursuant to this Section 4.5 shall be allocated among the affected Participant's
Deferral Contribution Account and Matching Contribution Account, respectively.
Amounts transferred from the EDCP or the DCP to this Plan pursuant to this
Section 4.5 may not be transferred from this Plan to the EDCP or DCP.

                                      -9-
<PAGE>

                                  ARTICLE FIVE
                                   WITHDRAWALS

     5.1 ACCELERATION OF BENEFITS.

          (a) GENERAL. A Participant may elect to receive an accelerated
withdrawal by filing an election with the EDCP Committee in accordance with the
uniform procedures promulgated by the EDCP Committee. The Participant may
request an accelerated withdrawal equal to 25%, 50%, 75% or 100% of the sum of
the Participant's Deferral Contribution Account balance plus the Participant's
vested interest in his Matching Contribution Account. If a Participant requests
an accelerated withdrawal of less than 100% of his vested Accounts, the
Participant may instruct the EDCP Committee to allocate the requested withdrawal
amount between his Deferral Contribution Account and Matching Contribution
Account in the manner set forth by the Participant in his accelerated withdrawal
request. If a Participant makes an accelerated withdrawal election, the
Participant shall receive a single lump sum payment equal to 90% of the
accelerated withdrawal amount. For purposes of determining the amount to be
distributed, the Participant's Accounts shall be valued as of the Valuation Date
immediately preceding the date of the withdrawal. The Participant's vested
interest in his Matching Contribution Account shall be determined as of the
Valuation Date immediately preceding the date of the withdrawal. The accelerated
withdrawal shall be paid as soon as reasonably possible following the filing of
the election by the Participant. If a Participant is married at the time an
accelerated withdrawal is requested, the request will not be given effect unless
the Participant's spouse consents to such request in a manner prescribed by the
EDCP Committee for that purpose.

          (b) FORFEITURE. The Participant shall forfeit the remaining 10% of the
accelerated withdrawal amount as of the day on which the accelerated withdrawal
is distributed to the Participant.

          (c) SUSPENSION OF PARTICIPATION. If a Participant elects to receive an
accelerated withdrawal, the Participant's right to make Deferral Contributions
to the Plan shall be suspended for the remainder of the Deferral Period during
which the accelerated withdrawal is distributed to the Participant and for the
entire next following Deferral Period. Upon expiration of the suspension period
described in the preceding sentence, the Participant shall be permitted to
submit a new Participation Agreement in accordance with Section 3.3 (REVISED
PARTICIPATION AGREEMENT) and to begin making Deferral Contributions with respect
to Compensation earned on or after the first day of the first payroll period of
the next following Deferral Period.

     5.2 ACCOUNT ADJUSTMENTS. Withdrawals shall be charged to the Participant's
Accounts in accordance with the allocation instructions set forth in the
Participant's request for an accelerated withdrawal. In the absence of such
allocation instructions, the withdrawal shall be charged pro rata to the
Participant's Accounts.

     5.3 LIMITATION ON DISTRIBUTIONS. To the extent that any payment under this
Section, when combined with all other payments received during the year that are
subject to the limitations on deductibility under Section 162(m) of the Code,
exceeds the limitations on deductibility under Section 162(m) of the Code, such
payment shall, in the discretion of the

                                      -10-
<PAGE>

EDCP Committee, be deferred to a later calendar year. Such deferred amounts
shall be paid in the next succeeding calendar year, provided that such payment,
when combined with any other payments subject to the Section 162(m) limitations
received during the year, does not exceed the limitations on deductibility under
Section 162(m) of the Code. Any payment that is deferred in accordance with this
Section 5.3 shall be credited with hypothetical investment earnings and losses
in accordance with Article Six (CREDITING OF CONTRIBUTIONS AND INCOME).

                                  ARTICLE SIX
                      CREDITING OF CONTRIBUTIONS AND INCOME

     6.1 ACCOUNT ALLOCATIONS. All Deferral Contributions and Matching
Contributions shall be credited to the Participants' Deferral Contribution
Account and the Matching Contribution Account, respectively, in accordance with
the uniform policies and procedures of the EDCP Committee. All transfers to,
payments from and charges against an Account shall be charged against the
Account as of the Valuation Date on which the transaction occurs. The Accounts
are bookkeeping accounts only and the EDCP Committee is not in any way obligated
to segregate assets for the benefit of any Participant.

     6.2 SUBACCOUNTS. The EDCP Committee may divide any Account into such
subaccounts as it deems necessary and desirable.

     6.3 HYPOTHETICAL INVESTMENT FUNDS. The EDCP Committee shall establish a
series of hypothetical Investment Funds for use pursuant to this Article Six.

     6.4 INVESTMENT DIRECTION. A Participant shall complete a portfolio
allocation form directing the hypothetical investment of his Deferral
Contributions and Matching Contributions among the Investment Funds. The
Participant's Deferral Contributions and Matching Contributions shall not be
invested in the Investment Funds, but the value of the Participant's Accounts
shall be measured by the performance of the Investment Funds selected. A
Participant may change his Investment Fund allocations by executing a portfolio
allocation form and delivering such form to the EDCP Committee at least 5 days
prior to the Valuation Date on which it is to be effective. Any and all changes
to a Participant's Investment Fund allocation shall be made in accordance with
the uniform procedures of the EDCP Committee, which shall permit changes in
Investment Fund allocations on a quarterly or more frequent basis. If a
Participant fails to file a portfolio allocation form with the EDCP Committee,
the Participant will be deemed to have selected the default hypothetical
Investment Fund(s) selected by the EDCP Committee for such purpose, in its
discretion and in accordance with its uniform policies and procedures.

     6.5 RATE OF RETURN. Participant Accounts shall be adjusted on each
Valuation Date to reflect investment gains and losses as if the Accounts were
invested in the hypothetical Investment Funds selected by the Participants in
accordance with Section 6.4 (INVESTMENT DIRECTION) and charged with any and all
reasonable expenses related to the administration of the Plan including, but not
limited to, the reasonable expenses of carrying out the hypothetical investment
directions related to each Account. The earnings and losses allocated to any
Account shall be allocated among the subaccounts of that Account in the same
manner. The earnings and losses determined by the EDCP Committee in good faith
and in its discretion pursuant to this

                                      -11-
<PAGE>

Article Six shall be binding and conclusive on the Participant, the
Participant's Beneficiary and all parties claiming through them.

                                 ARTICLE SEVEN
                                     VESTING

     7.1 VESTING OF BENEFITS.

          (a) DEFERRAL CONTRIBUTIONS. Each Participant shall at all times have a
fully vested interest in his Deferral Contribution Account, and a Participant's
rights and interest therein shall not be forfeitable for any reason.

          (b) MATCHING CONTRIBUTIONS.

               (1) FULL VESTING. Each Participant shall have a fully vested
          interest in his Matching Contribution Account on and after the first
          to occur of the following events:

                    (A) The Participant's attainment of age 60;

                    (B) The date of death of the Participant;

                    (C) The Participant's Disability;

                    (D) A Change of Control;

                    (E) Termination of the Plan; or

                    (F) The completion of five Years of Vesting Service.

               (2) VESTING SCHEDULE. If a Participant terminates service with an
Employer at a time when the Participant does not have a fully vested interest in
his Matching Contribution Account, the Participant's vested interest shall be
determined in accordance with the following schedule:

<TABLE>
<CAPTION>

                  COMPLETED YEARS
                  OF VESTING SERVICE            PERCENTAGE VESTED
                  ------------------            -----------------

                  <S>                           <C>
                  Less than 1 Year                    0%
                  1 but less than 2                  20%
                  2 but less than 3                  40%
                  3 but less than 4                  60%
                  4 but less than 5                  80%
                  5 or more                         100%
</TABLE>

A Participant's vested interest in his Matching Contribution Account shall be
determined as of the Valuation Date immediately preceding the first distribution
to the Participant from his Matching Contribution Account following his
termination of employment. Any portion of a

                                      -12-
<PAGE>

Participant's Accounts which is not vested shall be forfeited in the first
Deferral Period in which the Participant receives a distribution from this Plan.

     7.2 CHANGES IN VESTING SCHEDULE. In the event that an amendment to this
Plan or the Savings and Retirement Plan directly or indirectly changes the
vesting provisions of Section 7.1 (VESTING OF BENEFITS), the vested percentage
for each Participant in his benefit accumulated to the date when the amendment
is adopted shall not be reduced as a result of the amendment.

                                 ARTICLE EIGHT
                               PAYMENT OF BENEFITS

     8.1 TIME OF PAYMENT. With the exception of the withdrawal of amounts
pursuant to Article Five (WITHDRAWALS), no distributions will be made to a
Participant prior to the Participant's death or termination of employment with
the Company and all Affiliates. A Disabled Participant shall continue to
participate in the Plan until such time as the Participant terminates or retires
from employment with the Company and all Affiliates or the Participant dies.
Following the Participant's termination of employment, distributions normally
will be made as soon as possible and in any event shall commence within 60 days
following the end of the month in which the Participant terminates employment.
If benefits are being paid pursuant to this Plan following the death of a
Participant, distributions will be made or commence as of the January 1 next
following the date of the Participant's death.

     8.2 METHOD OF PAYMENT.

          (a) GENERAL. The general method of payment under this Plan shall be a
cash lump sum payment.

          (b) INSTALLMENT PAYMENTS. Notwithstanding the provisions of paragraph
(a) above, an "eligible Participant" may receive distributions from his Account
in the form of substantially equal monthly cash installment payments over a
period certain not exceeding 15 years, provided that such method of payment has
been elected by the Participant in his initial Participation Agreement or in any
revised Participation Agreement that has been in effect for the requisite period
of time specified in Section 3.3 (REVISED PARTICIPATION AGREEMENT). For purposes
of this Section 8.2, the term "eligible Participant" includes each Participant
who (1) attains the age of 55 and completes 10 Years of Vesting Service prior to
his termination of employment, (2) attains the age of 60 prior his termination
of employment or (3) terminates or is terminated from employment with the
Employer within two years of a Change of Control. The term "eligible
Participant" also shall include the Beneficiary of a Participant who dies prior
to his termination of employment but after satisfying the age and service
criteria set forth in clause (1) or (2) above. If installment payments are made,
the provisions of Sections 6.3 (HYPOTHETICAL INVESTMENT FUNDS), 6.4 (INVESTMENT
DIRECTION) and 6.5 (RATE OF RETURN) shall continue to apply to the unpaid
balance. Unless a Participant has affirmatively elected to receive payments in
installments over a period of 15 years or less, the Participant's Accounts shall
be distributed in one lump sum. If a Participant is married at the time a
Participation Agreement or a revised Participation Agreement is filed, an
election to receive payments in installments shall be ineffective unless the

                                      -13-
<PAGE>

Participant's spouse consents to such election in a manner prescribed by the
EDCP Committee for that purpose.

          8.3 BENEFICIARY DESIGNATIONS.

               (a) GENERAL. In the event of the death of the Participant, the
Participant's vested interest in his Accounts shall be paid to the Participant's
Beneficiary. Each Participant shall have the right to designate, in the manner
specified by the EDCP Committee, a Beneficiary or Beneficiaries to receive his
benefits hereunder in the event of the Participant's death.

               (b) SPOUSAL CONSENT REQUIREMENTS. If the Participant is married
at the time the Beneficiary designation is filed, the Participant must designate
his spouse as the Beneficiary of at least 50% of the Participant's Account or
provide the spouse's consent to the designation of a Beneficiary other than the
Spouse. If a Participant marries or divorces after a Beneficiary designation is
filed, the designation will no longer be effective.

               (c) REVISED DESIGNATIONS. Subject to the spousal consent
requirements noted above, each Participant may change his Beneficiary
designation from time to time in the manner described above. Upon receipt of
such designation by the EDCP Committee, such designation or change of
designation shall become effective as of the date of the notice, whether or not
the Participant is living at the time the notice is received. There shall be no
liability on the part of the Employer, the EDCP Committee or the Trustee with
respect to any payment authorized by the EDCP Committee in accordance with the
most recent Beneficiary designation of the Participant in the possession of the
EDCP Committee before the EDCP Committee receives a more recent Beneficiary
designation.

               (d) DEEMED BENEFICIARY DESIGNATIONS. If no designated Beneficiary
is living when benefits become payable, or if there is no designated
Beneficiary, the Beneficiary shall be the Participant's spouse or, if there is
no living spouse, the Beneficiary shall be the Participant's estate. If the
designated Beneficiary dies after the payment of benefits begin, then the
Beneficiary for the remainder of the benefits payable shall be the estate of the
Beneficiary.

     8.4 LIMITATION ON DISTRIBUTIONS. Distributions made under this Article 8
shall be subject to the same limitations set forth in Section 5.3 (LIMITATION ON
DISTRIBUTIONS) of the Plan.

     8.5 WITHHOLDING AND PAYROLL TAXES. The Employer shall withhold from Plan
payments any taxes required to be withheld from such payments under federal,
state or local law. Any withholding of taxes or other amounts required by
federal, state or local law with respect to amounts credited to Participant
Accounts including, but not limited to, tax due under the Federal Insurance
Contributions Act, shall be withheld, to the maximum extent possible, from the
portion of the Participant's Salary or Bonus that is not contributed to this
Plan. Any withholding amounts that cannot be withheld in accordance with the
preceding sentence shall be withheld from the Participant's Deferral
Contributions.

                                      -14-
<PAGE>

                                  ARTICLE NINE
                           ADMINISTRATION OF THE PLAN

     9.1 ADOPTION OF TRUST. The Company shall enter into a Trust Agreement with
the Trustee, which Trust Agreement shall form a part of this Plan and is hereby
incorporated herein by reference.

     9.2 POWERS OF THE EDCP COMMITTEE.

          (a) NAMED FIDUCIARY. The EDCP Committee is the named fiduciary with
respect to the administration of the Plan.

          (b) GENERAL POWERS OF THE EDCP COMMITTEE. The EDCP Committee shall
have the power and discretion to perform the administrative duties described in
this Plan or required for proper administration of the Plan and shall have all
powers necessary to enable it to properly carry out such duties. Without
limiting the generality of the foregoing, the EDCP Committee shall have the
power and discretion to construe and interpret this Plan, to hear and resolve
claims relating to this Plan, and to decide all questions and disputes arising
under this Plan. The EDCP Committee shall determine, in its discretion, the
service credited to the Participants, the status and rights of a Participant,
and the identity of the Beneficiary or Beneficiaries entitled to receive any
benefits payable hereunder on account of the death of a Participant.

          (c) DISTRIBUTIONS. Except as is otherwise provided hereunder, the EDCP
Committee shall determine the manner and time of payment of benefits under this
Plan. All benefit disbursements by the Trustee shall be made upon the
instructions of the EDCP Committee.

          (d) DECISIONS CONCLUSIVE. The decision of the EDCP Committee upon all
matters within the scope of its authority shall be binding and conclusive upon
all persons.

          (e) REPORTING. The EDCP Committee shall file all reports and forms
lawfully required to be filed by the EDCP Committee and shall distribute any
forms, reports or statements to be distributed to Participants and others.

          (f) TRUST FUND. The EDCP Committee shall keep itself advised with
respect to the funded status and investment of the Trust Fund.

     9.3 CREATION OF COMMITTEE. The EDCP Committee shall be appointed by the
Company by action of the HRC. The EDCP Committee must consist of at least three
members, and they shall hold office during the pleasure of the HRC. The EDCP
Committee members shall serve without compensation but shall be reimbursed for
all expenses by the Company. The EDCP Committee shall conduct itself in
accordance with the provisions of this Article Nine. The members of the EDCP
Committee may resign with thirty (30) days notice in writing to the Company and
may be removed immediately at any time by written notice from the Company or the
HRC.

                                      -15-
<PAGE>

     9.4 CHAIRMAN AND SECRETARY. The EDCP Committee shall elect a chairman from
among its members and shall select a secretary who is not required to be a
member of the EDCP Committee and who may be authorized to execute any document
or documents on behalf of the EDCP Committee. The secretary of the EDCP
Committee or his designee shall record all acts and determinations of the EDCP
Committee and shall preserve and retain custody of all such records, together
with such other documents as may be necessary for the administration of this
Plan or as may be required by law.

     9.5 APPOINTMENT OF AGENTS. The EDCP Committee may appoint such other
agents, who need not be members of the EDCP Committee, as it may deem necessary
for the effective performance of its duties, whether ministerial or
discretionary, as the EDCP Committee may deem expedient or appropriate. The
compensation of any agents who are not employees of the Company shall be fixed
by the committee within any limitations set by the HRC.

     9.6 MAJORITY VOTE AND EXECUTION OF INSTRUMENTS. In all matters, questions
and decisions, the action of the EDCP Committee shall be determined by a
majority vote of its members. They may meet informally or take any ordinary
action without the necessity of meeting as a group. All instruments executed by
the EDCP Committee shall be executed by a majority of its members or by any
member of the EDCP Committee designated to act on its behalf.

     9.7 ALLOCATION OF RESPONSIBILITIES. The EDCP Committee may allocate
responsibilities among its members or designate other persons to act on its
behalf. Any allocation or designation, however, must be set forth in writing and
must be retained in the permanent records of the EDCP Committee.

     9.8 CONFLICT OF INTEREST. No member of the EDCP Committee who is a
Participant shall take any part in any action in connection with his
participation as an individual. Such action shall be voted or decided by the
remaining members of the EDCP Committee.

     9.9 INDEMNIFICATION OF COMMITTEE. The Company shall indemnify and hold
harmless the members of the EDCP Committee against any and all claims, loss,
damage, expense or liability arising from any action or failure to act with
respect to this Plan on account of such member's service on the EDCP Committee,
except in the case of gross negligence or willful misconduct.

     9.10 ACTION TAKEN BY EMPLOYER. Any action to be taken by an Employer shall
be taken by resolution adopted by its board of directors or appropriate board
committee; provided, however, that by resolution, the board of directors or
appropriate board committee may delegate to any committee of the board or any
officer of the Employer the authority to take any actions under this Plan, other
than the power to determine the basis of Employer contributions.

     9.11 FIDUCIARY AUTHORITY. All delegations of fiduciary responsibility set
forth in this document regarding the determination of benefits and the
interpretation of the terms of the Plan confer discretionary authority upon the
named fiduciary.

     9.12 PARTICIPANT STATEMENTS. The EDCP Committee shall provide a statement
of Plan Accounts to each Participant and Beneficiary on a quarterly or more
frequent basis, as

                                      -16-
<PAGE>

determined by the EDCP Committee in its discretion. Such statement of Plan
Accounts shall reflect the amounts allocated to each Account maintained for the
Participant, the Participant's vested interest in his Accounts, any
distributions, withdrawals or expenses charged against the Participant's
Account, the hypothetical investment earnings and losses on the Participant's
Account, and any other information deemed appropriate by the EDCP Committee.

                                  ARTICLE TEN
                             CLAIM REVIEW PROCEDURE

     10.1 GENERAL. In the event that a Participant or Beneficiary (the
"claimant") is denied a claim for benefits under this Plan, the EDCP Committee
shall provide to the claimant written notice of the denial which shall set
forth:

          (a) The specific reason or reasons for the denial;

          (b) Specific references to pertinent Plan provisions on which the EDCP
Committee based its denial;

          (c) A description of any additional material or information needed for
the claimant to perfect the claim and an explanation of why the material or
information is needed;

          (d) A statement that the claimant may:

               (1) Request a review upon written application to the EDCP
Committee;

               (2) Review pertinent Plan documents; and

               (3) Submit issues and comments in writing; and

          (e) That any appeal the claimant wishes to make of the adverse
determination must be in writing to the EDCP Committee within 60 days after
receipt of the EDCP Committee's notice of denial of benefits. The EDCP
Committee's notice must further advise the claimant that his failure to appeal
the action to the EDCP Committee in writing within the 60 day period will render
the EDCP Committee's determination final, binding, and conclusive.

     10.2 APPEALS.

          (a) If the claimant should appeal to the EDCP Committee, he, or his
duly authorized representative, may submit, in writing, whatever issues and
comments he, or his duly authorized representative, feels are pertinent. The
EDCP Committee shall re-examine all facts related to the appeal and make a final
determination as to whether the denial of benefits is justified under the
circumstances. The EDCP Committee shall advise the claimant in writing of its
decision on his appeal, the specific reasons for the decision, and the specific
Plan provisions on which the decision is based. The notice of the decision shall
be given within 60 days of the claimant's written request for review, unless
special circumstances (such as a hearing) would make the rendering of a decision
within the 60 day period infeasible, but in no event shall the EDCP Committee
render a decision regarding the denial of a claim for benefits later than 120

                                      -17-
<PAGE>

days after its receipt of a request for review. If an extension of time for
review is required because of special circumstances, written notice of the
extension shall be furnished to the claimant prior to the date the extension
period commences.

          (b) If, upon appeal, the EDCP Committee shall grant the relief
requested by the claimant, then, in addition, the EDCP Committee shall award to
the claimant reasonable fees and expenses of counsel, or any other duly
authorized representative of claimant, which shall be paid by the Company. The
determination as to whether such fees and expenses are reasonable shall be made
by the Company in its sole and absolute discretion and such determination shall
be binding and conclusive on all parties.

     10.3 NOTICE OF DENIALS. The EDCP Committee's notice of denial of benefits
shall identify the address to which the claimant may forward his appeal.

                                 ARTICLE ELEVEN
                  LIMITATION ON ASSIGNMENT; PAYMENTS TO LEGALLY
                             INCOMPETENT DISTRIBUTEE

     11.1 ANTI-ALIENATION CLAUSE. No benefit which shall be payable under the
Plan to any person shall be subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance or charge, and any attempt to
anticipate, alienate, sell, transfer, assign, pledge, encumber, charge or
otherwise dispose of the same shall be void. No benefit shall in any manner be
subject to the debts, contracts, liabilities, engagements or torts of any
person, nor shall it be subject to attachment or legal process for or against
any person, except to the extent as may be required by law. The benefits
provided by this Plan are not subject to the qualified domestic relations order
provisions of ERISA or the Code.

     11.2 PERMITTED ARRANGEMENTS. Section 11.1 (ANTI-ALIENATION CLAUSE) shall
not preclude arrangements for the withholding of taxes from benefit payments,
arrangements for the recovery of benefit overpayments, arrangements for the
transfer of benefit rights to another plan, or arrangements for direct deposit
of benefit payments to an account in a bank, savings and loan association or
credit union (provided that such arrangement is not part of an arrangement
constituting an assignment or alienation).

     11.3 PAYMENT TO MINOR OR INCOMPETENT. Whenever any benefit which shall be
payable under the Plan is to be paid to or for the benefit of any person who is
then a minor or determined by the EDCP Committee to be incompetent, the EDCP
Committee need not require the appointment of a guardian or custodian, but shall
be authorized to cause the same to be paid over to the person having custody of
the minor or incompetent, or to cause the same to be paid to the minor or
incompetent without the intervention of a guardian or custodian, or to cause the
same to be paid to a legal guardian or custodian of the minor or incompetent if
one has been appointed or to cause the same to be used for the benefit of the
minor or incompetent.

                                 ARTICLE TWELVE
                        AMENDMENT, MERGER AND TERMINATION

     12.1 AMENDMENT. The Company shall have the right at any time, by an
instrument in writing duly executed, acknowledged and delivered to the EDCP
Committee, to modify, alter or

                                      -18-
<PAGE>

amend this Plan, in whole or in part, prospectively or retroactively; provided,
however, that the duties and liabilities of the EDCP Committee and the Trustee
hereunder shall not be substantially increased without its written consent; and
provided further that the amendment shall not reduce any Participant's vested
interest in the Plan, calculated as of the date on which the amendment is
adopted. If the Plan is amended by the Company after it is adopted by an
Affiliate, unless otherwise expressly provided, it shall be treated as so
amended by such Affiliate without the necessity of any action on the part of the
Affiliate. Any Affiliate or other corporation adopting this Plan hereby
delegates the authority to amend the Plan to the Company. An Affiliate or other
corporation that has adopted this Plan may terminate its future participation in
the Plan at any time.

     12.2 MERGER OR CONSOLIDATION OF COMPANY. The Plan shall not be
automatically terminated by the Company's acquisition by or merger into any
other employer, but the Plan shall be continued after such acquisition or merger
if the successor employer elects and agrees to continue the Plan. Except as
provided in Section 12.4 (CONTINUATION OF PLAN FOLLOWING CHANGE OF CONTROL), all
rights to amend, modify, suspend, or terminate the Plan shall be transferred to
the successor employer, effective as of the date of the merger.

     12.3 TERMINATION OF PLAN OR DISCONTINUANCE OF CONTRIBUTIONS. It is the
expectation of the Company that this Plan and the payment of contributions
hereunder will be continued indefinitely. However, continuance of the Plan is
not assumed as a contractual obligation of the Company. Except as provided in
Section 12.4 (CONTINUATION OF PLAN FOLLOWING CHANGE OF CONTROL), the right is
reserved at any time to terminate this Plan or to reduce, temporarily suspend or
discontinue contributions hereunder. If this Plan is terminated, the HRC may, in
its discretion, direct that all Plan benefits be distributed to current and
former Participants in cash lump sum payments as soon as practicable following
the termination of the Plan. Any distributions made pursuant to this Section
12.3 shall be made in accordance with Section 8.3 (BENEFICIARY DESIGNATIONS),
Section 8.4 (LIMITATION ON DISTRIBUTIONS) and Section 8.5 (WITHHOLDING AND
PAYROLL TAXES).

     12.4 CONTINUATION OF PLAN FOLLOWING A CHANGE OF CONTROL. Notwithstanding
any provision of this Plan to the contrary, if a Change of Control occurs
following the Effective Date of this Plan, a successor employer shall have the
power to (a) terminate this Plan, (b) amend Section 13.5 (FUNDING UPON A CHANGE
OF CONTROL) of the Plan, or (c) amend any provision of the Plan that affects a
Participant's entitlement to or the timing of a distribution from the Plan, only
if 80% of the individuals who are Participants in the Plan as of the date of the
Change of Control consent to such an amendment or termination. The provisions of
this Section 12.4 shall not limit a successor employer's authority to take other
actions with respect to the Plan, including the authority to discontinue
contributions to the Plan.

     12.5 LIMITATION OF COMPANY'S LIABILITY. The adoption of this Plan is
strictly a voluntary undertaking on the part of the Company and shall not be
deemed to constitute a contract between the Company and any employee or
Participant or to be consideration for, an inducement to, or a condition of the
employment of any employee. A Participant, employee, or Beneficiary shall not
have any right to retirement or other benefits except to the extent provided
herein.

                                      -19-
<PAGE>

                                ARTICLE THIRTEEN
                               GENERAL PROVISIONS

     13.1 LIMITATION OF RIGHTS. Neither this Plan, the Trust nor membership in
the Plan shall give any employee or other person any right except to the extent
that the right is specifically fixed under the terms of the Plan. The
establishment of the Plan shall not be construed to give any individual a right
to be continued in the service of a Employer or as interfering with the right of
a Employer to terminate the service of any individual at any time.

     13.2 CONSTRUCTION. The masculine gender, where appearing in the Plan, shall
include the feminine gender (and vice versa), and the singular shall include the
plural, unless the context clearly indicates to the contrary. Headings and
subheadings are for the purpose of reference only and are not to be considered
in the construction of this Plan. If any provision of this Plan is determined to
be for any reason invalid or unenforceable, the remaining provisions shall
continue in full force and effect. All of the provisions of this Plan shall be
construed and enforced in accordance with the laws of the State of Delaware.

     13.3 STATUS OF PARTICIPANTS AS UNSECURED CREDITORS. All benefits under
the Plan shall be the unsecured obligations of the Company and each Employer,
as applicable, and, except for those assets which will be placed in the Trust
established in connection with this Plan, no assets will be placed in trust
or otherwise segregated from the general assets of the Company or each
Employer, as applicable, for the payment of obligations hereunder. To the
extent that any person acquires a right to receive payments hereunder, such
right shall be no greater than the right of any unsecured general creditor of
the Company and each Employer, as applicable.

     13.4 STATUS OF TRUST FUND. The Trust Fund is being established to assist
the Company and the Employers in meeting their obligations to the Participants
and to provide the Participants with a measure of protection in certain limited
instances. In certain circumstances described in the Trust Agreement, the assets
of the Trust Fund may be used for the benefit of the Company's or an Affiliate's
creditors and, as a result, the Trust Fund is considered to be part of the
Company's and Employer's general assets. Benefit payments due under this Plan
shall either be paid from the Trust Fund or from the Company's or Affiliate's
general assets as directed by the EDCP Committee. Despite the establishment of
the Trust Fund, it is intended that the Plan be considered to be "unfunded" for
purposes of the ERISA and the Code.

     13.5 FUNDING UPON A CHANGE OF CONTROL. Upon a Change of Control, and in no
event later than 90 days following the date of a Change of Control, the Company
shall determine whether, for any reason, the assets of the Trust Fund are less
than the aggregate Account balances of all Participants (determined without
regard to the vested interest of each Participant) and transfer an amount equal
to the deficiency to the Trustee of the Trust. If it is discovered at any time
that the amount initially transferred is less than the total amount called for
by the preceding sentence, the shortfall, including any accrued interest on the
shortfall, shall be transferred to the Trustee immediately upon the discovery of
such error.

     13.6 NO LIABILITY FOR ACCELERATION OF PAYMENTS. Under the Plan,
Participants are allowed, to a certain extent, to designate the dates on which
distributions are to be made to them. The EDCP Committee, however, also has the
right, in the exercise of its discretion, to accelerate

                                      -20-
<PAGE>

payments. By accepting the benefits offered by the Plan, each Participant (and
each Beneficiary claiming through a Participant) acknowledges that the EDCP
Committee may override the Participant's elections and agrees that neither the
Participant nor any Beneficiary shall have may claim against the EDCP Committee,
the Trustee, or any Employer if distributions are made earlier than anticipated
by the Participant due to the EDCP Committee's exercise of its discretion to
accelerate payments.

     13.7 UNIFORM ADMINISTRATION. Whenever in the administration of the Plan any
action is required by the EDCP Committee, such action shall be uniform in nature
as applied to all persons similarly situated, except as otherwise provided to
the contrary in this Plan document or the Trust Agreement.

     13.8 HEIRS AND SUCCESSORS. All of the provisions of this Plan shall be
binding upon all persons who shall be entitled to any benefits hereunder, and
their heirs and legal representatives.

                                     * * * *

     To signify its adoption of this Executive Supplemental Savings Plan, the
Company has caused this Plan document to be executed by a duly authorized
officer of the Company on this 13th day of March, 2001.

                                         Harrah's Entertainment, Inc.

                                         By  Marilyn G. Winn
                                             ------------------------------
                                             Marilyn G. Winn
                                             Senior Vice President

                                      -21-

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