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EXHIBIT 10.2    
    

 
 

EMPLOYMENT AGREEMENT    
    

        THIS EMPLOYMENT AGREEMENT ("Agreement") is made and effective as of the 26th day of May, 2004, by and between CAESARS
ENTERTAINMENT, INC. (the "Company"), and BERNARD E. DeLURY, JR. ("Executive"). 

        In
consideration of the premises and of the covenants and agreements herein contained, the parties agree as follows: 

        1.     Employment.

        A.    The
employment agreement entered into between the parties dated February 1, 2003, as amended on May 21, 2003, shall terminate as of the effective date
hereof, and shall be of no further force and effect. 

        B.    The
Company hereby agrees to employ Executive in the capacity of Executive Vice President and General Counsel of the Company, and such other capacity or capacities of
equal status and responsibility as the Chief Executive Officer of the Company (the "CEO") shall determine, reporting directly and solely to the CEO of the Company, and Executive hereby accepts such
employment, all upon and subject to the terms and conditions herein set forth. 

        C.    During
the term of his employment hereunder Executive shall devote his best efforts to such employment and perform such duties as are reasonably assigned or delegated to
him by the CEO, consistent with his position and capacities hereunder and such other related positions(s) and capacity or capacities as the CEO shall from time to time determine. While it is
understood and agreed that
Executive's job capacities may change at the Company's discretion during the Term (hereafter defined) of this Agreement, his general level of responsibility shall not be substantially reduced at any
time. Furthermore, Executive agrees that the Company may direct him to perform some or all of his duties hereunder for the benefit of subsidiaries and affiliates of the Company. Subject to the
exceptions set forth in 1D(1) below, Executive shall devote his entire working time and attention to the business and related interests of, and shall be loyal to, the Company and its subsidiaries and
affiliates, and Executive agrees to render services hereunder on behalf of the Company and/or on behalf of such subsidiaries and affiliates. 

        D.    During
the term of his employment hereunder Executive shall not: 

        (1)   Render
services of a business, professional or commercial nature to any person or entity, directly or indirectly, whether for compensation or otherwise, except that this
prohibition shall not be construed to prevent Executive from (a) engaging in occasional outside business activities which (i) are not in violation of 1D(2) and (ii) do not
interfere with the performance of his duties hereunder; (b) investing his assets in such form or manner as will not require any services on the part of Executive in the operation of the affairs
of the companies in which such investments are made and which are not in violation of 1C(2) immediately below, or (c) from engaging in charitable or civic activities so long as such activities
do not interfere with the performance of his duties hereunder. 

        (2)   Engage
in any activity competitive with or adverse to the welfare or business or related interests of the Company or any of its subsidiaries or affiliates, whether
alone, as a partner, officer, director, employee or shareholder of any other corporation or other entity, or otherwise, directly or indirectly, if Executive knows or should have known that such other
corporation or entity is competitive with or adverse to the Company, except that the ownership of not more than one percent of the stock of any one or more publicly traded corporations shall not be
deemed a violation of this subparagraph (2); 

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        (3)   Be
engaged by any person or entity which conducts business with or acts as a consultant or advisor to the Company or any of its subsidiaries or affiliates, whether
alone, as a partner, officer, director, employee or shareholder of any other corporation or entity, or otherwise, directly or indirectly, except that ownership of not more than one percent of the
stock of any one or more publicly traded corporations shall not be deemed a violation of this subparagraph (3). 

        E.    Executive
acknowledges and agrees that he shall perform his duties hereunder at the corporate headquarters of the Company in Las Vegas, NV and at the Company's east coast
office located in Atlantic City, NJ, and such other locations as may be required by the nature of Executive's responsibilities. It is understood that Executive maintains his present residence in
Atlantic County, NJ and it is agreed that he shall not be required to relocate his present residence to any other location. 

        2.     Term.

        The
term of this Agreement (the "Term") shall begin on the effective date stated above and shall continue until May 25, 2007. The Term shall automatically renew beginning
May 26, 2007 for successive periods of one year unless the Company or the Executive gives written notice to the other at least six (6) months prior to the end of the then applicable
term, that the Agreement shall not be further extended. Otherwise, this Agreement may be terminated as specifically provided below. 

        3.     Compensation.

        A.    In
consideration of the services to be rendered by Executive hereunder, the Company agrees to pay or cause to be paid to Executive, and Executive agrees to accept, the
sum of $600,000 (the "Base Salary") for the initial twelve month period following the effective date of this Agreement during the Term, which shall be paid in accordance with the regular payroll
practices of the Company. During the Term, the Base Salary shall be reviewed annually in accordance with the Company's then applicable merit policies or as otherwise determined by the CEO and the
Board in its discretion, but in no event shall the Base Salary be lower than $600,000 per annum. 

        B.    In
addition to Base Salary, the Executive shall be entitled to participate in the Company's annual incentive plan for senior executive ("the Annual Bonus"). The Target
amount of any Annual Bonus shall be set at 100% of Base Salary depending upon Company and individual performance and shall be subject to the discretion of the CEO and the Board. The Executive will be
eligible for additional special bonus awards if and when determined by the Board in its sole discretion. 

        C.    In
addition to Base Salary and Annual Bonus, the Executive shall be entitled to participate in the Company's Stock Option Plan and Long-Term Incentive Plans
as in effect from time to time in accordance with the terms of such Plans. Upon confirmation by the Compensation Committee of the Board, Executive shall be granted options and other equity vehicles in
an amount equal to or greater than those awarded to officers of like status and position in the Company. The option and grant price shall be set on the date of approval of the grant as provided in the
Option Plan or other plans. Additional grants shall be subject to the discretion of the Board. Such options shall vest and be governed by the provisions of the Option Plan or as otherwise provided. 

        D.    If
the Company restructures the compensation arrangement applicable to its senior executives by replacing the plans described in B and C above, Executive shall be
entitled to participate in the new plans at a level appropriate in light of his status and, as nearly as may be, with comparable economic effect to the compensation provided for in B and C, above. 

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        4.     Vacation and Other Benefits.

        A.    Executive
shall be entitled to reasonable paid vacation annually, as well as other employment benefits, including death and retirement plans, and group insurance programs
for medical, hospitalization, life, and long term disability, and the like, afforded in general to senior executives of the Company of comparable status and tenure, and consistent with the Company's
policies for executive employment benefits. The Company may, in its sole discretion, change such benefits policies from time to time. 

        B.    So
long as Executive is employed hereunder, the Company shall maintain in full force and effect a policy of term insurance on the life of Executive in an amount as
provided by the applicable policy of the Company. Executive shall promptly advise the Company of the designated beneficiary or beneficiaries of such policy. Upon termination of Executive's employment,
to the extent permitted under the policy, Executive shall have the right to transfer such policy to his own name or the name of a beneficiary thereof, provided Executive shall pay all premiums for
such policy as shall accrue thereafter. 

        5.     Expenses.

        The
Company shall pay or cause to be paid all reasonable expenses incurred by Executive in the performance of his responsibilities and duties for the Company hereunder
[including reasonable and customary expenses (including, without limitation, attorney's fees and expenses) incurred in connection with entering into this Agreement], as well as
those reasonably incurred in the promotion of the Company's business, including but not limited to the costs of licensing or qualification as may be required by any gaming jurisdiction. Executive
shall submit to the Company periodic statements of all expenses so incurred in accordance with the Company's policy. Subject to such audits as the Company may deem appropriate, the Company shall,
promptly and in the ordinary course, reimburse Executive the full amount of any such expenses advanced by Executive. 

        6.     Covenants; Confidential Information.

        A.    Executive
agrees that, for the applicable period specified below, he shall not, directly or indirectly, do any of the following: 

        (1)   Own,
manage, control, or participate in the ownership, management or control of, or be employed or engaged by, or otherwise affiliated or associated with, as a
consultant, independent contractor or otherwise, any other corporation, partnership, proprietorship, firm, association or other business entity, or otherwise engage in any business that is competitive
with any business or enterprise in which the Company is engaged at the time Executive's employment ceases including, without limitation, any gaming venture, Indian gaming, river boat gaming or
otherwise within any country or any state (or any metropolitan area involving multiple jurisdictions) in which there is located any gaming facility owned, managed or under development to be owned or
managed by the Company, determined as of the date Executive ceases to be employed hereunder; 

        (2)   Solicit
or induce any person who is an employee, officer, consultant or agent of the Company or of any subsidiary or affiliate of the Company, to terminate such
relationship; 

        (3)   Employ,
assist in employing, or otherwise be associated in business with any present or former employee or officer of the Company or of any subsidiary or affiliate of
the Company, including without limitation those who commence such positions with the Company or any such subsidiary or affiliate, after the effective date hereof; provided that if such circumstance
occurs without the knowledge or assistance of Executive, it shall not be a breach of this provision. 

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        (4)   Disclose,
divulge, discuss, copy or otherwise use or suffer to be used in any manner, the customer lists, proprietary and confidential inventions, ideas, discoveries,
marketing methods, product research or other data or any other methodologies of the Company (collectively, "Confidential Information"), it being acknowledged by Executive that all such Confidential
Information compiled or obtained by, or furnished to, Executive while he is or was employed by or associated with the Company, is confidential and proprietary information which is the exclusive
property of the Company. 

        B.    The
provisions of subparagraphs 6A(I) through 6A(4) hereof shall be operative throughout the Term and for so long as Executive is receiving compensation (other
than benefit continuation) from the Company thereafter, except as provided in the following sentences. In the event that Executive is terminated pursuant to paragraph 8 hereof for Cause, the
provisions of subparagraphs 6A(1), 6A(2) and 6A(3) shall be operative during the Term and for a period of one year thereafter. In the event that Executive is terminated pursuant to paragraph 8
hereof without Cause, the provisions of subparagraph 6A(1) shall be operative for a period of six months after the termination date and the provisions of subparagraphs 6A(2) and 6A(3) shall be
operative for a period of 12 months after the termination date. All obligations created by the terms of subparagraph 6A(4) are of a continuing nature and shall remain
in effect at all times during Executive's period of employment hereunder and for a period of five years thereafter; provided that if at any time
following the termination of this Agreement any Confidential Information shall become part of the public domain through no fault of Executive, then the restrictions and limitations of subparagraph
6A(4) shall not apply to such particular information. 

        C.    The
Executive acknowledges and agrees that the restrictions contained in this paragraph are reasonable and necessary to protect and preserve the legitimate interests,
properties, goodwill and business of the Company, that the Company would not have entered into this Agreement in the absence of such restrictions and that irreparable injury will be suffered by the
Company should the Executive breach any of those provisions. Executive represents and acknowledges that (i) the Executive has been advised by the Company to consult Executive's own legal
counsel in respect of this Agreement, and (ii) that the Executive has had full opportunity, prior to execution of this Agreement, to review thoroughly this Agreement with the Executive's
counsel. The Executive further acknowledges and agrees that a breach of any of the restrictions in this paragraph cannot be adequately compensated by monetary damages. 

        D.    The
Company agrees to give the Executive written notice of any action taken by the Executive that it believes in good faith to constitute a violation of the Executive's
undertakings under Paragraph 6 and to give the Executive at least 10 days thereafter to cease any such action which, if he complies with such request, will preclude any further action or
any recovery by the Company. In the event that the Executive fails to do so, the Executive agrees that the Executive's right to any payment pursuant to Paragraph 8 shall be forfeited (but only
to the extent of those portions not previously received) and the Executive's right to exercise any and all stock options shall cease. In addition, in the case of any violation of the provisions of
this paragraph 6, the Company shall be entitled to preliminary and permanent injunctive relief, without the necessity of proving actual damages, as well as provable damages and an equitable
accounting of all earnings, profits and other benefits arising from any violation of this paragraph (with appropriate credit for the amounts forfeited by the Executive and the
non-exercisability of the stock options), which rights shall be cumulative and in addition to any other rights or remedies to which the Company may be entitled. 

        E.    In
the event that any of the provisions of this Paragraph 6 should ever be adjudicated to exceed the time, geographic, service, or other limitations permitted by
applicable law in any jurisdiction, it is the intention of the parties that the provision shall be amended to the extent of the maximum time, geographic, service, or other limitations permitted by
applicable law, that such 

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amendment
shall apply only within the jurisdiction of the court that made such adjudication and that the provision otherwise be enforced to the maximum extent permitted by law. The Executive
irrevocably and unconditionally (x) agrees that any suit, action or other legal proceeding arising out of this Paragraph, including without limitation, any action commenced by the Company for
preliminary and permanent injunctive relief and other equitable relief, may be brought (without posting a bond) in the United States District Court for the District of Nevada, or if such court does
not have jurisdiction or will not accept jurisdiction, in any court of general jurisdiction in Clark County, Nevada, (y) consents to the non-exclusive jurisdiction of any such court
in any such suit, action or proceeding, and (z) waives any objection which the Executive may have to the laying of venue of any such suit, action or proceeding in any such court. The Executive
also irrevocably and unconditionally consents to the service of any process, pleadings, notices or other papers in a manner permitted by the notice provisions of Paragraph 12 hereof. 

        F.     For
purposes of this Paragraph 6, the term "Company" shall be deemed to mean the Company and/or any of its subsidiaries or affiliates, together with their
respective successors or assigns. 

        7.     Illness, Incapacity or Death During Employment

        A.    If
Executive is unable to perform services hereunder by reason of illness or incapacity resulting in a failure to discharge his duties under this Agreement as determined
by the Company in the manner described in paragraph 5A of the Company's form of Change of Control Agreement applicable to Executive, for six or more consecutive months, then upon 30 days
notice, the Company may terminate the employment of Executive and the Term under this Agreement, and upon such termination Executive shall be paid (i) his Base Salary on a pro-rata
basis to the date of termination through the 30-day period; (ii) an amount equal to his prior year's Annual Bonus on a pro-rata basis to the date of termination through
the 30-day notice period; (iii) reimbursement of all expenses reasonably incurred by Executive in performing his responsibilities and duties for the Company prior to and including
such date; and (iv) applicable insurance and other group benefits proceeds. In the event of termination pursuant to this paragraph 7(A), 

        (1)   Executive
shall have the right to the assignment of any and all of the Company group insurance policies or health protection plans if and to the extent that such
policies and plans permit assignment out of the group to the individual Executive, and 

        (2)   Executive
shall be entitled to a salary continuation benefit equal to 60% of his Base Salary, reduced by the value of any salary continuation received (whether in lump
sum or periodically) under the Company's Long Term Disability Plan or any other applicable insurance or other group benefits provided by the Company. This salary continuation benefit shall be payable
for the same period as benefits would be provided to a similarly situated senior officer of the Company under the Plan. 

        B.    In
the event of Executive's death, this Agreement shall automatically terminate; provided that the Company shall pay to the Executive's estate (i) his Base Salary
on a pro-rata basis to the date of death; (ii) an amount equal to his prior year's Annual Bonus on a pro-rata basis to the date of death; (iii) reimbursement of
all expenses reasonably incurred by Executive in performing his responsibilities and duties for the Company prior to and including such date; and (iv) applicable insurance and other group
benefits proceeds. 

        8.     Termination for Cause or without Cause.

        A.    The
employment of Executive under this Agreement, and the Term hereof, may be terminated by the Company for Cause at any time. If the Company properly terminates
Executive's employment hereunder for Cause, it shall be without liability to Executive except for all amounts 

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and
benefits accrued and due but not paid to the date of such termination. For all purposes of this Agreement, the term "Cause" means: 

        (1)   Executive's
material fraud, dishonesty, willful misconduct or gross negligence in the performance of his duties hereunder, including willful failure to perform such
duties as may properly be assigned him hereunder; 

        (2)   Executive's
material breach of any provision of this Agreement; or 

        (3)   Executive's
failure to qualify (or, having so qualified, being thereafter disqualified or suspended) under any suitability or licensing requirements to which Executive
may be subject by reason of his position with the Company or any of its affiliates or subsidiaries, under the laws of any applicable gaming jurisdiction, except that any such failure to qualify or
disqualification or suspension resulting from Executive's corporate conduct, rather than individual conduct, shall not constitute "Cause" hereunder. 

        B.    Any
termination for Cause shall not be in limitation of any other right or remedy the Company may have under law, pursuant to this Agreement or otherwise. 

        C.    If
the Company believes the Executive has engaged in conduct that would be cause for termination of this Agreement, the Company shall give written notice of the grounds
for such action and may suspend Executive with pay until such time as the Company has made a decision whether to terminate Executive for Cause. Unless such cause constitutes a crime or jeopardizes the
safety or welfare of the Company's properly, employees, customers or licenses (in which case no cure period shall apply), Executive shall have 30 days to cure such grounds to the Company's
satisfaction. In the event that the Company exercises its right to terminate this Agreement for Cause, Executive shall have the right to challenge such action by seeking arbitration in the manner
provided in Paragraph 9. 

        D.    The
employment of Executive under this Agreement may be terminated without Cause at any time upon written notice to Executive. (A non-renewal of the Term
shall not be treated as a Termination without Cause.) In such case, the Company shall have no liability arising out of such termination except as follows: 

        (1)   Executive
shall be paid (a) the Base Salary for the balance of the Term or for a period of twelve months, whichever is greater, paid in accordance with the
regular payroll practices of the Company, plus (b) a lump sum amount equal to the greater of the average of the Annual Bonuses, if any, paid to the Executive for the three prior years or the
amount of the Annual Bonus, if any, paid for the prior year; 

        (2)   Any
remaining unvested options or stock retention units that would have vested during the applicable Term of this Agreement shall be vested, and 

        (3)   Executive
shall be entitled to continuation of health and dental benefits for the remaining portion of the otherwise applicable Term. 

Fifty
percent of amounts paid after termination hereunder shall be consideration for the Executive's undertaking not to breach the terms of the covenants contained in Paragraph 6 hereof. The
Company shall also pay to the Executive, in a lump sum in cash within ten (10) days after the date of termination, the Executive's accrued but unpaid cash compensation (the "Accrued
Obligations"), which shall include but not be limited to: (1) any portion of the Executive's Annual Base Salary through the date of termination that has not yet been paid and an amount
representing the Annual Bonus for the year of termination determined at the target rate under the Company's then applicable incentive bonus plan, and multiplying that amount by a fraction, the
numerator of which is the number of days in the current fiscal year through the date of termination, and the denominator of which is 365 (the "Annual Bonus Amount"); (2) any 

6

 

compensation
previously deferred by the Executive (together with any accrued interest or earnings thereof) that has not yet been paid; (3) any earned but unpaid vacation pay; and
(4) similar unpaid items that have accrued or to which the Executive has become entitled as of the date of termination, including declared but unpaid bonuses and unreimbursed employee business
expenses, and provided further that the Company's obligation to make any payments under this Paragraph 8, to the extent that any such payment shall not have accrued as of the day before the
date of termination shall also be conditioned upon the Executive's execution, and non-revocation, of a written release, substantially in the form attached hereto as Annex 1 (the
"Release"), of any and all claims against the Company and all related parties with respect to all matters arising out of the Executive's employment by the Company (other than any entitlements under
the terms of this Agreement or under any other plans or programs of the Company in which the Executive participated and under which the Executive has accrued or become entitled to a benefit), or the
termination thereof. 

        E.    In
the event of a Change of Control (as defined in the Change of Control Agreement), Executive shall have certain rights as set forth in a separate agreement (a "Change
of Control Agreement") of even date herewith by and between Executive and the Company. 

        9.     Arbitration.

        The
Company and the Executive mutually consent to the resolution by arbitration by a panel of three arbitrators, in accordance with the National Rules for the Resolution of Employment
Disputes of the American Arbitration Association, to be held in Clark County, Nevada, of all claims or controversies arising out of the Executive's employment (or its termination) that the Company may
have against the Executive or that the Executive may have against the Company or against its officers, directors, shareholders, employees or agents in their capacity as such other than a claim which
is primarily for an injunction or other equitable relief. 

        10.   Severable Provisions.

        The
provisions of this Agreement are severable, and if any one or more provisions hereof may be determined to be illegal or otherwise unenforceable, in whole or in part, the remaining
provisions, and any partially unenforceable provision to the extent enforceable, shall nevertheless be binding and enforceable. 

        11.   Binding Agreement.

        The
rights and obligations of the Company and Executive under this Agreement shall be binding upon and inure to the benefit of, and be enforceable by and against, the parties hereto and
their respective heirs, personal representations, and successors and assigns. 

        12.   Notices.

        Any
notice, request, demand, waiver, consent, approval or other communication (a "Notice") which is required or permitted hereunder shall be in writing as referenced below. All Notices
may be delivered by telecopier or similar device, with a true copy thereof sent the same day by Federal Express, DHL Courier, or other similar overnight delivery service providing receipt against
delivery, and shall be deemed given or made upon receipt thereof. All Notices are to be given or 

7

 

made
to the parties at the following addresses (or to such other address as any party may designate by a Notice given in accordance with the provisions of this Paragraph 12): 

	 
	 	 

	If to the Company:	 	Caesars Entertainment, Inc.

3930 Howard Hughes Parkway

Las Vegas, NV 89109

Attention: President and Chief Executive Officer
	

If to Executive:	
 	

Bernard E, DcLury, Jr.

807 Sterling Place

Brigantine, NJ 08203

        13.   Waiver.

        Either
party's failure to enforce any provision(s) of this Agreement shall not in any way be construed as a waiver of any such provision(s) as; to any future violations(s) thereof, nor
prevent that party thereafter from enforcing each and every other provision of this Agreement. The rights granted the parties herein are cumulative, and the waiver by a party of any single remedy
shall not constitute a waiver of such party's right to assert all other legal remedies available to him or it under the circumstances. 

        14.   Governing Law.

        This
Agreement shall be governed by and construed and interpreted according to the internal laws of the State of Nevada, without reference to such State's principles of conflict of laws. 

        15.   Tax Withholding.

        Notwithstanding
anything the to contrary set forth in this Agreement, the Company may withhold from amounts payable under this Agreement, all federal, state, local and foreign income and
employment taxes that are required to be withheld by applicable laws or regulations. 

        16.   Captions and Paragraph Headings.

        Captions
and paragraph headings used herein are for convenience only and are not a part of this Agreement and shall not be used in construing it. 

        17.   Compliance Committee Approval

        Executive
shall cooperate with requests for information, documentation or assurances from the Caesars Entertainment, Inc. Compliance Committee during the term of this Agreement.
In the event the Compliance Committee, in its absolute discretion, disapproves Executive's continued employment or determines that Executive's continued employment may adversely affect the licensing
status of Employer or any of its parents, subsidiaries, affiliates, successors and assigns with any gaming or other regulatory agency, Employer shall have the right to immediately terminate this
Agreement without further liability to Executive, other than for payment of any accrued but unpaid portion of Base Salary through the date of termination. 

        18.   Entire Agreement.

        This
Agreement constitutes the entire agreement between the Company and Executive with respect to the subject matter hereof, and may not be modified or terminated orally. No
modification, termination or attempted waiver of this Agreement shall be valid unless in writing and signed by the party against whom the same is sought to be enforced. 

8

 

        IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. 

	 	 	The Company:
	

 	
 	

CAESARS ENTERTAINMENT, INC.
	

 	
 	

By:	
 	

/s/  WALLACE R. BARRR      
 Wallace R. Barrr

President and Chief Executive Officer
	

 	
 	

Executive:
	

 	
 	

 	
 	

/s/  BERNARD E. DELURY, JR.      
 Bernard E. DeLury, Jr.

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ANNEX 1
  
    GENERAL RELEASE    
    

        1.     I,                        ,
for and in consideration of certain payments to be made and the benefits to be provided to me under Paragraph 8 of my Employment Agreement dated
as of                                    , 200    
(the "Employment Agreement") with Caesars Entertainment, Inc. (the "Company"), and conditioned upon such payments and provisions, do
hereby REMISE, RELEASE, AND FOREVER DISCHARGE the Company and each of its subsidiaries and affiliates, their officers, directors, shareholders, partners, employees and agents, their respective
successors and assigns, heirs, executors and administrators (hereinafter collectively included within the term the "Company"), acting in any capacity whatsoever, of and from any and all manner of
actions and causes of actions, suits, debts, claims and demands whatsoever in law or in equity, which I ever had, now have, or hereafter may have, or which my heirs, executors or administrators
hereafter may have, by reason of any matter, cause or thing whatsoever from the beginning of my employment with Caesars Entertainment, Inc. to the date of these presents arising from or
relating in any way to my employment relationship and the termination of my employment relationship with Caesars Entertainment, Inc., including but not limited to, any claims which have been
asserted, could have been asserted, or could be asserted now or in the future under any federal, state or local laws, including any claims under the Age Discrimination in Employment Act ("ADEA"), 29
U.S.C. §621 et seq., Americans with Disabilities Act ("ADA"), 42 U.S.C. §2000e et
seq., Title VII of the Civil Rights Act of 1964, 42 U.S.C. §2000c et seq., any contracts between the Company and me
and any common law claims now or hereafter recognized and all claims for counsel fees and costs; provided, however, that this General Release shall not apply to any entitlements under the terms of the
Employment Agreement or under any other plans or programs of the Company in which I participated and under which I have accrued and become entitled to a benefit. 

        2.     Subject
to the limitations of paragraph 1 above, I expressly waive all rights afforded by any statute which expressly limits the effect of a release with respect
to unknown claims. I understand the significance of this release of unknown claims and the waiver of statutory protection against a release of unknown claims which provides as follows: 

A
general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected
his settlement with the debtor. 

        3.     I
hereby agree and recognize that my employment by the Company was permanently and irrevocably severed on                        ,
        and the Company has no obligation,
contractual or otherwise to me to hire, rehire or re-employ me in the future. I acknowledge that the terms of the Employment Agreement provide me with payments and benefits which are in
addition to any amounts to which I otherwise would have been entitled. 

        4.     I
hereby agree and acknowledge that the payments and benefits provided by the Company are to bring about an amicable resolution of my employment arrangements and are not
to be construed as an admission of any violation of any federal, state or local statute or regulation, or of any duty owed by the Company and that this Agreement and General Release is made
voluntarily to provide an amicable resolution of my employment relationship with the Company and the termination of the Employment Agreement. 

        5.     I
hereby certify that I have read the terms of this General Release, that I have been advised by the Company to discuss it with my attorney, and that I understand its
terms and effects. I acknowledge, further, that 1 am executing this General Release of my own volition with a full understanding of its terms and effects and with the intention of releasing all claims
recited herein in exchange for the consideration described in the Employment Agreement, which I acknowledge is adequate and satisfactory to me. None of the above-named parties, nor their agents,
representatives, or 

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attorneys
have made any representations to me concerning the terms or effects of this General Release other than those contained herein. 

        6.     I
hereby acknowledge that I have been informed that I have the right to consider this General Release for a period of 21 days prior to execution. I also understand
that I have the right to revoke this General Release for a period of seven days following execution by giving written notice to the Company at 3930 Howard Hughes Parkway, Las Vegas, NV 89101,
Attention: President and Chief Executive Officer. 

        Intending
to be legally bound hereby, I execute the foregoing General Release this            day
of                        , 200    . 

	 
	 	 

	

 Witness	
 	

    

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QuickLinks

EXHIBIT 10.2

EMPLOYMENT AGREEMENT

ANNEX 1 GENERAL RELEASEQuickLinks
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Exhibit 10.3    
    

 
 

Annex A
  
    CAESARS ENTERTAINMENT, INC.
  
    2004 LONG TERM INCENTIVE PLAN    
    

	 
	 	Page

	       Section	 	 
	

1.    Purpose; Types of Awards; Construction.	
 	

A-1
	

2.    Definitions.	
 	

A-1
	

3.    Administration.	
 	

A-4
	

4.    Eligibility.	
 	

A-5
	

5.    Stock Subject to the Plan.	
 	

A-5
	

6.    Specific Terms of Awards.	
 	

A-6
	

7.    Change in Control Provisions.	
 	

A-8
	

8.    General Provisions.	
 	

A-9

  

 
 

CAESARS ENTERTAINMENT, INC.
  
    2004 LONG TERM INCENTIVE PLAN    
    

        1.     Purpose; Types of Awards; Construction.

        The
purposes of the Caesars Entertainment, Inc. 2004 Long Term Incentive Plan (the "Plan") are to afford an incentive to directors, officers, employees and consultants of Caesars
Entertainment, Inc. (the "Company"), or any Subsidiary of the Company or Related Entity that now exists or hereafter is organized or acquired, to continue as directors, officers, employees or
consultants, as the case may be, to increase their efforts on behalf of the Company and its Subsidiaries and Related Entities and to promote the success of the Company's business. The Plan provides
for the grant of stock options (including "incentive stock options" and "nonqualified stock options"), stock appreciation rights, restricted stock, restricted stock units and other stock-based awards.
The Plan is designed so that Awards granted hereunder intended to comply with the requirements for "performance-based compensation" under Section 162(m) of the Code may comply with such
requirements, and the Plan and Awards shall be interpreted in a manner consistent with such requirements. 

        2.     Definitions.

        For
purposes of the Plan, the following terms shall be defined as set forth below: 

        (a)   "Award"
means any Option, SAR, Restricted Stock, Restricted Stock Unit or Other Stock-Based Award granted under the Plan. 

        (b)   "Award
Agreement" means any written agreement, contract, or other instrument or document evidencing an Award. 

        (c)   "Board"
means the Board of Directors of the Company. 

        (d)   "Change
in Control" means: 

        (i)    An
acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14 (d)(2) of the Exchange Act) (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (1) the then outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (2) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the
"Outstanding Company Voting Securities") (a "Control Purchase"); excluding, however, the following: (1) any acquisition directly from the Company, other than an acquisition by virtue of the
exercise of a conversion privilege unless the security [conversion privilege] being so converted was itself acquired directly from the Company, (2) any acquisition by
the Company, (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, (4) any acquisition
by any corporation pursuant to a transaction which complies with clauses (1), (2) and (3) of subsection (iii) of this Section 2(d), or (5) any acquisition by Barron
Hilton, the Charitable Remainder Unitrust created by Barron Hilton to receive shares from the Estate of Conrad N. Hilton, or the Conrad N. Hilton Fund (the "Hilton Acquirors"); or 

        (ii)   A
change in the composition of the Board such that the individuals who, as of the effective date of the Plan, constitute the Board (such Board shall be hereinafter
referred to as the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, for purposes of this Section 2(d), that any individual who becomes
a member of the Board subsequent to the effective date of the Plan, whose election, or nomination for election by the Company's stockholders, was approved by a vote of at least a majority of those
individuals who are members of the Board and who were also members of 

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the
Incumbent Board (or deemed to be such pursuant to this proviso) shall be considered as though such individual were a member of the Incumbent Board; but, provided further, that any such individual
whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board shall not be so considered as a member of the Incumbent Board
(any change described in this Section 2(d)(ii), "Board Change"); or 

        (iii)  The
consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company ("Corporate
Transaction"); excluding however, such a Corporate Transaction pursuant to which (1) all or substantially all of the individuals and entities who are the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Corporate Transaction will beneficially own, directly or indirectly, more than 60% of,
respectively, the outstanding shares of common stock, and the
combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Corporate
Transaction (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or
more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Corporate Transaction, of the Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (2) no Person (other than the Company, any employee benefit plan (or related trust) of the Company, the Hilton Acquirors or such corporation resulting from such
Corporate Transaction) will beneficially own, directly or indirectly, 20% or more of, respectively, the outstanding shares of common stock, and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Corporate Transaction (including, without limitation, a corporation which
as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) except to the extent that such ownership
existed prior to the Corporate Transaction and (3) individuals who were members of the Incumbent Board will constitute at least a majority of the members of the board of directors of the
corporation resulting from such Corporate Transaction; or 

        (iv)  The
approval by the stockholders of the Company of a complete liquidation or dissolution of the Company. 

        (e)   "Code"
means the Internal Revenue Code of 1986, as amended from time to time. 

        (f)    "Committee"
means the Compensation Committee of the Board, unless a committee is established by the Board to administer the Plan, the composition of which shall at all
times satisfy the provisions of Rule 16b-3 and Section 162(m) of the Code. 

        (g)   "Company"
means Caesars Entertainment, Inc., a corporation organized under the laws of the State of Delaware, or any successor corporation. 

        (h)   "Covered
Employee" shall have the meaning set forth in Section 162(m)(3) of the Code. 

        (i)    "Effective
Date" means the date upon which the Plan is approved by the stockholders of the Company. 

        (j)    "Exchange
Act" means the Securities Exchange Act of 1934, as amended from time to time, and as now or hereafter construed, interpreted and applied by regulations,
rulings and cases. 

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        (k)   "Fair
Market Value" means, as of any given date, the mean between the highest and lowest reported sales price of the Stock on the New York Stock Exchange Composite Tape
or, if not listed on such exchange, on any other national securities exchange on which the Stock is listed or on NASDAQ. If there is no regular public trading market for such Stock, the Fair Market
Value of the Stock shall be determined by the Committee in good faith. 

        (l)    "Grantee"
means a person who, as a director, officer, employee or consultant of the Company, a Subsidiary of the Company or a Related Entity, has been granted an Award
under the Plan. 

        (m)  "ISO"
means any Option intended to be and designated as an incentive stock option within the meaning of Section 422 of the Code. 

        (n)   "NQSO"
means any Option that is not designated as an ISO. 

        (o)   "Option"
means a right, granted to a Grantee under Section 6(b)(i), to purchase shares of Stock. An Option may be either an ISO or an NQSO, provided that ISOs may
be granted only to employees of the Company or a Subsidiary of the Company. 

        (p)   "Other
Stock-Based Award" means a right or other interest granted to a Grantee under the Plan that may be denominated or payable in, valued in whole or in part by
reference to, or otherwise based on, or related to, Stock, including but not limited to (i) unrestricted Stock awarded as a bonus or upon the attainment of Performance Goals or otherwise as
permitted under the Plan, and (ii) a right granted to a Grantee to acquire Stock from the Company containing terms and conditions prescribed by the Committee. 

        (q)   "Performance
Goals" means performance goals based upon one or more of the following business criteria for the Company as a whole, or any of its Subsidiaries or Related
Entities on an absolute or relative basis: (i) earnings including operating income, earnings before or after taxes, earnings before or after interest, depreciation, amortization, or
extraordinary or special items; (ii) earnings per common share (basic or diluted); (iii) return on assets (gross or net), return on investment, return on capital, or return on equity;
(iv) return on revenues; (v) cash flow, free cash flow, cash flow return on investment (discounted or otherwise), net cash provided by operations, or cash flow in excess of cost of
capital;
(vi) economic value created; (vii) operating margin or profit margin; (viii) stock price or total stockholder return; (ix) cost targets, reductions and savings,
productivity and efficiencies; and (x) strategic business criteria, consisting of one or more objectives based on meeting specified market penetration or market share, geographic business
expansion, customer satisfaction, employee satisfaction, human resources management, supervision of litigation, information technology, and goals relating to acquisitions, divestitures, joint ventures
and similar transactions. In addition, and provided such is consistent with the goal of providing for deductibility under the Code, performance goals for incentive awards to Covered Employees may be
based upon a participant's attainment of personal professional objectives. Such objectives may include any of the foregoing performance goals, the implementation of policies and plans, the negotiation
of transactions, and the development of long-term business goals. Measuring the performance of the Company or a participant's against these performance goals established by the Committee
will be objectively determinable. In addition, unless otherwise determined by the Committee at the time the performance goals are established, performance will be determined (to the extent applicable)
according to generally accepted accounting principles in existence on the date on which the performance goals are established and without regard to any changes in such principles after such date.
Performance Goals may relate to all or any portion of a Performance Period. 

        (r)   "Performance
Period" means a period of time determined by the Committee that is no less than twelve months. 

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        (s)   "Plan"
means this Caesars Entertainment, Inc. 2004 Long Term Incentive Plan, as amended from time to time. 

        (t)    "Plan
Year" means a calendar year. 

        (u)   "Prior
Plans" means, collectively, the Park Place Entertainment Corporation 1998 Stock Incentive Plan, Park Place Entertainment Corporation 1998 Independent Director
Stock Option Plan and the Park Place Entertainment Corporation Supplemental Retention Plan. 

        (v)   "Related
Entity" means any business, corporation, limited liability Company or other entity in which the Company, or a Subsidiary of the Company, holds at least 25%
ownership interest, directly or indirectly. 

        (w)  "Restricted
Stock" means an Award of shares of Stock to a Grantee under Section 6(d) that may be subject to certain restrictions and to a risk of forfeiture. 

        (x)   "Restricted
Stock Unit" means a right granted to a Grantee under Section 6(e) to receive Stock or cash at the end of a specified deferral period, which right may
be conditioned on the satisfaction of specified performance or other criteria. 

        (y)   "Rule 16b-3"
means Rule 16b-3, as from time to time in effect promulgated by the Securities and Exchange Commission under
Section 16 of the Exchange Act, including any successor to such Rule. 

        (z)   "Securities
Act" means the Securities Act of 1933, as amended from time to time, and as now or hereafter construed, interpreted and applied by regulations, rulings and
cases. 

        (aa) "Stock"
means shares of the common stock, par value $0.01 per share, of the Company. 

        (bb) "Stock
Appreciation Right" or "SAR" means the right, granted to a Grantee under Section 6(c), to be paid an amount measured by the appreciation in the Fair
Market Value of Stock from the date of grant to the date of exercise of the right. 

        (cc) "Subsidiary"
means a "subsidiary corporation," whether now or hereafter existing, as defined in Section 424(f) of the Code. 

        3.     Administration.

        The
Plan shall be administered by the Committee. The Committee shall have the authority in its discretion, subject to and not inconsistent with the express provisions of the Plan, to
administer the Plan and to exercise all the powers and authorities either specifically granted to it under the Plan or necessary or advisable in the administration of the Plan, including, without
limitation, the authority to grant Awards; to determine the persons to whom and the time or times at which Awards shall be granted; to determine the type and number of Awards to be granted, the number
of shares of Stock to which an Award may relate and the terms, conditions, restrictions and performance criteria relating to any Award; to determine Performance Goals no later than such time as
required to ensure that an underlying Award which is intended to comply with the requirements of Section 162(m) of the Code so complies; to determine whether, to what extent, and under what
circumstances an Award may be settled, cancelled, forfeited, exchanged, or surrendered; to make adjustments in the terms and conditions of, and the Performance Goals (if any) included in, Awards; to
designate Related Entities; to construe and interpret the Plan and any Award; to prescribe, amend and rescind rules and regulations relating to the Plan; to determine the terms and provisions of the
Award Agreements (which need not be identical for each Grantee); and to make all other determinations deemed necessary or advisable for the administration of the Plan. The Committee may delegate its
authority to grant awards under the Plan to individuals who are not executive officers of the Company, subject to such conditions determined by the Committee to such person(s) as the Committee shall
determine. Notwithstanding the foregoing, neither the Board, the Committee nor their respective delegates shall have the authority to 

A-4

 

reprice
(or cancel and regrant) any Option or, if applicable, other Award at a lower exercise, base or purchase price without first obtaining the approval of the Company's stockholders. 

        The
Committee may appoint a chairperson and a secretary and may make such rules and regulations for the conduct of its business as it shall deem advisable, and shall keep minutes of its
meetings. The Committee may delegate to one or more of its members or to one or more agents such administrative duties as it may deem advisable, and the Committee or any person to whom it has
delegated duties as aforesaid may employ one or more persons to render advice with respect to any responsibility the Committee or such person may have under the Plan. All decisions, determinations and
interpretations of the Committee shall be final and binding on all persons, including the Company, any Subsidiary of the Company, any Related Entity or Grantee (or any person claiming any rights under
the Plan from or through any Grantee) and any stockholder. 

        No
member of the Board, the Committee or any of respective delegates shall be liable for any action taken or determination made in good faith with respect to the Plan or any Award
granted hereunder. 

        4.     Eligibility.

        Awards
may be granted to selected directors, officers, employees or consultants of the Company, any Subsidiary of the Company or any Related Entity, in the discretion of the Committee.
In determining the persons to whom Awards shall be granted and the type of any Award (including the number of
shares to be covered by such Award), the Committee shall take into account such factors as the Committee shall deem relevant in connection with accomplishing the purposes of the Plan. 

        5.     Stock Subject to the Plan.

        The
maximum number of shares of Stock reserved for the grant of Awards under the Plan shall, subject to adjustment as provided herein, be 20 million shares. If, subsequent to the
Effective Date, any shares of Stock subject to an Award are forfeited, cancelled, exchanged or surrendered or if an Award otherwise terminates or expires without a distribution of shares to the
Grantee, the shares of stock with respect to such Award shall, to the extent of any such forfeiture, cancellation, exchange, surrender, termination or expiration, be available for Awards under the
Plan. No more than 5 million shares of Stock may be made subject to Options to a single individual in a single Plan Year, subject to adjustment as provided herein, and no more than
10 million shares of Stock may be made subject to stock-based awards other than Options (including non-tandem SARs, Restricted Stock and Restricted Stock Units or Other Stock-Based
Awards denominated in shares of Stock) to a single individual in a single Plan Year, in either case, subject to adjustment as provided herein. Shares available under the Plan may, in whole or in part,
be authorized but unissued shares or shares that shall have been or may be reacquired by the Company in the open market, in private transactions or otherwise. Upon the exercise of any Award granted in
tandem with any Awards, such related Awards shall be cancelled to the extent of the number of shares of Stock as to which the Award is exercised and, notwithstanding the foregoing, such number of
shares shall no longer be available for Awards under the Plan. 

        In
the event that the Committee shall determine that any dividend or other distribution (whether in the form of cash, Stock, or other property), recapitalization, Stock split, reverse
split, reorganization, merger, consolidation, spin-off, combination, repurchase, or share exchange, or other similar corporate transaction or event, affects the Stock such that an
adjustment is appropriate in order to prevent dilution or enlargement of the rights of Grantees under the Plan, then the Committee shall make such equitable changes or adjustments as it deems
necessary or appropriate to any or all of (i) the maximum number and kind of shares of Stock or other property (including cash) that may thereafter be issued in connection with Awards under the
Plan or to any particular Grantee, (ii) the number and kind of shares of Stock or other property (including cash) issued or issuable in respect of outstanding Awards, (iii) the exercise
price, grant price, or purchase price relating to any Award; provided, that, with respect 

A-5

 

to
ISOs, such adjustment shall be made in accordance with Section 424(h) of the Code; and (iv) the Performance Goals applicable to outstanding Awards. 

        6.     Specific Terms of Awards.

        (a)   General. The term of each Award shall be for such period as may be determined by the Committee. Subject to the terms of
the Plan and any applicable Award Agreement, payments to be made by the Company, a Subsidiary of the Company or Related Entity upon the grant, maturation, or exercise of an Award may be made in such
forms as the Committee shall determine at the date of grant or thereafter, including, without limitation, cash, Stock, or other property, and may be made in a single payment or transfer, in
installments, or on a deferred basis. The Committee may make rules relating to installment or deferred payments with respect to Awards, including the rate of interest to be credited with respect to
such payments. In addition to the foregoing, the Committee may impose on any Award or the exercise thereof, at the date of grant or thereafter, such additional terms and conditions, not inconsistent
with the provisions of the Plan, as the Committee shall determine. 

        (b)   Options. The Committee is authorized to grant Options to Grantees on the following terms and conditions: 

        (i)    Type of Award. The Award Agreement evidencing the grant of an Option under the Plan shall designate the Option as an ISO
or an NQSO. 

        (ii)   Exercise Price. The exercise price per share of Stock purchasable under an Option shall be determined by the Committee,
but in no event shall the exercise price per share of any Option be less than the Fair Market Value of a share of Stock on the date of grant of such Option. The exercise price for Stock subject to an
Option may be paid in cash or by an exchange of Stock previously owned by the Grantee for at least six months, through a "broker cashless exercise" procedure approved by the Committee (to the extent
permitted by law), or a combination of the above, in any case in an amount having a combined value equal to such exercise price. 

        (iii)  Term and Exercisability of Options. Options shall be exercisable over the exercise period (which shall not exceed ten
years from the date of grant), at such times and upon such conditions as the Committee may determine, as reflected in the Award Agreement; provided that, the Committee shall have the authority to
accelerate the exercisability of any outstanding Option at such time and under such circumstances as it, in its sole discretion, deems appropriate. An Option may be exercised to the extent of any or
all full shares of Stock as to which the Option has become exercisable, by giving written notice of such exercise to the Committee or its designated agent. 

        (iv)  Termination of Employment, etc. An Option may not be exercised unless the Grantee is then a director of, in the employ
of, or then maintains a consulting relationship with, the Company, a Subsidiary of the Company or a Related Entity, and unless the Grantee has remained continuously so employed, or continuously
maintained such relationship, since the date of grant of the Option; provided that, the Award Agreement may contain provisions extending the exercisability of Options, in the event of specified
terminations of employment or service, to a date not later than the expiration date of such Option. 

        (v)   Other Provisions. Options may be subject to such other conditions including, but not limited to, restrictions on
transferability of the shares acquired upon exercise of such Options, as the Committee may prescribe in its discretion or as may be required by applicable law. 

A-6

 

        (c)   SARs. The Committee is authorized to grant SARs to Grantees on the following terms and conditions: 

        (i)    In General. SARs may be granted independently or in tandem with an Option. Unless the Committee determines otherwise, an
SAR (1) granted in tandem with an NQSO may be granted at the time of grant of the related NQSO or at any time thereafter or (2) granted in tandem with an ISO may only be granted at the
time of grant of the related ISO. An SAR granted in tandem with an Option shall be exercisable only to the extent the underlying Option is exercisable. Payment of an SAR may made in cash, Stock, or
property as specified in the Award or determined by the Committee. 

        (ii)   SARs. An SAR shall confer on the Grantee a right to receive an amount with respect to each share subject thereto, upon
exercise thereof, equal to the excess of (1) the Fair Market Value of one share of Stock on the date of exercise over (2) the grant price of the SAR (which in the case of an SAR granted
in tandem with an Option shall be equal to the exercise price of the underlying Option, and which in the case of any other SAR shall be such price as the Committee may determine). 

        (d)   Restricted Stock. The Committee is authorized to grant Restricted Stock to Grantees on the following terms and
conditions: 

        (i)    Issuance and Restrictions. Restricted Stock shall be subject to such restrictions on transferability and other
restrictions, if any, as the Committee may impose at the date of grant or thereafter, which restrictions may lapse separately or in combination at such times, under such circumstances, in such
installments, or otherwise, as the Committee may determine. The Committee may place restrictions on Restricted Stock that shall lapse, in whole or in part, only upon the attainment of Performance
Goals. Except to the extent restricted under the Award Agreement relating to the Restricted Stock, a Grantee granted Restricted Stock shall have all of the rights of a stockholder including, without
limitation, the right to vote Restricted Stock and the right to receive dividends thereon. 

        (ii)   Forfeiture. Upon termination of employment with or service to the Company, a Subsidiary of the Company or a Related
Entity, or upon termination of the consulting or director relationship, as the case may be, during the applicable restriction period, Restricted Stock and any accrued but unpaid dividends that are
then subject to restrictions shall be forfeited; provided that, the Committee may provide, by rule or regulation or in any Award Agreement, or may determine in any individual case,
that restrictions or forfeiture conditions relating to Restricted Stock will be waived in whole or in part in the event of terminations resulting from specified causes, and the Committee may in other
cases waive in whole or in part the forfeiture of Restricted Stock. 

        (iii)  Certificates for Stock. Restricted Stock granted under the Plan may be evidenced in such manner as the Committee shall
determine. If certificates representing Restricted Stock are registered in the name of the Grantee, such certificates shall bear an appropriate legend referring to the terms, conditions, and
restrictions applicable to such Restricted Stock, and the Company shall retain physical possession of the certificate. 

        (iv)  Dividends. Dividends paid on Restricted Stock shall be either paid at the dividend payment date, or deferred for payment
to such date as determined by the Committee, in cash or in shares of unrestricted Stock having a Fair Market Value equal to the amount of such dividends. Stock distributed in connection with a stock
split or stock dividend, and other property distributed as a dividend, shall be subject to restrictions and a risk of forfeiture to the same extent as the Restricted Stock with respect to which such
Stock or other property has been distributed. 

A-7

 

        (e)   Restricted Stock Units. The Committee is authorized to grant Restricted Stock Units to Grantees, subject to the following
terms and conditions: 

        (i)    Award and Restrictions. Delivery of Stock or cash, as determined by the Committee, will occur upon expiration of the
deferral period specified for Restricted Stock Units by the Committee. The Committee may place restrictions on Restricted Stock that shall lapse, in whole or in part, only upon the attainment of
Performance Goals. 

        (ii)   Forfeiture. Upon termination of employment with the Company, a Subsidiary of the Company or a Related Entity, or
termination of the director or consulting relationship during the applicable deferral period or portion thereof to which forfeiture conditions apply, or upon failure to satisfy any other conditions
precedent to the delivery of Stock or cash to which such Restricted Stock Units relate, all Restricted Stock Units and any accrued but unpaid dividend equivalents that are then subject to deferral or
restriction shall be forfeited; provided that, the Committee may provide, by rule or regulation or in any Award Agreement, or may determine in any individual case, that restrictions or forfeiture
conditions relating to Restricted Stock Units will be waived in whole or in part in the event of termination resulting from specified causes, and the Committee may in other cases waive in whole or in
part the forfeiture of Restricted Stock Units. 

        (f)    Other Stock-Based Awards. The Committee is authorized to grant Awards to Grantees in the form of Other
Stock-Based Awards, as deemed by the Committee to be consistent with the purposes of the Plan. Awards granted pursuant to this paragraph may be granted with value and payment contingent upon
Performance Goals. The Committee shall determine the terms and conditions of such Awards at the date of grant or thereafter. Payments earned hereunder may be decreased or, with respect to any Grantee
who is not a Covered Employee, increased in the sole discretion of the Committee based on such factors as it deems appropriate. No payment shall be made prior to the certification by the Committee
that the Performance Goals have been attained. The Committee may establish such other rules applicable to the Other Stock-Based Awards to the extent not inconsistent with Section 162(m) of the
Code. 

        7.     Change in Control Provisions.

        Unless
otherwise determined by the Committee and evidenced in an Award Agreement, in the event of a Change in Control: 

        (a)   any
Award carrying a right to exercise that was not previously vested and exercisable shall become fully vested and exercisable; and 

        (b)   the
restrictions, deferral limitations, payment conditions, and forfeiture conditions applicable to any other Award granted under the Plan shall lapse and such Awards
shall be deemed fully vested, and any performance conditions imposed with respect to Awards shall be deemed to be fully achieved. 

A-8

 

        8.     General Provisions.

        (a)   Nontransferability. Unless otherwise provided in an Award Agreement, Awards shall not be transferable by a Grantee except
by will or the laws of descent and distribution and shall be exercisable during the lifetime of a Grantee only by such Grantee or his guardian or legal representative. 

        (b)   No Right to Continued Employment, etc. Nothing in the Plan or in any Award, any Award Agreement or other agreement
entered into pursuant hereto shall confer upon any Grantee the right to continue in the employ of or to continue as consultant or director of the Company, any Subsidiary of the Company or any Related
Entity or to be entitled to any remuneration or benefits not set forth in the Plan or such Award Agreement or other agreement or to interfere with or limit in any way the right of
the Company, Subsidiary of the Company or Related Entity to terminate such Grantee's employment, or consulting or director relationship. 

        (c)   Taxes. The Company, any Subsidiary of the Company or any Related Entity is authorized to withhold from any Award granted,
any payment relating to an Award under the Plan, including from a distribution of Stock, or any other payment to a Grantee, amounts of withholding and other taxes due in connection with any
transaction involving an Award, and to take such other action as the Committee may deem advisable to enable the Company and Grantees to satisfy obligations for the payment of withholding taxes and
other tax obligations relating to any Award. This authority shall include authority to withhold or receive Stock or other property and to make cash payments in respect thereof in satisfaction of a
Grantee's tax obligations. The Committee may provide in the Award Agreement that in the event that a Grantee is required to pay any amount to be withheld in connection with the issuance of shares of
Stock in settlement or exercise of an Award, the Grantee may satisfy such obligation (in whole or in part) by electing to have a portion of the shares of Stock to be received upon settlement or
exercise of such Award equal to the minimum amount required to be withheld. 

        (d)   Stockholder Approval; Amendment and Termination.

        (i)    The
Plan shall take effect upon its approval by the stockholders of the Company at a meeting of such stockholders at which such issue is considered and voted upon. In
the event that the stockholders of the Company do not approve the Plan, then upon such event the Plan and all rights hereunder shall immediately terminate, no Grantee (or any permitted transferee
thereof) shall have any rights under the Plan or any Award Agreement, and all shares reserved under Prior Plans shall remain available under such Prior Plans in accordance with the terms of such Prior
Plans. 

        (ii)   The
Board may at any time and from time to time alter, amend, suspend, or terminate the Plan in whole or in part; provided, however, that an amendment that requires
stockholder approval in order for the Plan to continue to comply with Section 162(m) or any other law, regulation or stock exchange requirement shall not be effective unless approved by the
requisite vote of stockholders. Notwithstanding the foregoing, no amendment to or termination of the Plan shall affect adversely any of the rights of any Grantee, without such Grantee's consent, under
any Award theretofore granted under the Plan. 

        (e)   Expiration of Plan. Unless earlier terminated by the Board pursuant to the provisions of the Plan, the Plan shall expire
on the tenth anniversary of the Effective Date. No Awards shall be granted under the Plan after such expiration date. The expiration of the Plan shall not affect adversely any of the rights of any
Grantee, without such Grantee's consent, under any Award theretofore granted. 

A-9

 

        (f)    Deferrals. The Committee shall have the authority to establish such procedures and programs that it deems appropriate to
provide Grantees with the ability to defer receipt of cash, Stock or other property payable with respect to Awards granted under the Plan. 

        (g)   No Rights to Awards; No Stockholder Rights. No Grantee shall have any claim to be granted any Award under the Plan, and
there is no obligation for uniformity of treatment of Grantees. Except as provided specifically herein, a Grantee or a transferee of an Award shall have no rights as a stockholder with respect to any
shares covered by the Award until the date of the issuance of a stock certificate to him for such shares. 

        (h)   Unfunded Status of Awards. The Plan is intended to constitute an "unfunded" plan for incentive and deferred compensation.
With respect to any payments not yet made to a Grantee pursuant to an Award, nothing contained in the Plan or any Award shall give any such Grantee any rights that are greater than those of a general
creditor of the Company. 

        (i)    No Fractional Shares. No fractional shares of Stock shall be issued or delivered pursuant to the Plan or any Award. The
Committee shall determine whether cash, other Awards, or other property shall be issued or paid in lieu of such fractional shares or whether such fractional shares or any rights thereto shall be
forfeited or otherwise eliminated. 

        (j)    Regulations and Other Approvals.

        (i)    The
obligation of the Company to sell or deliver Stock with respect to any Award granted under the Plan shall be subject to all applicable laws, rules and regulations,
including all applicable federal and state securities laws, and the obtaining of all such approvals by governmental agencies as may be deemed necessary or appropriate by the Committee. 

        (ii)   Each
Award is subject to the requirement that, if at any time the Committee determines, in its absolute discretion, that the listing, registration or qualification of
Stock issuable pursuant to the Plan is required by any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body is necessary or desirable
as a condition of, or in connection with, the grant of an Award or the issuance of Stock, no such Award shall be granted or payment made or Stock issued, in whole or in part, unless listing,
registration, qualification, consent or approval has been effected or obtained free of any conditions not acceptable to the Committee. 

        (iii)  In
the event that the disposition of Stock acquired pursuant to the Plan is not covered by a then current registration statement under the Securities Act and is not
otherwise exempt from such registration, such Stock shall be restricted against transfer to the extent required by the Securities Act or regulations thereunder, and the Committee may require a Grantee
receiving Stock pursuant to the
Plan, as a condition precedent to receipt of such Stock, to represent to the Company in writing that the Stock acquired by such Grantee is acquired for investment only and not with a view to
distribution. 

        (iv)  The
Committee may require a Grantee receiving Stock pursuant to the Plan, as a condition precedent to receipt of such Stock, to enter into a stockholder agreement or
"lock-up" agreement in such form as the Committee shall determine is necessary or desirable to further the Company's interests. 

        (k)   Governing Law. The Plan and all determinations made and actions taken pursuant hereto shall be governed by the laws of
the State of Delaware without giving effect to the conflict of laws principles thereof. 

A-10

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Exhibit 10.3

Annex A CAESARS ENTERTAINMENT, INC. 2004 LONG TERM INCENTIVE PLAN

CAESARS ENTERTAINMENT, INC. 2004 LONG TERM INCENTIVE PLAN

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