Document:

<PAGE>   1
                                                                   EXHIBIT 10.40

                         HORSESHOE GAMING HOLDING CORP.
                           DEFERRED COMPENSATION PLAN

WHEREAS, Horseshoe Gaming Holding Corp. (the "Employer") heretofore adopted the
Horseshoe Gaming Deferred Compensation Plan (the "Horseshoe Plan"); and

WHEREAS, Empress Entertainment, Inc. ("Empress") heretofore adopted the Empress
Entertainment, Inc. And Subsidiaries Executive Deferred Compensation Plan (the
"Empress Plan"); and

WHEREAS, Empress Casino Joliet Corporation ("Empress Joliet") and Empress Casino
Hammond Corporation ("Empress Hammond"), subsidiaries of Empress, heretofore
adopted the Empress Plan for the benefit of their employees; and

WHEREAS, Empress Joliet assumed the obligations as sponsor of the Empress Plan,
and changed the name of the Empress Plan to the "Empress Casino Executive
Deferred Compensation Plan", effective as of December 1, 1999; and

WHEREAS, the Employer acquired Empress Joliet and Empress Hammond as of December
1, 1999; and

WHEREAS, the Employer and Empress Joliet desire to merge the Horseshoe Plan with
the Empress Plan;

<PAGE>   2

NOW, THEREFORE, effective as of April 1, 2000, the Empress Plan is merged into
the Horseshoe Plan, with the Horseshoe Plan being renamed the "Horseshoe Gaming
Holding Corp. Deferred Compensation Plan" and being amended and restated to read
in its entirety as follows:

SECTION 1. PURPOSE OF PLAN

The Plan is unfunded and is maintained for the purpose of providing deferred
compensation to a select group of management and highly compensated employees of
the Company and any Subsidiaries within the meaning of the United States Code of
Federal Regulations Section 2520.104-23 and Sections 201(2), 301(a)(3) and
401(a)(1) of ERISA. The Plan is expected to encourage the continued employment
of the participating employees whose management and individual performance are
largely responsible for the success of the Company and its Subsidiaries and to
facilitate the recruiting of key management and highly compensated employees
required for the continued growth and profitability of the Company and its
Subsidiaries.

SECTION 2. DEFINITIONS

2.1  "Administrator" means the Board or the committee appointed to administer
     the Plan in accordance with Section 14.

2.2  "Beneficiary" means the person or entity determined to be a Participant's
     beneficiary pursuant to Section 13.

2.3  "Board" means the board of directors of the Company.

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

2.5  "Company" means Horseshoe Gaming Holding Corp.

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

2.7  "Participant" means an employee of the Company who is eligible to
     participate in the Plan pursuant to Section 3.

2.8  "Plan" means the Horseshoe Gaming Holding Corp. Deferred Compensation Plan,
     as set forth herein and as amended from time to time.

2.9  "Plan Year" means the calendar year.

2.10 "Subsidiary" means any directly or indirectly owned entities of the
     Company.

SECTION 3. ELIGIBLE EMPLOYEES

The Administrator shall determine which management employees and highly
compensated employees of the Company and/or a Subsidiary shall be eligible to
participate in the Plan from time to time, the eligibility waiting period and
such other conditions as may be applicable from time to time.

                                       2
<PAGE>   3

SECTION 4. ELECTION TO DEFER COMPENSATION

A Participant may elect to defer a specified percentage (up to one hundred
percent (100%) of his or her base salary and/or any bonus to be paid on his or
her behalf for a Plan Year by filing an election with the Administrator
(pursuant to Section 5) on or prior to December 31 of the preceding Plan Year.
Any election so made shall be binding for any following Plan Year, unless
revised on or before December 31 of the immediately preceding Plan Year.
Provided, however, that a Participant who first becomes eligible to participate
in the Plan after the beginning of a Plan Year shall be entitled to make a
deferral election within thirty (30) days after he or she is informed of his or
her eligibility to participate in the Plan; and provided, further, that, subject
to the consent of the Administrator, during a Plan Year, a Participant may elect
to reduce his or her deferral election for the balance of the Plan Year in the
event of a "qualified change" in the Participant's status. Any such reduction
shall also apply for any following Plan Year, unless revised on or before
December 31 of the immediately preceding Plan Year. For this purpose, a
"qualified change" shall include, without limitation, the following:

        (i)   the death of the Participant's spouse;

        (ii)  the Participant's spouse losing employment;

        (iii) the Participant's divorce, legal separation or remarriage;

        (iv)  an unexpected hardship due to financial circumstances beyond the
              Participant's control;

        (v)   a change in the Participant's employment status or position as a
              result of the change of equity or voting control of the Company, a
              merger, consolidation, reorganization, acquisition of or
              divestiture by the Company or its shareholders, or such other
              capital or structural change of the Company resulting in the
              promotion, demotion, material change in duties of or position of
              the Participant; or

        (vi)  such other qualified changes as the Administrator shall determine
              from time to time.

SECTION 5. MANNER OF ELECTION

Any election made by a Participant under the Plan shall be made in writing by
executing such form(s) as the Administrator shall from time to time prescribe.

SECTION 6. ACCOUNTS/VESTING

The Company shall establish and maintain on its books with respect to each
Participant a separate account which shall record (a) any amounts deferred by
the Participant under the Plan pursuant to the Participant's election, (b) any
Company contributions made on behalf of the Participant pursuant to Section 7
below, and (c) the allocation of any investment experience pursuant to Section
8. Subject to the claims of creditors of the Company, a Participant shall at all
times have a nonforfeitable (vested) right to his account under the Plan.

                                       3
<PAGE>   4

SECTION 7. EMPLOYER MATCHING CONTRIBUTIONS

The Company may match a percentage (as determined by the Board) of the amount
deferred by each Participant, or such of the Participants as the Board may, in
its sole discretion, from time to time determine. The Company shall have no
obligation to make such matching contribution nor shall the fact that matching
contributions may be made in one Plan Year create any obligation to make
matching contributions at any other time or to any other Participant.

SECTION 8. CREDITS AND ADJUSTMENTS TO ACCOUNTS

Each Participant's account shall be credited with any amounts deferred under the
Plan and any Company matching contributions made on behalf of the Participant.
Each Participant's account shall be reduced by the amount of any distributions
to the Participant from the Plan. Pursuant to procedures established by the
Administrator, each Participant's account shall be adjusted as of each business
day the New York Stock Exchange is open to reflect the earnings or losses
determined by reference to the Participant's investment elections made pursuant
to Section 9.

SECTION 9. INVESTMENT OF ACCOUNTS

For purposes of determining the amount of earnings and appreciation and losses
and depreciation to be credited to a Participant's account, each Participant's
account shall be deemed invested in the investment options (designated by the
Administrator as available under the Plan) as the Participant may elect, from
time to time, in accordance with such rules and procedures as the Administrator
may establish. However, no provision of the Plan shall require the Company to
actually invest any amounts in any fund or in any other investment vehicle.

SECTION 10. TIME AND MANNER OF DISTRIBUTION

Distribution of a Participant's account shall be made or commence to the
Participant (or, in the event of the Participant's death, to his Beneficiary)
within thirty (30) days following the earlier of (1) the Participant's
termination of employment with the Company and any "affiliate" thereof (within
the meaning of Sections 414(b), (c) and (m) of the Code), or (2) the
Participant's death.

Each Participant shall elect, on the election form used to make his or her
initial deferral election hereunder, either of the following modes of
distribution:

        (a)   a single lump-sum payment; or

        (b)   monthly installments over a period of five (5), ten (10), fifteen
              (15) or twenty (20) years, or over the Participant's "life
              expectancy" (within the meaning of Section 401(a)(9) of the Code)
              as the Participant may elect, the amount of each installment to
              equal the balance of the Participant's account immediately prior
              to the installment divided by the number of installments remaining
              to be paid; provided, however, that if a Participant dies after
              installment payments have commenced, the undistributed balance of
              the Participant's account, if any, shall be paid to the
              Participant's Beneficiary in accordance with the provisions of
              Section 13.

                                       4
<PAGE>   5

Any election under this Section 10 shall be irrevocable and shall apply to all
amounts credited to the Participant's account under the Plan. Provided, however,
that the Administrator reserves the right, at any time, to accelerate payments
being made in monthly installments by making a single lump-sum payment of the
amount then credited to the Participant's account without the consent of the
Participant.

SECTION 11. DISTRIBUTION IN THE EVENT OF UNFORESEEABLE EMERGENCY

In the event of an "unforeseen emergency", a Participant may, by filing a
written election with the Administrator, elect to receive a distribution from
the Plan in an amount not to exceed the lesser of (i) the fair market value of
the Participant's account or (ii) the amount necessary to satisfy the
unforeseeable emergency. For purposes hereof, an "unforeseeable emergency" shall
mean a severe financial hardship to the Participant resulting from a sudden and
unexpected illness or accident of the Participant or of a dependent (as defined
in Section 152(a) of the Code) of the Participant, loss of the Participant's
property due to casualty, or other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the
Participant. The circumstances that will constitute an unforeseeable emergency
shall depend upon the facts of each case, but, in any, case, payment may not be
made to the extent that such emergency is or may be relieved:

        (i)   through reimbursement or compensation by insurance or otherwise;

        (ii)  by liquidation of the Participant's assets, to the extent the
              liquidation of such assets would not itself cause severe financial
              hardship; or

        (iii) by cessation of deferrals under the Plan.

SECTION 12. CHANGE IN CONTROL

Notwithstanding the foregoing, as soon as possible following a "Change of
Control" of the Company, each Participant shall be paid his or her entire
account balance in a single lump-sum payment.

For purposes of this Section 12, "Change of Control" means (a) the purchase or
other acquisition by any person, entity or group of persons, within the meaning
of Section 13(d) or 14(d) of the Securities Exchange Act of 1934 or any
comparable successor provisions, of beneficial ownership (within the meaning of
Rule 13d-3 of the Securities Exchange Act of 1934) of thirty percent (30%) or
more of either the outstanding shares of common stock or the combined voting
power of the Company's then outstanding voting securities entitled to vote
generally, or (b) the approval by the stockholders of the Company of a
reorganization, merger, or consolidation, in each case, with respect to which
persons who were stockholders of the Company immediately prior to such
reorganization, merger or consolidation do not, immediately thereafter, own more
than fifty percent (50%) of the combined voting power entitled to vote generally
in the election of directors of the reorganized, merged or consolidated
Company's then outstanding securities, or a liquidation or dissolution of the
Company or of the sale of substantially all of the Company's assets.

                                       5
<PAGE>   6

In addition, in the event a Subsidiary, for which a Participant is employed,
ceases to be a Subsidiary prior to the date the Participant's entire account
under the Plan has been distributed, the Participant's account (or remaining
balance, as the case may be) shall be paid, as soon as reasonably practicable,
to the Participant in a single lump-sum payment, unless the Administrator
establishes an alternate method of handling such account, including, without
limitation, an assumption of the liability for the value of the account by the
Participant's employer and a transfer of any assets held in any trust
established pursuant to Section 15.2 with respect to such account.

SECTION 13. BENEFICIARY DESIGNATION

A Participant may designate the person or persons to whom the Participant's
account under the Plan shall be paid in the event of the Participant's death. If
no Beneficiary is designated, or no designated Beneficiary survives the
Participant, payment shall be made to the Participant's surviving spouse or, if
none, to the Participant's estate.

SECTION 14. PLAN ADMINISTRATION

14.1 Administration. The Plan shall be administered by the Board or, in the
     discretion of the Board, a committee or subcommittee of the Board (the
     "Committee"), appointed by the Board and composed of at least two members
     of the Board. All references in the Plan to the Administrator shall be
     understood to refer to the Committee or the Board, whoever shall administer
     the Plan.

Where the Committee serves as Administrator, in the event that a vacancy on the
Committee occurs on account of the resignation of a member or the removal of a
member by vote of the Board, a successor member shall be appointed by vote of
the Board.

The Administrator shall select one of its members as Chairman and shall hold
meetings at such times and places as it may determine. A majority shall
constitute a quorum, and acts of the Administrator at which a quorum is present,
or acts reduced to or approved in writing by all its members, shall be the valid
acts of the Administrator.

The Administrator is authorized to interpret and construe any provision of the
Plan, to determine eligibility and benefits under the Plan, to prescribe, amend
and rescind rules and regulations relating to the Plan, to adopt such forms as
it may deem appropriate for the administration of the Plan, to provide for
conditions and assurances deemed necessary or advisable to protect the interests
of the Company and to make all other determinations necessary or advisable for
the administration of the Plan, but only to the extent not contrary to the
express provisions of the Plan. The Administrator shall be responsible for the
day-to-day administration of the Plan. Determinations, interpretations or other
actions made or taken by the Administrator under the Plan shall be final and
binding for all purposes and upon all persons.

                                       6
<PAGE>   7

14.2 Review Procedure. The purpose of the review procedure set forth in this
     Section 14.2 is to provide a procedure by which a Participant or
     Beneficiary under the Plan, or the duly authorized representative of any
     such Participant or Beneficiary, may have a reasonable opportunity to
     appeal a denied claim to the Administrator for a full and fair review. To
     accomplish that purpose, the Participant or Beneficiary, or the duly
     authorized representative of any Participant or Beneficiary, may:

        (a)   request a review by the Administrator upon written application to
              it;

        (b)   review pertinent documents; and

        (c)   submit issues and comments in writing.

A Participant or Beneficiary may request a review of a denied claim by filing a
written application with the Administrator at any time within sixty (60) days
after receipt by the Participant or Beneficiary of written notice of denial of
the claim.

The decision on review shall be made by the Administrator, which may, in its
discretion, hold a hearing on a denied claim. The Administrator shall issue a
decision within sixty (60) days after receipt of an application for review
unless special circumstances require an extension of time for processing, in
which case a decision shall be rendered as soon as possible but not later than
one hundred twenty (120) days after receipt of a request for review. In the
event that the decision is not furnished within the appropriate time, the claim
shall be deemed denied. If an extension of time for review is required, written
notice of the extension shall be furnished to the Participant or Beneficiary
prior to commencement of the extension. The decision to review shall be in
writing and shall include specific reasons for the decision, written in a manner
calculated to be understood by the Participant and Beneficiary, and specific
references to the pertinent Plan provisions on which the decision is based. The
Administrator shall have discretionary authority to interpret and apply the
provisions of the Plan with respect to, and to make any factual determination in
connection with, any benefit claim, and the decision of the Administrator shall
be final and binding upon all parties.

SECTION 15. FUNDING

15.1 Plan Unfunded. The Plan is unfunded for tax purposes and for purposes of
     Title I of ERISA. Accordingly, the obligation of the Company to make
     payments under the Plan constitutes solely an unsecured (but legally
     enforceable) promise of the Company to make such payments, and no person,
     including any Participant or Beneficiary shall have any lien, prior claim
     or other security interest in any property of the Company as a result of
     this Plan. Any amounts payable under the Plan shall be paid out of the
     general assets of the Company and each Participant and Beneficiary shall be
     deemed to be a general unsecured creditor of the Company.

15.2 Rabbi Trust. The Company may create a grantor trust to pay its obligations
     hereunder (a so-called rabbi trust), the assets of which shall be treated,
     for all purposes, as the assets of the Company. The terms of the trust
     shall generally conform to the terms of the model trust described in
     Revenue Procedure 92-64. In the event the trustee of such trust is unable
     or unwilling to make payments directly to Participants and Beneficiaries
     and such trustee remits payments to the Company for delivery to
     Participants and Beneficiaries, the Company shall promptly remit such
     amount, less applicable income and other taxes required to be withheld, to
     the Participant or Beneficiary.

                                       7
<PAGE>   8

SECTION 16. AMENDMENT

The Company, by resolution of the Board, shall have the right to amend, suspend
or terminate the Plan at any time; provided, however, that no such action shall,
without the Participant's consent, impair the Participant's right with respect
to any existing account under the Plan.

SECTION 17. NO ASSIGNMENT

A Participant's right to the amount credited to his account under the Plan shall
not be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment or garnishment by creditors of the
Participant or the Participant's Beneficiary.

SECTION 18. SUCCESSORS AND ASSIGNS

The provisions of this Plan shall be binding upon and inure to the benefit of
the Company, its successors and assigns, and the Participant, his or her
Beneficiaries, heirs, legal representatives and assigns.

SECTION 19. NO CONTRACT OF EMPLOYMENT

Nothing contained herein shall be construed as a contract of employment between
a Participant and the Company, or as a right of the Participant to continue in
employment with the Company, or as a limitation of the right of the Company to
discharge the Participant at any time, with or without cause.

SECTION 20. GOVERNING LAW

This Plan shall be subject to and construed in accordance with the provisions of
ERISA, where applicable, and otherwise by the laws of the State of Nevada.

                           --------------------------

IN WITNESS WHEREOF, the Company, by its duly authorized officer, has caused this
Plan to be executed as of the ____ day of _______________, 2000.

                                               HORSESHOE GAMING HOLDING CORP.

                                               By
                                                  ------------------------------
                                                      Authorized Officer

                                       8<PAGE>   1

                                                                   Exhibit 10.41

                              EMPLOYMENT AGREEMENT

        AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Employment Agreement")
entered into as of July 5, 1999, by and between Horseshoe Gaming, Inc., a Nevada
Corporation ("Employer"), and Floyd B. Hannon ("Employee").

                                    RECITALS

        WHEREAS, Employer is the Manager of Horseshoe Gaming, LLC, a Delaware
limited liability company (the "LLC"), whose subsidiaries and affiliates have
developed and are currently operating casino and hotel facilities in Tunica,
Mississippi (the "Tunica Facility"), and in Bossier City, Louisiana (the
"Bossier City Facility" and, together with the Tunica Facility, referred to as
the "Existing Facilities"), and who is party to an agreement to acquire
additional casino and hotel facilities in Hammond, Indiana (the "Hammond
Facility") and Joliet, Illinois (the "Joliet Facility" and, together with the
Hammond Facility referred to as the "To Be Acquired Facilities"); and

        WHEREAS, Employer desires to employ Employee, and Employee desires to
accept such employment, pursuant to the terms of this Employment Agreement;

        NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, and in consideration of the mutual
covenants, promises and agreements herein contained, the parties hereto agree as
follows:

                                    AGREEMENT

               1. Definitions. All capitalized words referenced or used in this
Employment Agreement and not specifically defined herein shall have the meaning
set forth on Exhibit A, which is attached hereto and by this reference made a
part hereof.

               2. Term. This Employment Agreement shall become effective on the
date first above written (the "Commencement Date") and shall continue in effect
for a period terminating March 31, 2001, unless terminated sooner by Employer or
Employee pursuant to the terms set forth herein.

               3. Position to be Held by Employee. Employee is hereby employed
and hired by Employer to serve and act as the Senior Vice President-Governmental
Relations and Regulatory Compliance for Employer, and shall perform each and all
of the duties and shall have all of the

                                      -1-
<PAGE>   2

responsibilities described herein. Employee shall at all times report directly
to and take directives from the Chief Executive Officer of Employer (the
"Supervisor") or such other executive of Employer as directed by Employer.

               4. Duties and Responsibilities.

               A. Duties. In his capacity as Senior Vice President of Employer,
Employee shall have the responsibility for overseeing all aspects of
Governmental Relations and Regulatory Compliance of the Existing Facilities and
the To Be Acquired Facilities, if acquired, and assisting in the opening of any
casino and hotel facilities to be developed and/or acquired by subsidiaries or
affiliates of the LLC (together with the Existing Facilities and the To Be
Acquired Facilities each referred to individually as a "Facility" and
collectively as the "Facilities") in a manner so as to maximize, to the best of
his ability, the profitability of each Facility, for and on behalf of the LLC in
accordance with all applicable laws and regulations. The authority of Employee
to bind Employer shall be as broad or as limited as may be determined from time
to time by the Supervisor or the Board of Directors of Employer (the "Board").
"). Employee acknowledges and agrees that in connection with his employment he
may be required to travel on behalf of Employer.

               B. Fiduciary Duty. In every instance, Employee shall carry out
his various duties and responsibilities in a fiduciary capacity on behalf of
Employer, in an effort to maximize the profitability of Employer. In no event
whatsoever shall Employee enter into any commitments or obligations, written or
verbal, or take or omit to take any other action, the result of which would be
to create a conflict of interest between Employer and Employee, or the result of
which would (directly or indirectly) benefit Employee, or any person or entity
associated with or affiliated with Employee, or any person or entity in any
manner involved in the gaming industry to the detriment of Employer. In all
instances, Employee shall perform his services and oversee his department(s) in
a thorough, competent, efficient and professional manner.

               C. Full-Time Effort. Employee acknowledges and agrees that the
duties and responsibilities to be discharged by Employee require a full-time
effort on the part of Employee, and accordingly, Employee agrees to devote his
full-time effort and resources for and on behalf of Employer, and agrees that he
will not, during the term hereof, enter into (directly or indirectly) any other
business activities or ventures, other than investments which are passive in
nature provided no such investment may exceed 5% of the equity securities of any
entity without the prior approval of the Board.

               D. Directives from the Supervisor. In all instances, Employee
agrees to carry out all of his duties and responsibilities as set forth herein
pursuant to the guidance, directives and instructions of the Supervisor and

                                      -2-
<PAGE>   3

agrees that at all times his authority shall be subordinate to such Supervisor.
The wishes and directives of the Supervisor shall prevail in all matters and
decisions as to which there is a disagreement between Employee and the
Supervisor, and Employee shall carry out any and all lawful directives from the
Supervisor to the best of his ability.

               5. Compensation. As compensation for the services to be rendered
by Employee pursuant to the terms of this Employment Agreement, Employee shall
be entitled to receive the following:

               A. a base salary of Two Hundred Fifty Thousand Dollars ($250,000)
per year, to be paid as follows, a one time payment of $50,000 upon the
effective date of this Agreement and the balance of $200,000 to be paid in equal
semi-monthly installments, which may be adjusted annually by a merit increase
based upon Employer's existing policy and an annual performance appraisal of
Employee and Employer and the LLC (the "Base Compensation"), which appraisals
shall be performed in a manner suitable to Employer in all respects, and which
shall be payable in equal semi-monthly installments;

               B. a discretionary bonus in an amount determined in accordance
with Employer's bonus plan, as may be amended from time to time by Employer in
Employer's sole discretion, (the "Bonus"), which shall not exceed 50% of
Employee's Base Compensation at the time such Bonus is awarded; and

               C. the right to participate in any employee stock option or stock
purchase plan that may be adopted by Employer for its executive level employees
and the executive level employees of its gaming subsidiaries (and, at Employer's
sole discretion, possibly for executive level employees of other gaming
operations principally owned or controlled by Jack B. Binion), such
participation to be at a level commensurate with that of other executives
performing similar duties and at a similar compensation level as that of
Employee.

               6. Fringe Benefits. It is understood and agreed that the Base
Compensation to be received by Employee is to be all-inclusive of other typical
fringe benefits provided to executives in a similar position as Employee;
provided, however, that Employee shall be entitled to the following benefits:

               A. reimbursement, on an on-going basis, for all reasonable
entertainment, traveling and other similar expenses incurred in the performance
of his duties and responsibilities hereunder, such expenses to be subject to
budgets established for such purpose and the Employer's reimbursement
procedures;

                                      -3-
<PAGE>   4

               B. participation in such pension plans as Employer shall adopt
for all of its employees; it being understood and agreed that the only pension
plan that Employer has adopted at this time is a Section 401(k) form of pension
plan;

               C. for the term of the Contract, Employer shall pay Employee an
allowance for use of one automobile in the amount of $750 per month;

               D. reimbursement for the cost of maintaining a One Million Dollar
($1,000,000) term life insurance policy insuring the life of Employee provided
that Employee remains insurable at the rate generally established by major life
insurance companies for term life insurance policies for persons in good health
and the same age as Employee; and provided further that if Employee is rated in
a higher risk category said policy shall nevertheless be made available but
Employer shall only be obligated to pay the premium payable by a person in good
health and all premiums in excess of such amount shall be paid Employee; and

               E. relocation expenses as set forth in a Horseshoe memorandum
dated October 6, 1996, which is attached hereto as Exhibit A and incorporated
herein.

               7. Employer will provide Employee with liability insurance
coverage to the extent that such coverage is common in the industry and for
other employees at or above the level of the Employee within the Employer.

               8. Gaming License.

               A. Employer and Employee understand that it shall be necessary
for Employee to maintain in full force and effect at all times, gaming licenses
required by each of the various jurisdictions in which subsidiaries or
affiliates of the LLC are conducting gaming operations for persons serving in a
similar capacity as Employee. Accordingly, during the course of his employment,
Employee agrees to use his best efforts to obtain and maintain such licenses, to
fully cooperate in the investigation or investigations to be conducted in
connection therewith and otherwise to fully comply with all requirements of
applicable Gaming Authorities and Governmental Authorities.

               B. Employer and Employee understand that Indiana Code 4-2-6-11
sets forth postemployment restrictions except as provided in Section 20 or 21 of
this Rule, or upon the request of the Indiana Gaming Commission (the
"commission") a restricted employee of the commission who leaves the employment
of the commission for any reason, may not without consent of the commission:

                                      -4-
<PAGE>   5

                      (1) appear before the commission on any matter before the
commission or an administrative law judge appointed by the commission on behalf
of a licensee or an applicant for any license; or

                      (2) engage in any discussion with any commission employee
regarding any specific applicant or licensee;

for a period of one hundred eighty (180) days following the termination of the
restricted employee's employment with the commission.

               C. Without the consent of the commission, a former employee or
former restricted employee may not appear before the commission on behalf of an
occupational licensee, Level 2 or 3 or an applicant for an occupational license,
Level 2 or 3 for a period of ninety (90) days. Consent to so appear may be
granted by the commission if the former employee or former restricted employee
was not involved with that specific issue during the last year of employment
with the commission. (Indiana Gaming Commission; 68 IAC 9-2-18; filed June 23,
1995, 2:30 p.m.; 18 IR 2669).

               In addition to the post employment restrictions set forth in IC
4-2-6-11, a former restricted employee may not apply for:

               (1) a riverboat owner's license;

               (2) a supplier's license; or

               (3) an occupational license, Level 1;

without the prior approval of the commission for a period of one hundred eighty
(180) days following the termination of the restricted employee's employment
with the commission. (Indiana Gaming Commission; 68 IAC 9-2-18; filed June 23,
1995, 2:30 p.m.; 18 IR 2669).

               9. Termination

               A. Termination With Cause. Employer may terminate Employee for
"cause" as provided in this Section 8. For purposes of this Employment Agreement
"cause" means the occurrence of one or more of the following events:

                      i. the revocation, suspension or failure to renew for a
period in excess of ninety (90) days, of any such gaming license due to an act
or omission of Employee (or such alleged act or omission) upon which the Gaming
Authorities or Governmental Authorities have based their determination to
revoke, suspend or fail to renew any gaming license;

                                      -5-
<PAGE>   6

                      ii. failure or refusal by Employee to observe or perform
any of the material provisions of this Employment Agreement or any other written
agreement with Employer, or to perform in a reasonably satisfactory manner all
of the material duties required of Employee under this Employment Agreement or
any other written agreement with Employer;

                      iii. commission of fraud, misappropriation, embezzlement
or other acts of dishonesty, or conviction for any crime punishable as a felony
or a gross misdemeanor involving dishonesty or moral turpitude or the use of
illegal drugs while on duty for Employer or on premises of any Facility;

                      iv. unreasonable refusal or failure to comply with the
proper and lawful directives of and/or procedures established by the CEO or the
Board (or persons of comparable or senior position); and/or

                      v. the death of Employee or the mental or physical
disability of Employee to such a degree that Employee, in the reasonable
judgment of a licensed physician retained by Employer, is unable to carry out
all of his obligations, duties and responsibilities set forth herein for a
period in excess of sixty (60) days.

        Termination of Employee's employment for cause under Subsections
8(A)(i), 8(A)(iii) or 8(A)(v) above shall be effective immediately upon notice
thereof by Employer to Employee. Termination of Employee's employment for cause
under Subsections 8(A)(ii) or 8(A)(iv) above shall be effective upon fourteen
(14) days' prior notice thereof by Employer to Employee. The factual basis for
termination for cause shall be included within any such notice of termination.

               B. Termination for Cause, Resignation, or Expiration of Term.
Upon termination of Employee's employment with Employer (i) by Employer for
cause (ii) upon the resignation of Employee or (iii) upon the expiration of the
term of this Employment Agreement, all compensation as defined in Section 5
herein will cease as of the date of termination.

               C. Termination Without Cause. Employer in its discretion may
terminate Employee at any time without cause upon thirty (30) days prior written
notice to the Employee. If Employee is terminated by Employer without cause,
Employee shall continue to receive for a period of time equal to the balance of
the term of this Agreement: (1) the base Compensation payable as provided in
Subsection 5(A) described herein and (2) all fringe benefits otherwise provided
to Employee shall terminate immediately and Employee shall be entitled to a pro
rata Bonus.

               D Survival of Certain Covenants. The covenants not to

                                      -6-
<PAGE>   7

compete, solicit or hire and the confidentiality agreements set forth in
Sections 10 and 11 herein below shall continue to apply beyond termination in
the manner and to the extent set forth herein.

               10. Covenants Not to Compete, Solicit or Hire.

               A. Covenant Not to Compete. For so long as the Employee is
receiving Base Compensation and for a period of six (6) months from and after
the last date on which any amount constituting Base Compensation is paid to
Employee, Employee agrees that he will not directly or indirectly, whether as
principal, manager, agent, consultant, officer, director, stockholder, partner,
investor, lender or employee, or in any other capacity, on, be engaged in or
employed by or be a consultant to or to have any financial interest in any other
casino operation conducting business within one hundred (100) miles of any
gaming facility principally owned or controlled by Jack B. Binion, Employer, or
Employer's subsidiaries or related companies, including, but not limited to, the
Existing Facilities or the To Be Acquired Facilities. Employer and Employee
agree that such covenant not to compete is a condition of Employee's employment
and that the covenant not to compete has been given by Employee to Employer for
full and adequate consideration.

               B. Covenant Not to Solicit or Hire. . For so long as the Employer
is receiving Base Compensation and for a period of one (1) year from and after
the last date on which any amount constituting Base Compensation is paid to
Employee, Employee agrees that he will not, directly or indirectly, hire, retain
or solicit, or cause any other employer of his or any other person who has
retained Employee as a consultant or independent contractor to hire, retain or
solicit, as an employee, consultant, independent contractor in a supervisory
capacity or otherwise any person who was at any time during the period
commencing on the date three (3) months prior to the Commencement Date and
ending on the date of the termination of Employee's employment hereunder, an
employee of or consultant or independent contractor in a supervisory capacity to
Employer, the LLC or any other gaming operations principally owned or controlled
by Jack B. Binion, Employer, or Employer's subsidiaries or related companies,
including, but not limited to, the Existing Facilities or the To Be Acquired
Facilities.

               11. Nondisclosure of Confidential Information.

               A. Definition of Confidential Information. For purposes of this
Employment Agreement, "Confidential Information" means any information that is
not generally known to the public that relates to the existing or reasonably
foreseeable business of Employer. Confidential Information includes, but is not
limited to, information contained in or relating to the customer lists, account
lists, price lists, product designs, marketing plans or proposals, acquisition
or

                                      -7-
<PAGE>   8

growth plans or proposals, customer information, merchandising, selling,
accounting, finances, knowhow, trademarks, trade names, trade practices, trade
secrets and other proprietary information of Employer.

               B. Employee Shall Not Disclose Confidential Information. Employee
will not, during the term of Employee's employment and following the termination
of this Employment Agreement, until such time as the confidential information
becomes generally known to or readily ascertainable by proper means by, the
public, use, show, display, release, discuss, communicate, divulge or otherwise
disclose Confidential Information to any unauthorized person, firm, corporation,
association or other entity for any reason or purpose whatsoever, without the
prior written consent or authorization of Employer. Nothing contained herein
shall be interpreted or construed as restraining or preventing Employee from
using Confidential Information in the proper conduct of services to be rendered
by Employee on behalf of Employer pursuant to this Employment Agreement. Mistake
or lack of knowledge as to the status of information wrongly disclosed or used
by Employer shall not serve as a defense to this Employment Agreement.

               C. Scope. Employee's covenant in Subsection 11(B) above not to
disclose Confidential Information shall not apply to information which, at the
time of such disclosure, may be obtained from sources other than from Employer,
or its agents, lawyers or accountants, provided however, that such information
received is not received from sources which received the information in an
improper manner or against the wishes of Employer.

               D. Title. All documents and other tangible or intangible property
relating in any way to the business of Employer which are conceived or generated
by Employee or come into Employee's possession during the employment period
shall be and remain the exclusive property of Employer, and Employee agrees to
return immediately to Employer, upon its request, all such documents and
tangible and intangible property, including, but not limited to, all records,
manuals, books, blank forms, documents, letters, memoranda, notes, notebooks,
reports, data, tables, magnetic tapes, computer disks, calculations or copies
thereof, which are the property of Employer and which relate in anyway to the
business, customers, products, practices or techniques of Employer, as well as
all other property of Employer, including but not limited to, all documents
which in whole or in part contain any Confidential Information of Employer which
in any of these cases are in Employee's possession or under Employee's control.

               E. Compelled Disclosure. In the event a third party seeks to
compel disclosure of Confidential Information by Employee by judicial or
administrative process, Employee shall promptly notify Employer of such
occurrence and furnish to Employer a copy of the demand, summons, subpoena

                                      -8-
<PAGE>   9

or other process served upon Employee to compel such disclosure, and will permit
Employer to assume, at its expense, but with Employee's cooperation, defense of
such disclosure demand. In the event that Employer refuses to contest such a
third party disclosure demand under judicial or administrative process, or a
final judicial judgment is issued compelling Employee to disclose Confidential
Information, Employee shall be entitled to disclose such information in
compliance with the terms of such administrative or judicial process or order.

               12. Reasonableness of Terms. The Employer and the Employee
stipulate and agree that the terms and covenants contained in Section 10 and
Section 11 herein are fair and reasonable in all respects, including the time
period and geographical coverage in Section 10, and that these restrictions are
designed for the reasonable protection of the Employer's business and Employer's
legitimate interests therein. In the event that these restrictions are found to
be overly broad or unreasonable, the Employer and the Employee agree that such
restrictions shall be severable and enforceable on such modified terms as may be
deemed reasonable and enforceable by a court of competent jurisdiction.

               13. Representations and Warranties.

        Employee hereby represents and warrants to Employer, LLC and its
affiliated or related entities that:

               A. the execution, delivery and performance by Employee of this
Employment Agreement will not conflict with, violate the terms of or create a
default under any other agreement by which Employee is bound, including without
limitation Employee's present employment or similar agreements, whether oral or
written;

               B. no Gaming Authority or other Governmental Authority has ever
denied or otherwise declined to issue any gaming license or related
authorization applied for by Employee;

               C. Employee is not aware of any facts which, if known to any
Gaming Authority or other Governmental Authority, would cause the refusal of his
application for, or renewal of, any gaming licenses required to be obtained by
Employee pursuant to Section 7;

               D. Employee is not aware of any mental, physical or emotional
condition which currently affects Employee, and which might result in Employee's
being unable to carry out all of his duties, obligations and responsibilities
set forth herein;

                                      -9-
<PAGE>   10

               E. Employee understands and agrees that Employer is entering into
this Employment Agreement in strict reliance upon the representations and
warranties of Employee set forth herein, and that a breach of any of said
representations and warranties by Employee would constitute a default hereunder;
and

               14. Entire Agreement. This Employment Agreement constitutes the
entire agreement of the parties hereto with respect to the subject matter set
forth herein, and supersedes any and all previous oral or written agreements,
understandings or discussions between the parties hereto with respect to the
subject matter set forth herein with respect to the employment of Employee.

               15. All Amendments in Writing. This Employment Agreement may be
amended only pursuant to an instrument executed by Employer and Employee. It
shall not be reasonable for either Employer or Employee to rely on any oral
statements or representations by the other party that are in conflict with the
terms of this Employment Agreement.

               16. Arbitration. In the event of any dispute or controversy
between Employer and Employee with respect to any of the matters set forth
herein, both Employer and Employee agree to submit such dispute or controversy
to binding arbitration, to be conducted in Las Vegas, Nevada pursuant to the
then prevailing rules and regulations of the American Arbitration Association.
In such arbitration, the prevailing party shall be entitled, in addition to any
award made in such proceeding, to recover all of its costs and expenses incurred
in connection therewith, including, without limitation, attorneys' fees. This
provision does not in any way affect Section 23 of this Employment Agreement.

               17. Governing Law. This Employment Agreement shall be governed
and construed in accordance with the internal laws of the State of Nevada. The
terms of this Employment Agreement are intended to supplement but not displace,
the parties respective rights under the Nevada Uniform Trade Secrets Act, Nev.
Rev. Stat. Ann. 600A.010 et seq., as amended, and any similar laws adopted in
Indiana, Illinois, Mississippi or Louisiana.

               18. Notices. All notices required or desired to be given under
this Employment Agreement shall be in writing and shall be deemed to have been
duly given (i) on the date of service if served personally on the party to whom
notice is to be given, (ii) on the date of receipt by the party to whom notice
is to be given if transmitted to such party by telefax, provided a copy is
mailed as set forth below on the date of transmission, or (iii) on the third day
after mailing if mailed to the party to whom notice is to be given by registered
or certified mail, return receipt requested, postage prepaid, to at the
following

                                      -10-
<PAGE>   11

addresses, or to such other address as may be provided from time to time by one
party to the other

               If to Employer:      Horseshoe Gaming, Inc.
                                    330 S. Fourth Street
                                    Las Vegas, NV 89101
                                    Attn:  Jack B. Binion

               If to Employee:      Mr. Floyd B. Hannon
                                    2274 N. 300 W
                                    Greenfield, IN 46140

               19. Assignment. This Employment Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs,
successors, administrators and assigns. Notwithstanding the foregoing, Employee
understands and agrees that the nature of this Employment Agreement is a
personal services agreement, and that Employer is entering into this Employment
Agreement based upon the specific services to be rendered personally by Employee
hereunder; and accordingly, Employee shall not assign, transfer or delegate in
any manner any of his duties, responsibilities or obligations hereunder.

               20. No Third Party Beneficiaries. This Employment Agreement is
solely for the benefit of Employer and Employee, and in no event shall any other
person or entity by deemed or construed as a third party beneficiary of any of
the provisions or conditions set forth herein.

               21. Waiver. No waiver of any term, condition or covenant of this
Employment Agreement by a party shall be deemed to be a waiver of any subsequent
breaches of the same or other terms, covenants or conditions hereof by such
party.

               22. Construction. Whenever possible, each provision of this
Employment Agreement shall be interpreted in such manner as to be effective or
valid under applicable law, but if any provision of this Employment Agreement
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions of this
Employment Agreement. Without limiting the generality of the foregoing, if any
court determines that the term or the business or geographic scope of the
covenants contained in Subsections 10(A) or 10(B) is impermissible due to the
extent thereof, said covenant shall be modified to reduce its term, business
and/or geographic scope, as the case may be, to the extent necessary to make
such covenant valid, and said covenant shall be enforced as modified.

                                      -11-
<PAGE>   12

               23. Withholding. Employer shall withhold from any payments due to
Employee hereunder, all taxes, FICA or other amounts required to be withheld
pursuant to any applicable law.

               24. Injunctive Relief. Employee and Employer each acknowledge
that the provisions of Sections 10 and 11 are reasonable and necessary, that the
damages that would be suffered as a result of a breach or threatened breach by
Employee of Sections 10 and/or 11 may not be calculable, and that the award of a
money judgment to Employer for such a breach or threatened breach thereof by
Employee would be an inadequate remedy. Consequently, Employee agrees that in
addition to any other remedy to which Employer may be entitled in law or in
equity, the provisions of Sections 10 and 11 may be enforced by Employer by
injunctive or other equitable relief, including a temporary and/or permanent
injunction (without proving a breach therefor), and Employer shall not be
obligated to post bond or other security in seeking such relief. Employee hereby
consents to the jurisdiction of any state or federal court located in the State
of Nevada or Mississippi and hereby waives any and all objections to venue.

               25. Counterparts. This Employment Agreement may be executed in
any number of counterparts, each of which shall be deemed an original but all of
which together shall constitute a single instrument.

        IN WITNESS WHEREOF, the undersigned have executed this Employment
Agreement as of the day and year first above written.

"EMPLOYER" HORSESHOE GAMING, INC.
                    a Nevada Corporation

                                    By:
                                       ----------------------------------------
                                       Jack B. Binion, Chief Executive Officer

EMPLOYEE"                              ----------------------------------------
                                            Floyd B. Hannon

                                      -12-
<PAGE>   13

                                    EXHIBIT A

                                   DEFINITIONS

        All capitalized terms referenced or used in this Employment Agreement
and not specifically defined therein shall have the meaning set forth below in
this Exhibit A, which is attached to and made a part of this Employment
Agreement for all purposes.

        Gaming Authorities. The term "Gaming Authorities" shall mean all
agencies, authorities and instrumentalities of any state, nation (including
Native American nations) or other governmental entity or any subdivision
thereof, regulating gaming or related activities in the United States or any
state or political subdivision thereof, including, without limitation, the
Mississippi and Louisiana Gaming Commissions.

        Governmental Authority. The term "Governmental Authority" means the
governments of (i) the United States of America, (ii)the State of Mississippi,
(iii) Tunica County, (iv) the State of Louisiana, (v) Bossier City, Louisiana
and (vi) any other political subdivision of any state of the United States in
which a casino Facility is located, and any court or political subdivision,
agency, commission, board or instrumentality or officer thereof, whether
federal, state or local, having or exercising jurisdiction over Employer or a
Facility, and including, without limitation, any Gaming Authority.

                                      -13-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00023-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00023-of-00352.parquet"}]]