Exhibit 10.7
LETTER AGREEMENT
August 31, 2000
Harrah's Entertainment, Inc.
0000 Xxxx Xxxxxx, Xxxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxx 00000
RE: Escrow Agreement Dated as of February 6, 1990, as
Amended October 29, 1993, June 7, 1995, July 18,
1997, October 30, 1997, and April 26, 1997
As you know Xxxxxx'x Entertainment, Inc.(the "Company") has recently
appointed Xxxxx Fargo Bank Minnesota, N.A,. ("Escrow Agent") to act as Escrow
Agent of the above-referenced Escrow Agreement established by the Company in
connection with nonqualified deferred compensation plans established for the
benefit of persons currently and/or formerly employed by the Company or its
affiliates (the "Escrow Agreement"). Escrow Agent hereby accepts such
appointment, effective as of the date of this letter and hereby authorizes
the transfer of all assets of the Escrow Fund from the prior escrow agent as
soon as administratively feasible. In consideration for Escrow Agent acting
in its capacity and notwithstanding anything in the Escrow Agreement to the
contrary, both parties acknowledge and agree as follows:
Income, ICA, FUTA and other Taxes.
1. The Escrow Agent shall, if directed by Company or if required by the
Escrow Agreement, make distribution payments from the Escrow Fund directly to
beneficiaries.
2. (a) Payments Directed by Company. As an inducement to Escrow Agent
to make such distributions, Company will be responsible for satisfying all
federal, state or local tax reporting obligations that may be required with
respect to the payment of benefits, the performance of services to which the
benefits relate, and the vesting of benefits pursuant to the terms of the
Plans or Escrow Agreement. The amount withheld and time at which such taxes
are considered to be due and payable shall be determined by the Company.
Company will provide the Escrow Agent with instructions regarding the
appropriate amount of
withholding and the Escrow Agent will not be liable for damages for
withholding in accordance with such instructions. Escrow Agent will pay
amounts withheld to Company for remittance by Company to the appropriate
taxing authorities. If the Escrow Agent does not receive such instructions
the Escrow Agent will make a written request to Company to provide the
instructions. If the instructions are not received by the Escrow Agent with
ten business days after the date on which the Escrow Agent makes such written
request, the Escrow Agent is not required to withhold any amount from the
payment.
(b) Payments Required by Escrow Agreement. For these
distributions, the Escrow Agent will promptly make a written request to the
Company for withholding instructions. If the Company does not give
withholding instructions to Escrow Agent within five business days after
receiving this request, then Escrow Agent will withhold and remit to
appropriate authorities such withholding taxes as Escrow Agent deems are
necessary. The Company, not the Escrow Agent, will be responsible for FICA or
FUTA taxes that apply unless the Escrow Agent is advised by its counsel or
required by court order to apply these taxes. The Escrow Agent will promptly
report any payments and withholdings to the Company. The Company will then be
responsible for all reporting obligations to governmental authorities and
will hold the Escrow Agent harmless from such reporting obligations and from
any withholding decisions made by Escrow Agent under this subparagraph (b).
3. The Escrow Agent has no responsibility to advise the Company as to the
taxability or deductibility of contributions to or distributions from
the Escrow Fund, or gains or losses thereon, whether with regard to
income, FICA, FUTA, or other taxes, and Company acknowledges that it
has not and will not rely on Escrow Agent for such purposes.
Escrow Agent's Protection.
1. The Escrow Agent does not warrant and shall not be liable for any
tax consequences associated with the Escrow Fun or the Plans.
2. The Escrow Agent shall have no duty to determine or inquire whether
any contributions to this Escrow Fund are in compliance with the Plans or the
Escrow Agreement, or to compute any amount to be paid to the Escrow Agent;
nor shall the Escrow Agent be responsible for the collection or adequacy of
any contributions to the Escrow Fund or for the adequacy of the Escrow Fund
to meet and discharge liabilities to Participants and their Beneficiaries
under the Plan or to other creditors of the Company.
3. Company acknowledges its responsibility to report annual income of the
Escrow Fund on its corporate returns, notwithstanding whether it has
made arrangements to receive annual Forms 1041 from the Escrow Agent.
4. In any judicial proceeding between the Company and the Escrow Agent
with respect to the Escrow Agent or the Escrow Fund, the Escrow Agent
and the Company shall be the only necessary parties; and no participant
or beneficiary shall be entitled to any notice of process. A final
judgment in any such proceeding shall be binding upon the parties to
the proceeding and al Participants and beneficiaries.
5. If all or any part of the Escrow Fund is at any time attached,
garnished, or levied upon by a court order which is in full force and
effect and has not been stayed, or in case the payment assignment
transfer, conveyance or delivery of any such property shall be stayed
or enjoined by any court order which is in full force and effect and
has not been stayed or in case an order, judgment or decree that is in
full force and effect and has not been stayed shall be made or entered
by a court affecting such property or any part thereof, then and in any
of such events the Escrow Agent is authorized, in its sole discretion,
to rely upon and comply with any such order,
judgment or decree while it is in full force and has not been stayed,
and it shall not be liable to the Company or any Participant by reason
of such compliance even though such order, judgment or decree shall
subsequently may be reversed, modified, annulled set aside or vacated.
This agreement shall continue throughout the Escrow Agent's term as Escrow
Agent of the Escrow Agreement unless otherwise mutually agreed upon by the
parties. In the event this agreement is breached resulting in litigation
between the parties, a party who is not in breach of this agreement or the
Escrow Agreement shall be entitled to reimbursement from the breaching party
that prevails in such litigation for all reasonable costs incurred in
enforcing this agreement, including but not limited to reasonable attorney
fees.
Sincerely,
XXXXX FARGO BANK MINNESOTA, N. A., Escrow Agent
/s/ XXXXXX XXXXX
--------------------------------
Xxxxxx Xxxxx, Vice President
Received and agreed to this 8th day of September, 2000.
XXXXXX'X ENTERTAINMENT, INC.
By: /s/ XXXXXX XX
----------------------------
Xxxxxx Xx
Its Vice President
