Unassociated Document


    EMPLOYMENT
      AGREEMENT

     

    EMPLOYMENT
      AGREEMENT dated as of December 1, 2006 (this “Agreement”), between AMERICAN REAL
      ESTATE HOLDINGS LIMITED
      PARTNERSHIP, a Delaware limited partnership (the “Company”), having an
      address at 767 Fifth Avenue, Suite 4700, New York, New York 10153, and PETER
      SHEA (the “Employee”), having an address at 3 Longwood Drive, Redding,
      Connecticut 06896.

     

    1. Employment

     

    Upon
      the
      terms and conditions hereinafter set forth, the Company hereby agrees to employ
      Employee and Employee hereby agrees to become employed by the Company. During
      the Term of Employment (as hereinafter defined), Employee shall be employed
      in
      the position of: (i) Head of Portfolio Operations of the Company; and (ii)
      as an
      officer, director, advisor or agent to the Company, its general partner,
      American Property Investors, Inc. (“API”), and/or American Real Estate Partners,
      L.P. (“AREP”), and each of their respective subsidiaries (each of such
      subsidiaries, the “Designated Affiliates”), as such positions may be specified
      from time to time by API or its Board of Directors (the “Board”). In such
      capacities Employee shall perform such duties as are specified by any of the
      Board, the Company, AREP, API and the Designated Affiliates.

     

    The
      parties acknowledge that Employee may from time to time also be requested by
      Carl C. Icahn to act as an officer, director, advisor or agent to entities
      with
      which he and his affiliates are involved (such entities, other than the Company,
      AREP, API and their subsidiaries, are referred to herein as the “Icahn
      Designated Entities”) and the Employee agrees that he will do so. The Employee
      will not receive any additional compensation in taking on such activities and
      the Company will be reimbursed by the Icahn Designated Entities based on the
      time spent by the Employee in such activities in accordance with its
      policies.

     

    Employee
      shall report to, and be under the supervision of the Board or such other persons
      or entities as shall be specified by the Board from time to time.

     

    Employee’s
      principal place of employment shall be in New York City but Employee
      acknowledges such employment shall require substantial travel to, and
      significant time spent at, other locations (including possible long term visits)
      as required by his duties.

     

    During
      the Term of Employment, Employee shall devote all of his professional attention,
      on a full time basis, to his duties hereunder and shall use his best efforts
      to
      advance the best interest of the Company, AREP, API and the Designated
      Affiliates and shall comply with all of the policies of the Company, AREP,
      API
      and the Designated Affiliates, including, without limitation, such policies
      with
      respect to legal compliance, conflicts of interest, confidentiality and business
      ethics as are from time to time in effect.

     

    
      
        
        

      

      
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    During
      the Term of Employment, and except as contemplated herein with respect to the
      Icahn Designated Entities, the Employee shall not, without the prior written
      consent of the Company, directly or indirectly render services to, or otherwise
      act in a business or professional capacity on behalf of or for the benefit
      of,
      any other Person (as hereafter defined) as an employee, advisor, independent
      contractor, agent, consultant, representative or otherwise, whether or not
      compensated.

     

    2. Term

     

    The
      employment period shall commence as of December 1, 2006 and shall continue
      through the period (the “Term of Employment”) ending on December 31, 2008 (the
“Expiration Date”), unless earlier terminated as set forth in this
      Agreement.

     

    3. Compensation

     

    For
      all
      services to be performed by Employee under this Agreement, during the Term
      of
      Employment, the Employee shall be compensated in the following
      manner:

     

    
      	
              (a)

            	
              Base
                Compensation

            


    

     

    The
      Company will pay Employee a salary (the “Base Salary”) at an annual rate of
      $450,000. The Base Salary shall be payable in accordance with the normal payroll
      practice of the Company (but no less frequently than bi-weekly).

     

    
      	
              (b)

            	
              Bonus
                Compensation

            


    

     

    Employee
      shall be eligible for an annual bonus of up to 50% of the Base Salary. The
      amount will be determined annually by the Board, in its sole discretion, based
      on factors that the Board, in its sole discretion, shall determine critical
      for
      the role.

     

    
      	
              (c)

            	
              Taxes

            


    

     

    All
      amounts paid by the Company to Employee under or pursuant to this Agreement,
      including, without limitation, the Base Salary and any bonus, or any other
      compensation or benefits, whether in cash or in kind, shall be
      subject
      to normal withholding and deductions imposed by any one or more local, state
      or
      federal governments.

     

    4. Termination

     

    This
      Agreement shall terminate (subject to Section 10(f) below) and the Term of
      Employment shall end, on the first to occur of (each a “Termination
      Event”):

     

    
      	 	
              (a)

            	
              The
                Expiration Date;

            


    

     

    
      	 	
              (b)

            	
              The
                death of Employee or the total or partial disability that, in the
                judgment
                of the Company, renders Employee, with or without reasonable
                accommodation, unable to perform his essential job functions for
                the
                Company for a period of at least 30 consecutive business
                days;

            


    

     

    
      	 	
              (c)

            	
              The
                discharge of Employee by the Company with or without Cause (as defined
                below); or

            


    

     

    
      
        
        

      

      
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              (d)

            	
              The
                resignation of Employee (and without limiting the effect of such
                resignation, Employee agrees to provide the Company with not less
                than 30
                days prior written notice of his
                resignation).

            


    

     

    The
      Company may discharge Employee at any time, for any reason or no reason, with
      or
      without Cause, in which event Employee shall be entitled only to such payments
      as are set forth in Section 5 below. As used herein, “Cause” is defined as
      Employee’s: (i) failure to (x) perform the duties assigned to him or (y) comply
      with the instructions given to him; (ii) personal misconduct or insubordination;
      (iii) impairment due to alcohol or substance abuse; (iv) conviction of a crime
      or being charged with a felony; (v) violation of a federal or state securities
      law or regulation; (vi) commission of an act of moral turpitude or dishonesty
      relating to the performance of his duties hereunder; (vii) failure to comply
      with any of the terms of this Agreement; (viii) breach of any of his obligations
      set forth in Section 6 below; (ix) any failure to obtain, or revocation or
      suspension by any state or local authority of any licenses, permits or other
      authorizations necessary to allow Employee to act in the capacities contemplated
      in this Agreement; or (x) any act or failure to act by Employee which causes
      any
      gaming or other regulatory authority having jurisdiction over the Company,
      AREP,
      API, the Designated Affiliates or any of their affiliates to seek any redress
      or
      remedy against the Employee, the Company, AREP, API, any Designated Affiliate
      or
      any of their affiliates.

     

    5. Effect
      of Termination

     

    In
      the
      event of termination of Employee’s employment hereunder, all rights of Employee
      under this Agreement, including all rights to compensation, shall end and
      Employee shall only be entitled to be paid the amounts set forth in this Section
      5 below.

     

    
      	 	
              (a)

            	
              In
                the event that the Term of Employment ends (i) for the reason set
                forth in
                Section 4(a) above (i.e., Expiration Date), or (ii) for any of the
                reasons
                set forth in Section 4(b) above (i.e. death or disability), or (iii)
                for
                the reason set forth in Section 4(d) above (i.e. resignation), or
                (iv) due
                to the discharge of Employee by the Company for Cause, then, in lieu
                of
                any other payments of any kind (including, without limitation, any
                severance payments), Employee shall be entitled to receive, within
                seven
                (7) days following the date on which the Termination Event in question
                occurred (the “Clause (a) Termination Date”) any amounts of Base Salary
                due and unpaid to Employee from the Company as of the Clause (a)
                Termination Date.

            


    

     

    
      	 	
              (b)

            	
              In
                the event that the Term of Employment ends (i) due to the discharge
                of the
                Employee by the Company without Cause (which the Company is free
                to do at
                any time in its sole and absolute discretion), then, in lieu of any
                other
                payments of any kind (including, without limitation, any severance
                payments), Employee shall be entitled to receive, within thirty (30)
                days
                following the date on which the Termination Event in question occurred
                (the “Clause (b) Termination
                Date”):

            


    

     

    
      	 	
              (i)

            	
              any
                amounts of Base Salary previously earned due and unpaid to Employee
                from
                the Company as of the Clause (b) Termination Date;
                and

            


    

     

    
      
        
        

      

      
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              (ii)

            	
              a
                lump-sum payment in the amount of $225,000 which shall be conditioned
                upon
                execution of a settlement and release agreement in form and substance
                acceptable to the Company.

            


    

     

    
      	 	
              (c)

            	
              In
                any event upon end of the Term of Employment, the Employee shall
                be
                reimbursed for all previously unreimbursed business expenses properly
                incurred and shall be paid for unused paid time off (“PTO”) to the extent
                so provided in the PTO policy of the Company then in
                effect.

            


    

     

    6. Non-Disclosure

     

    During
      the Term of Employment and at all times thereafter, Employee shall hold in
      a
      fiduciary capacity for the benefit of the Company, API, each Designated
      Affiliate and each of their affiliates, respectively, all secret or confidential
      information, knowledge or data, including, without limitation, trade secrets,
      identity of investments, identity of contemplated investments, business
      opportunities, valuation models and methodologies, relating to the business
      of
      the Company, API, the Designated Affiliates or their affiliates, and their
      respective business as, (i) obtained by Employee at any time during Employee’s
      employment by the Company and (ii) not otherwise in the public domain
      (“Confidential Information”). Employee also agrees to keep confidential and not
      disclose to any unauthorized Person any personal information regarding any
      controlling Person of the Company, API, the Designated Affiliates or any of
      their affiliates and any member of the immediate family of any such Person
      (and
      all such personal information shall be deemed “Confidential Information” for the
      purposes of this Agreement). Employee shall not, without the prior written
      consent of the Company: (i) except to the extent compelled pursuant to the
      order
      of a court or other body having jurisdiction over such matter or based upon
      the
      advice of counsel that such disclosure is legally required, communicate or
      divulge any Confidential Information to anyone other than the Company and those
      designated by the Company; or (ii) use any Confidential Information for any
      purpose other than the performance of his duties as an employee of the Company.
      Employee will assist the Company, at the Company’s expense, in obtaining a
      protective order, other appropriate remedy or other reliable assurance that
      confidential treatment will be accorded any Confidential Information disclosed
      pursuant to the terms of this Agreement.

     

    In
      no
      event shall Employee during or after his employment hereunder, disparage the
      Company, API, the Designated Affiliates, any controlling Person of the Company,
      API, the Designated Affiliates, their respective affiliates and family members
      or any of their respective officers, directors or employees.

     

    In
      furtherance of all of the foregoing, the Employee agrees that during the Term
      of
      Employment and following the termination of his employment hereunder, the sole
      and only disclosure he will make about or concerning Mr. Icahn, his family,
      the
      Company, AREP, API, the Designated Affiliates, their subsidiaries and
      affiliates, is to acknowledge that he is or was employed by the Company, AREP,
      API, the Designated Affiliates or their subsidiaries and affiliates, and his
      title and dates of employment therewith.

     

    All
      processes, technologies, intellectual property and inventions (collectively,
      “Inventions”) conceived, developed, invented, made or found by Employee, alone
      or with others, during the Term of Employment, whether or not patentable and
      whether or not on the Company’s, AREP’s or API’s time or with the use of the
      Company’s, AREP’s or API’s facilities or materials, shall be the property of the
      Company, AREP or API, as applicable, and shall be promptly and fully disclosed
      by the Employee to the Company, AREP or API, as applicable. Employee shall
      perform all necessary acts (including, without limitation, executing and
      delivering any confirmatory assignments, documents, or instruments requested
      by
      the Company, AREP or API) to vest title to any such Inventions in the Company,
      AREP or API, as applicable, and to enable to the Company, AREP or API, at its
      expense, to secure and maintain domestic and/or foreign patents or any other
      rights for such Inventions.

     

    
      
        
        

      

      
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    7. Non-Compete

     

    (a)
      During the Term of Employment and, unless Employee’s employment is terminated by
      the Company without Cause, for a period of three (3) months following the last
      day of Employee’s employment by the Company, Employee will not, either directly
      or indirectly, as principal, agent, owner, employee, partner, investor,
      shareholder (other than solely as a holder of not more than 1% of the issued
      and
      outstanding shares of any public corporation), consultant, advisor or otherwise
      howsoever own, operate, carry on or engage in the operation of or have any
      financial interest in or provide, directly or indirectly, financial assistance
      to or lend money to or guarantee the debts or obligations of any Person carrying
      on or engaged in any business that is competitive with or similar to the
      business conducted by the Company, AREP, API, the Designated Affiliates or
      any
      of their subsidiaries which is located in or within fifty 50 miles of any
      locations in which the Company, AREP, API, the Designated Affiliates or any
      of
      their subsidiaries or affiliates are doing business.

     

    (b)
      Employee covenants and agrees with the Company, AREP, API, the Designated
      Affiliates or any of their subsidiaries and affiliates that, during Employee’s
      employment by the Company and for one (1) year following the last day of
      Employee’s employment by the Company, Employee shall not directly, or
      indirectly, for herself or for any other Person:

     

    
      	 	
              (i)

            	
              solicit,
                interfere with or endeavor to entice away from the Company, AREP,
                API, any
                Designated affiliate or any of their subsidiaries or affiliates,
                any
                customer, client or any Person in the habit of dealing with any of
                the
                foregoing;

            


    

     

    
      	 	
              (ii)

            	
              interfere
                with, entice away or otherwise attempt to obtain the withdrawal of
                any
                employee of the Company, AREP, API, any Designated Affiliate or any
                of
                their subsidiaries or affiliates;
                or

            


    

     

    
      	 	
              (iii)

            	
              advise
                any Person not to do business with the Company, AREP, API, any Designated
                Affiliate or any of their subsidiaries or
                affiliates.

            


    

     

    Employee
      represents to and agrees with the Company and for the benefit of API that the
      enforcement of the restrictions contained in Section 6 and Section 7 (the
      Non-Disclosure and Non-Compete sections respectively) would not be unduly
      burdensome to Employee and that such restrictions are reasonably necessary
      to
      protect the legitimate interests of the Company, AREP, API and any Designated
      Affiliate. Employee agrees that the remedy of damages for any breach by Employee
      of the provisions of either of these sections may be inadequate and that the
      Company and API shall be entitled to injunctive relief, without posting any
      bond. This section constitutes an independent and separable covenant that shall
      be enforceable notwithstanding any right or remedy that the Company, AREP,
      API
      and any Designated Affiliate may have under any other provision of this
      Agreement or otherwise.

     

    
      
        
        

      

      
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    8. Benefits

     

    During
      the Term of Employment, Employee shall be entitled to receive: (i) in addition
      to normal Company holidays, Twenty-two (22) days of PTO which shall be earned
      and payable in accordance with the Company’s PTO policy; and (ii) certain
      healthcare and other similar employee welfare benefits comparable to those
      received by other employees of the Company at a similar pay level and/or
      position with the Company as such may be provided or modified by the Company
      in
      its sole and absolute discretion from time to time, as well.

     

    9. Definitions

     

    For
      purposes of this Agreement only, the following definitions shall
      apply:

     

    “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended, and any successor
      thereto.

     

    “Person”
means
      any individual, entity or group within the meaning of Section 13(d)(3) or
      14(d)(2) of the Exchange Act, other than employee benefit plans sponsored or
      maintained by the Company or by entities controlled by the Company.

     

    10. Miscellaneous

     

    
      	 	
              (a)

            	
              This
                Agreement constitutes the entire agreement between the parties with
                respect to the subject matter hereof and supersedes all previous
                written,
                and all previous or contemporaneous oral negotiations, understandings,
                arrangements, and agreements.

            


    

     

    
      	 	
              (b)

            	
              This
                Agreement and all of the provisions hereof shall inure to the benefit
                of
                and be binding upon the legal representatives, heirs, distributees,
                successors (whether by merger, operation of law or otherwise) and
                assigns
                of the parties hereto; provided, however, that Employee may not delegate
                any of Employee’s duties hereunder, and may not assign any of Employee’s
                rights hereunder, without the prior written consent of the Company,
                which
                may be withheld in its sole and absolute discretion. The Company
                may
                assign this contract to one of the Designated Affiliates or Icahn’s
                Designated Entities upon notice to Employee in which event Employee
                will
                become an employee of such entity and such entity will succeed to
                all of
                the rights and obligations of the Company, AREP, API, the Board and
                their
                respective affiliates hereunder.

            


    

     

    
      	 	
              (c)

            	
              This
                Agreement will be interpreted and the rights of the parties determined
                in
                accordance with the laws of the United States applicable thereto
                and the
                internal laws of the State of New
                York.

            


    

     

    
      
        
        

      

      
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              (d)

            	
              Employee
                covenants and represents that he is not a party to any contract,
                commitment or agreement, nor is he subject to, or bound by, any order,
                judgment, decree, law, statute, ordinance, rule, regulation or other
                restriction of any kind or character, which would prevent or restrict
                him
                from entering into and performing his obligations under this
                Agreement.

            


    

     

    
      	 	
              (e)

            	
              Employee
                acknowledges that he had the opportunity to engage legal counsel
                in
                reviewing and negotiating this
                Agreement.

            


    

     

    
      	 	
              (f)

            	
              This
                Agreement and all of its provisions, other than the provisions of
                Section
                5, Section 6, Section 7 and Section 1 hereunder (which shall survive
                termination), shall terminate upon Employee ceasing to be an employee
                of
                the Company for any reason.

            


    

     

    
      	 	
              (g)

            	
              To
                the extent not covered by insurance or by indemnification obligations
                of
                any Designated Affiliates (whether under their articles, bylaws,
                contracts
                or other documents) the Company agrees to indemnify and hold harmless
                the
                Employee from damages and costs incurred by the Employee as a result
                of
                service rendered by the Employee to the Designated Affiliates (but
                not the
                Icahn Designated Entities) in accordance with the terms of this Agreement;
                provided that no such indemnification or hold harmless obligation
                shall
                apply to any matter, or any act or omission by Employee, involving
                bad
                faith, gross negligence or willful misconduct or that is in violation
                of
                our policies.

            


    

     

    
      	 	
              (h)

            	
              Employee
                acknowledges that any remuneration or other property that Employee
                might
                otherwise be entitled to by virtue of serving as an officer, director,
                agent, advisor or employee of any Designated Entity shall be the
                property
                of the Employer and Employee shall not be entitled to any such
                remuneration or other Property.

            


    

     

    [signature
      page follows]

     

    
      
        
        

      

      
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              AMERICAN
                REAL ESTATE HOLDINGS, LIMITED
                PARTNERSHIP.

            
	 
	
              By:
                American Property Investors, Inc., its general partner:

            
	 	 
	 	 
	
              By:

            	
              /s/
                Hillel Moerman

            	
            
	
              Name:

            	
              Hillel
                Moerman

            
	
              Title:

            	
              Chief
                Financial Officer

            
	 
	
              EMPLOYEE:

            
	 	 
	 	 
	
              By:

            	
              /s/
                Peter Shea

            	
            
	 	
              Peter
                Shea

            
	
               

            


    

     

    
      
        
        

      

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