EX-10.01






Exhibit 10.1




EMPLOYMENT AGREEMENT




This Employment Agreement dated as of October 23, 2008 (this “Agreement”), between Stratosphere
Gaming, LLC( the “Company”), having an address at 2000 Las Vegas Boulevard South, Las Vegas, Nevada
89104, and Arthur Keith(“Employee”), of Las Vegas, Nevada.



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 President of the Company and
shall also serve in other positions of the affiliates of the Company as may be designated (the
“Designated Affiliates”) from time to time by the board of directors of the Company (the “Board”),
provided that such Designated Affiliates are engaged in businesses relating to gaming, casino or
resort operation or development (collectively, the “Gaming Business”). Employee shall perform such
duties as are specified from time to time by the Company and the Board. Employee shall serve in
such capacities at the pleasure of the Board. Employee shall report to and be under the supervision
of the Company’s Board.



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



Except as specifically provided herein, during the Term of Employment, Employee shall not, without
the prior written consent of the Company, directly or indirectly (i) render services to, or
otherwise act in a business or professional capacity on behalf of or for the benefit of, any other
individual, entity, company or group (hereinafter



 









 







referred to as “Person”) as an employee, advisor, independent contractor, agent, consultant, representative or otherwise, whether or not compensated, (ii) plan,
negotiate or have discussions with any Person regarding, or otherwise attempt to secure, future
employment with any Person other than the Company or the Acquiring Person (as hereinafter defined)
or (iii) plan, take any actions in furtherance of, or otherwise devote any time to, any future
business opportunity (except as otherwise provided in this Agreement), whether sponsored by
Employee or any other Person (the “Exclusivity Obligation” ).



2. Term




The employment period shall commence as of October 23, 2008 and shall continue through the period
(the “Term of Employment”) ending on October 22, 2011 (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,
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 $425,000. 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




During the Term of Employment, Employee shall be eligible to receive an annual bonus, as may, from
time to time, be determined in the sole discretion of the Board (the “Bonus Compensation”).



(c) Second Tier Bonus




During the Term of Employment, Employee shall be eligible to receive a Second Tier Bonus, as may,
from time to time, be



 









 







determined in the sole discretion of the Board (the “Second Tier Bonus”). Any Second Tier Bonus, if determined to be paid to Employee, will vest as follows: a)
one-third immediately upon date a that a Second Tier Bonus is granted by the Board (“Grant Date”),
b) one-third on the expiration of twelve (12) months from the Grant Date, and c) one-third on the
expiration of twenty four (24) months from the Grant Date



(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 Compensation, 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 9(g) 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 90 consecutive business days;
	 
	 	(c)	 	The discharge of Employee by the Company with (i) Cause (as
hereinafter defined) or (ii) without Cause;
	 
	 	(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); or





 









 






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 perform the duties assigned to
him; (ii) chronic impairment due to alcohol or substance abuse; (iii) conviction of a Serious Crime
or being charged with a felony (for purposes of this Agreement a “Serious Crime” is a crime that
the Company believes could prohibit the Employee from obtaining or maintaining any work card,
license, or finding of compliance suitability necessary for Employee to maintain employment with
Company) ; (iv) violation of a federal or state securities law or regulation; (v) negligent
conduct, error or omission in the carrying out of his duties under this Agreement; (vi) conduct
that causes damage to the reputation of the Company(vii) breach of the Exclusivity Obligation or
any of the obligations set forth in Section 6 or Section 7 below; (viii) any revocation or
suspension by any state or local authority of Employee’s required license(s) to serve in his
position(s) with the Company; or (ix) any act or failure to act by Employee which causes any gaming
or other regulatory authority having jurisdiction over the Company, the Designated Affiliates or
any of their affiliates to seek any redress or remedy against Employee, the Company, 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) for the
reason set forth in Section 4(c)(i) (with Cause), then, in lieu of any other
payments of any kind, Employee shall be entitled to receive, within fifteen
(15) days following the date on which the Termination Event in question
occurred (the “Clause (a)



 









 







Termination Date”) any amounts of: (A) Base Salary
due and unpaid to Employee from the Company as of the Clause (a) Termination
Date; and (B) Bonus Compensation earned, vested, 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) for the reasons set
forth in Section 4(c)(ii) above (without Cause) then, in lieu of any other
payments of any kind, Employee shall be entitled to receive, within fifteen
(15) days following the date on which the Termination Event in question
occurred (the “Clause (b) Termination Date”) any amounts of: (A) Base Salary
due and unpaid to Employee from the Company as of the Clause (b) Termination
Date; (B) Bonus Compensation earned, vested, due and unpaid to Employee from
the Company as of the Clause (b) Termination Date; (C) Severance Payment equal
to one (1) year of Base Compensation.



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, 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, 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 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, the
Designated Affiliates, any controlling Person of the Company, the Designated Affiliates, their
respective affiliates and family members or any of their respective officers, directors or
employees.



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 time or with the use of
the Company’s facilities or materials, shall be the property of the Company and shall be promptly
and fully disclosed by Employee to the Company. Employee shall perform all necessary acts
(including, without limitation, executing and delivering any confirmatory assignments, documents,
or instruments requested by the Company) to vest title to any such Inventions in the Company and to
enable to the Company, at its expense, to secure and maintain domestic and/or foreign patents or
any other rights for such Inventions.



7. Non-Compete




(a) During the Term of Employment and, unless Employee’s employment is terminated for the reason
set forth in Section 4(a) above (i.e., Expiration Date), in which case this Section 7(a) shall
terminate automatically and without notice, for a period of six (6) 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 the hotel or casino business in or within one
hundred (100) miles of the Stratosphere Hotel and Casino.



Notwithstanding the foregoing, nothing in this Agreement will prohibit Employee from investing in
the securities of private companies in which he does not participate in the management (either as
an employee, officer or director), provided that such investment has been cleared in accordance
with all investment or insider trading policies applicable to Employee or to the Other Activity as
outlined in Section 1 of this Agreement.



(b) Employee covenants and agrees with the Company and its subsidiaries 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 himself or for any other Person:




	 	(i)	 	solicit, interfere with or endeavor to entice away from the Company,
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, any Designated Affiliate
or any of their subsidiaries or affiliates; or
	 
	 	(iii)	 	advise any Person not to do business with the Company, any
Designated Affiliate or any of their subsidiaries or affiliates.





Employee represents to and agrees with the Company 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. 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 shall be entitled to injunctive relief, without posting any bond. In the event the terms of
this Section 7 shall be determined by any court of competent jurisdiction to be unenforceable by
reason of its extending for too great a period of time or over too great a geographical area or by
reason of its being too extensive in any other respect, it will be interpreted to extend only over
the maximum period of time for which it may be enforceable, over the maximum geographical area as
to which it may be enforceable, or to the maximum extent in all other respects as to which it may
be enforceable, all as determined by such court in such action. This section constitutes an
independent and separable covenant that shall be enforceable notwithstanding any right or remedy
that the Company may have under any other provision of this Agreement or otherwise.



8. Benefits




During the Term of Employment, Employee shall be entitled to receive certain healthcare and other
similar employee welfare benefits (including eligibility to participate in the Executive Medical
Reimbursement Plan provided by the Company) 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 by the
Company in its sole and absolute discretion from time to time within thirty (30) days hereof. In
the event that, during the Term of Employment, the Company awards to its executives stock options
or restricted stock in anticipation of a public offering, Employee shall be eligible to receive an
award of such options or restricted stock comparable to that received by other employees at a
similar pay level and/or position with the Company; provided, however, that the decision to make
any such award to Employee and the amount of any such award shall be subject to the review and
approval of the Board, in its sole and absolute discretion.



 









 





9. 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. If elected by the Company, upon any such
assignment, all references herein to the Company shall be deemed
instead to be references to the assignee and/or its designee(s).
	 
	 	(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 Nevada.
	 
	 	(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, including without limitation any contract, commitment,
agreement, rule or regulation relating to the Other Activity.
	 
	 	(e)	 	Employee acknowledges that he has had the assistance of legal counsel
in reviewing and negotiating this Agreement.
	 
	 	(f)	 	This Agreement shall be deemed drafted equally by both the 




 









 






	 	 	 	parties.
Its language shall be construed as a whole and according to its fair
meaning. Any presumption or principle that the language is to be
construed against any party shall not apply. The headings in this
Agreement are only for convenience and are not intended to affect
construction or interpretation. Any references to paragraphs,
subparagraphs, sections or subsections are to those parts of this
Agreement, unless the context clearly indicates to the contrary.






	 	(g)	 	This Agreement and all of its provisions, other than the provisions of
Section 5, Section 6, Section 7 and Section 9 hereunder (which shall
survive termination), shall terminate upon Employee ceasing to be an
employee of the Company for any reason.
	 
	 	(h)	 	In the event of the death of Employee during the Term of Employment,
Employee’s heir shall be entitled to receive all payments otherwise
earned, vested, due and unpaid to Employee from the Company pursuant
to the terms and conditions of this Agreement as of the date of
Employee’s death.
	 
	 	(i)	 	Employee acknowledges and agrees that he shall be solely responsible
for the payment of all federal, state and other income taxes, excise
taxes and other taxes that may be payable from time to time by
Employee with respect to all payments or benefits earned or received
by or payable to Employee under this Agreement (whether consisting of
Base Salary, Bonus Compensation, Severance Payment, or otherwise) and
shall not be entitled to receive any “gross-up payments” or other
additional payments from the Company or its affiliates on account of,
with respect to, in mitigation of, or as a set-off against, such
taxes. Without limiting the foregoing, if it is determined that any
amount, right or benefit paid or payable (or otherwise provided or to
be provided) to Employee by the Company or any of its affiliates under
this Agreement or any other plan, program or arrangement under which
Employee participates or is a party (whether consisting of Base
Salary, Bonus Compensation, Severance 




 









 






	 	 	 	Payment, or otherwise), would
constitute an “excess parachute payment” within the meaning of Section
280G of the Internal Revenue Code, as amended (the “Code”), subject to
the excise tax imposed by Section 4999 of the Code, as amended from
time to time (the “Excise Tax”), then Employee shall be solely
responsible for the payment of the Excise Tax and shall not be
entitled to receive any “gross-up payments” or other additional
payments from the Company or its affiliates on account of, with
respect to, in mitigation of, or as a set-off against, such Excise
Tax.





	 	 	 	 	 
	American Casino & Entertainment Properties, LLC

 	 
	By:  	/s/ Frank V. Riolo
 	 
	 	Name:  	Frank V Riolo 	 
	 	Title:  	President of American Casino & Entertainment Properties
LLC 	 
	 
	EMPLOYEE:

 	 
	By:  	/s/ Arthur Keith
 	 
	 	Name:  	Arthur Keith