Document:

EX-10.1

 

Exhibit 10.1

EMPLOYMENT AGREEMENT

     EMPLOYMENT AGREEMENT dated as of January 1, 2007 (this “Agreement”), between American Casino
& Entertainment Properties LLC (the “Company”), having an address at 2000 Las Vegas Boulevard
South, Las Vegas, Nevada 89104, and Mr. Richard P. Brown (“Employee”), having an address at 1795
Mezza Court, Henderson, Nevada 89012.

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 and Chief Executive Officer of the Company and shall also serve in other positions of
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, the Board and the Designated Affiliates. 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. Employee will also meet and work with executives of American Property Investors, Inc.
(“API”) and members of the board of directors of API.

During the Term of Employment, Employee shall devote all of 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 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
Person (as hereinafter defined) 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 (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”).
However, nothing contained herein shall restrict Employee from being involved in the business of
horse racing/breeding of thoroughbred horses (“Other Activity”), provided that (a) Employee
devotes his full professional attention to the business affairs of the Company, its subsidiaries
and of any affiliated entities to which the Company has made his services available, (b) the Other
Activity does not interfere with, and Employee is otherwise in compliance with,
Employee’s professional duties and responsibilities

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hereunder, and (c) Employee otherwise cooperates with the Company in connection with any
information regarding the Other Activity that may be requested or required by any licensing or
other regulatory authorities.

2. Term

The employment period shall commence as of January 1, 2007 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,
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 $625,000. 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
determined in the sole discretion of the Board (the “Bonus Compensation”). The Bonus Compensation,
if any, shall be computed based upon the following formula of performance targets (“Targets”):

	 	(i)	 	2007 bonus is conditioned on ACEP’s four current properties having aggregate
Net Revenues of not less than $451.0 million and aggregate EBITDA of not less than
$106.0 million, in each case for the fiscal year ended December 31, 2007;1

	 	a.	 	If (1) both of the following are satisfied: (x) such aggregate
2007 EBITDA equals or exceeds $106.0 million by up to 7.5%; and (y)
such aggregate 2007 Net Revenues equal or exceed $451.0 million by up to 7.5%,
then (2) the maximum 2007 bonus shall be $93,750.
	 
	 	b.	 	If (1) both of the following are satisfied: (x) such aggregate
2007 EBITDA exceeds $106.0 million by 7.5% (but less than 15%); and
(y) such aggregate 2007 Net Revenues exceed $451.0 million by 7.5% (but less
than 15%), then (2) the maximum 2007 bonus shall be $187,500.00; and

 

			
	1	 	Employee and the Company acknowledge and agree that these Targets are based upon
the Net Revenues and EBITDA forecasted in the 2007 budget submitted by the Company’s management to
API.

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	 	c.	 	If (1) both of the following are satisfied: (x) such aggregate 2007
EBITDA exceeds $106.0 million by 15%; and (y) such aggregate 2007 Net Revenues
exceed $451.0 million by 15%, then (2) the maximum 2007 bonus shall be
$312,500.00;

	 	(ii)	 	Targets for 2008 Net Revenues and EBITDA and amount of 2008 bonus shall
be determined by the Company in January 2008.

All calculations and determinations of any of the foregoing matters (including the amount
of Bonus Compensation, or any component thereof, including but not limited to EBITDA or
Net Revenues or the achievement of any Target) will be made by the Company in its
reasonable discretion and will be final and binding on Employee, and provided further will
be adjusted by the Company to exclude the impact, as it may determine, of extraordinary
accounting items.

The allocation of the Bonus Compensation shall be deemed earned and to become due on (i) December
31, 2007, with respect to 2007 Targets, provided that Employee is employed in good standing as of
such date, and provided further that the Bonus Compensation with respect to the 2007 Targets shall
not be payable by the Company until February 28, 2008, and (ii) December 31, 2008, with respect to
2008 Targets, provided that Employee is employed in good standing as of such date, and provided
further that the Bonus Compensation with respect to the 2008 Targets shall not be payable by the
Company until February 28, 2009.

(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.

(d) Change of Control

     (i) In the event that the Company enters into a binding contract for a Change of Control
transaction during the Term of Employment and Employee is employed in good standing as of such
date, then, if Employee has complied with the requirements of clause
(ii) below and Employee: (x)
has not been terminated for Cause or resigned prior to the Closing Date; or (y) if the Election (as
defined in clause (ii) below) has occurred, Employee has not been terminated for Cause or resigned
prior to the expiration of the Transition Period, then Employee shall be paid a lump-sum bonus of
$1,000,000 (the “Change of Control Payment”), subject to and in accordance with Section 5(b) below.

     (ii) Employee acknowledges and agrees that, in the event of a Change of Control as a result
of: (x) an acquisition of the equity of the Company or its direct or indirect parent (whether by
sale of equity interests, merger or otherwise), then this Agreement will remain the obligation of
the Company (or its successor) and Employee’s obligations hereunder will

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remain in full force and effect; or (y) a transfer of assets of the Company or its subsidiaries and
in connection therewith this Agreement is assigned by the Company, then this Agreement will become
the obligation of the assignee and Employee’s obligations hereunder will (as such) remain in full
force and effect. If, prior to the Closing Date, the Company so elects (the “Election”) by giving
written notice thereof to Employee, then Employee shall provide, on a full time basis and in a
professional manner, during the Transition Period, such services to the Company, the acquiring
Person in such Change of Control transaction (the “Acquiring Person”) and their respective
designees as are necessary in all respects to permit a smooth, professional transition of
management (which may include, without limitation, continuing to provide the services specified in
this Agreement or such other executive services as may be specified from time to time by the
Company, the Acquiring Person or their respective designees).

     (iii) It is understood and agreed that: (aa) if Employee becomes, directly or indirectly, an
employee of the Acquiring Person, then all of Employee’s salary, benefits and other compensation
shall be paid by the Acquiring Person; and (bb) if Employee has entered into a new employment
agreement with the Acquiring Person then the term “Cause” shall be deemed for purposes of the
foregoing provision to have the meaning given such term in such new employment agreement.

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 90
consecutive business days;
	 
	 	(c)	 	The discharge of Employee by the Company with or without Cause (as hereinafter
defined);
	 
	 	(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
	 
	 	(e)	 	Upon the later of: (x) a Change of Control; or (y) if the Election has been
delivered to Employee, then upon the expiration of the Transition Period.

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)

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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 the Exclusivity Obligation or any of his obligations set forth in Section 6 or Section 7
below; (ix) 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 (x) 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. In the case of clauses
(i) and (vii) above, the Company will give Employee a written notice of the alleged “Cause” and a
20-day period to cure prior to termination, to the extent that the Company, in its sole discretion,
determines such conduct is curable.

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 Payment or Change of Control Payment),
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 (as
determined below, and not on a pro rata basis); and (C) any compensation due to
Employee in respect of any accrued vacation days that were not taken by Employee
prior to the Clause (a) Termination Date.
	 
	 	(b)	 	In the event that the Term of Employment ends for the reason set forth in
Section 4(e) above (i.e., Change of Control), then, in lieu of any other payments of
any kind (including, without limitation, any Severance Payment), Employee shall be
entitled to receive: (A) within fifteen (15) days following the date on which the
Termination Event in question occurred (the “Clause (b) Termination Date”), any
amounts of (1) Base Salary due and unpaid to Employee from the Company as of the
Clause (b) Termination Date, and (2) Bonus Compensation earned, vested, due and
unpaid to Employee from the Company as of the Clause (b) Termination Date

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	 	 	 	(as determined below, and not on a pro rata basis); and (C) any compensation due to
Employee in respect of any accrued vacation days that were not taken by Employee prior to the
Clause (b) Termination Date; and (B) sixty (60) days following the Closing Date (if Employee
has complied with the requirements of clause (ii) of Section 3(d) above), the Change of Control
Payment, payment of which shall be conditioned upon Employee’s execution of an Employee
Severance and Release Agreement in a form similar to that shown in Exhibit A of this Agreement;
provided that the Change of Control Payment shall not be payable to Employee if either of the
following events has occurred: (1) if the Company has delivered the Election to Employee, but
Employee has been terminated for Cause or resigns prior to the expiration of the Transition
Period; or (2) if Employee has been terminated for Cause or resigns prior to the Closing Date.
	 
	 	(c)	 	In the event that the Term of Employment ends due to the discharge of 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 Change of Control Payment), Employee shall be entitled to receive, within fifteen (15)
days following the date on which the Termination Event in question occurred (the “Clause (c)
Termination Date”): (A) any amounts of Base Salary due and unpaid to Employee from the
Company as of the Clause (c) Termination Date; (B) any amounts of Bonus Compensation earned,
vested, due and unpaid to Employee from the Company as of the Clause (c) Termination Date (as
determined below, and not on a pro rata basis); (C) any compensation due to Employee in
respect of any accrued vacation days that were not taken by Employee prior to the Clause (c)
Termination Date; and (D) a lumpsum payment in the amount equal to one year’s then current
Base Salary (the “Severance Payment”), payment of which shall be conditioned upon Employee’s
execution of an Employee Severance and Release Agreement in a form similar to that shown in
Exhibit A of this Agreement. Notwithstanding the foregoing, if all of the following occur,
then Employee shall be entitled to receive, within fifteen (15) days following the Closing
Date, an additional payment equal to the difference between $1,000,000 and the Severance
Payment that was previously paid to Employee: (i) Employee is employed in good standing with
the Company through and including the date that the Company enters into a binding contract
for a Change of Control transaction (the “Execution Date”); and (ii) Employee is terminated
without Cause either (1) after the Execution Date but prior to the Closing Date, or (2) after
the Election is made but prior to the end of the Transition Period; and (iii) Employee has
complied with clause (ii) of Section 3(d) from the beginning of a sale or auction process
that is reasonably likely to lead to a Change of Control (the “Sale Process”) through the
date of termination of Employee’s employment; and (iv) the Closing Date occurs on or prior to
December 31, 2008; and (v) the party with whom the Company engages in a Change of Control
transaction is a party with respect to which the Employee was actively involved in the
negotiation of the Sale Process prior to the date of termination of Employee’s employment;
provided further that the Employee shall execute and deliver a “bring

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     down” release as a condition for the receipt of such payment.

For the purpose of this Paragraph 5, any Bonus Compensation shall be deemed earned, vested and to
become due, (a) with respect to the 2007 Targets, on December 31, 2007, provided that Employee is
employed in good standing by the Company as of such date, and provided further that the Bonus
Compensation with respect to the 2007 Targets shall not be payable by the Company to Employee until
February 28, 2008, and (b) with respect to the 2008 Targets, on December 31, 2008, provided
Employee is employed in good standing by the Company as of such date, and provided further that the
Bonus Compensation with respect to the 2008 Targets shall not be payable by the Company to Employee
until February 28, 2009.

Employee acknowledges and agrees that, notwithstanding any provisions to the contrary contained in
this Agreement, in the event that Employee becomes entitled to: (x) a Change of Control Payment,
then Employee shall not be entitled to any payments under Section
5(a) or 5(c); or (y) a Severance
Payment or other payment pursuant to Section 5(a) or 5(c), then Employee shall not be entitled to
any Change of Control Payment.

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 any controlling Person of
the Company, 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.

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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

     (x) by the Company without Cause, in which case this Section 7(a) shall terminate automatically and
without notice, or

     (y) by the Company in connection with a Change of Control, in which case this Section 7(a) shall
terminate automatically and without notice 60 days following the Closing Date, or

     (z) 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 if, but only if Employee has
delivered to the Company, no later than ninety (90) days prior to the Expiration Date, a written
notice, in form and substance satisfactory to the Company, certifying that (i) Employee’s
employment with the Company shall terminate on the Expiration Date, (ii) Employee has at all times
during the Term of Employment complied with the Exclusivity Obligation and (iii) Employee shall,
from the date of such notice through and including the Expiration Date, continue to comply with the
Exclusivity Obligation,

for a period of one (1) year 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.

For the avoidance of doubt, 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

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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, which shall include 20 business days
paid vacation per calendar year, which shall accrue at the rate of 1.67 days per each calendar
month.

In the event that, during the Term of Employment, the Company awards to its executives

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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. This provision will not
be applicable in the event of a Change of Control and will not be binding on the Company or any
Acquiring Person following the occurrence of a Change of Control.

9. Definitions

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

“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the
Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as
that term is used in Section 13(d)(3) of the Exchange Act), such “person” will be deemed to have
beneficial ownership of all securities that such “person” has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is exercisable only
after the passage of time. The terms “Beneficially Owns” and “Beneficially Owned” have a
corresponding meaning.

“Change
of Control” means: (i) the consummation of any transaction (including, without limitation,
any merger or consolidation), the result of which is that any Person, other than Carl Icahn or the
Related Parties, becomes the Beneficial Owner, directly or indirectly, of more than 50% of the
Voting Stock of the Company, measured by voting power rather than number of shares; or (ii) the
sale, transfer or other disposition of all or substantially all of the assets of the Company; or
(iii) the sale, transfer or other disposition of all of the Company’s interest in the Stratosphere
Las Vegas Hotel & Casino (the “Stratosphere”); it being understood and agreed that the direct or
indirect sale, transfer or other disposition of any one or more individual properties of the
Company shall in no event constitute a Change of Control under the foregoing clause (ii), unless
such transaction includes the sale, transfer or other disposition of all of the Company’s interest
in the Stratosphere,

“Closing Date” means the later of the following dates: (i) the closing of the Change of Control
transaction; or (ii) the transfer of funds from the Change of Control transaction to Carl Icahn or
the Related Parties.

“EBITDA” means, with respect to the Company net income, plus (i) net interest expense (which
includes interest expense and interest income), (ii) provision for income tax (or less income tax
benefit), and (iii) depreciation and amortization, calculated in a manner consistent with the
preparation of the Company’s most recent financial statements.

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

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“Net Revenues” means, with respect to any relevant period, gross revenues of the Company for such
period, as reported on the consolidated statements of income of the Company (the “Financial
Statements”) for such period, less promotional allowances for such period, as reported on the
Financial Statements for such period.

“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.

“Related Parties” means: (1) Carl Icahn, any spouse and any child, stepchild, sibling or descendant
of Carl Icahn; (2) any estate of Carl Icahn or of any person identified in clause (1); (3) any
person who receives a beneficial interest in any estate identified in clause (2) to the extent of
such interest; (4) any executor, personal administrator or trustee who holds such beneficial
interest in the Company for the benefit of, or as fiduciary for, any person identified in clauses
(1), (2) or (3) to the extent of such interest; (5) any corporation, partnership, limited liability
company, trust, or similar entity, directly or indirectly owned or controlled by Carl Icahn or any
other person or persons identified in clauses (1), (2), (3) or (4); and (6) any not-for-profit
entity not subject to taxation pursuant to Section 501(c)(3) of the Internal Revenue Code or any
successor provision to which Carl Icahn or any person identified in clauses (1), (2), (3) or (4)
above contributes his beneficial interest in the Company or to which such beneficial interest
passes pursuant to such person’s will.

“Transition Period” means 60 days following a Change of Control.

“Voting Stock” means, with respect to any Person that is (a) a corporation, any class or series of
capital stock of such Person that is ordinarily entitled to vote in the election of directors
thereof at a meeting of stockholders called for such purpose, without the occurrence of any
additional event or contingency, (b) a limited liability company, membership interests entitled to
manage, or to elect or appoint the Persons that will manage the operations or business of the
limited liability company, or (c) a partnership, partnership interests entitled to elect or replace
the general partner thereof.

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

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	 	 	 	discretion. Without limiting the foregoing, Employee acknowledges and agrees that the Company shall
have the right (but no obligation) to assign this Agreement, in connection with or in anticipation
of a Change of Control, any sale or transfer of assets or equity or otherwise, to any Person
(including, without limitation, to an Acquiring Person or to any Person that acquires directly or
indirectly any one or more properties of the Company). 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 New
York.
	 
	 	(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 10 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

Page 12 of 18

 

 

	 	 	(whether consisting of Base Salary, Bonus Compensation, Severance Payment, Change of Control
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, Change of Control 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.

Page 13 of 18

 

 

	 	 	 	 	 
	American Casino
& Entertainment Properties LLC
	 
	 	 	 	 
	By:

	 	/s/ Denise Barton	 	 
	 

	 	 

Name:
	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	EMPLOYEE:

	 	 
	 
	 	 	 	 
	By:
	 	/s/ Richard P. Brown
 

Richard P. Brown
	 	 

[Signature page to Employment Agreement between American Casino & Entertainment

Properties LLC and Richard P. Brown)

Page 14 of 14

 

 

EXHIBIT A 

                    , 200_

Employee

[Address]

Re: Separation Agreement and Release of Claims

Dear                    :

Reference is hereby made to your Employment Agreement with American Casino &
Entertainment Properties LLC (ACEP) (the “Company”), dated___, 2007 (the
“Employment Agreement”).

This letter agreement (this “Agreement”), upon your signature, will constitute the agreement
between you and the Company on the terms of your separation from employment with the Company.

	 	1.	 	Your employment with the Company will be terminated effective
                    , 200___, and you will be paid the applicable amounts set forth in
the Employment Agreement.
	 
	 	2.	 	You agree that this consideration exceeds any payment, benefit, or other thing of value
to which you otherwise would be entitled to absent this Agreement and the Employment Agreement.
	 
	 	3.	 	As consideration and inducement to the Company to grant you the payment described in
paragraph 1 above, you, for yourself, your heirs, executors, administrators and assigns
(collectively, the “Releasors”), unconditionally release the Company, its parent, members,
subsidiaries and affiliates, and its officers, directors, managers, agents and employees,
including without limitation Carl C. Icahn (collectively, the “Releasees”), from any claims,
charges, complaints or grievances of any nature whatsoever whether known or unknown, which you or
any other Releasor has or ever have had against any Releasee by reason of any actual or alleged
act, omission, transaction, practice, conduct, occurrence, or other matter up to and including the
“effective date” of

Page 15 of 18

 

 

	 	 	 	this Agreement, as defined in paragraph 10 below, including but not limited to, (i) those arising
under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 1981, the Fair Labor
Standards Act, the Equal Pay Act, the Age Discrimination in Employment Act, as amended, the
Americans with Disabilities Act, the Family Medical Leave Act, the Employee Retirement Income
Security Act of 1974, the Civil Rights Act of 1991, as amended, the Worker Adjustment and
Retraining Notification Act, as well as any other federal, state or local law (statutory or
decisional), regulation or ordinance, and (ii) any tort and/or contract claims, including any
claims of wrongful discharge, defamation, emotional distress, nonphysical injury, personal injury
or sickness or other harm. You further agree not to institute any legal actions against any
Releasee for any claim arising out of your employment or the termination thereof, excluding any
claim to enforce your rights under this Agreement or for state unemployment benefits. You represent
that you have not filed any complaints, claims, charges or actions against any Releasee with any
federal, state or local agency or court based on actions occurring at any time up to the date of
your execution of this Agreement.
	 
	 	4.	 	You agree to keep confidential and not to disclose to persons other than your family
members, attorneys, accountants, personal advisors or authorities (as required) the facts and terms
of this Agreement and the discussions leading up to the preparation and signature of this
Agreement.
	 
	 	5.	 	You agree not to disclose any information (whether business or personal), trade secrets,
knowledge or data relating to the business of the Company or its affiliates or relating to the
person or persons who control the Company, obtained by you in the course of employment with the
Company. You agree to not, without prior written consent of the Company, except to the extent
compelled pursuant to the order of a court or other body having jurisdiction over such matter,
communicate or divulge any such information, knowledge or data to anyone other than the Company and
those designated by the Company. To the extent that you are requested to divulge such information
and you believe that you are required to do so, you will immediately notify the Company of the
facts and circumstances thereof and cooperate with the Company if it determines to attempt to
assert that you are not so required.
	 
	 	6.	 	You agree that all processes, technologies and inventions including new contributions,
improvements, ideas, discoveries, agreements, contracts, trademarks or trade names
conceived, developed, invented, made or found by you alone or with other employees, during the
period of your employment by the Company shall be and remain property of the Company.
	 
	 	7.	 	You agree and acknowledge that should you violate any term of this Agreement, the
amount of damages that the Company, or any individual named or acknowledged in Section 3 would
suffer as a result of such violation would be difficult to ascertain. You further agree and
acknowledge that in the

Page 16 of 18

 

 

	 	 	 	event of a breach of any term of this Agreement, the Company’s duty to provide you with any
payments pursuant to this Agreement shall immediately cease, and, in addition to injunctive
relief or any other damages, the Company, or individuals as outlined in this section above and in
Section 3, may recover all consideration paid pursuant to this Agreement, as well as all costs and
expenses incurred by the Company in enforcing this Agreement or defending against a suit brought in
violation of this Agreement, including damages and reasonable attorneys’ fees.
	 
	 	8.	 	This Agreement and the Employment Agreement sets forth the entire agreement
between you and the Company. There are no other written or verbal agreements.
	 
	 	9.	 	You have forty five (45) days to consider this Agreement from the date that it was first
given to you, although you may accept it at any time within the forty five (45) day period. You
are advised to consult with an attorney to review this Agreement.
	 
	 	10.	 	You have seven (7) days after signing this Agreement to revoke it by notifying
                    
in writing, of such revocation within the seven (7) day period.
However, if you do not revoke the agreement, it will become effective on the eighth day after you
sign it (the “effective date”). To accept this Agreement,
please date and sign this Agreement and return it to                    -                    
of American Casino & Entertainment Properties LLC (ACEP) c/o the Stratosphere Hotel,
2000 Las Vegas Blvd. S., Las Vegas, NV 89104. (An additional copy is enclosed for your records.)

	 	 	 	 	 
	 	American Casino & Entertainment Properties, LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

I ACKNOWLEDGE THAT I HAVE CAREFULLY READ THIS AGREEMENT AND UNDERSTAND ALL OF ITS TERMS, INCLUDING
THE FULL AND FINAL RELEASE OF CLAIMS SET FORTH HEREIN. I FURTHER ACKNOWLEDGE THAT I HAVE
VOLUNTARILY ENTERED INTO THIS AGREEMENT, THAT I HAVE NOT RELIED UPON ANY REPRESENTATION OR
STATEMENT, WRITTEN OR ORAL, NOT SET FORTH IN THIS AGREEMENT AND THAT I HAVE BEEN GIVEN THE
OPPORTUNITY TO HAVE THIS AGREEMENT REVIEWED BY MY ATTORNEY. I ALSO ACKNOWLEDGE THAT I HAVE BEEN
AFFORDED A REASONABLE AMOUNT OF TIME TO CONSIDER THIS AGREEMENT. I FURTHER ACKNOWLEDGE THAT THE
WAIVER AND RELEASE IN THIS AGREEMENT IS

Page 17 of 18

 

 

BEING REQUESTED IN CONNECTION WITH THE CESSATION OF MY EMPLOYMENT WITH THE COMPANY AND IN
EXCHANGE FOR MY RECEIPT OF CONSIDERATION TO WHICH I OTHERWISE WOULD NOT BE ENTITLED.

Dated:                                         

Signature:                                                             

Page 18 of 18EX-10.2

 

Exhibit 10.2

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT dated as of April 1, 2007 (this “Agreement”), between American Casino &
Entertainment Properties LLC (the “Company”), having an address at 2000 Las Vegas Boulevard South,
Las Vegas, Nevada 89104, and Ms. Denise Barton (“Employee”), having an address at 3149
Sterlingshire Drive, Las Vegas, NV 89146.

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 Chief Financial Officer of the
Company and shall also serve in other positions of 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, the Board and the Designated
Affiliates. 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. Employee will also meet and work
with executives of American Property Investors, Inc. (“API”) and members of the board of directors
of API.

During the Term of Employment, Employee shall devote all of her professional attention, on a full
time basis, to the business and affairs of the Company and the Designated Affiliates, shall use her
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 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 render services to, or otherwise
act in a business or professional capacity on behalf of or for the benefit of, any other Person
(as hereinafter defined) as an employee, advisor, independent contractor, agent, consultant,
representative or otherwise, whether or not compensated (the “Exclusivity Obligation”).

2. Term

The employment period shall commence as of April 1, 2007 and shall continue through the period
(the “Term of Employment”) ending on March 31, 2009 (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

Page 1 of 14

 

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 $380,000. 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
determined in the sole discretion of the Board (the “Bonus Compensation”). The Bonus
Compensation, if any, shall be computed based upon the following formula of performance
targets (“Targets”):

	 	(i)	 	2007 bonus is conditioned on ACEP’s four current properties having
aggregate Net Revenues of not less than $451.0 million and aggregate EBITDA of not
less than $106.0 million, in each case for the fiscal year ended December 31,
2007;1
	 
	 	 	 	2007 bonus amount will be calculated by: (x) determining the range in column (1) of
the table below (the “Table”) which includes the percentage amounts by which both
(aa) actual 2007 aggregate Net Revenues exceed $451.0 million and (bb)
actual 2007 aggregate EBITDA exceeds $106.0 million (it being understood and agreed
that, if the actual 2007 aggregate Net Revenues and actual 2007 aggregate EBITDA
amounts fall within different ranges, then the lower range shall prevail); and (y)
multiplying the corresponding percentage set forth in column (2) of the Table by the
product of (aa) $380,000 and (bb) the Factor. Of this total bonus amount, the
applicable percentage set forth in column (3) of the table will be paid in cash and
the applicable percentage set forth in column (4) will be Deferred.
	 
	 	 	 	By way of example (and assuming, for purposes of illustration only, a Factor of
0.5), if aggregate 2007 EBITDA is 103% of $106.0 million and aggregate 2007 Net
Revenue is 107% of $451.0 million, then: (x) the applicable range under column
(1) would be 100-104.99%; (y) total bonus amount would be 4125 x $380,000 x
0.5 = $78,375; and (z) of this amount, 27.5% (or $52,250) would be paid in cash
and 13.75% (or $26,125) would be Deferred.

 

			
	1	 	Employee and the Company acknowledge and agree that these Targets are based upon the Net
Revenues and EBITDA forecasted in the 2007 budget submitted by the Company’s management to
API.

Page 2 of 14

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	(1) EBITDA and	 	 	 	 	 	 
	Net revenue	 	(2) Total	 	(3) Cash	 	(4) Deferred
	equals or exceeds	 	Bonus	 	Amount	 	Amount
	100-104.99%
	 	 	41.25	%	 	 	27.5	%	 	 	13.75	%
	105-109.99
	 	 	48.0	%	 	 	32.0	%	 	 	16.0	%
	110-114.99
	 	 	55.5	%	 	 	37.0	%	 	 	18.5	%
	115-119.99
	 	 	60.0	%	 	 	40.0	%	 	 	20.0	%
	120-124.99
	 	 	64.5	%	 	 	43.0	%	 	 	21.5	%
	125-129.99
	 	 	69.0	%	 	 	46.0	%	 	 	23.0	%
	130-134.99
	 	 	73.5	%	 	 	49.0	%	 	 	24.5	%
	135-139.99
	 	 	79.5	%	 	 	53.0	%	 	 	26.5	%
	140-144.99
	 	 	85.5	%	 	 	57.0	%	 	 	28.5	%
	145-149.99
	 	 	91.5	%	 	 	61.0	%	 	 	30.5	%
	150%
	 	 	99.0	%	 	 	66.0	%	 	 	33.0	%

	 	(ii)	 	Targets for 2008 Net Revenues and EBITDA and amount of 2008 bonus
shall be determined by the Company in January 2008.

All calculations and determinations of any of the foregoing matters (including the amount
of Bonus Compensation, or any component thereof, including but not limited to EBITDA or
Net Revenues or the achievement of any Target) will be made by the Company in its
sole discretion and will be final and binding on Employee, and provided further will be
adjusted by the Company to exclude the impact, as it may determine, of items of gain,
loss or expenses of an extraordinary or unusual nature or infrequent in occurrence.

The allocation of the Bonus Compensation shall be deemed earned and to become due on (i)
February 28, 2008, with respect to 2007 Targets, provided that Employee is employed in good
standing as of such date, and (ii) December 31, 2008, with respect to 2008 Targets, provided
that Employee is employed in good standing as of such date, and provided further that the
Bonus Compensation with respect to the 2008 Targets shall not be payable by the Company until
February 28, 2009.

(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.

(d) Change of Control

     (i) In the event that the Company enters into a binding contract for a Change of
Control transaction during the Term of Employment and Employee is employed in good

Page 3 of 14

 

standing as of such date, then, if Employee has complied with the requirements of clause (ii) below
and Employee: (x) has not been terminated for Cause or resigned prior to the Closing Date; or (y)
if the Election (as defined in clause (ii) below) has occurred, Employee has not been terminated
for Cause or resigned prior to the expiration of the Transition Period, then Employee shall be paid
a lump-sum bonus of $505,000 (the “Change of Control Payment”), subject to and in accordance with
Section 5(b) below.

     (ii) Employee acknowledges and agrees that, in the event of a Change of Control as a result
of: (x) an acquisition of the equity of the Company or its direct or indirect parent (whether by
sale of equity interests, merger or otherwise), then this Agreement will remain the obligation of
the Company (or its successor) and Employee’s obligations hereunder will remain in full force and
effect; or (y) a transfer of assets of the Company or its subsidiaries and in connection therewith
this Agreement is assigned by the Company, then this Agreement will become the obligation of the
assignee and Employee’s obligations hereunder will (as such) remain in full force and effect. If,
prior to the Closing Date, the Company so elects (the “Election”) by giving written notice thereof
to Employee, then Employee shall provide, on a full time basis and in a professional manner, during
the Transition Period, such services to the Company, the acquiring Person in such Change of Control
transaction (the “Acquiring Person”) and their respective designees as are necessary in all
respects to permit a smooth, professional transition of management (which may include, without
limitation, continuing to provide the services specified in this Agreement or such other executive
services as may be specified from time to time by the Company, the Acquiring Person or their
respective designees).

     (iii) It is understood and agreed that: (aa) if Employee becomes, directly or indirectly, an
employee of the Acquiring Person, then all of Employee’s salary, benefits and other compensation
shall be paid by the Acquiring Person; and (bb) if Employee has entered into a new employment
agreement with the Acquiring Person then the term “Cause” shall be deemed for purposes of the
foregoing provision to have the meaning given such term in such new employment agreement.

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 her
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 or without Cause (as hereinafter
defined);

Page 4 of 14

 

	 	(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
her resignation); or
	 
	 	(e)	 	Upon the later of: (x) a Change of Control; or (y) if the Election has been
delivered to Employee, then upon the expiration of the Transition Period.

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 her or (y) comply with the instructions given to her; (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 her duties
hereunder; (vii) failure to comply with any of the terms of this Agreement; (viii) breach of the
Exclusivity Obligation or any of her obligations set forth in Section 6 or Section 7 below; (ix)
any revocation or suspension by any state or local authority of Employee’s required license(s) to
serve in her position(s) with the Company; or (x) 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. In the case of clauses (i) and
(vii) above, the Company will give Employee a written notice of the alleged “Cause” and a 10-day
period to cure prior to termination, to the extent that the Company, in its sole discretion,
determines such conduct is curable.

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 Payment or Change of Control Payment), 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 (as determined below,
and not on a pro rata basis);

Page 5 of 14

 

	 	(b)	 	In the event that the Term of Employment ends for the reason set forth in Section 4(e)
above (i.e., Change of Control), then, in lieu of any other payments of any kind (including,
without limitation, any Severance Payment), Employee shall be entitled to receive: (A)
within fifteen (15) days following the date on which the Termination Event in question
occurred (the “Clause (b) Termination Date”), any amounts of (1) Base Salary due and unpaid
to Employee from the Company as of the Clause (b) Termination Date and (2) Bonus
Compensation earned, vested, due and unpaid to Employee from the Company as of the Clause
(b) Termination Date (as determined below, and not on a pro rata basis); and (B) sixty (60)
days following the Closing Date (if Employee has complied with the requirements of clause
(ii) of Section 3(d) above), the Change of Control Payment, payment of which shall be
conditioned upon Employee’s execution of an Employee Severance and Release Agreement in a
form similar to that shown in Exhibit A of this Agreement; provided that the Change of
Control Payment shall not be payable to Employee if either of the following events has
occurred: (1) if the Company has delivered the Election to Employee, but Employee has been
terminated for Cause or resigns prior to the expiration of the Transition Period; or (2) if
Employee has been terminated for Cause or resigns prior to the Closing Date.
	 
	 	(c)	 	In the event that the Term of Employment ends due to the discharge of 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 Change of Control Payment), Employee shall be entitled to receive, within fifteen (15)
days following the date on which the Termination Event in question occurred (the “Clause
(c) Termination Date”): (A) any amounts of Base Salary due and unpaid to Employee from the
Company as of the Clause (c) Termination Date; (B) any amounts of Bonus Compensation
earned, vested, due and unpaid to Employee from the Company as of the Clause (c)
Termination Date (as determined below, and not on a pro rata basis); and (C) a lump-sum
payment in the amount equal to one year’s then current Base Salary (the “Severance
Payment”), payment of which shall be conditioned upon Employee’s execution of an Employee
Severance and Release Agreement in a form similar to that shown in Exhibit A of this
Agreement. Notwithstanding the foregoing, if all of the following occur, then Employee
shall be entitled to receive, within fifteen (15) days following the Closing Date, an
additional payment equal to the difference between $505,000 and the Severance Payment that
was previously paid to Employee: (i) Employee is employed in good standing with the Company
through and including the date that the Company enters into a binding contract for a Change
of Control transaction (the “Execution Date”); and (ii) Employee is terminated without
Cause either (1) after the Execution Date but prior to the Closing Date, or (2) after the
Election is made but prior to the end of the Transition Period; and (iii) Employee has
complied with clause (ii) of Section 3(d) from the beginning of a sale or auction process
that is reasonably likely to lead to a Change of Control (the “Sale Process”) through the
date of termination of Employee’s

Page 6 of 14

 

	 	 	 	employment; and (iv) the Closing Date occurs on or prior to March 31, 2009; and (v)
the party with whom the Company engages in a Change of Control transaction is a
party with respect to which the Employee was actively involved in the negotiation of
the Sale Process prior to the date of termination of Employee’s employment; provided
further that the Employee shall execute and deliver a “bring down” release as a
condition for the receipt of such payment.

For the purpose of this Paragraph 5, any Bonus Compensation shall be deemed earned, vested and
to become due (a) with respect to the 2007 Targets, on February 28, 2008, provided that
Employee is employed in good standing by the Company as of such date, and (b) with respect to
the 2008 Targets, on December 31, 2008, provided Employee is employed in good standing by the
Company as of such date, and provided further that the Bonus Compensation with respect to the
2008 Targets shall not be payable by the Company to Employee until
February 28, 2009.

Employee acknowledges and agrees that, notwithstanding any provisions to the contrary contained
in this Agreement, in the event that Employee becomes entitled to: (x) a Change of Control
Payment, then Employee shall not be entitled to any payments under Section 5(a) or 5(c); or (y)
a Severance Payment or other payment pursuant to Section 5(a) or 5(c), then Employee shall not
be entitled to any Change of Control Payment.

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 any controlling Person of
the Company, 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 her 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.

Page 7 of 14

 

In no event shall Employee during or after her 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

     (x) by the Company without Cause, in which case this Section 7(a) shall terminate
automatically and without notice, or

     (y) by the Company in connection with a Change of Control, in which case this Section
7(a) shall terminate automatically and without notice 60 days following the Closing Date,
or .

     (z) 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 one (1) year 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.

For the avoidance of doubt, nothing in this Agreement will prohibit Employee from investing in the
securities of private companies in which she 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.

(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

Page 8 of 14

 

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, 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..

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; 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. This provision will not be
applicable in the event of a Change of Control and will not be binding on the Company or any
Acquiring Person following the occurrence of a Change of Control.

Page 9 of 14

 

9. Definitions

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

“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the
Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as
that term is used in Section 13(d)(3) of the Exchange Act), such “person” will be deemed to have
beneficial ownership of all securities that such “person” has the right to acquire by conversion
or exercise of other securities, whether such right is currently exercisable or is exercisable
only after the passage of time. The terms “Beneficially Owns” and “Beneficially Owned” have a
corresponding meaning.

“Change of Control” means: (i) the consummation of any transaction (including, without limitation,
any merger or consolidation), the result of which is that any Person, other than Carl Icahn or the
Related Parties, becomes the Beneficial Owner, directly or indirectly, of more than 50% of the
Voting Stock of the Company, measured by voting power rather than number of shares; or (ii) the
sale, transfer or other disposition of all or substantially all of the assets of the Company.

“Closing
Date” means the later of the following dates: (i) the closing of the Change of Control
transaction; or (ii) the transfer of funds from the Change of Control transaction to Carl Icahn or
the Related Parties.

“Deferred” means deferred and payable in accordance with the provisions of Section VI of the
Incentive Plan.

“EBITDA” means, with respect to the Company, net income plus (i) net interest expense (which
includes interest expense and interest income), (ii) provision for income tax (or less income tax
benefit), and (iii) depreciation and amortization, calculated in a manner consistent with the
preparation of the Company’s most recent financial statements.

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

“Factor” means Employee’s Individual Performance Factor, as calculated in accordance with Section
IV of the Incentive Plan.

“Incentive Plan “ means the American Casino & Entertainment Properties LLC and Atlantic Coast
Entertainment Holdings, Inc. Management Incentive Plan, effective January 1, 2005 and revised as
of January 10, 2006, as the same may be amended from time to time.

“Net Revenues” means, with respect to any relevant period, gross revenues of the Company for such
period, as reported on the consolidated statements of income of the Company (the “Financial
Statements”) for such period, less promotional allowances for such period, as

Page 10 of 14

 

reported on the Financial Statements for such period.

“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.

“Related Parties” means: (1) Carl Icahn, any spouse and any child, stepchild, sibling or
descendant of Carl Icahn; (2) any estate of Carl Icahn or of any person identified in clause (1);
(3) any person who receives a beneficial interest in any estate identified in clause (2) to the
extent of such interest; (4) any executor, personal administrator or trustee who holds such
beneficial interest in the Company for the benefit of, or as fiduciary for, any person identified
in clauses (1), (2) or (3) to the extent of such interest; (5) any corporation, partnership,
limited liability company, trust, or similar entity, directly or indirectly owned or controlled by
Carl Icahn or any other person or persons identified in clauses (1), (2), (3) or (4); and (6) any
not-for-profit entity not subject to taxation pursuant to Section 501(c)(3) of the Internal
Revenue Code or any successor provision to which Carl Icahn or any person identified in clauses
(1), (2), (3) or (4) above contributes her beneficial interest in the Company or to which such
beneficial interest passes pursuant to such person’s will.

“Transition Period” means 60 days following a Change of Control.

“Voting Stock” means, with respect to any Person that is (a) a corporation, any class or series of
capital stock of such Person that is ordinarily entitled to vote in the election of directors
thereof at a meeting of stockholders called for such purpose, without the occurrence of any
additional event or contingency, (b) a limited liability company, membership interests entitled to
manage, or to elect or appoint the Persons that will manage the operations or business of the
limited liability company, or (c) a partnership, partnership interests entitled to elect or
replace, the general partner thereof.

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. Without limiting the
foregoing, Employee acknowledges and agrees that the Company shall have the right (but no
obligation) to assign this Agreement, in connection with or in anticipation of a Change
of Control, any sale or transfer of

Page 11 of 14

 

	 	 	 	assets or equity or otherwise , to any Person (including, without limitation, to an
Acquiring Person or to any Person that acquires directly or indirectly any one or more
properties of the Company). 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 New York.
	 
	 	(d)	 	Employee covenants and represents that she is not a party to any contract,
commitment or agreement, nor is she 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 her from entering into and performing her
obligations under this Agreement.
	 
	 	(e)	 	Employee acknowledges that she 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 10 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(s) 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 she 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, Change of Control 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,

Page 12 of 14

 

	 	 	 	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, Change of Control 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.

Page 13 of 14

 

American Casino & Entertainment Properties LLC ,

	 	 	 	 	 
	By:

	 	/s/ Richard P. Brown
 

Name: Richard P. Brown
	 	 
	 

	 	Title: President/CEO	 	 

EMPLOYEE:

	 	 	 	 	 
	By:

	 	/s/ Denise Barton
 

Denise Barton
	 	 

[Signature page to Employment Agreement between American Casino & Entertainment

Properties LLC and Denise Barton]

Page 14 of 14

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