Document:

EX-10.12

 

Exhibit
10.12

American Casino & Entertainment Properties LLC

& Atlantic Coast Entertainment Holdings, Inc.

Management Incentive Plan

Effective January 1, 2005

Revised January 10, 2006

	I.	 	PURPOSE
	 
	 	 	The purpose of this Plan is to incentivize Participants to achieve certain financial objectives of
the Company; encourage and stimulate superior performance by such personnel, and assist in
attracting and retaining highly qualified key employees.
	 
	II.	 	DEFINITIONS

	 	A.	 	“ACEP” refers to American Casino & Entertainment Properties LLC.
	 
	 	B.	 	“ACEHI” refers to Atlantic Coast Entertainment Holdings, Inc.
	 
	 	C.	 	“Base Salary” equals the annual base salary of an individual Participant on December
31st of the Fiscal Year for which an award is calculated.
	 
	 	D.	 	“Board of Directors” means the Board of Directors of American Entertainment Properties Corp.
or the Board of Directors for Atlantic Coast Entertainment Holdings, Inc., as applicable
depending upon the actual employer of an individual Participant.
	 
	 	E.	 	“Bonus as a Percent of Base Salary” shall be determined in accordance with Exhibit A based
upon the Position Level of each Participant and based upon the Company’s achievement of its
EBITDA Goal.
	 
	 	F.	 	“Cash Award” refers to the Financial Award amount disbursed by March 15 of the year following
the Fiscal Year for which a Financial Award has been earned. Each Position Level has a
minimum and a maximum Cash Award limit as indicated in Exhibit A.
	 
	 	G.	 	“Chief Executive Officer” or “CEO” means the Chief Executive Officer of ACEP or the Chief
Executive Officer of ACEHI, as applicable depending upon the actual employer of an individual
Participant.
	 
	 	H.	 	“Company” means American Casino & Entertainment Properties LLC (“ACEP”) (including
Stratosphere Gaming Corp., Fresca, LLC dba Arizona Charlie’s Boulder, and Arizona Charlie’s
LLC, dba Arizona Charlie’s Decatur) or Atlantic Coast Entertainment Holdings, Inc. (“ACEHI”)
(including ACE Gaming LLC dba Sands Hotel and Casino), and any successors and assigns, as
applicable based upon the actual employer of an individual Participant.

1

 

American Casino & Entertainment Properties LLC

& Atlantic Coast Entertainment Holdings, Inc.

Management Incentive Plan

Effective January 1, 2005

Revised January 10, 2006

	 	I.	 	“Deferred Bonus Award” refers to that portion of the Participant Financial Award that is paid
out over a period of four (4) years. Each Position Level has a minimum and a maximum Deferred
Bonus Award limit as indicated in Exhibit A.
	 
	 	J.	 	“Department Executive” shall be (i) the CEO for those Participants reporting directly to the
CEO, (ii) in the case of a Participant having responsibility for a single property who does
not report to the CEO, the Property General Manager, and (iii) in the case of a Participant
having responsibility for more than one property who does not report to the CEO, the
Participant’s most senior functional executive who is also a direct report to the CEO.
	 
	 	K.	 	“EBITDA” shall mean operating income before interest, taxes, depreciation and amortization,
excluding restructuring charges.
	 
	 	L.	 	“EBITDA Goal” shall be determined by the Board of Directors on an annual basis. The EBITDA
Goal for Participants having responsibility for more than one property shall be the cumulative
EBITDA Goals for all properties over which they have responsibility. The EBITDA Goal for
Participants having responsibility for a single property shall be the EBITDA Goal for the
property over which they have responsibility.
	 
	 	M.	 	“Financial Award” shall be the total bonus amount that includes both a cash award and a
Deferred Bonus Award. If a Participant was in more than one management level during a Fiscal
Year, a separate computation shall be made for each level applicable to the Participant during
such Fiscal Year prorated for the time in each level; the sum of the separate computations
shall be the Participant’s Financial Award.
	 
	 	N.	 	“Financial Targets” are the financial goal(s) of the Company for a particular Fiscal Year as
established by the Board of Directors.
	 
	 	O.	 	“Fiscal Year” means the Company’s Fiscal Year beginning January 1 and ending December 31.
	 
	 	P.	 	“Individual Performance Factor” shall have the value calculated in Section IV below.
	 
	 	Q.	 	“Participant” means an employee who has been identified by the CEO for inclusion under the
Plan and who is otherwise eligible to participate under the Plan in accordance with Exhibit B.
	 
	 	R.	 	“Plan” means American Casino & Entertainment Properties LLC and Atlantic Coast Entertainment
Holdings, Inc. Management Incentive Plan, as from time to time amended.
	 
	 	S.	 	“Position Level” of each Participant shall be as set forth in Exhibit B below.

2

 

American Casino & Entertainment Properties LLC

& Atlantic Coast Entertainment Holdings, Inc.

Management Incentive Plan

Effective January 1, 2005

Revised January 10, 2006

	III.	 	FINANCIAL AWARD
	 
	 	 	Provided that the Company achieves its EBITDA Goal, a Participant in the Plan shall be entitled to
a Financial Award computed as follows:
	 
	 	 	Participant’s Base Salary times Individual Performance Factor times Bonus as a Percent of Base
Salary
	 
	 	 	A Participant’s Financial Award shall then be divided into a Cash Award and a Deferred Bonus Award.

	IV.	 	INDIVIDUAL PERFORMANCE GOALS
	 
	 	 	Individual performance goals will be established for each Participant, including a mix of
predetermined goals and an additional 2 or 3 goals that are to be developed jointly by the
Participant and his/her Department Executive for each Fiscal Year. The Department Executive, in
consultation with the Participant’s management, will assign weight factors to the individual
performance goals based on the critical factors facing the Company for that Fiscal Year, provided
that the cumulative weighted value of all of an individual’s performance goals shall equal 1. For
example, individual performance goals could include departmental budget adherence, departmental
revenue goals, guest satisfaction scores and employee opinion survey results, development of
subordinates and attainment of self development objectives.
	 
	 	 	Attainment of such individual performance goals will be used to arrive at an overall Individual
Performance Factor. Such criteria shall be applied consistently to Participants with similar
duties pursuant to an evaluation process to be recommended by the ACEP Vice President, Human
Resources, and approved by the CEO. The Individual Performance Factor can be adjusted by the
Department Executive between 0.0 and 1.0, depending upon a Participant’s achievement of his/her
individual performance goals. For example, if a Participant fully attained all of his/her
individual performance goals, his/her Individual Performance Factor would be 1.0. Alternatively,
assume that a Participant had three individual performance goals — departmental budget adherence
weighted at 0.4 (or 40% of the individual’s performance goals), departmental revenue achievement
weighted at 0.4 (or 40% of the individual’s performance goals) and guest satisfaction weighted at
0.2 (or 20% of the individual’s performance goals). If the Participant in this example attained
his/her departmental budget adherence, he/she would receive 0.4 points for that goal. If the
Participant significantly missed his/her departmental revenue performance goal, he/she would
receive 0.0 points for that goal. Finally, if the Participant attained 50% of his/her guest
satisfaction performance goal, he/she would receive 0.1 points for that goal. The Individual
Performance Factor would be 0.5 calculated as 0.4 plus 0.0 plus 0.1.

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American Casino & Entertainment Properties LLC

& Atlantic Coast Entertainment Holdings, Inc.

Management Incentive Plan

Effective January 1, 2005

Revised January 10, 2006

	 	 	The Department Executive’s recommended Individual Performance Factor, including the evaluation of
each of the individual performance goals, must be completed by the Participant’s Department
Executive by January 31st following the end of each Fiscal Year. In preparation of such
recommendation, the Department Executive shall consult with an individual Participant‘s management.
The recommendation must then be forwarded to the ACEP Vice President, Human Resources, and CEO for
final approval of the actual Individual Performance Factor achieved. The CEO may, in his sole
discretion, modify the recommended Individual Performance Factor for each Participant upwards or
downwards by up to 50%, provided that the final Individual Performance Factor must be between 0.0
and 1.0.

	V.	 	EBITDA GOAL
	 
	 	 	The EBITDA Goal shall be proposed on an annual basis by the CEO and approved by the Board of
Directors. The Chief Financial Officer of the Company shall calculate the Company’s performance
against the EBITDA Goal and shall report such calculation to the CEO and to the ACEP Vice
President, Human Resources, as soon as practicable after the end of each Fiscal Year.
	 
	VI.	 	DEFERRED BONUS AWARD
	 
	 	 	The Participants’ Deferred Bonus Award shall be paid out in four equal installments by March 15 in
each subsequent year, provided the Participant remains an active employee of the Company through
each subsequent payment date. By way of example, for Fiscal Year 2005, 25% of the Participant’s
Deferred Bonus Award shall be paid by March 15 in each of 2007, 2008, 2009 and 2010.
	 
	 	 	The unpaid amount of a Participant’s Deferred Bonus Award accumulates investment growth, compounded
annually at the same rate as the guaranteed investment vehicle used within the Company’s 401K Plan
each Fiscal Year.
	 
	VII.	 	CALCULATION OF A FINANCIAL AWARD
	 
	 	 	The proposed Financial Awards shall be calculated by the ACEP Vice President, Human Resources, and
presented to the CEO for review. Following the CEO’s review and modification as provided by the
Plan, a list of the proposed Financial Awards shall be forwarded to the Board of Directors for
final approval. Once approved by the Board of Directors, payment of the Financial Awards shall be
made as soon as practicable after the completion of the annual audit but no later than March 15 of
the year following end of the applicable Fiscal Year. All payment awards shall be reduced by
amounts required to be withheld for taxes at the time payments are made.

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American Casino & Entertainment Properties LLC

& Atlantic Coast Entertainment Holdings, Inc.

Management Incentive Plan

Effective January 1, 2005

Revised January 10, 2006

	VIII.	 	PARTIAL AWARDS
	 
	 	 	A Participant, who was an active employee of the Company for a minimum of 90 consecutive calendar
days during a Fiscal Year, shall be entitled to payment of a partial Cash Award if, prior to the
end of such Fiscal Year, a Participant:

	 	•	 	Dies;
	 
	 	•	 	Becomes permanently disabled;
	 
	 	•	 	Enters military service;
	 
	 	•	 	Takes an approved leave of absence; or
	 
	 	•	 	Is appointed or elected to public office.

	 	 	If the Participant dies before receiving his/her Cash Award, the amount due will be paid to the
designated beneficiaries on file with the Company and, in the absence of such designation, to the
Participant’s estate. Participants hired, or who otherwise become eligible to participate
hereunder, during a Fiscal Year shall be eligible for a partial Financial Award provided that the
Participant was an active employee of the Company, in an eligible position, for a minimum of 90
consecutive calendar days during such Fiscal Year.
	 
	 	 	All such partial awards shall be calculated based upon the number of days of active employment
during which the employee was a Participant in the Plan divided by 365 and shall be paid at the
time when payments of Financial Awards for such Fiscal Year are made to other Participants.

	IX.	 	FORFEITURE OF BONUS
	 
	 	 	Except as provided in Section VIII, a Participant, who is not an active employee of the Company on
the date that a Cash Award is actually paid, shall not be entitled to any Financial Award under
this Plan for the prior Fiscal Year unless the CEO and Board of Directors determine otherwise. For
example, in order for a Participant to earn a Financial Award with respect to Fiscal Year 2005,
where such award is actually paid on March 15, 2006, the Participant must be an active employee of
the Company on March 15, 2006.
	 
	X.	 	ADMINISTRATION
	 
	 	 	This Plan shall be administered by the ACEP Vice President, Human Resources, subject to the control
and supervision of the CEO and Board of Directors. Financial issues relating to this Plan shall be
administered by the Chief Financial Officer of ACEP or the Chief Financial Officer of ACEHI, as
applicable, and the most senior Treasury official of American Real Estate Partners LP, subject to
oversight by the CEO and Board of Directors.

5

 

American Casino & Entertainment Properties LLC

& Atlantic Coast Entertainment Holdings, Inc.

Management Incentive Plan

Effective January 1, 2005

Revised January 10, 2006

	 	 	In the event of a claim or dispute by a Participant, the CEO shall render a decision on the merits
of such claim or dispute. In the event that the Participant does not agree with the CEO’s
decision, following discussions with the CEO, the Participant may appeal to the Board of Directors.
The decision by the Board of Directors as to the claim or dispute shall be final and conclusive.

	XI.	 	NO EMPLOYMENT CONTRACT; FUTURE PLANS
	 
	 	 	Participation in this Plan shall not confer upon any Participant any right to continue in the
employ of the Company nor interfere in any way with the right of the Company to terminate any
Participant’s employment at any time. The Company is under no obligation to continue the Plan in
future Fiscal Years.
	 
	XII.	 	PLAN CHANGES, AMENDMENTS OR TERMINATION
	 
	 	 	At any time prior to the final determination of a Financial Award under the Plan and in
consultation with the CEO, the Board of Directors may change the EBITDA Goal, performance measures,
and payout ranges set forth herein, if, in the judgment of the Board of Directors, such change(s)
is/are desirable in the interests of equitable treatment of the Participants and the Company as a
result of extraordinary or non-recurring events, changes in applicable accounting rules or
principles, changes in the Company’s methods of accounting, changes in applicable law, changes due
to consolidation, acquisitions, or reorganization. In the event of any such change, the Company
shall calculate the Financial Awards payable under the Plan in accordance with such change.
	 
	 	 	The Board of Directors of the Company may at any time, or from time to time, (a) amend, alter or
modify the provisions of this Plan, (b) terminate this Plan, or (c) terminate the participation of
an employee or group of employees in this Plan; provided, however, that in the event of the
termination of this Plan or the termination of one or more employees participation in the Plan,
notwithstanding any other provision of this Plan to the contrary, the Company shall provide partial
awards to the affected Participants for the portion of the Fiscal Year during which such employees
were Participants in this Plan, in a manner in which the Company and its Board of Directors, in its
sole judgment, determines to be equitable to such Participants.
	 
	XIII.	 	GENERAL PROVISIONS
	 
	 	 	No right under the Plan shall be assignable, either voluntarily or involuntarily by way of
encumbrance, pledge, attachment, level or charge of any nature, except as may be required by state
or federal law.
	 
	 	 	Nothing in the Plan shall require the Company to segregate or set aside any funds or other property
for the purpose of paying any portion of an award. No Participant, beneficiary or other person
shall have

6

 

American Casino & Entertainment Properties LLC

& Atlantic Coast Entertainment Holdings, Inc.

Management Incentive Plan

Effective January 1, 2005

Revised January 10, 2006

	 	 	any right, title or interest in any amount awarded under the Plan prior to the payment date of the
Plan award, or in any property of the Company, its affiliates or subsidiaries.

	 	 	 	 	 	 	 
	January 16, 2006
 

           Final Approval Date

	 	 
	 	/s/ Richard P. Brown
 

Chief Executive Officer
	 	 

7

 

EXHIBIT A

ACEP & ACEHI

Management Incentive Plan

Bonus as a Percent of Base Salary

A Participant’s Position Level shall determine the potential Bonus as a Percent of Base Salary
as set forth in the table below.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Company	 	 	 	 	 	 	 	 	 	 	 	 
	EBITDA	 	Position Levels IC & IP	 	Position Level II	 	Position Level III	 	Position Level IV
	Goal	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Achieved	 	TOTAL	 	CASH	 	DEFERRED	 	TOTAL	 	CASH	 	DEFERRED	 	TOTAL	 	CASH	 	DEFERRED	 	TOTAL	 	CASH	 	DEFERRED
	 100 —
104.99%
	 	41.25%	 	27.50%	 	13.75%	 	33.50%	 	22.00%	 	11.50%	 	27.00%	 	18.00%	 	9.00%	 	22.50%	 	15.00%	 	 7.50%
	 105 —
109.99
	 	48.00%	 	32.00%	 	16.00%	 	39.00%	 	26.00%	 	13.00%	 	32.00%	 	21.00%	 	11.00%	 	27.00%	 	18.00%	 	 9.00%
	 110 —
114.99
	 	55.50%	 	37.00%	 	18.50%	 	45.00%	 	30.00%	 	15.00%	 	38.00%	 	25.00%	 	13.00%	 	33.00%	 	22.00%	 	11.00%
	 115 —
119.99
	 	60.00%	 	40.00%	 	20.00%	 	52.50%	 	35.00%	 	17.50%	 	45.00%	 	30.00%	 	15.00%	 	37.50%	 	25.00%	 	12.50%
	 120 —
124.99
	 	64.50%	 	43.00%	 	21.50%	 	56.50%	 	38.00%	 	18.50%	 	48.00%	 	32.00%	 	16.00%	 	40.00%	 	27.00%	 	13.00%
	 125
—
129.99
	 	69.00%	 	46.00%	 	23.00%	 	61.00%	 	41.00%	 	20.00%	 	52.00%	 	34.50%	 	17.50%	 	43.00%	 	29.00%	 	14.00%
	 130
—
134.99
	 	73.50%	 	49.00%	 	24.50%	 	65.50%	 	44.00%	 	21.50%	 	56.00%	 	37.00%	 	19.00%	 	46.00%	 	31.00%	 	15.00%
	 135
—
139.99
	 	79.50%	 	53.00%	 	26.50%	 	70.50%	 	47.00%	 	23.50%	 	60.00%	 	40.00%	 	20.00%	 	50.00%	 	33.00%	 	17.00%
	 140
—
144.99
	 	85.50%	 	57.00%	 	28.50%	 	76.00%	 	50.50%	 	25.50%	 	64.00%	 	43.00%	 	21.00%	 	54.00%	 	35.00%	 	19.00%
	 145
—
149.99
	 	91.50%	 	61.00%	 	30.50%	 	81.00%	 	54.00%	 	27.00%	 	68.50%	 	46.00%	 	22.50%	 	58.00%	 	38.00%	 	20.00%
	150%
	 	99.00%	 	66.00%	 	33.00%	 	87.00%	 	58.00%	 	29.00%	 	73.50%	 	49.00%	 	24.50%	 	61.50%	 	    41%	 	 20.5%
	 	 	 	 	99.0%
	 	 	 	87.0%
	 	 	 	73.5%
	 	 	 	61.5%

1

 

EXHIBIT B

ACEP & ACEHI

Management Incentive Plan

Position Levels

	 	 	 
	Position Level	 	Participants
	 
	 	 
	IC

	 	Direct reports to CEO, excluding Property General Managers
	IP

	 	Property General Managers
	II

	 	Vice Presidents
	III

	 	Directors having responsibility for more than one property
	IV

	 	Directors having responsibility for one property

2<PAGE>

                                                                    Exhibit 10.1

                                 MetLife, Inc.
                Summary of Non-Management Director Compensation

     The following non-management director compensation arrangements will take
effect on April 25, 2006, the date of MetLife, Inc.'s 2006 Annual Meeting:

     1. Annual retainer of $225,000, of which $112,500 will be payable in cash
        and $112,500 will be payable in MetLife, Inc. common stock grants. The
        entire retainer will be in the form of a one-time payment payable on the
        date of the MetLife, Inc. Annual Meeting; provided, however, that the
        amount of the retainer will be adjusted on a pro rata basis for
        directors newly elected to the Board during the period between MetLife,
        Inc.'s Annual Meetings. MetLife, Inc. common stock grants will be
        rounded up to the next whole share at the closing price of MetLife, Inc.
        common stock on the New York Stock Exchange on the award day;

     2. An annual retainer of $25,000 will be payable in cash to each Chair of
        a Board Committee, such payment to be made concurrently with the payment
        of the annual retainer;

     3. An annual retainer of $25,000 will be payable in cash to the presiding
        Lead Director, such payment to be made concurrently with the payment of
        the annual retainer;

     4. An annual retainer of $25,000 will be payable in cash to the Chair of
        the Metropolitan Life Insurance Company Investment Committee, such
        payment to be made concurrently with the payment of the annual retainer;
        and

     5. No fees will be paid for directors' attendance at meetings.

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