8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): January 16, 2006

American Casino & Entertainment Properties LLC

(Exact name of registrant as specified in its charter)

Delaware	333-118149	20-0572058
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
2000 Las Vegas Boulevard South, Las Vegas, NV		89104
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (702) 380-7777

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

EX-10.11: EMPLOYMENT AGREEMENT

EX-10.12: MANAGEMENT INCENTIVE PLAN

Section 1 — Registrant’s Business and Operations

Item 1.01 Entry into a Material Definitive Agreement.

On January 16, 2006, we entered into an employment agreement with Denise Barton, our chief financial officer. Under the terms of the employment agreement, Ms. Barton will receive an annual base salary of $350,000, subject to review on an annual basis for increase under our normal performance review process, which occurs in March of each year. In addition, Ms. Barton will be eligible to participate in the management incentive plan on a basis proportionate to her compensation level and, level of activity which contributes to our success, as determined by the board of directors. Ms. Barton will also be entitled to receive certain healthcare and similar employee welfare benefits comparable to those received by our other employees at a similar pay level and/or position with us. The employment agreement is effective as of January 16, 2006 and continues through March 31, 2007.

According to its terms, the employment agreement will terminate on the first of the following events to occur: (1) March 31, 2007; (2) death or disability of Ms. Barton; (3) the discharge of Ms. Barton with or without cause (as defined in the employment agreement); or (4) Ms. Barton’s resignation.

The employment agreement provides that we may discharge Ms. Barton at any time, for any reason, with or without cause. Cause is defined to include the failure to perform the duties assigned or comply with the instructions given to her; personal misconduct or insubordination; impairment due to alcohol or substance abuse; conviction of a crime or being charged with a felony; violation of a federal or state securities law or regulation; failure to comply with any of the terms of her employment agreement; revocation or suspension by any state or local authority of her required licenses to be our chief financial officer; or any act or failure to act by her which causes any gaming or other regulatory authority having jurisdiction over us, our designated affiliates or any of their affiliates to seek any redress or remedy against her, us, any of our designated affiliates or any of their affiliates. If Ms. Barton’s employment is terminated by us without cause or by Ms. Barton for good reason (as defined in the employment agreement) within six months following a change of control (as defined in the employment agreement), then in lieu of any other payments of any kind, Ms. Barton shall be entitled to receive within 30 days of the termination date: (1) any amounts of base salary and previously earned bonus compensation due and unpaid as of the termination date and (2) a lump-sum payment equal to one year’s base salary. Bonus compensation shall be deemed earned and to become due with respect to any year on the last business day of February of the year following the year with respect to which the applicable performance targets are computed provided that Ms. Barton is employed by us on such last business day of February. Payment of these amounts is conditioned upon the execution of a settlement and release agreement in the form acceptable to us.

The employment agreement further provides that during the term of employment and at all times thereafter, Ms. Barton will hold all confidential information in a fiduciary capacity for our benefit. The employment agreement also restricts Ms. Barton from soliciting our customers or employees during her employment and for a period of one year thereafter. The employment

agreement also provides that, for a period of one year following her last day of employment, Ms. Barton will not accept employment with, or in any capacity engage or participate in, any business that competes with or is similar to the business conducted by us which is located within 50 miles of any locations in which we are doing business.

The foregoing description of the Employment Agreement is qualified in its entirety by reference to such document, which is filed herewith as Exhibit 10.11 and incorporated herein by reference.

Effective January 1, 2005, we established a management incentive plan to provide members of our executive management, other than our chief executive officer, and certain employees, with additional compensation for their contribution to the achievement of our corporate objectives. Provided that we achieve our EBITDA goals which are determined annually by our board of directors, a participant in the Plan shall be entitled to a financial award under the plan computed as the product of (1) base salary, (2) individual performance factors determined by each participant’s attainment of predetermined goals and (3) bonus as a percentage of base salary. A financial award under the management incentive plan includes a cash award and a deferred bonus award, both components of which are within a pre-established range based upon the participant’s position level. Where a participant holds more than one position level during the fiscal year, the financial award will be prorated based upon service time within each position level. The deferred portion of the bonus award is paid out over a four year vesting period. Pursuant to the plan, payment of the awards will be made after completion of the annual audit but no later than March 15 of the year following the end of the previous fiscal year, as defined in the plan. All payment awards will be reduced by amounts required to be withheld for taxes at the time payments are made. In addition, unless our chief executive officer and board of directors determine otherwise, a participant in the plan who is no longer our employee on the date of the award payment will not be entitled to payment of the award unless the participant (1) dies, (2) becomes permanently disabled, (3) enters military service, (4) takes an approved leave of absence or (5) is appointed or elected to public office; provided that the participant was an active employee for a minimum of 90 consecutive calendar days during the fiscal year (as defined in the plan). The plan is administered by our vice president of human resources, subject to control and supervision of our chief executive officer and board of directors.

The foregoing description of the Management Incentive Plan is qualified in its entirety by reference to such document, which is filed herewith as Exhibit 10.12 and incorporated herein by reference.

Section 9 – Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

     (c) Exhibits

10.11 Employment Agreement, dated as of January 16, 2006, between American Casino & Entertainment Properties LLC and Denise Barton.

10.12 Management Incentive Plan, effective January 1, 2005, of American Casino & Entertainment Properties LLC and Atlantic Coast Entertainment Holdings, Inc.

[remainder of page intentionally left blank; signature page follows]

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

AMERICAN CASINO & ENTERTAINMENT     PROPERTIES LLC    (Registrant)
By:	/s/ Denise Barton
	Denise Barton
	Senior Vice President, Chief Financial Officer Secretary and Treasurer

Date: January 18, 2006

EX-10.11

EXHIBIT 10.11

EMPLOYMENT AGREEMENT

     EMPLOYMENT AGREEMENT dated as of January 16, 2006 (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 (the “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 act as Chief Financial Officer of such affiliates of the Company as may be designated (the “Designated Affiliates”) from time to time by the board of directors of American Entertainment Properties Corp., the sole member of the Company (the “Board”). 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 President of the Company or the President’s designee and such other persons as shall be designated from time to time by the Board.

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.

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

2. Term

The employment period shall commence as of January 16, 2006 and shall continue through the period (the “Term of Employment”) ending on March 31, 2007 (the “Expiration Date”), unless earlier terminated as set forth in this Agreement.

3. Compensation

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

(a) Base Compensation

The Company will pay Employee a salary (the “Base Salary”) at an annual rate of $350,000. The Base Salary shall be payable in accordance with the normal payroll practice of the Company (but no less frequently than bi-weekly). The Base Salary shall be reviewed on an annual basis for increase under the Company’s normal performance review process, which occurs in March of each year and shall become effective during the first pay period in April. The Company is under no obligation to grant any such increases and any such increases may be granted or withheld in the sole discretion of the Company.

(b) Bonus Compensation

In the event that, during the Term of Employment, the Company shall develop a management incentive plan applicable to all executive management employees of the Company, Employee shall be eligible to participate in such plan, if any, on a basis proportionate to her compensation level and level of activity to contribute to the Company’s success, as determined in the sole discretion of the Board (“Bonus Compensation”).

(c) Taxes

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

4. Termination

This Agreement shall terminate (subject to Section 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 45 consecutive business days;
(c)	The discharge of Employee by the Company with or without Cause (as defined below); or
(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

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of her resignation).

The Company may discharge Employee at any time, for any reason or no reason, with or without Cause, in which event Employee shall be entitled only to such payments as are set forth in Section 5 below. As used herein, “Cause” is defined as Employee’s: (i) failure to (x) perform the duties assigned to 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 any of her obligations set forth in Section 6 below; (ix) any revocation or suspension by any state or local authority of Employee’s required license(s) to be the Chief Financial Officer (or similar position) of 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 the Employee, the Company, any Designated Affiliate or any of their affiliates.

5. Effect of Termination

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

(a)

In the event that the Term of Employment ends (i) for the reason set forth in Section 4(a) above (i.e., Expiration Date), or (ii) for any of the reasons set forth in Section 4(b) above (i.e. death or disability), or (iii) for the reason set forth in Section 4(d) above (i.e. resignation), other than a resignation within six (6) months following a Change of Control (as hereafter defined), which shall be governed by paragraph 5(b) below, or (iv) due to the discharge of Employee by the Company for Cause, then, in lieu of any other payments of any kind (including, without limitation, any severance payments), Employee shall be entitled to receive, within thirty (30) 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, due and unpaid to Employee from the Company as of the Clause (a) Termination Date.

(b)

In the event that the Term of Employment ends (i) due to the discharge of the Employee by the Company without Cause (which the Company is free to do at any time in its sole and absolute discretion) or (ii) by the Employee for Good Reason (as hereinafter defined) within six (6) months following a Change of Control, then, in lieu of any other payments of any kind (including, without limitation, any severance payments), Employee shall be entitled to receive, within thirty (30) days following the date on which the Termination Event in question occurred (the “Clause (b) Termination Date”):

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(i)	any amounts of Base Salary and previously earned Bonus Compensation due and unpaid to Employee from the Company as of the Clause (b) Termination Date; and
(ii)	a lump-sum payment in the amount equal to one year’s Base Salary, payment of which shall be conditioned upon execution of a settlement and release agreement in form and substance acceptable to the Company.

For the purpose of this Paragraph 5, any Bonus Compensation shall be deemed earned and to become due with respect to any year on the last business day of February of the year following the year with respect to which the applicable performance targets (“Targets”) are computed, provided that Employee is employed by the Company on such last business day of February. By way of example, any Bonus Compensation with respect to 2005 Targets shall be deemed earned and to become due on February 28, 2006.

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.

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.

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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 the 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 by the Company without Cause or this Agreement is not renewed or extended following the Expiration Date, 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 any business that is competitive with or similar to the business conducted by the Company, the Designated Affiliates or any of their subsidiaries which is located in or within fifty (50) miles of any locations in which the Company, the Designated Affiliates or any of their subsidiaries are doing business.

(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 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

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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. 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 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.

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 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.

The Employee shall have “Good Reason” to terminate her employment following a Change of Control only if: (i) the Company fails to provide compensation or benefits that the Company is obligated to provide under paragraph 3 above and the failure is not remedied within 30 days after the Company receives written notice from the Employee of such failure; or (ii) the Company assigns the Employee duties, responsibilities or reporting relationships not contemplated by paragraph 1 above without her consent, or limits her duties or responsibilities contemplated by paragraph 1 above in any respect materially detrimental to her, and in either case the situation is not remedied within 30 days after the Company receives written notice from the Employee of the situation; or (iii) the Company relocates her office to an area that is more than 50 miles in radius

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from the Las Vegas Metropolitan area without her written consent and the situation is not remedied within 30 days after the Company receives written notice from the Employee of the situation.

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

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

“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.

“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.

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(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 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.

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AMERICAN CASINO & ENTERTAINMENT PROPERTIES LLC
By: American Entertainment Properties Corp., its sole member

By:	/s/ Richard P. Brown Richard P. Brown President and CEO
EMPLOYEE:
By:	/s/ Denise Barton
	Denise Barton

[Signature page to Employment Agreement between ACEP and Denise Barton]

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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.

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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

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.

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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

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.

3

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 31^st 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.

4

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