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): December 27, 2006
American
Real Estate Partners, L.P.
(Exact
name of registrant as specified in its charter)
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Delaware
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1-9516
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13-3398766
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(State
or Other Jurisdiction of Incorporation)
|
(Commission
File Number)
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(IRS
Employer
Identification
No.)
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767
Fifth Avenue, Suite 4700, New York, NY 10153
|
|
(Address
of Principal Executive Offices) (Zip
Code)
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Registrant’s
Telephone Number, Including Area Code: (212)
702-4300
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))
Section
1 - Registrant’s Business and Operations.
Item
1.01. - Entry into a Material Definitive Agreement.
Section
5 - Corporate Governance and Management.
Item
5.02(b) and (c) - Departure of Directors or Principal Officers; Election
of
Directors; Appointment of Principal Officers; Compensatory Arrangements of
Certain Officers.
On
December 27, 2006, Jon F. Weber resigned as President of our general partner,
American Property Investors, Inc., or API. Mr. Weber’s resignation comes in
connection with his recent announcement to resign, in order to pursue other
opportunities, from his various positions at companies affiliated with Carl
C.
Icahn, the
beneficial owner of approximately 86.5% and 90.0% of our outstanding preferred
units and depositary units, respectively,
and the
Chairman of API’s Board of Directors. Mr. Weber’s resignation as President of
API was not a result of any disagreement with API or API’s Board of
Directors.
Also
on
December 27, 2006, the Board of Directors of API appointed Peter K. Shea
as
President of API. Since December 1, 2006, Mr. Shea, 55, has been head of
portfolio company operations at American Real Estate Holdings Limited
Partnership, of which we are the 99% limited partner and API is the 1% general
partner. Since December 27, 2006, Mr. Shea has also served as a director
of XO
Holdings, Inc., a publicly traded telecommunications services provider
controlled by Mr. Icahn. Since December 21, 2006, Mr. Shea has served as a
director of American Railcar Industries, Inc., a publicly traded company of
which Mr. Icahn is the principal beneficial stockholder and chairman of the
board of directors and which is primarily engaged in the business of
manufacturing covered hopper and tank railcars. Since December 20, 2006,
Mr.
Shea has served as a director of WestPoint International Inc., our
majority-owned subsidiary engaged in the home textile business. Since November
2006, Mr. Shea has been a director of Viskase Companies, Inc., a publicly
traded
producer of cellulose and plastic casings used in preparing and packaging
meat
products, in which Mr. Icahn has a controlling interest through the ownership
of
securities. From 2002 to November 2006, Mr. Shea was an independent consultant
to various companies and an advisor to private equity firms. From 1997 to
2001,
he was a Managing Director of H.J. Heinz Company, a manufacturer and marketer
of
a broad line of food products across the globe, in Europe. Mr. Shea has an
MBA
from the University of Southern California and a BBA from Iona
College.
Pursuant
to an employment agreement with American Real Estate Holdings Limited
Partnership, Mr. Shea receives an annual base salary of $450,000 and is eligible
for a discretionary bonus, to be determined by the Board of Directors of
API, of
up to 50% of his base salary. The employment agreement has a two year term,
ending December 31, 2008, and may be terminated by Mr. Shea at any time upon
30
days’ prior written notice or by us at any time. If Mr. Shea’s employment is
terminated by us without cause, Mr. Shea will be entitled to receive (1)
any
amount of base salary previously earned through the date of termination and
unpaid and (2) a
lump
sum payment in the amount of $225,000. The employment agreement also contains
non-disclosure, non-compete and non-solicitation provisions.
2
A
copy of
the employment agreement is attached hereto as Exhibit 10.1 and incorporated
herein by reference. The foregoing description is qualified in its entirety
by
reference to the full text of the agreement.
Item
9.01 - Financial Statements and Exhibits.
(d)
Exhibits
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10.1
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Employment
Agreement, dated December 1, 2006, between American Real Estate
Holdings
Limited Partnership and Peter Shea.
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3
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 REAL ESTATE PARTNERS, L.P. | ||
| (Registrant) | ||
| |
|
|
| By: | American Property Investors, Inc. | |
| General Partner | ||
| |
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| By: | /s/ Hillel Moerman | |
|
Hillel Moerman |
||
| Chief Financial Officer | ||
| Date: December 28, 2006 | ||
4
EMPLOYMENT
AGREEMENT
EMPLOYMENT
AGREEMENT dated as of December 1, 2006 (this “Agreement”), between AMERICAN REAL
ESTATE HOLDINGS LIMITED
PARTNERSHIP, a Delaware limited partnership (the “Company”), having an
address at 767 Fifth Avenue, Suite 4700, New York, New York 10153, and PETER
SHEA (the “Employee”), having an address at 3 Longwood Drive, Redding,
Connecticut 06896.
1. Employment
Upon
the
terms and conditions hereinafter set forth, the Company hereby agrees to employ
Employee and Employee hereby agrees to become employed by the Company. During
the Term of Employment (as hereinafter defined), Employee shall be employed
in
the position of: (i) Head of Portfolio Operations of the Company; and (ii)
as an
officer, director, advisor or agent to the Company, its general partner,
American Property Investors, Inc. (“API”), and/or American Real Estate Partners,
L.P. (“AREP”), and each of their respective subsidiaries (each of such
subsidiaries, the “Designated Affiliates”), as such positions may be specified
from time to time by API or its Board of Directors (the “Board”). In such
capacities Employee shall perform such duties as are specified by any of the
Board, the Company, AREP, API and the Designated Affiliates.
The
parties acknowledge that Employee may from time to time also be requested by
Carl C. Icahn to act as an officer, director, advisor or agent to entities
with
which he and his affiliates are involved (such entities, other than the Company,
AREP, API and their subsidiaries, are referred to herein as the “Icahn
Designated Entities”) and the Employee agrees that he will do so. The Employee
will not receive any additional compensation in taking on such activities and
the Company will be reimbursed by the Icahn Designated Entities based on the
time spent by the Employee in such activities in accordance with its
policies.
Employee
shall report to, and be under the supervision of the Board or such other persons
or entities as shall be specified by the Board from time to time.
Employee’s
principal place of employment shall be in New York City but Employee
acknowledges such employment shall require substantial travel to, and
significant time spent at, other locations (including possible long term visits)
as required by his duties.
During
the Term of Employment, Employee shall devote all of his professional attention,
on a full time basis, to his duties hereunder and shall use his best efforts
to
advance the best interest of the Company, AREP, API and the Designated
Affiliates and shall comply with all of the policies of the Company, AREP,
API
and the Designated Affiliates, including, without limitation, such policies
with
respect to legal compliance, conflicts of interest, confidentiality and business
ethics as are from time to time in effect.
Page
1of 8
During
the Term of Employment, and except as contemplated herein with respect to the
Icahn Designated Entities, the Employee shall not, without the prior written
consent of the Company, directly or indirectly render services to, or otherwise
act in a business or professional capacity on behalf of or for the benefit
of,
any other Person (as hereafter defined) as an employee, advisor, independent
contractor, agent, consultant, representative or otherwise, whether or not
compensated.
2. Term
The
employment period shall commence as of December 1, 2006 and shall continue
through the period (the “Term of Employment”) ending on December 31, 2008 (the
“Expiration Date”), unless earlier terminated as set forth in this
Agreement.
3. Compensation
For
all
services to be performed by Employee under this Agreement, during the Term
of
Employment, the Employee shall be compensated in the following
manner:
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(a)
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Base
Compensation
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The
Company will pay Employee a salary (the “Base Salary”) at an annual rate of
$450,000. The Base Salary shall be payable in accordance with the normal payroll
practice of the Company (but no less frequently than bi-weekly).
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(b)
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Bonus
Compensation
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Employee
shall be eligible for an annual bonus of up to 50% of the Base Salary. The
amount will be determined annually by the Board, in its sole discretion, based
on factors that the Board, in its sole discretion, shall determine critical
for
the role.
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(c)
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Taxes
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All
amounts paid by the Company to Employee under or pursuant to this Agreement,
including, without limitation, the Base Salary and any bonus, or any other
compensation or benefits, whether in cash or in kind, shall be
subject
to normal withholding and deductions imposed by any one or more local, state
or
federal governments.
4. Termination
This
Agreement shall terminate (subject to Section 10(f) below) and the Term of
Employment shall end, on the first to occur of (each a “Termination
Event”):
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(a)
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The
Expiration Date;
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(b)
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The
death of Employee or the total or partial disability that, in the
judgment
of the Company, renders Employee, with or without reasonable
accommodation, unable to perform his essential job functions for
the
Company for a period of at least 30 consecutive business
days;
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(c)
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The
discharge of Employee by the Company with or without Cause (as defined
below); or
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(d)
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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).
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The
Company may discharge Employee at any time, for any reason or no reason, with
or
without Cause, in which event Employee shall be entitled only to such payments
as are set forth in Section 5 below. As used herein, “Cause” is defined as
Employee’s: (i) failure to (x) perform the duties assigned to him or (y) comply
with the instructions given to him; (ii) personal misconduct or insubordination;
(iii) impairment due to alcohol or substance abuse; (iv) conviction of a crime
or being charged with a felony; (v) violation of a federal or state securities
law or regulation; (vi) commission of an act of moral turpitude or dishonesty
relating to the performance of his duties hereunder; (vii) failure to comply
with any of the terms of this Agreement; (viii) breach of any of his obligations
set forth in Section 6 below; (ix) any failure to obtain, or revocation or
suspension by any state or local authority of any licenses, permits or other
authorizations necessary to allow Employee to act in the capacities contemplated
in this Agreement; or (x) any act or failure to act by Employee which causes
any
gaming or other regulatory authority having jurisdiction over the Company,
AREP,
API, the Designated Affiliates or any of their affiliates to seek any redress
or
remedy against the Employee, the Company, AREP, API, any Designated Affiliate
or
any of their affiliates.
5. Effect
of Termination
In
the
event of termination of Employee’s employment hereunder, all rights of Employee
under this Agreement, including all rights to compensation, shall end and
Employee shall only be entitled to be paid the amounts set forth in this Section
5 below.
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(a)
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In
the event that the Term of Employment ends (i) for the reason set
forth in
Section 4(a) above (i.e., Expiration Date), or (ii) for any of the
reasons
set forth in Section 4(b) above (i.e. death or disability), or (iii)
for
the reason set forth in Section 4(d) above (i.e. resignation), or
(iv) due
to the discharge of Employee by the Company for Cause, then, in lieu
of
any other payments of any kind (including, without limitation, any
severance payments), Employee shall be entitled to receive, within
seven
(7) days following the date on which the Termination Event in question
occurred (the “Clause (a) Termination Date”) any amounts of Base Salary
due and unpaid to Employee from the Company as of the Clause (a)
Termination Date.
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(b)
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In
the event that the Term of Employment ends (i) due to the discharge
of the
Employee by the Company without Cause (which the Company is free
to do at
any time in its sole and absolute discretion), then, in lieu of any
other
payments of any kind (including, without limitation, any severance
payments), Employee shall be entitled to receive, within thirty (30)
days
following the date on which the Termination Event in question occurred
(the “Clause (b) Termination
Date”):
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(i)
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any
amounts of Base Salary previously earned due and unpaid to Employee
from
the Company as of the Clause (b) Termination Date;
and
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8
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(ii)
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a
lump-sum payment in the amount of $225,000 which shall be conditioned
upon
execution of a settlement and release agreement in form and substance
acceptable to the Company.
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(c)
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In
any event upon end of the Term of Employment, the Employee shall
be
reimbursed for all previously unreimbursed business expenses properly
incurred and shall be paid for unused paid time off (“PTO”) to the extent
so provided in the PTO policy of the Company then in
effect.
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6. Non-Disclosure
During
the Term of Employment and at all times thereafter, Employee shall hold in
a
fiduciary capacity for the benefit of the Company, API, each Designated
Affiliate and each of their affiliates, respectively, all secret or confidential
information, knowledge or data, including, without limitation, trade secrets,
identity of investments, identity of contemplated investments, business
opportunities, valuation models and methodologies, relating to the business
of
the Company, API, the Designated Affiliates or their affiliates, and their
respective business as, (i) obtained by Employee at any time during Employee’s
employment by the Company and (ii) not otherwise in the public domain
(“Confidential Information”). Employee also agrees to keep confidential and not
disclose to any unauthorized Person any personal information regarding any
controlling Person of the Company, API, the Designated Affiliates or any of
their affiliates and any member of the immediate family of any such Person
(and
all such personal information shall be deemed “Confidential Information” for the
purposes of this Agreement). Employee shall not, without the prior written
consent of the Company: (i) except to the extent compelled pursuant to the
order
of a court or other body having jurisdiction over such matter or based upon
the
advice of counsel that such disclosure is legally required, communicate or
divulge any Confidential Information to anyone other than the Company and those
designated by the Company; or (ii) use any Confidential Information for any
purpose other than the performance of his duties as an employee of the Company.
Employee will assist the Company, at the Company’s expense, in obtaining a
protective order, other appropriate remedy or other reliable assurance that
confidential treatment will be accorded any Confidential Information disclosed
pursuant to the terms of this Agreement.
In
no
event shall Employee during or after his employment hereunder, disparage the
Company, API, the Designated Affiliates, any controlling Person of the Company,
API, the Designated Affiliates, their respective affiliates and family members
or any of their respective officers, directors or employees.
In
furtherance of all of the foregoing, the Employee agrees that during the Term
of
Employment and following the termination of his employment hereunder, the sole
and only disclosure he will make about or concerning Mr. Icahn, his family,
the
Company, AREP, API, the Designated Affiliates, their subsidiaries and
affiliates, is to acknowledge that he is or was employed by the Company, AREP,
API, the Designated Affiliates or their subsidiaries and affiliates, and his
title and dates of employment therewith.
All
processes, technologies, intellectual property and inventions (collectively,
“Inventions”) conceived, developed, invented, made or found by Employee, alone
or with others, during the Term of Employment, whether or not patentable and
whether or not on the Company’s, AREP’s or API’s time or with the use of the
Company’s, AREP’s or API’s facilities or materials, shall be the property of the
Company, AREP or API, as applicable, and shall be promptly and fully disclosed
by the Employee to the Company, AREP or API, as applicable. Employee shall
perform all necessary acts (including, without limitation, executing and
delivering any confirmatory assignments, documents, or instruments requested
by
the Company, AREP or API) to vest title to any such Inventions in the Company,
AREP or API, as applicable, and to enable to the Company, AREP or API, at its
expense, to secure and maintain domestic and/or foreign patents or any other
rights for such Inventions.
Page4of
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7. Non-Compete
(a)
During the Term of Employment and, unless Employee’s employment is terminated by
the Company without Cause, for a period of three (3) months following the last
day of Employee’s employment by the Company, Employee will not, either directly
or indirectly, as principal, agent, owner, employee, partner, investor,
shareholder (other than solely as a holder of not more than 1% of the issued
and
outstanding shares of any public corporation), consultant, advisor or otherwise
howsoever own, operate, carry on or engage in the operation of or have any
financial interest in or provide, directly or indirectly, financial assistance
to or lend money to or guarantee the debts or obligations of any Person carrying
on or engaged in any business that is competitive with or similar to the
business conducted by the Company, AREP, API, the Designated Affiliates or
any
of their subsidiaries which is located in or within fifty 50 miles of any
locations in which the Company, AREP, API, the Designated Affiliates or any
of
their subsidiaries or affiliates are doing business.
(b)
Employee covenants and agrees with the Company, AREP, API, the Designated
Affiliates or any of their subsidiaries and affiliates that, during Employee’s
employment by the Company and for one (1) year following the last day of
Employee’s employment by the Company, Employee shall not directly, or
indirectly, for herself or for any other Person:
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(i)
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solicit,
interfere with or endeavor to entice away from the Company, AREP,
API, any
Designated affiliate or any of their subsidiaries or affiliates,
any
customer, client or any Person in the habit of dealing with any of
the
foregoing;
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(ii)
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interfere
with, entice away or otherwise attempt to obtain the withdrawal of
any
employee of the Company, AREP, API, any Designated Affiliate or any
of
their subsidiaries or affiliates;
or
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(iii)
|
advise
any Person not to do business with the Company, AREP, API, any Designated
Affiliate or any of their subsidiaries or
affiliates.
|
Employee
represents to and agrees with the Company and for the benefit of API that the
enforcement of the restrictions contained in Section 6 and Section 7 (the
Non-Disclosure and Non-Compete sections respectively) would not be unduly
burdensome to Employee and that such restrictions are reasonably necessary
to
protect the legitimate interests of the Company, AREP, API and any Designated
Affiliate. Employee agrees that the remedy of damages for any breach by Employee
of the provisions of either of these sections may be inadequate and that the
Company and API shall be entitled to injunctive relief, without posting any
bond. This section constitutes an independent and separable covenant that shall
be enforceable notwithstanding any right or remedy that the Company, AREP,
API
and any Designated Affiliate may have under any other provision of this
Agreement or otherwise.
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8
8. Benefits
During
the Term of Employment, Employee shall be entitled to receive: (i) in addition
to normal Company holidays, Twenty-two (22) days of PTO which shall be earned
and payable in accordance with the Company’s PTO policy; and (ii) certain
healthcare and other similar employee welfare benefits comparable to those
received by other employees of the Company at a similar pay level and/or
position with the Company as such may be provided or modified by the Company
in
its sole and absolute discretion from time to time, as well.
9. Definitions
For
purposes of this Agreement only, the following definitions shall
apply:
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended, and any successor
thereto.
“Person”
means
any individual, entity or group within the meaning of Section 13(d)(3) or
14(d)(2) of the Exchange Act, other than employee benefit plans sponsored or
maintained by the Company or by entities controlled by the Company.
10. Miscellaneous
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(a)
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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.
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(b)
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This
Agreement and all of the provisions hereof shall inure to the benefit
of
and be binding upon the legal representatives, heirs, distributees,
successors (whether by merger, operation of law or otherwise) and
assigns
of the parties hereto; provided, however, that Employee may not delegate
any of Employee’s duties hereunder, and may not assign any of Employee’s
rights hereunder, without the prior written consent of the Company,
which
may be withheld in its sole and absolute discretion. The Company
may
assign this contract to one of the Designated Affiliates or Icahn’s
Designated Entities upon notice to Employee in which event Employee
will
become an employee of such entity and such entity will succeed to
all of
the rights and obligations of the Company, AREP, API, the Board and
their
respective affiliates hereunder.
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(c)
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This
Agreement will be interpreted and the rights of the parties determined
in
accordance with the laws of the United States applicable thereto
and the
internal laws of the State of New
York.
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(d)
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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.
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(e)
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Employee
acknowledges that he had the opportunity to engage legal counsel
in
reviewing and negotiating this
Agreement.
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(f)
|
This
Agreement and all of its provisions, other than the provisions of
Section
5, Section 6, Section 7 and Section 1 hereunder (which shall survive
termination), shall terminate upon Employee ceasing to be an employee
of
the Company for any reason.
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(g)
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To
the extent not covered by insurance or by indemnification obligations
of
any Designated Affiliates (whether under their articles, bylaws,
contracts
or other documents) the Company agrees to indemnify and hold harmless
the
Employee from damages and costs incurred by the Employee as a result
of
service rendered by the Employee to the Designated Affiliates (but
not the
Icahn Designated Entities) in accordance with the terms of this Agreement;
provided that no such indemnification or hold harmless obligation
shall
apply to any matter, or any act or omission by Employee, involving
bad
faith, gross negligence or willful misconduct or that is in violation
of
our policies.
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(h)
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Employee
acknowledges that any remuneration or other property that Employee
might
otherwise be entitled to by virtue of serving as an officer, director,
agent, advisor or employee of any Designated Entity shall be the
property
of the Employer and Employee shall not be entitled to any such
remuneration or other Property.
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[signature
page follows]
Page7of
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AMERICAN
REAL ESTATE HOLDINGS, LIMITED
PARTNERSHIP.
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By:
American Property Investors, Inc., its general partner:
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By:
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/s/
Hillel Moerman
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Name:
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Hillel
Moerman
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Title:
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Chief
Financial Officer
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EMPLOYEE:
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By:
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/s/
Peter Shea
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Peter
Shea
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