Employment Agreement (2007)Full Document 

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EXECUTIVE EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into as of the 7th day of November, 2007, by and between STATION CASINOS, INC., a Nevada corporation (the "Company"), and FRANK J. FERTITTA III (the "Executive").

WHEREAS, the Company and the Executive are parties to an Executive Employment Agreement dated May 20, 2003 as amended by that First Amendment to Employment Agreement dated January 21, 2005 (as so amended, the "Former Agreement"); and

WHEREAS, the Executive has agreed to continue his employment with the Company, and to serve as Chief Executive Officer and Chairman of the Board of the Company, on the terms and conditions set forth herein; and

WHEREAS, the parties to this Agreement desire to replace the Former Agreement in its entirety with this Agreement, and the Former Agreement shall no longer be of any force or effect;

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and for other good and valuable consideration, the Company and the Executive (each individually a "Party" and together the "Parties") agree as follows.

1.             DEFINITIONS. In addition to certain terms defined elsewhere in this Agreement, the following terms shall have the following respective meanings:

1.1           "Affiliate" shall mean any Person controlling, controlled by or under common control with the Company,

1.2           "Base Salary" shall mean the greater of (a) the salary provided for in Section 3.1 of this Agreement, as the same may be increased thereunder, (b) any increased salary granted to the Executive by the Board (in accordance with the terms of the LLC Agreement) or (c) any increased salary provided for in Section 7.1(a).

1.3           "Board" shall mean the Board of Directors of the Company, including any successor of the Company in the event of a Change in Control.

1.4           "Cause" shall mean that the Executive has been found unsuitable to hold a gaming license by final, non-appealable decision of the Nevada Gaming Commission.

1.5           "Change of Control" shall mean the following:  (A) prior to the occurrence of an Initial Public Offering (as defined in the LLC Agreement), the consummation of any transaction (including, without limitation, any merger or consolidation) as a result of which any "person" or "group" (in each case, as such term is used in Section 13(d)(3) of the Exchange Act), other than any Member of HoldCo LLC who is an Existing Equity Holder or Permitted Transferee (as defined in the LLC Agreement) of such a Member of HoldCo LLC, or an Affiliate thereof, becomes the "beneficial owner" (as such term is defined in rule 13d-3 promulgated under the Exchange Act) of more than fifty percent (50%) of the total issued and outstanding Class A Units



and Class B Units of HoldCo LLC; (B) after the occurrence of an Initial Public Offering, the consummation of any transaction (including, without limitation, any merger or consolidation) as a result of which any person or group, other than a Member of HoldCo LLC who is an Existing Equity Holder or Permitted Transferee of such a Member of HoldCo LLC, or any Affiliate thereof, becomes the beneficial owner of more than thirty-five percent (35%) of the total issued and outstanding shares of Voting Stock of the IPO Corporation; or (C) the sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation) in one or a series of related transactions, of more than 50% (as measured by fair market value at the time of transfer) of the assets of the Company to any person (other than the Company or a Company subsidiary), other than (x) any Member of HoldCo LLC on the date hereof or Permitted Transferee of such a Member of HoldCo LLC or Affiliate thereof or (y) as part of any financing transaction engaged in by the Company or a Company subsidiary. In addition, no Change of Control shall be deemed to have occurred as a result of any reorganization of or similar transaction engaged in by the Company or any subsidiary of the Company (including in respect of an Initial Public Offering). The Executive acknowledges and agrees that the consummation of the transactions contemplated by that Agreement and Plan of Merger dated February 23, 2007, and amended as of May 4, 2007, among HoldCo LLC, FCP Acquisition Sub and the Company shall not constitute a "Change in Control" hereunder.

1.6           "Code" shall mean the Internal Revenue Code of 1986, as amended.

1.7           "Company Property" shall mean all items and materials provided by the Company to the Executive, or to which the Executive has access, in the course of his employment, including, without limitation, all files, records, documents, drawings, specifications, memoranda, notes, reports, manuals, equipment, computer disks, videotapes, drawings, blueprints and other documents and similar items relating to the Company, HoldCo LLC, Affiliates under the Company’s control, or their respective customers, whether prepared by the Executive or others, and any and all copies, abstracts and summaries thereof.

1.8           "Confidential Information" shall mean all nonpublic and/or proprietary information respecting the business of the Company, HoldCo LLC or any Affiliate of either of them, including, without limitation, its products, programs, projects, promotions, marketing plans and strategies, business plans or practices, business operations, employees, research and development, intellectual property, software, databases, trademarks, pricing information and accounting and financing data. Confidential Information also includes information concerning the Company’s, HoldCo LLC’s or any Affiliate’s customers, such as their identity, address, preferences, playing patterns and ratings or any other information kept by the Company, HoldCo LLC or any Affiliate concerning its customers whether or not such information has been reduced to documentary form. Confidential Information does not include information that is, or becomes, available to the public unless such availability occurs through an unauthorized act on the part of the Executive.

1.9           "Deferred Compensation Plan for Executives" shall mean the Company’s Deferred Compensation Plan for Executives, effective as of November 30, 1994, as the same may be amended from time to time.



1.10         "Disability" shall mean a physical or mental incapacity that prevents the Executive from performing the essential functions of his position with the Company for a minimum period of ninety (90) days as determined (a) in accordance with any long-term disability plan provided by the Company of which the Executive is a participant, or (b) by the following procedure:  The Executive agrees to submit to medical examinations by a licensed healthcare professional selected by the Company, in its sole discretion, to determine whether a Disability exists. In addition, the Executive may submit to the Company documentation of a Disability, or lack thereof, from a licensed healthcare professional of his choice. Following a determination of a Disability or lack of Disability by the Company’s or the Executive’s licensed healthcare professional, the other Party may submit subsequent documentation relating to the existence of a Disability from a licensed healthcare professional selected by such other party. In the event that the medical opinions of such licensed healthcare professionals conflict, such licensed healthcare professionals shall appoint a third licensed healthcare professional to examine the Executive, and the opinion of such third licensed healthcare professional shall be dispositive.

1.11         "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended.

1.12         "Existing Equity Holders" shall mean (a) the Sponsor Equity Holder and (b) the Executive, Blake L. Sartini, Delise F. Sartini, Lorenzo J. Fertitta, Scott M Nielson, William W. Warner and Richard J. Haskins, and their executors, administrators or the legal representatives of their estates, their heirs, distributees and beneficiaries, and any trust as to which any of the foregoing is a settlor or co-settlor and any corporation, partnership or other entity which is an Affiliate of any of the foregoing, and any lineal descendants of such persons (but only to the extent that the beneficial ownership of the Class A Units and/or Class B Units of HoldCo LLC held by such lineal descendants was directly received by gift, trust or sale from any such person).

1.13         "Good Reason" shall mean and exist if, without the Executive’s prior written consent, one or more of the following events occurs:

(a)           the Executive is not appointed to or is otherwise removed from the office(s) provided for in Section 2.3, for any reason other than the termination of his employment;

(b)           the Executive is assigned any duties or responsibilities that are inconsistent with the scope of duties and responsibilities associated with the Executive’s position as described in Section 2.3;

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