**UNITED STATESSECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

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**FORM 10-K/AAmendment No. 1**

**(Mark One)**

**x**                               ANNUAL REPORT PURSUANT TO SECTION 13OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

**forthe fiscal year ended December 31, 2006**

**OR**

**o**                                  TRANSITION REPORT PURSUANT TO SECTION 13OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

**forthe transition period from                     to                     .**

**Commissionfile number 000-21640**

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**STATION CASINOS, INC.**

(Exact name of registrantas specified in its charter)

| **Nevada**                                                        |   | **88-0136443**                         |
|-------------------------------------------------------------------|--------|----------------------------------------|
| (State or other  jurisdiction of   incorporation or organization) |   | (I.R.S. Employer   Identification No.) |

 

**2411 West Sahara Avenue,Las Vegas, Nevada 89102**

(Address of principalexecutive offices, Zip Code)

Registrant’s telephonenumber, including area code: **(702) 367-2411**

Securitiesregistered pursuant to Section 12(b) of the Act:

|            | **Title of each class  Common Stock, $0.01 Par Value** | ** ** |   | ** ** | **Name of each exchange on which  registered  New York Stock Exchange** | ** ** |
|------------|--------------------------------------------------------|------------|--------|------------|-------------------------------------------------------------------------|------------|
| ** ** |                                                   | ** ** |

 

Securities registeredpursuant to Section 12(g) of the Act: **None**

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Indicate by check mark ifthe registrant is a well-known seasoned issuer, as defined in Rule 405 ofthe Securities Act. Yes x  No o

Indicate by check mark ifthe registrant is not required to file reports pursuant to Section 13 or Section 15(d) ofthe Act. Yes o  No x

Indicate by check markwhether the registrant (1) has filed all reports required to be filed by Section 13or 15(d) of the Securities Exchange Act of 1934 during the preceding 12months (or for such shorter period that the registrant was required to filesuch reports), and (2) has been subject to such filing requirements forthe past 90 days. Yes x  No o

Indicate by check mark ifdisclosure of delinquent filers pursuant to Item 405 of Regulation S-K is notcontained herein, and will not be contained, to the best of registrant’sknowledge, in definitive proxy or information statements incorporated byreference in Part III of this Form 10-K or any amendment to theForm 10-K. x

Indicate by check markwhether the registrant is a large accelerated filer, an accelerated filer, or anon-accelerated file. See definition of “accelerated filer and largeaccelerated filer” in Rule 12b-2 of the Exchange Act. (Checkone):Large accelerated filer x  Accelerated filer o  Non-accelerated filer o

Indicate by check markwhether the registrant is a shell company (as defined in Rule 12b-2of the Act). Yes  o No x

The aggregate market valueof the voting stock held by non-affiliates (all persons other than executiveofficers or directors) of the registrant as of June 30, 2006, based on theclosing price per share of $68.08 as reported on the New York Stock Exchangewas $3,163,811,105.

As of January 31,2007, the registrant has 57,260,989 shares of common stock outstanding.

**DocumentsIncorporated by Reference**

None.

 

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**EXPLANATORY NOTE**

The registrant filed with the Securities and ExchangeCommission (the “SEC”) an Annual Report on Form 10-K for the yearended December 31, 2006 (“Form 10-K”) on March 1, 2007,pursuant to which it incorporated by reference into Part III thereofportions of its definitive Proxy Statement for its 2007 Annual Meeting ofStockholders (“Proxy Statement”) to be subsequently filed with the SEC. Theregistrant has determined to amend the Form 10-K to include such Part IIIinformation in this Amendment No. 1 on Form 10-K/A rather thanincorporating it into the Form 10-K by reference to the ProxyStatement. Accordingly, Part III, Items 10 through 14, on the Form 10-Kare hereby amended along with the cover page to remove the DocumentsIncorporated by Reference. In addition, as required by Rule 12b-15under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), newcertifications by our principal executive officer and principal financialofficer are being filed or furnished as exhibits to this Amendment No. 1on Form 10-K/A under Item 15 of Part IV hereof.

No attempt has been made in this Amendment No. 1on Form 10-K/A to modify or update the other disclosures presentedin the Form 10-K. This Amendment No. 1 on Form 10-K/Adoes not reflect events occurring after the filing of the Form 10-Kor modify or update those disclosures. Accordingly, this Amendment No. 1on Form 10-K/A should be read in conjunction with the Form 10-Kand our other filings with the SEC.

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**PART III**

**ITEM 10.**         DIRECTORS,EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

**DIRECTORS ANDEXECUTIVE OFFICERS**

The Company’sArticles and Bylaws require that the number of directors on the Board ofDirectors be not less that three nor more than fifteen. Currently, the Board ofDirectors has fixed the number of directors at six. The directors are evenlydivided into three classes. Class I consists of Lowell H. Lebermann, Jr.and Robert E. Lewis whose terms expire in 2009. Class II consists ofLorenzo J. Fertitta and James E. Nave, D.V.M. whose terms expire in 2007.Class III consists of Frank J. Fertitta III and Lee S. Isgur whose termsexpire in 2008. All directors hold their positions until their terms expire anduntil their respective successors are elected and qualified. Executive officersare elected by and serve at the discretion of the Board of Directors. Thefollowing table sets forth the directors and executive officers of the Companyas of December 31, 2006 and provides their respective ages and positionswith the Company.

| **Name**                       | ** ** | ** ** | ** ** | **Age** | ** ** | **Position**                                                                                  | ** ** |
|--------------------------------|------------|------------|------------|---------|------------|-----------------------------------------------------------------------------------------------|------------|
| Frank J. Fertitta  III(*)      |       |       | 45         |    |       | Chairman  of the Board and Chief Executive Officer                                            |       |
| Lorenzo J.  Fertitta(*)        |       |       | 38         |    |       | Vice  Chairman of the Board and President                                                     |       |
| Glenn C.  Christenson(**)      |       |       | 57         |    |       | Executive Vice President, Chief Financial Officer, Chief Administrative Officer and Treasurer |       |
| William W. Warner              |       |       | 42         |    |       | Executive  Vice President and Chief Operating Officer                                         |       |
| Scott M Nielson                |       |       | 49         |    |       | Executive  Vice President and Chief Development Officer                                       |       |
| Richard J.  Haskins            |       |       | 43         |    |       | Executive  Vice President, General Counsel and Secretary                                      |       |
| Lee S. Isgur                   |       |       | 69         |    |       | Director                                                                                      |       |
| Lowell H.  Lebermann, Jr. |       |       | 67         |    |       | Director                                                                                      |       |
| Robert E. Lewis                |       |       | 61         |    |       | Director                                                                                      |       |
| James E. Nave, D.V.M.          |       |       | 62         |    |       | Director                                                                                      |       |

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(*)          Frank J. Fertitta IIIand Lorenzo J. Fertitta are brothers.

(**)   On March 29, 2007, theCompany and Mr. Christenson entered into a Separation Agreement andGeneral Release, pursuant to which Mr. Christenson’s employment with theCompany terminated effective March 30, 2007.

**Setforth below is a description of the backgrounds, including business experience,for each of our directors and executive officers as of December 31, 2006.**

**FrankJ. Fertitta III.****  **Mr. Fertittahas served as Chairman of the Board of the Company since February 1993 andChief Executive Officer since July 1992. Mr. Fertitta also served asPresident of the Company from 1989 until July 2000. He has held seniormanagement positions since 1985, when he was named General Manager of PalaceStation. He was elected a director of the Company in 1986, at which time he wasalso appointed Executive Vice President and Chief Operating Officer.

**LorenzoJ. Fertitta.****  **Mr. Fertittawas appointed Vice Chairman of the Board of the Company in December 2003. Mr. Fertittahas served as President of the Company since July 2000 and has served as adirector since 1991. From 1991 to 1993, he served as Vice President of theCompany. Mr. Fertitta served as President and Chief Executive Officer ofFertitta Enterprises, Inc. from June 1993 to July 2000, where hewas responsible for managing an investment portfolio consisting of marketablesecurities and real property. Mr. Fertitta currently serves as the firstPresident of the Nevada Resort Association and a member of its Board ofDirectors and serves as a director of the American Gaming Association. Mr. Fertittaserved as a commissioner on the Nevada State Athletic Commission from November 1996until July 2000.

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**GlennC. Christenson.****  **Mr. Christensonwas appointed Chief Administrative Officer in March 1997 and has served asExecutive Vice President of the Company since February 1994. From 1989 to1993, he served as Vice President of the Company. He has served as ChiefFinancial Officer since 1989, as Treasurer since 1992 and as a director of theCompany from 1993 to December 2003. Mr. Christenson is a CertifiedPublic Accountant. From 1983 to 1989, he was a partner of the international accountingfirm of Deloitte Haskins & Sells (now Deloitte & Touche),where he served as partner-in-charge of audit services for the Nevada practiceand National Audit partner for the Hospitality Industry. He currently serves asa director of the National Center for Responsible Gaming and is Chairman of theAudit Committee. He is a member of the Board of Trustees of the NevadaDevelopment Authority and is a member of the Board of Directors for the LasVegas Convention and Visitors Authority and the Nevada State College FoundationBoard. On March 29, 2007, the Company and Mr. Christenson enteredinto a Separation Agreement and General Release, pursuant to which Mr. Christenson’semployment with the Company terminated effective March 30, 2007.

**WilliamW. Warner.****  **Mr. Warnerwas appointed Chief Operating Officer of the Company in July 2004 and hasbeen an Executive Vice President of the Company since March 2002. Heserved as Chief Development Officer from March 2002 to July 2004,Vice President of Finance of the Company from January 1996 to March 2002and Director of Finance from August 1993 to January 1996.

**ScottM Nielson.****  **Mr. Nielsonwas appointed Chief Development Officer of the Company in July 2004 andhas been an Executive Vice President of the Company since June 1994. Heserved as Chief Legal Officer from March 2002 to July 2004 andGeneral Counsel from 1991 to March 2002. In 1992, he was appointedSecretary of the Company and served in that position until July 2004. From1991 through June 1994, he served as Vice President of the Company. From1986 to 1991, Mr. Nielson was in private legal practice as a partner inthe Las Vegas firm of Schreck, Jones, Bernhard, Woloson & Godfrey (nowBrownstein Hyatt Farber Schreck, P.C.), where he specialized in gaming law andland use planning and zoning. Mr. Nielson is a member of the American BarAssociation, the Nevada Bar Association and the International Association ofGaming Attorneys.

**RichardJ. Haskins.****  **Mr. Haskinswas appointed Executive Vice President and Secretary of the Company in July 2004and has served as General Counsel of the Company since April 2002. Hepreviously served as Assistant Secretary from September 2003 to July 2004,as Vice President and Associate General Counsel from November 1998 to March 2002and as General Counsel of Midwest Operations from November 1995 to October 1998.From 1990 to October 1995, Mr. Haskins was in private legal practice,most recently as a partner in the Kansas City, Missouri law firm of RoseBrouillette & Shapiro P.C. Mr. Haskins is a member of theAmerican Bar Association, Kansas Bar Association, Missouri Bar Association andNevada Bar Association.

**LeeS. Isgur.****  **Mr. Isgurhas served as a director of the Company since December 2003 and serves onthe Audit and Governance and Compensation Committees. Mr. Isgur has beenthe Managing Partner of Corporate Counselors, a research and investment bankingconsulting firm, since 1997 and has served on the Board of Directors of eDietssince 1999, where he serves as chair of the Audit Committee and as a member ofthe Governance and Compensation committees. From 1994 to 1997, Mr. Isgurwas a Managing Director of Jefferies & Company, an investment bankingfirm. Prior to that, he was a partner at Volpe Welty & Company, aresearch and investment banking firm.

**LowellH. Lebermann, Jr.**   Mr. Lebermannhas served as a director of the Company since October 1993 and is Chairmanof the Governance and Compensation Committee and serves on the Audit Committee.He is Chairman of Centex Beverage, Inc., a wholesale distributor of Millerbeer and imported beverages. He is a director of Patton Medical, Inc. andDoggettData, Inc., of Austin, Texas. Mr. Lebermann is a formerdirector of Valero Energy Corporation, San Antonio and of Franklin FederalBancorp, Austin (acquired by Norwest) and a founding member of the Board ofDirectors of the Texas 

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Workers’ CompensationFund. From 1993 to 1999, he was a member of the Board of Regents of TheUniversity of Texas System and was a Council Member on the Austin City Councilfrom 1971 to 1977.

**RobertE. Lewis.****  **Mr. Lewishas served as a director of the Company since May 2004 and serves on theAudit and Governance and Compensation Committees. Mr. Lewis has served aspresident of the Nevada Division of Lewis Operating Corp. since December 1999.Mr. Lewis became the president of the Nevada Region of Kaufman and BroadHome Corporation upon the merger of Lewis Homes Management Corp. and Kaufmanand Broad Home Corporation in January 1999. He served in that capacityuntil December 1999. Prior to the merger, Mr. Lewis ran the Nevadaoperations of the Lewis Homes group of companies and its affiliates for 25years. He has served as a director for the National Association of HomeBuilders and as a director and President of the Southern Nevada Home BuildersAssociation. Mr. Lewis is also on the Executive Committee and served asSecretary and Legislative Chairman for the Nevada Development Authority, he isa Past Chairman of the Las Vegas District Council of the Urban Land Instituteand served on the Clark County Community Growth Task Force.

**James E. Nave, D.V.M.****  **Dr. Nave has served as adirector of the Company since March 2001 and is Chairman of the AuditCommittee and serves on the Governance and Compensation Committee. Dr. Navehas been an owner of the Tropicana Animal Hospital since 1974 and has been theowner and manager of multiple veterinary hospitals since 1976. Dr. Navehas also served on the Board of Directors of Bank West of Nevada since 1994,where he also serves as Chairman of the Site Committee. Dr. Nave hasserved on the Board of Directors of Western Alliance Bancorporation since 2003,where he also serves as a member of the Audit and Compensation Committees. Dr. Naveis also the Globalization Liaison Agent for Education and Licensing for theAmerican Veterinary Medical Association and is Chairperson of the NationalCommission for Veterinary Economics Issues. In addition, Dr. Nave is amember and past President of the Nevada Veterinary Medical Association, theWestern Veterinary Conference and the American Veterinary Medical Association.He is also a member of the Clark County Veterinary Medical Association, theNational Academy of Practitioners, the American Animal Hospital Association andthe Executive Board of the World Veterinary Association. Dr. Nave was amember of the University of Missouri, College of Veterinary MedicineDevelopment Committee from 1984 to 1992. He was also a member of the NevadaState Athletic Commission from 1988 to 1999 and served as its chairman from1989 to 1992 and from 1994 to 1996.

**SECTION 16(A) BENEFICIALOWNERSHIP REPORTING COMPLIANCE**

Section 16(a) of the Exchange Act requiresthe Company’s executive officers and directors and persons who own more than10% of the Company’s common stock to file reports of ownership on Forms 3, 4and 5 with the Securities and Exchange Commission (the “SEC”). Executiveofficers, directors and 10% stockholders are required by the SEC to furnish theCompany with copies of all Forms 3, 4 and 5 they file.

Based solely on theCompany’s review of the copies of such forms it has received, the Companybelieves that all of its executive officers, directors and greater than 10%beneficial owners complied with all of the filing requirements applicable tothem with respect to transactions during 2006.

**CODE OF ETHICS**

The Company has adopted aCode of Business Conduct and Ethics (the “Code of Ethics”) that applies to allof its directors, officers (including its principal executive officer andprincipal financial officer) and employees. The Code of Ethics and any waiversor amendments to the Code of Ethics are available on the Company’s website atwww.stationcasinos.com. Printed copies are also available to any person withoutcharge, upon request directed to the Company’s Corporate Secretary,2411 West Sahara Avenue, Las Vegas, Nevada 89102.

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**CORPORATEGOVERNANCE GUIDELINES**

The Company has adoptedCorporate Governance Guidelines that are available on its website atwww.stationcasinos.com. Printed copies are also available upon request directedto the Company’s Corporate Secretary.

**STOCKHOLDERCOMMUNICATIONS WITH DIRECTORS**

Stockholders maycommunicate with the Board of Directors, including the non-managementdirectors, by sending a letter to Station Casinos, Inc. Board of Directors,c/o Corporate Secretary, 2411 West Sahara Avenue, Las Vegas, Nevada 89102.The Corporate Secretary has the authority to disregard any inappropriatecommunications or to take other actions with respect to any such inappropriatecommunications. If deemed an appropriate communication, the Corporate Secretarywill submit the correspondence to the Chairman of the Board or to any specificdirector to whom the correspondence is directed.

**MEETINGS ANDCOMMITTEES**

The Board of Directors met 14 times during 2006. Noneof the members of the Board of Directors attended less than 75% of the meetingsof the Board of Directors held, or of the total number of meetings held by allcommittees of the Board of Directors on which various members served during 2006.

All of the members of the Board of Directors were inattendance, with the exception of Mr.  Lebermann at the 2006 annualstockholders’ meeting which included Frank J. Fertitta III, Lorenzo J.Fertitta, Dr. Nave and Messrs. Isgur and Lewis. It is the Company’spolicy that all members of the Board of Directors are expected to attend theannual stockholders’ meeting.

In order to promote opendiscussion among the non-management directors, the Board of Directors holdsexecutive sessions at least four times each year, in which those directors meetwithout management participation. The Chairman of each executive sessionrotates between the chairpersons of the Company’s Audit Committee andGovernance and Compensation Committee, depending upon the primary subjectmatter of the meeting. During 2006, the non-management directors met four timeswithout management participation following Audit Committee or Governance andCompensation Committee meetings.

**The Audit Committee**

The Board of Directors has a separately designatedstanding Audit Committee that was established in accordance with Section 3(a) (58)(A) of the Exchange Act. The current members of the Audit Committee are Dr. Nave,Chairman and Messrs. Lebermann, Isgur and Lewis.

The Audit Committee,comprised solely of independent directors (as independence is defined in Section 303A.02 ofthe New York Stock Exchange (“NYSE”) listing standards), meets periodicallywith the Company’s independent auditors, management, internal auditors andlegal counsel to discuss accounting principles, financial and accountingcontrols, the scope of the annual audit, internal controls, regulatorycompliance and other matters. The Audit Committee also advises the Board ofDirectors on matters related to accounting and auditing and selects the Company’sindependent auditors. The independent auditors and the internal auditors havecomplete access to the Audit Committee without management present to discussresults of their audit and their opinions on adequacy of internal controls,quality of financial reporting and other accounting and auditing matters. Theresponsibilities of the Audit Committee are outlined in a written charter,which is available on the Company’s website at www.stationcasinos.com. Printedcopies are also available upon request directed to the Company’s CorporateSecretary.

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**Audit CommitteeFinancial Expert**

The Board of Directors hasdetermined that all Audit Committee members are financially literate under thecurrent listing standards of the NYSE. The Board of Directors has alsodetermined that Lee S. Isgur qualifies as an “audit committee financial expert”as defined by the SEC rules adopted pursuant to the Sarbanes-OxleyAct of 2002. Mr. Isgur is an independent director (as independence isdefined in Section 303A.02 of the NYSE listing standards).

**REPORT OF AUDITCOMMITTEE(1)**

The Audit Committee of the Board of Directorsdeveloped a charter for the Committee that was approved by the Board ofDirectors. The Audit Committee has adopted a policy that requires advanceapproval of all audit-related, tax services and other services performed by theindependent auditors. The policy provides for pre-approval by the AuditCommittee of specifically defined audit and non-audit services. Unless thespecific service has been previously pre-approved with respect to that year,the Audit Committee must approve the permitted service before the independentauditors are engaged to perform it. The Audit Committee has delegated to theChairman of the Audit Committee authority to approve permitted servicesprovided that the Chairman reports any decisions to the Committee at its nextscheduled meeting.

In conjunction with its activities during the Company’syear, the Audit Committee has reviewed and discussed the Company’s auditedfinancial statements with management of the Company. The members of the AuditCommittee have also discussed with the Company’s independent auditors the mattersrequired to be discussed by Statement of Auditing Standards 61 (Codification ofStatements on Auditing Standards, AU Section 380), as amended. The AuditCommittee has received from the Company’s independent auditors the writtendisclosures and the letter required by Independence Standards Board Standard No. 1,and has discussed with the independent auditors the independent auditors’independence. Based on the foregoing review and discussions, the AuditCommittee recommended to the Board of Directors of the Company that the auditedfinancial statements be included in the Company’s Annual Report on Form 10-Kfor the Company’s year ended December 31, 2006.

Respectfully Submitted,James E. Nave, D.V.M., ChairmanLowell H. Lebermann, Jr.Lee S. IsgurRobert E. Lewis

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(1)          Notwithstanding anythingto the contrary set forth in any of the Company’s previous or future filingsunder the Securities Act or the Exchange Act, this Report of Audit Committeeshall not be incorporated by reference in any such filings.

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**ITEM 11.**         EXECUTIVECOMPENSATION

**COMPENSATIONDISCUSSION AND ANALYSIS**

This sectionprovides an overview and analysis of our compensation program and policies, thematerial compensation decisions we have made under those programs and policiesand the role of the Governance and Compensation Committee of the Board ofDirectors in setting compensation programs and policies. This section alsodiscusses the material elements of the compensation of each of the executiveofficers as of December 31, 2006 identified below, whom we refer to as our“Named Executive Officers”:

·       FrankJ. Fertitta III, Chairman of the Board and Chief Executive Officer;

·       LorenzoJ. Fertitta, Vice Chairman of the Board and President;

·       GlennC. Christenson, Executive Vice President, Chief Financial Officer, ChiefAdministrative Officer and Treasurer;

·       WilliamW. Warner, Executive Vice President and Chief Operating Officer; and

·       ScottM Nielson, Executive Vice President and Chief Development Officer.

This section is intended to help you understand thedetailed information provided in the compensation tables and relateddisclosures set forth below and to help you put that information into contextwithin our overall compensation program.

As discussed elsewhere in this Amendment No. 1 onForm 10-K/A, the Company entered into an Agreement and Plan ofMerger with Fertitta Colony Partners LLC (“FCP”) and FCP Acquisition Sub(“Merger Sub”) on February 23, 2007 (the “Merger Agreement”), pursuant towhich Merger Sub will be merged with and into the Company, and as a result, theCompany will continue as the surviving corporation (the “Merger”). Inanticipation of the Merger there have been no increases in annual salaries forthe Named Executive Officers, no additional stock options or restricted stockawards granted to the Named Executive Officers and no changes to thecompensation plans and policies for 2007. See “Certain Relationships andRelated Transactions, and Director Independence—Merger Agreement” below foradditional information regarding the Merger Agreement.

On March 29, 2007,the Company and Mr. Christenson entered into a Separation Agreement andGeneral Release, pursuant to which Mr. Christenson’s employment with theCompany terminated effective March 30, 2007. See “Summary CompensationTable—Discussion of Summary Compensation Table and Grant of Plan-Based AwardsTable—Separation Agreement and Release with Mr. Christenson” for additionalinformation. On March 28, 2007, Thomas M. Friel was appointed as ExecutiveVice President, Chief Accounting Officer and Treasurer of the Company,effective March 30, 2007. Upon the effectiveness of the termination of Mr. Christenson’semployment, Mr. Friel succeeded Mr. Christenson as the principalfinancial officer and principal accounting officer of the Company.

*Governance andCompensation Committee*

The Governance and Compensation Committee, currentlycomprised solely of independent directors (as independence is defined in Section 303A.02of the NYSE listing standards), meets periodically to discuss matters relatingto the nomination of directors and corporate governance policies in addition tocompensation matters which include reviewing and taking action regarding termsof compensation, employment contracts, pension matters that concern officersand key employees of the Company and grants of stock options and restricted stockawards to employees.

The current members of the Governance and CompensationCommittee are Lowell H. Lebermann, Jr., Chairman, James E. Nave,D.V.M., Lee S. Isgur and Robert E. Lewis, who comprise all of theindependent members of the Board. Per the Governance and Compensation Committee’scharter, 

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members are appointed bythe Board of Directors. The Governance and Compensation Committee’s chairpersonis designated by the full Board of Directors. Mr. Lebermann has served asthe Chairman of the Governance and Compensation Committee since 2001. TheGovernance and Compensation Committee met seven times during 2006.

The Governance and Compensation Committee operatesunder a written charter adopted by the Board of Directors and is responsiblefor shaping and maintaining the Company’s compensation policy by (i) reviewingand approving all elements of the total compensation program for the Company, (ii) aligningthe total compensation program with stockholders’ interests and the Company’sbusiness strategy and (iii) assuring stockholders that the compensationprograms are effective, responsible and competitive when compared to similarlysituated organizations.

Steps that aretaken to fulfill the responsibility of the Governance and CompensationCommittee in shaping and maintaining the Company’s compensation philosophy are:

·       reviewingand approving corporate goals and objectives relevant to the compensation ofthe Chief Executive Officer and the other executive officers;

·       evaluatingthe performance of the Chief Executive Officer and the other executive officersin light of these goals and objectives;

·       settingthe compensation of the Chief Executive Officer and the other executiveofficers based on such evaluation;

·       makingrecommendations to the Board of Directors with respect to the Company’sincentive-compensation plans and equity-based plans; and

·       reviewingthe level and type of perquisites and other personal benefits provided to theChief Executive Officer and other executive officers, taking into account theirlevels of salary and other compensation, the value of similar benefits providedat comparable companies and the value of such benefits given to such officersin past years.

In addition, the Governance and Compensation Committeeevaluates and recommends candidates for election as directors, makesrecommendations concerning the size and composition of the Board of Directors,implements the Company’s corporate governance policies and assesses theeffectiveness of the Board of Directors.

The Governance andCompensation Committee’s written charter is available on the Company’s websiteat www.stationcasinos.com. Printed copies are also available upon requestdirected to the Company’s Corporate Secretary.

**CompensationPhilosophy and Objectives**

The Companybelieves that it is necessary to establish compensation programs and relatedopportunities that are designed to attract and retain those individuals neededto successfully implement the Company’s strategy and motivate individuals witha long-term vision for the Company. These programs and opportunities have to bebalanced with the cost to the Company and its stockholders. In order to arriveat a proper balance, the Company has established the following compensationphilosophy and guidelines:

·       employmentagreements determine the salary which provides the basic level of compensationfor performing the job expected of the Named Executive Officers;

·       cashbonus awards are used as an incentive for attainment of the Company’s financialperformance in a particular period; and

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·       restrictedstock awards are used to provide a long-term incentive and align the interestsof our executives with those of our stockholders.

The Governance and Compensation Committee’s primaryobjectives in setting compensation policies are to develop a program designedto attract and retain those individuals needed to successfully implement theCompany’s strategy and to reward them relative to the Company’s performance.The Governance and Compensation Committee sets compensation policies to promoteprofitable growth and to retain highly talented, motivated individuals with along-term vision for the Company. The Governance and Compensation Committeealso seeks to align the financial interest of the Company’s executives withthat of its stockholders. To achieve this goal, the Governance and CompensationCommittee believes that a significant portion of the Company’s executives’compensation should be “at risk” and tied to the achievement of annual andlong-term corporate performance criteria.

The Company’sexecutive compensation program is designed to achieve the following objectives:

·       attractand motivate experienced executives in light of the competitive realities ofour industry;

·       retaintalented individuals;

·       alignour compensation strategy with our business objectives, including enhancingstockholder value; and

·       supporta culture of strong performance by rewarding employees for results.

These objectives underlie our compensation philosophyand all compensation-related decisions.

Each element of our compensation is intended togenerally match, in cost and type, the corresponding component offered to executivesin similar positions in similar organizations. Each of the elements of theCompany’s compensation and benefit programs are discussed and illustrated below.Unless otherwise stated, all elements are accrued as an expense and aredeductible to the Company as compensation expense.

**CompensationProgram Design**

The executive compensation program is designed withour executive compensation objectives in mind and is comprised of various cashand equity compensation methods over a short-term and long-term paymentstructure in order to recognize and reward executives for their contributionsto the Company today and in the future.

There is some variation in the overall mix ofcompensation paid directly to each Named Executive Officer. In order todetermine the proper allocation and value, the Governance and CompensationCommittee uses benchmarks to provide guidance. In order to establish thebenchmarks, each year the Governance and Compensation Committee identifies agroup of casino and gaming companies (the “Peer Companies”) that it believesare the Company’s competition for executive level employees. For the year endedDecember 31, 2006, the Peer Companies consisted of Harrah’s EntertainmentInc., MGM Mirage, Boyd Gaming Corp., Las Vegas Sands Corp., Penn NationalGaming Inc., Trump Entertainment Resorts, Inc. and Wynn Resorts Ltd.

The Governance andCompensation Committee generally meets during the first quarter of each fiscalyear to review and vote on the Named Executive Officers’ base salaries andequity grant awards, if any, for the current year. Bonus payments to be paid tothe Named Executive Officers for the preceding year, which are administered pursuantto the Senior Executive Annual Bonus Plan described in more detail herein, arealso evaluated, discussed and voted on at this first-quarter meeting. Thistiming corresponds with the Governance and Compensation Committee’s annualperformance reviews of our Chief Executive Officer and the other seniorexecutives of the Company and also enables us to consider the Company’sperformance during the prior year, as well as our expectations for the currentyear. The Governance and 

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CompensationCommittee approves the Named Executive Officers’ base salaries, equity grantsand bonus awards after considering the recommendations presented by the ChiefExecutive Officer at this meeting.

*Roles of Managementin Compensation Decisions*

Executive officers andother management play a significant role in the compensation-setting process. TheChief Executive Officer annually reviews the performance of our seniorexecutives and, based on these reviews, recommends to the Governance andCompensation Committee compensation for all senior executives, other than hisown. The Governance and Compensation Committee, however, has the discretion tomodify the Chief Executive Officer’s recommendations and makes the finaldecisions regarding material compensation to senior executives, including basesalary, annual bonuses and equity awards. The Chief Executive Officer and othersenior executives typically are invited to attend Governance and CompensationCommittee meetings, from time to time, except when their own compensation isbeing discussed or determined.

*Role of OutsideConsultants in Establishing Compensation*

The Governance and Compensation Committee has theauthority to engage the services of independent legal counsel, consultants andsubject matter experts in order to analyze, review and recommend actions withregard to director compensation, executive officer compensation or generalcompensation and plan provisions. The Company provides appropriate funding forany such services commissioned by the Governance and Compensation Committee. TheGovernance and Compensation Committee retains a nationally recognized humanresources consulting firm, Towers Perrin, to assist with the design,implementation and communication of the Company’s compensation program. TheCommittee will continue to engage external consultants for the purposes ofdetermining the Chief Executive Officer’s and other senior executive officers’ compensation.

The Governance and Compensation Committee utilizesoutside consultants, such as Towers Perrin, to facilitate in the gathering ofdata regarding our Peer Companies from published executive compensation surveysand proxy statements filed with the SEC and to review the externalcompetitiveness of the Company’s executive compensation program. Data compiledby Towers Perrin regarding the Peer Companies is used to benchmark seniorexecutive compensation, including base salary, bonus and long-term incentivepay. Due to the highly competitive nature of the gaming industry, the Companytargets the higher end of the Peer Companies’ compensation practices in orderto attract and retain the most talented executives.

During 2006, Towers Perrin was engaged toevaluate both existing senior executive total direct compensation andnon-management director pay and their competitiveness against the PeerCompanies. The results showed that the Company’s top executives receivedcompensation packages within the mid- to upper tercile range of practices ofthe Peer Companies. In addition, the results of their analysis showed that ourcurrent fee structure for members of the Board of Directors is within the uppertercile range of practices of the Peer Companies, depending on the comparativefactors used.

The Governance andCompensation Committee has engaged Towers Perrin to provide similar services in2007.

**Elements ofCompensation Program**

The Company’s executive compensation program consistsof the following components: base salary, senior executive annual bonus plan,long-term incentives (including stock option grants, restricted stock awardsand participation in long-term stay-on incentive plans), retirement and otherbenefits and perquisites.

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The Company targetsoverall compensation levels competitive with our Peer Companies. The variouscomponents of executive compensation reflect the following elements:

*Base Salary*

As part of its strategy to attract and retain highquality executive employees, the Governance and Compensation Committee hasestablished a policy to pay executive base salaries based on competitive basesalaries paid by the Peer Companies, with the Company’s salaries being at ornear the high end of the range. Actual salaries are determined based upon anassessment of the individual’s contribution and value to the organization andthe competitive market for that position. The annual base salary for each NamedExecutive Officer is set forth in his employment agreement with the Company. Basesalaries are reviewed annually and may be adjusted (for increase but not fordecrease) based on an evaluation of the executive’s performance in conjunctionwith a review of compensation received by individuals holding similar positionsat the Peer Companies.

Adjustments in basesalary may be attributable to any of the following factors:

·       meritincreases as a reward for meeting or exceeding objectives;

·       marketincreases as a result of a competitive market analysis or in coordination witha long-term plan to pay a position at a more competitive level;

·       promotionalincreases as a result of increased responsibilities associated with a change inposition or organizational change; and/or

·       retentionincreases as a result of senior executives being recruited by or offered aposition by another competitor.

The amount of a Named Executive Officer’s base salaryis the reference point for determining the other elements of his compensationpackage. For example, the relative range of potential annual incentive awardsto each Named Executive Officer is based on a percentage of such NamedExecutive Officer’s base salary. In addition, base salary is a component of thecontribution formula under the Company’s retirement plans and is the keycomponent in determining change-in-control-related payments under the NamedExecutive Officers’ employment agreements.

Effective April 1,2006, the base salaries for the Named Executive Officers under their respectiveemployment agreements are as follows: $2,250,000 for Frank J. FertittaIII, $1,740,000 for Lorenzo J. Fertitta, $1,200,000 for Mr. Warner,$1,020,000 for Mr. Christenson and $960,000 for Mr. Nielson. In anticipationof the Merger, the Governance and Compensation Committee determined that the2007 annual base salaries for the Named Executive Officers would remain thesame as the salaries paid to such Named Executive Officers in 2006.

*Senior ExecutiveAnnual Bonus Plan*

The Senior Executive Annual Bonus Plan was approved bythe Company’s stockholders in 2004 to provide participating executive officersincentive compensation, through additional cash or equity, for theirsignificant contributions toward improved profitability and growth of theCompany as determined by the achievement of pre-established performance goals. TheSenior Executive Annual Bonus Plan is designed to ensure that annual incentiveawards paid to participating executive officers will be fully taxable asperformance-based compensation, as defined by the regulations under Section 162(m) ofthe Internal Revenue Code of 1986, as amended. Each year, the Governance andCompensation Committee approves which executive officers will participate inthe Senior Executive Annual Bonus Plan prior to, or at the time of, theestablishment of the Company’s performance goals for the year. In 2006, each ofthe Named Executive Officers was a participant in the Senior Executive AnnualBonus Plan.

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The purpose of the Senior Executive Annual Bonus Planis to focus each executive on the attainment of financial objectives that theGovernance and Compensation Committee believes are primary determinants of theCompany’s share price over time. Each year specific goals based on objectivescontained in the Senior Executive Annual Bonus Plan are approved by theGovernance Compensation Committee. For 2006, a specific goal based on earningsbefore interest, taxes, depreciation and amortization (“EBITDA”) are approvedby the Governance and Compensation Committee under the Senior Executive AnnualBonus Plan. The amount of the target award is determined by comparison ofactual EBITDA versus the Company’s EBITDA goal. The actual award may vary fromzero to 233% of each Named Executive Officer’s base salary. The Governance andCompensation Committee has retained the ability to award a discretionary bonus.

For 2006, the Governance and Compensation Committeeset an EBITDA goal of $545 million to $565 million for the Named ExecutiveOfficers. If this goal was reached, the Chief Executive Officer would havereceived a target bonus of 200% of his base salary, Lorenzo J. Fertitta wouldhave received 150% of his base salary and the other Named Executive Officerswould have received 100% of their base salary. For the year ended December 31,2006, the EBITDA goal set by the Governance and Compensation Committee was notreached, and as a result, the Named Executive Officers did not receive theirtarget bonuses as described above.

Each Named Executive Officer did receive a bonus whichwas 50% of his target bonus described above; these bonus awards wereestablished by the Governance and Compensation Committee based on a review ofeach Named Executive Officer’s individual performance and other factors,including the Company’s performance and assessments of the individual executive’scontribution to the success of the Company during 2006. The Governance andCompensation Committee also targeted total cash compensation paid to theCompany’s executives to compensation for similar positions in the PeerCompanies, with the Company’s total cash compensation being at or near the highend of the range. See the Non-Equity Incentive Plan Compensation column of the “SummaryCompensation Table” set forth herein for additional details regarding the bonusamounts earned in 2006.

In anticipation of theMerger, the Governance and Compensation Committee determined that the 2007target bonuses for the Named Executive Officers will remain the same as thetarget bonuses set for such Named Executive Officers in 2006.

*Long-TermIncentives*

The Company has provided stock-based incentivesto its executives since its inception. The Governance and CompensationCommittee attempts to pay a considerable portion of such executives’ totalcompensation in stock in order to give the executives a long-term stake in thebusiness and to align executives’ interests with those of the Company’sstockholders. These grants of stock options and restricted stock awards alignthe executive’s interests with the stockholder’s interests as the size of theexecutive’s reward is dependent on the Company’s stock performance. Grants madeto the Company’s executives are based on the grant values for similar positionsamong the Peer Companies, with the Company’s grant values being at or near thehigh end of the range. Awards have generally been granted with either 10% or20% of the award vesting on each anniversary from the date of grant until fullyvested.

For retention purposes, 2006 long-term equity grantsto Named Executive Officers were all in the form of restricted stock awards whichvest at a rate of 10% per year over a ten-year period. The grant awardstructure was proposed by senior management and approved by the Governance andCompensation Committee. The size of the 2006 restricted stock awards to ourNamed Executive Officers was determined in accordance with the Company’scompensation philosophy and objectives, as well as the practices of our PeerCompanies. The Named Executive Officers received quarterly dividends during2006 on their 

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unvestedrestricted stock awards on the same basis as all stockholders of the Companyand as all other employees holding unvested restricted stock awards.

*Long-Term Stay-OnPerformance Incentive Plan*

The Company has also entered into long-term incentive agreementswith certain Named Executive Officers, which are intended to assist the Companyin attracting, retaining and motivating these Named Executive Officers throughthe use of compensation that rewards long-term performance. The Companyprovides executive officers with long-term cash-based incentive awards in orderto promote our long-term objectives and motivate eligible employees to achievecritical operating and financial objectives and to produce positive returns forour stockholders, as well as our retention objectives.

Lorenzo J. Fertittaentered into a Long-Term Stay-On Performance Incentive Agreement dated March 15,2002, whereby the Company will pay him $1.0 million in cash in three equalinstallments on each of July 31, 2004, July 31, 2007 and July 31,2010, provided that he will have been continuously employed with the Companythrough those respective dates. Pursuant to his employment agreement, upon a Changein Control (as defined in his employment agreement), Lorenzo J. Fertittawould become immediately vested and paid all amounts remaining under hisLong-Term Stay-On Performance Incentive Agreement. Mr. Warner entered intoa Long-Term Stay-On Performance Incentive Agreement dated April 1, 2002,whereby the Company will pay him $250,000 in cash on each of April 1,2003, 2005, 2007 and 2009, provided that he will have been continuouslyemployed with the Company through those respective dates.

*Perquisites andOther Personal Benefits*

We provide each of our Named Executive Officers withperquisites and other personal benefits such as access to the Company’sairplane, club memberships, tax planning advice, retirement benefits and lifeand disability insurance. In addition, Frank J. Fertitta III and Lorenzo J.Fertitta were provided with personal security services. When determining whichperquisites and other personal benefits to provide to our Named ExecutiveOfficers, the Governance and Compensation Committee takes into account thelevels of salary and other compensation given to the Chief Executive Officerand other Named Executive Officers and the value of such benefits given to suchofficers in past years. The Governance and Compensation Committee does not viewperquisites as a significant element of our comprehensive compensationstructure; however, we believe that they can serve, along with other forms ofcompensation, to attract and retain talented individuals.

We offer a number of health and welfare and retirementprograms to all eligible employees. All of our Named Executive Officers areeligible to participate in our employee benefit plans, including medical,dental, life insurance and 401(k) plans. The Named Executive Officers alsoreceive group health insurance coverage through the Company’s Exec-U-CareMedical Plan, while under the Company’s group life insurance program, they areeligible for supplemental life insurance in the following amounts: not lessthan $70 million aggregate coverage for Frank J. Fertitta III, $35 millionfor Lorenzo J. Fertitta, $4 million for Mr. Warner, $7.5 million for Mr. Christensonand $7.5 million for Mr. Nielson.

In addition to the standard group long-term disabilitybenefit, each Named Executive Officer is eligible to participate in the SpecialLong-Term Disability Plan, which is a Company-paid individual long-termdisability insurance policy paying an additional monthly benefit equal to acombined monthly benefit amount of 66% of the average of base salary plus bonusfor the two plan years immediately preceding (but not including) the plan yearin which the participant’s employment is terminated due to disability dividedby twelve; provided, however, that the monthly benefit will be reduced by anybenefit the participant receives from all other disability plans sponsored bythe Company, if any. Benefits begin on the first day of the second monthsucceeding the month in which the participant’s termination of employment dueto disability occurs. The Governance and Compensation Committee of the Board ofDirectors chooses those 

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individuals that areeligible to participate in the plan from key executives nominated by the ChiefExecutive Officer. As of December 31, 2006, Messrs. Christenson,Warner and Nielson were participants in the plan. The Governance andCompensation Committee may, in its sole discretion, terminate the participationof any participant prior to the disability of such participant.

During 2006, Frank J.Fertitta III and Lorenzo J. Fertitta were eligible to participate in theSupplemental Executive Retirement Plan (the “SERP”), while the other NamedExecutive Officers were eligible to participate in the Supplemental ManagementRetirement Plan (the “SMRP”). Each Named Executive Officer was also eligible toparticipate in the Deferred Compensation Plan For Executives (the “DCPE”) andthe Deferred Compensation Plan For Management (the “DCPM”). These plans aredescribed in more detail elsewhere in this Amendment No. 1 on Form 10-K/A.

**Tax and AccountingConsiderations**

The Company takes into consideration tax andaccounting implications in the design of its compensation programs. In theselection of long-term incentives, the Governance and Compensation Committeereviews the projected expense amounts and expense timing associated withalternative types of awards. The Company also calculates and monitors the SFAS123R accounting expense related to equity-based compensation. To date, the SFAS123R expense has not been a significant factor in setting or changing equitycompensation grant practices except insofar as the general parity of treatmentof restricted stock awards and stock options under SFAS 123R was aconsideration in the Company’s decision to grant restricted stock awards inlieu of stock options.

Section 162(m) ofthe Internal Revenue Code of 1986, as amended (the “Code”), prevents publiclytraded companies from receiving a tax deduction on compensation paid to theNamed Executive Officers in excess of $1 million in any taxable year, effectivefor compensation paid after 1993. The Governance and Compensation Committeebelieves that there is approximately $25.8 million of non-deductiblecompensation in respect of its Named Executive Officers in 2006. While theGovernance and Compensation Committee is mindful of the provisions of Section 162(m),the Governance and Compensation Committee has the discretion to grant non-deductiblecompensation to Named Executive Officers, depending upon the circumstances. TheGovernance and Compensation Committee believes that in certain circumstances,achieving our compensation objectives set forth above might be more importantthan the benefit of tax deductibility under Section 162(m).

**Stock OwnershipGuidelines**

The Board of Directors hasnot adopted specific stock ownership guidelines for our Named ExecutiveOfficers or Board members. We will continue to periodically re-evaluate whetherit would be appropriate for us to implement stock ownership requirements forour Named Executive Officers and Board members.

**EmploymentAgreements**

We have maintained employment agreements with each ofour Named Executive Officers for many years. These employment agreementscontain provisions that we consider appropriate for executives at therespective level while providing the Company with the necessary protections. Theemployment agreements are described in more detail in the sections entitled “SummaryCompensation Table—Discussion of Summary Compensation Table and Grants ofPlan-Based Awards” and “Potential Payments Upon Change of Control orTermination of Employment” below.

As described further in “SummaryCompensation Table—Discussion of Summary Compensation Table and Grants ofPlan-Based Awards,” below, on March 29, 2007, the Company and Mr. Christensonentered into a Separation Agreement and General Release with the Company,pursuant to which Mr. Christenson’s employment with the Company terminatedeffective March 30, 2007.

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**REPORT OF THE GOVERNANCE AND COMPENSATION COMMITTEE**

We have reviewed and discussed the forgoingCompensation Discussion and Analysis with management. Based on our review anddiscussion with management, we have recommended to the Board of Directors thatthe Compensation Discussion and Analysis be included in Amendment No. 1 tothe Company’s Annual Report on Form 10-K/A for the year endedDecember 31, 2006.

Respectfully Submitted,Lowell H. Lebermann, Jr., ChairmanJames E. Nave, D.V.M.Lee S. IsgurRobert E. Lewis

**SUMMARY COMPENSATION TABLE**

The following table setsforth the compensation paid or accrued by the Company to the Named ExecutiveOfficers, for services rendered to the Company in all capacities during theyear ended December 31, 2006.

| Name and  Principal Position                                                         | ** ** | **Year** | ** ** | **Salary  ($) (a)** | ** ** | **Bonus  ($)** | ** ** | **Stock  Awards  ($) (b)** | ** ** | **Option  Awards  ($) (b)** | ** ** | **Non-Equity  Incentive Plan  Compensation  ($) (c)** | ** ** | **Change in  Pension Value  and  Nonqualified  Deferred  Compensation  Earnings  ($) (d)** | ** ** | **All Other  Compensation  ($) (e)** | ** ** | **Total  ($)** | ** ** |
|------------------------------------------------------------------------------------------------|------------|----------|------------|--------------------------|------------|----------------|------------|---------------------------------|------------|----------------------------------|------------|-----------------------------------------------------------------|------------|-----------------------------------------------------------------------------------------------------------|------------|------------------------------------------------|------------|----------------|------------|
| Frank J. Fertitta III                                                                          |       |     | 2006       |                     |       | 2,156,250      |       |                            | —     |                             |       | 4,931,019                                                       |       | 519,050                                                                                                   |       |                                           | 2,250,000  |           |       |   | 1,199,223 |   |   |   | 936,571 |   |   | 11,992,113 |   |
| Chairman of the Board and Chief  Executive Officer                                             |       |     |       |                     |       |           |       |                            |       |                             |       |                                                            |       |                                                                                                      |       |                                           |       |           |       |   |   |   |   |   |   |   |   |   |   |
| Glenn C. Christenson (f)                                                                       |       |     | 2006       |                     |       | 977,500        |       |                            | —     |                             |       | 1,780,428                                                       |       | 161,117                                                                                                   |       |                                           | 510,000    |           |       |   | 579,344 |   |   |   | 97,565 |   |   | 4,105,954 |   |
| Executive Vice President,  Chief Financial Officer, Chief Administrative Officer and Treasurer |       |     |       |                     |       |           |       |                            |       |                             |       |                                                            |       |                                                                                                      |       |                                           |       |           |       |   |   |   |   |   |   |   |   |   |   |
| Lorenzo J. Fertitta                                                                            |       |     | 2006       |                     |       | 1,667,500      |       |                            | —     |                             |       | 4,282,902                                                       |       | 500,713                                                                                                   |       |                                           | 1,305,000  |           |       |   | 426,649 |   |   |   | 162,832 |   |   | 8,345,596 |   |
| Vice Chairman of the Board and President                                                       |       |     |       |                     |       |           |       |                            |       |                             |       |                                                            |       |                                                                                                      |       |                                           |       |           |       |   |   |   |   |   |   |   |   |   |   |
| William W. Warner                                                                              |       |     | 2006       |                     |       | 1,150,000      |       |                            | —     |                             |       | 2,580,048                                                       |       | 405,665                                                                                                   |       |                                           | 600,000    |           |       |   | 242,603 |   |   |   | 132,948 |   |   | 5,111,264 |   |
| Executive Vice President  and Chief Operating Officer                                          |       |     |       |                     |       |           |       |                            |       |                             |       |                                                            |       |                                                                                                      |       |                                           |       |           |       |   |   |   |   |   |   |   |   |   |   |
| Scott M Nielson                                                                                |       |     | 2006       |                     |       | 920,000        |       |                            | —     |                             |       | 1,702,261                                                       |       | 119,312                                                                                                   |       |                                           | 480,000    |           |       |   | 362,600 |   |   |   | 160,571 |   |   | 3,744,744 |   |
| Executive Vice President and Chief  Development Officer                                        |       |     |       |                     |       |           |       |                            |       |                             |       |                                                            |       |                                                                                                      |       |                                           |       |           |       |   |   |   |   |   |   |   |   |   |   |

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(a)              Amounts shown are the salary amounts earned withoutconsideration as to the year of payment. See the Nonqualified Deferred Compensation table for amounts included inthis column that were deferred under the Company's Deferred Compensation Plan.

(b)              The value reported for Stock Awards and Option Awardsfor each Named Executive Officer is the aggregate cost recognized in theCompany's financial statements for such awards for the year ended December 31,2006, including awards granted in prior years. The expense for awards made during 2006 are determined in accordancewith SFAS 123R, disregarding adjustments for forfeiture assumptions, and thecosts for awards made prior to 2006 are determined in accordance with themodified prospective transition method under SFAS 123R.  All of the restricted stock awards granted in2006 vest in equal installments over ten years from the date of grant.  The assumptions for making the valuationdeterminations are included in footnote 11 of the Company's Annual Report onForm 10-K for the year ended December 31, 2006. If the Merger Agreement described in Item 13 is consummated, all outstandingstock options and unvested restricted stock awards under the 2005 Plan andPrior Plans will become immediately vested and all related unrecognizedcompensation cost will be recognized during the period in which the Merger isconsummated.

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(c)               Non-Equity Incentive Plan Compensation amounts for 2006were determined in January 2007 by the Governance and Compensation Committeebased on achieving predetermined goals. Amounts shown are the bonus amounts earned without consideration as tothe year of payment.  See the NonqualifiedDeferred Compensation table for amounts included in this column that weredeferred under the Company's Deferred Compensation Plan.

(d)              Amounts reflect increases in actuarial values ofbenefits accrued under defined benefit plans, which are calculated bydetermining the difference between the aggregate value of benefits accruedunder all defined benefit plans as of December 31, 2005 and December 31, 2006,the relevant measurement dates used for the related SERP and SMRP.  The amounts set forth in this column relateonly to the above mentioned benefit accruals as there are no above-market orpreferential earnings on deferred compensation accounts.

(e)              All Other Compensation consists of thefollowing:

| ** ** | ** ** | **Perquisites**                        | ** ** | **Other (i)**       | ** ** | ** **                                   | ** ** |
|------------|------------|----------------------------------------|------------|--------------------------|------------|----------------------------------------------|------------|
| ** ** | ** ** | **Executive  Security  ($) (ii)** | ** ** | **Life  Insurance  ($)** | ** ** | **Supplemental  Long-Term  Disability  ($)** | ** ** | **Exec-U-Care  Medical  Plan  ($)** | ** ** | **Personal  Use of  Company  Aircraft  ($) (iii)** | ** ** | **Tax  Services  ($)** | ** ** | **Club  Membership  & Dues  ($)** | ** ** | **Fitness  Training  ($)** | ** ** | **Deferred  Compensation  Plan  ($)** | ** ** | **401(k)  Plan  ($)** | ** ** | **Total  ($)** | ** ** |
|            |            |                                        |            |                          |            |                                              |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

| Frank J.  Fertitta III |   |   | 571,447 |   |   |   | 216,890 |   |   |   | — |   |   |   | 40,690 |   |   |   | 107,544 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   | 936,571 |   |
|------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|---------|--------|
| Glenn C. Christenson   |   |   | —  |   |   |   | 21,305  |   |   |   | 30,645 |   |   |   | 12,725 |   |   |   | —  |   |   |   | 25,850 |   |   |   | 7,040  |   |   |   | — |   |   |   | — |   |   |   | — |   |   | 97,565  |   |
| Lorenzo J. Fertitta    |   |   | 76,270  |   |   |   | 28,860  |   |   |   | — |   |   |   | 49,526 |   |   |   | 8,176   |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   | 162,832 |   |
| William W. Warner      |   |   | —  |   |   |   | 5,760   |   |   |   | 8,250  |   |   |   | 3,998  |   |   |   | —  |   |   |   | 15,325 |   |   |   | 8,100  |   |   |   | — |   |   |   | 87,115 |   |   |   | 4,400  |   |   | 132,948 |   |
| Scott M  Nielson       |   |   | —  |   |   |   | 6,090   |   |   |   | 19,471 |   |   |   | 3,563  |   |   |   | 32,045  |   |   |   | 16,550 |   |   |   | 1,320  |   |   |   | 11,840 |   |   |   | 69,692 |   |   |   | — |   |   | 160,571 |   |

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(i)                   Amounts relate to Company matching contributions to theNamed Executive Officers' accounts in the Company's Deferred Compensation Planand qualified 401(k) Plan, respectively.

(ii)                 In 2006, the Company provided personal securityservices for Frank J. Fertitta III and Lorenzo J. Fertitta and theirfamilies.  The decision to provide suchpersonal security services was prompted by the results of an analysis providedby an independent professional consulting firm specializing in executive safetyand security.  Based on these results,the Governance and Compensation Committee approved personal security servicesto be paid by the Company for Frank J. Fertitta III and Lorenzo J. Fertitta andtheir families. Compensation reported for personal security services representsthe aggregate incremental cost incurred by the Company for security personneland security equipment-related costs.

(iii)               Amount represents the incremental cost to the Companyfor personal use of the Company aircraft and is calculated based on the averagevariable operating cost to the Company. Variable operating costs include fuel,landing/ramp fees and other miscellaneous variable costs. The total annualvariable costs are divided by the annual number of miles flown by the Companyaircraft to derive at an average variable cost per mile. The average variablecost per mile is then multiplied by the miles flown for personal use to derivethe incremental cost. Fixed costs that do not change based on usage, such as pilots’salaries and non-trip hanger related costs are excluded from the calculation.

(f)                On March 29, 2007, the Company and Mr.Christenson entered into a Separation Agreement and General Release, pursuantto which Mr. Christenson's employment with the Company terminated effectiveMarch 30, 2007.

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**GRANTS OFPLAN-BASED AWARDS IN 2006**

**The following table sets forthinformation regarding each grant of stock awards to each Named ExecutiveOfficer in the year ended December 31, 2006 as well as estimated futurepayouts related to the Senior Executive Annual Bonus Plan.**

| ** **              | ** ** | ** ** | ** ** | **Estimated Future Payouts Under  Non-Equity  Incentive Plan Awards (a)** | ** ** | **Estimated Future Payouts  Under  Equity Incentive Plan Awards** | ** ** | ** **      | ** ** | ** **       | ** ** | ** **         | ** ** | ** **      | ** ** |             |
|-------------------------|------------|------------|------------|---------------------------------------------------------------------------------------------------------|------------|--------------------------------------------------------------------------------------------|------------|-----------------|------------|------------------|------------|--------------------|------------|-----------------|------------|------------------|
| **Name**                | ** ** | ** ** | ** ** | **Grant  Date**                                                                                         | ** ** | **Threshold  ($)**                                                                         | ** ** | **Target  ($)** | ** ** | **Maximum  ($)** | ** ** | **Threshold  ($)** | ** ** | **Target  ($)** | ** ** | **Maximum  ($)** | ** ** | **All Other  Stock  Awards:  Number  of Shares  of Stock  or Units  (#) (b)** | ** ** | **All Other  Option  Awards:  Number of  Securities  Underlying  Options  (#)** | ** ** | **Exercise  or Base  Price of  Option  Awards  ($/Sh)** | ** ** | **Grant Date  Fair Value  of Stock  and Option  Awards  ($)** | ** ** |   |
| Frank J.   Fertitta III |       | 1/13/2006  |       |                                                                                                    | —     |                                                                                       |       | —          |       |             | —     |               |       |            | —     |             |   |   | — |   |   |   | — |   |   |   | 325,000 |   |   |   | — |   |   |   | — |   |   |   | 22,002,500 |   |   |
|                    |       |       |       |                                                                                                    | —     |                                                                                       |       | 4,500,000       |       |             | 5,242,500  |               |       |            | —     |             |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |
| Glenn C.  Christenson   |       | 1/13/2006  |       |                                                                                                    | —     |                                                                                       |       | —          |       |             | —     |               |       |            | —     |             |   |   | — |   |   |   | — |   |   |   | 125,000 |   |   |   | — |   |   |   | — |   |   |   | 8,462,500 |   |   |
|                    |       |       |       |                                                                                                    | —     |                                                                                       |       | 1,020,000       |       |             | 2,376,600  |               |       |            | —     |             |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |
| Lorenzo J.   Fertitta   |       | 1/13/2006  |       |                                                                                                    | —     |                                                                                       |       | —          |       |             | —     |               |       |            | —     |             |   |   | — |   |   |   | — |   |   |   | 325,000 |   |   |   | — |   |   |   | — |   |   |   | 22,002,500 |   |   |
|                    |       |       |       |                                                                                                    | —     |                                                                                       |       | 2,610,000       |       |             | 4,054,200  |               |       |            | —     |             |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |
| William W.   Warner     |       | 1/13/2006  |       |                                                                                                    | —     |                                                                                       |       | —          |       |             | —     |               |       |            | —     |             |   |   | — |   |   |   | — |   |   |   | 200,000 |   |   |   | — |   |   |   | — |   |   |   | 13,540,000 |   |   |
|                    |       |       |       |                                                                                                    | —     |                                                                                       |       | 1,200,000       |       |             | 2,796,000  |               |       |            | —     |             |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |
| Scott M Nielson         |       | 1/13/2006  |       |                                                                                                    | —     |                                                                                       |       | —          |       |             | —     |               |       |            | —     |             |   |   | — |   |   |   | — |   |   |   | 125,000 |   |   |   | — |   |   |   | — |   |   |   | 8,462,500 |   |   |
|                    |       |       |       |                                                                                                    | —     |                                                                                       |       | 960,000         |       |             | 2,236,800  |               |       |            | —     |             |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |
|                         |            |            |            |                                                                                                         |            |                                                                                            |            |                 |            |                  |            |                    |            |                 |            |                  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

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(a)                 Represents potential target and maximum compensationfor 2006 as described in "Compensation Discussion and Analysis—SeniorExecutive Annual Bonus".  Amountsactually earned for 2006 are included in the "Non-Equity Incentive PlanCompensation" column in the Summary Compensation Table.  There is no threshold compensation for 2006.

(b)                The restricted stock awards vest in equal annualinstallments over ten years from the date of grant.  Dividends are payable in cash to the NamedExecutive Officers when declared on restricted stock in the same manner and tothe same extent as dividends are payable on other shares of the Company’s commonstock.  If the Merger Agreement describedin Item 13 is consummated, all restricted stock awards outstanding will immediatelyvest as of closing.

**Discussion ofSummary Compensation Table and Grant of Plan-Based Awards Table**

*EmploymentAgreements*

As described in the “Compensation Discussion &Analysis” section above, the annual base salary for each Named Executive Officeris set forth in his employment agreement with the Company, and is reviewed onan annual basis and is subject to adjustment (for increase but not fordecrease) based on an evaluation of the executive’s performance in conjunctionwith a review of compensation received by individuals holding similar positionsat the Peer Companies. Actual base salary amounts, stock awards, option awards,cash bonus awards and other compensation for 2006 were determined by theGovernance and Compensation Committee, subject to certain limitations. The basesalaries, stock awards, option awards, cash bonus awards and other compensationthat were awarded to each Named Executive Officer in 2006 are detailed in theabove tables. For a more detailed discussion of how actual base salaries, cashbonus awards, stock awards, option awards and other compensation amounts aredetermined, as well as the performance-based conditions, vesting schedule, anddividends pertaining to such compensation, see “Compensation Discussion andAnalysis—Elements of Compensation.” A description of the material terms of theNamed Executive Officers’ Employment Agreements is set forth below.

The Company entered into employment agreements datedas of May 20, 2003 with Frank J. Fertitta III, Lorenzo J.Fertitta, Glenn C. Christenson, William W. Warner and Scott M Nielson(the 

17

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“Employment Agreements”). TheCompany entered into First Amendments to Employment Agreements with Messrs. Christensonand Nielson, effective as of July 13, 2004, which expands the scope oftheir non-competition obligations thereunder. In addition, the Company alsoentered into First Amendments to Employment Agreements with Frank J.Fertitta III and Lorenzo J. Fertitta, effective as of January 21,2005, which provide for a lump-sum payment to each of them under the SERP inthe event of a Change in Control (as defined in their respective EmploymentAgreements). See the section entitled “Discussion of Pension Benefits Table—SupplementalExecutive Retirement Plan” for additional information regarding the SERP.

Pursuant to the terms of the Employment Agreements,Frank J. Fertitta III has agreed to serve as the Chief ExecutiveOfficer of the Company and Chairman of the Board, Lorenzo J. Fertitta hasagreed to serve as President of the Company and Vice Chairman of the Board, Mr. Warnerhas agreed to serve as Executive Vice President and Chief Operating Officer ofthe Company, Mr. Christenson has agreed to serve as the Executive VicePresident, Chief Financial Officer, Chief Administrative Officer and Treasurerof the Company and Mr. Nielson has agreed to serve as Executive VicePresident and Chief Development Officer of the Company. All of the EmploymentAgreements terminate on May 20, 2008, but are subject to automatic 5-yearextensions unless the Company or the Named Executive Officer who is partythereto gives notice at least one year prior to the end of the then-currentterm or unless the Employment Agreement is otherwise terminated pursuant to theterms of such agreement. The Employment Agreements provide that the NamedExecutive Officers shall devote reasonable time and attention to the businessand affairs of the Company. Frank J. Fertitta III and Lorenzo J. Fertitta’sEmployment Agreements do not prohibit them from engaging in any business orassisting any other entity in competition with the Company during the term oftheir employment or at any time thereafter.

Each Employment Agreement provides for a base salary(to be reviewed annually for increase but not decrease), an annual cash bonusin an amount determined based on achievement of predetermined goals set by theGovernance and Compensation Committee, and the inclusion of the Named ExecutiveOfficer in all benefit plans and programs of the Company made available to theCompany’s Named Executive Officers or salaried employees generally. The basesalaries for the Named Executive Officers under their respective EmploymentAgreements effective April 1, 2006 are detailed in the “Compensation Discussionand Analysis” section.

The Employment Agreements also provide that the NamedExecutive Officers are entitled to certain other benefits and perquisites inaddition to those made available to Company management generally. These otherbenefits include participation in the SERP in the case of Frank J.Fertitta III and Lorenzo J. Fertitta, and participation in the SMRP in thecase of Messrs. Christenson, Warner and Nielson, participation in theCompany’s Special Long-Term Disability Plan, group health insurance coveragethrough the Company’s Exec-U-Care Medical Plan and supplemental life insurance.Lorenzo J. Fertitta and Mr. Warner also participate in the Company’s Long-TermStay-On Performance Incentive Plan.

For a discussion of thebenefits to be paid to the Named Executive Officers upon termination of theirEmployment Agreements, please see the section entitled “Potential Payments UponTermination of Employment or Change of Control”, below.

*SeparationAgreement and Release with Mr. Christenson*

On March 29, 2007, the Company and Mr. Christensonentered into a Separation Agreement and General Release (the “SeparationAgreement”), pursuant to which Mr. Christenson’s employment with theCompany terminated effective March 30, 2007. Under the terms of theSeparation Agreement, the Company shall provide Mr. Christenson with onemonth of base pay in the amount of $85,000, accrued vacation pay in the amountof $98,077 and, subject to certain terms and conditions contained therein, 

18

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continued group medicaland dental insurance coverages for Mr. Christenson and his dependentsuntil he reaches age 62.

The Separation Agreement also provides that all vestedCompany stock options held by Mr. Christenson as of the termination of hisemployment shall remain fully exercisable until the earlier of the closing date(the “Merger Closing Date”) of the transaction contemplated by the MergerAgreement dated February 23, 2007 between the Company and Fertitta ColonyPartners LLC (the “Merger Agreement”) and the expiration of Mr. Christenson’sterm of engagement under the Consulting Agreement entered into between Mr. Christensonand the Company which is described below. In addition, all Company restrictedstock held by Mr. Christenson shall continue to vest in accordance withthe terms of the applicable awards until the earlier of the Merger Closing Dateand the expiration of Mr. Christenson’s term of engagement under theConsulting Agreement. The Separation Agreement also provides that if the MergerAgreement is terminated in certain circumstances, the provisions of theSeparation Agreement and the Consulting Agreement shall terminate, and Mr. Christenson’sEmployment Agreement shall be restored as if his employment with the Companyhad not been terminated.

In addition to the benefits described above, theSeparation Agreement provides for a release by Mr. Christenson of anyclaims against the Company and its affiliates and subsidiaries, and each oftheir agents, employees, managers, representatives, officers, directors,advisors, successors and assigns, relating to his employment with the Companyor the termination of his employment with the Company.

In connection with theSeparation Agreement, on March 29, 2007, the Company and Mr. Christensonentered into a Consulting Agreement, pursuant to which Mr. Christensonagreed to provide consulting services to the Company until the earlier of theMerger Closing Date and March 31, 2009, unless the Consulting Agreement isotherwise terminated pursuant to the terms thereof. The Consulting Agreementprovides that the Company shall pay Mr. Christenson a consulting fee of$20,000 during his term of engagement thereunder.

*2005 StockCompensation Plan*

In May 2005, the stockholders approved and theCompany adopted the 2005 Stock Compensation Plan (the “2005 Plan”) whichprovides for grants of stock options, stock appreciation rights, restrictedstock awards, restricted stock units and other stock awards (collectively, the “Awards”).Individuals eligible to receive Awards under the 2005 Plan include employees,directors and independent contractors of the Company and its subsidiaries andother entities controlled by the Company. However, incentive stock options maybe granted only to an employee of the Company or a subsidiary of the Company.Upon adoption of the 2005 Plan, no additional grants of awards will be madeunder the following plans of the Company (the “Prior Plans”): (i) theIncentive Stock Option Plan, (ii) the Compensatory Stock Option Plan, (iii) theRestricted Share Plan, (iv) the Non-employee Director Stock Option Plan, (v) the1999 Compensatory Stock Option Plan and (vi) the 1999 Share Plan.

Under the 2005 Plan the maximum number of shares ofcommon stock that will be available for the grants of Awards is 3,829,671,which includes 3,000,000 new shares and 829,671 shares that were available forawards under the Prior Plans. The number of shares otherwise available for thegrant of Awards under the 2005 Plan will be increased by the number of sharessubject to awards granted under any of the Prior Plans that are currentlyoutstanding which are cancelled, terminated, or forfeited or expire after theeffective date of the 2005 Plan. Each share subject to an award of restrictedstock, restricted stock unit or other stock award shall reduce the sharesavailable for grant by 1.9 shares. Options are granted at the closing marketprice on the date of grant. The plan provides for a variety of vestingschedules, including immediate, 20% per year for five years, 10% per year for tenyears, and a cliff vest at the vesting date, to be determined at the time ofgrant. Generally, all options expire ten years from the date of grant. The 2005Plan will terminate ten years from the date of adoption or extension, unlessterminated earlier by the 

19

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Board of Directors, and nooptions or restricted shares may be granted under the 2005 Plan after suchdate.

In 2006, the Named Executive Officers receivedrestricted stock awards pursuant to the 2005 Plan described above. The numberof restricted stock awards that were granted to each Named Executive Officerare detailed in the Grants of Plan-Based Awards table. The material terms ofthe 2005 Plan related to recipients, grant timing, number of options, optionprice and duration are determined by the Governance and Compensation Committee,subject to certain limitations. Grants to Named Executive Officers during 2006were all in the form of restricted stock awards which vests at a rate of 10%per year over a ten-year period. The Named Executive Officers receivedquarterly dividends during 2006 on their unvested restricted stock awards onthe same basis as all stockholders of the Company and as all other employeesholding unvested restricted stock awards. For a more detailed discussion of howequity grants are determined and a description of the performance-basedconditions that such equity grants are subject to, see “Compensation Discussion &Analysis—Elements of Compensation—Long-Term Incentives.”

20

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**OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2006(a)**

The following table setsforth information concerning all unexercised stock options outstanding andunvested restricted stock awards for the Named Executive Officers as of December 31,2006.

|                       | ** ** | **Option Awards** | ** ** | **Stock Awards**                                                              | ** ** |
|-----------------------|------------|------------------------|------------|------------------------------------------------------------------------------------|------------|
| **Name**              | ** ** | ** **             | ** ** | **Number of  Securities  Underlying  Unexercised  Options  (#)  Exercisable** | ** ** | **Number of  Securities  Underlying  Unexercised  Options  (#)  Unexercisable** | ** ** | **Equity  Incentive  Plan Awards:  Number of  Securities  Underlying  Unexercised  Unearned  Options  (#)** | ** ** | **Option  Exercise  Price  ($)** | ** ** | **Option  Expiration  Date** | ** ** | **Number of  Shares or  Units of  Stock That  Have Not  Vested  (#)** | ** ** | **Market  Value of  Shares or  units of  Stock That  Have Not  Vested  ($) (b)** | ** ** | **Equity  Incentive  Plan Awards:  Number of  Unearned  Shares,  Units or  Other Rights  That Have  Not Vested  (#)** | ** ** | **Equity  Incentive  Plan Awards:  Market or  Payout Value  of Unearned  Shares,  Units or  Other Rights  That Have  Not Vested  ($)** | ** ** |
| Frank J. Fertitta III |       |                   | 159,500    |                                                                               |       |   | — |   |   |   | — |   |   |   | 13.33 |   |   |   | 7/15/2012 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |
|                       |       |                   | 45,000     |                                                                               |       |   | — |   |   |   | — |   |   |   | 14.67 |   |   |   | 7/15/2012 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |
|                       |       |                   | 199,400    |                                                                               |       |   | — |   |   |   | — |   |   |   | 14.00 |   |   |   | 3/14/2011 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |
|                       |       |                   | 260,000    |                                                                               |       |   | — |   |   |   | — |   |   |   | 8.60 |   |   |   | 12/13/2011 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |
|                       |       |                   | —     |                                                                               |       |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 67,500 | (c) |   |   | 5,512,725 |   |   |   | — |   |   |   | — |   |   |
|                       |       |                   | —     |                                                                               |       |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 112,500 | (d) |   |   | 9,187,875 |   |   |   | — |   |   |   | — |   |   |
|                       |       |                   | —     |                                                                               |       |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 21,378 | (e) |   |   | 1,745,941 |   |   |   | — |   |   |   | — |   |   |
|                       |       |                   | —     |                                                                               |       |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 22,488 | (f) |   |   | 1,836,595 |   |   |   | — |   |   |   | — |   |   |
|                       |       |                   | —     |                                                                               |       |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 240,000 | (g) |   |   | 19,600,800 |   |   |   | — |   |   |   | — |   |   |
|                       |       |                   | —     |                                                                               |       |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 325,000 | (h) |   |   | 26,542,750 |   |   |   | — |   |   |   | — |   |   |
| Glenn C. Christenson  |       |                   | 30,000     |                                                                               |       |   | — |   |   |   | — |   |   |   | 14.00 |   |   |   | 3/14/2011 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |
|                  |       |                   | 80,000     |                                                                               |       |   | — |   |   |   | — |   |   |   | 8.60 |   |   |   | 12/13/2011 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |
|                  |       |                   | —     |                                                                               |       |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 22,500 | (c) |   |   | 1,837,575 |   |   |   | — |   |   |   | — |   |   |
|                  |       |                   | —     |                                                                               |       |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 37,500 | (d) |   |   | 3,062,625 |   |   |   | — |   |   |   | — |   |   |
|                  |       |                   | —     |                                                                               |       |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 8,612 | (e) |   |   | 703,342 |   |   |   | — |   |   |   | — |   |   |
|                  |       |                   | —     |                                                                               |       |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 4,503 | (f) |   |   | 367,760 |   |   |   | — |   |   |   | — |   |   |
|                  |       |                   | —     |                                                                               |       |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 80,000 | (g) |   |   | 6,533,600 |   |   |   | — |   |   |   | — |   |   |
|                  |       |                   | —     |                                                                               |       |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 125,000 | (h) |   |   | 10,208,750 |   |   |   | — |   |   |   | — |   |   |
| Lorenzo J. Fertitta   |       |                   | 341,400    |                                                                               |       |   | — |   |   |   | — |   |   |   | 13.50 |   |   |   | 7/24/2010 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |
|                       |       |                   | 60,000     |                                                                               |       |   | — |   |   |   | — |   |   |   | 14.00 |   |   |   | 3/14/2011 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |
|                       |       |                   | 260,000    |                                                                               |       |   | — |   |   |   | — |   |   |   | 8.60 |   |   |   | 12/13/2011 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |
|                       |       |                   | —     |                                                                               |       |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 75,000 | (d) |   |   | 6,125,250 |   |   |   | — |   |   |   | — |   |   |
|                       |       |                   | —     |                                                                               |       |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 16,000 | (e) |   |   | 1,306,720 |   |   |   | — |   |   |   | — |   |   |
|                       |       |                   | —     |                                                                               |       |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 11,657 | (f) |   |   | 952,027 |   |   |   | — |   |   |   | — |   |   |
|                       |       |                   | —     |                                                                               |       |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 240,000 | (g) |   |   | 19,600,800 |   |   |   | — |   |   |   | — |   |   |
|                       |       |                   | —     |                                                                               |       |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 325,000 | (h) |   |   | 26,542,750 |   |   |   | — |   |   |   | — |   |   |
| William W. Warner     |       |                   | 20,000     |                                                                               |       |   | — |   |   |   | — |   |   |   | 14.00 |   |   |   | 3/14/2011 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |
|                  |       |                   | 30,000     |                                                                               |       |   | — |   |   |   | — |   |   |   | 8.60 |   |   |   | 12/13/2011 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |
|                  |       |                   | 40,000     |                                                                               |       |   | 40,000 | (i) |   |   | — |   |   |   | 13.90 |   |   |   | 3/14/2012 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |
|                  |       |                   | —     |                                                                               |       |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 50,000 | (i) |   |   | 4,083,500 |   |   |   | — |   |   |   | — |   |   |
|                  |       |                   | —     |                                                                               |       |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 7,744 | (e) |   |   | 632,452 |   |   |   | — |   |   |   | — |   |   |
|                  |       |                   | —     |                                                                               |       |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 4,050 | (f) |   |   | 330,764 |   |   |   | — |   |   |   | — |   |   |
|                  |       |                   | —     |                                                                               |       |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 160,000 | (g) |   |   | 13,067,200 |   |   |   | — |   |   |   | — |   |   |
|                  |       |                   | —     |                                                                               |       |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 200,000 | (h) |   |   | 16,334,000 |   |   |   | — |   |   |   | — |   |   |
| Scott M Nielson       |       |                   | 17,207     |                                                                               |       |   | — |   |   |   | — |   |   |   | 15.29 |   |   |   | 12/7/2009 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |
|                       |       |                   | 50,000     |                                                                               |       |   | — |   |   |   | — |   |   |   | 14.00 |   |   |   | 3/14/2011 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |
|                       |       |                   | 150,000    |                                                                               |       |   | — |   |   |   | — |   |   |   | 8.60 |   |   |   | 12/13/2011 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |
|                       |       |                   | —     |                                                                               |       |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 18,000 | (c) |   |   | 1,470,060 |   |   |   | — |   |   |   | — |   |   |
|                       |       |                   | —     |                                                                               |       |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 25,000 | (d) |   |   | 2,041,750 |   |   |   | — |   |   |   | — |   |   |
|                       |       |                   | —     |                                                                               |       |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 7,744 | (e) |   |   | 632,452 |   |   |   | — |   |   |   | — |   |   |
|                       |       |                   | —     |                                                                               |       |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 3,855 | (f) |   |   | 314,838 |   |   |   | — |   |   |   | — |   |   |
|                       |       |                   | —     |                                                                               |       |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 80,000 | (g) |   |   | 6,533,600 |   |   |   | — |   |   |   | — |   |   |
|                       |       |                   | —     |                                                                               |       |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 125,000 | (h) |   |   | 10,208,750 |   |   |   | — |   |   |   | — |   |   |
|                       |            |                        |            |                                                                                    |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

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(a)                 If the Merger Agreement described in Item 13 isconsummated, all outstanding stock options and unvested restricted stock awardswill become vested as of closing.

(b)                Market value is calculated using the closing marketprice of our common stock on December 29, 2006 which was $81.67.

(c)                 Restricted stock awards vest in equal increments overthe next three years on December 7.

(d)                Restricted stock awards vest in equal increments overthe next five years on March 14.

(e)                 Restricted stock awards vest in equal increments overthe next two years on December 19.

(f)                  Restricted stock awards vest in equal increments overthe next three years on January 28.

(g)                 Restricted stock awards vest in equal increments overthe next eight years on July 13.

(h)                Restricted stock awards vest in equal increments overthe next ten years on January 13.

(i)                   Options and restricted stock awards vested on March 14,2007.

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**OPTION EXERCISESAND STOCK VESTED DURING 2006**

The following table setsforth information concerning****the valuerealized from the exercise of options and the vesting of restricted stock forthe Named Executive Officers for the year ended December 31, 2006.

| ** **             | ** ** | **Option Awards** | ** ** | **Stock Awards**                                                        | ** ** |
|------------------------|------------|------------------------|------------|------------------------------------------------------------------------------|------------|
| **Name**               | ** ** | ** **             | ** ** | **Number of Shares  Acquired on Exercise  (#) (a)** | ** ** | **Value Realized  on Exercise  ($) (b)** | ** ** | **Number of Shares  Acquired on Vesting  (#) (c)** | ** ** | **Value Realized  on Vesting  ($) (d)** | ** ** |
| Frank J. Fertitta  III |       |                   | —     |                                                                         |       |   | — |   |   |   | 123,185 |   |   |   | 9,215,287 |   |   |
| Glenn C.  Christenson  |       |                   | —     |                                                                         |       |   | — |   |   |   | 45,806 |   |   |   | 3,470,647 |   |   |
| Lorenzo J.  Fertitta   |       |                   | —     |                                                                         |       |   | — |   |   |   | 86,885 |   |   |   | 6,375,173 |   |   |
| William W. Warner      |       |                   | 30,000     |                                                                         |       |   | 1,783,443 |   |   |   | 35,222 |   |   |   | 2,507,862 |   |   |
| Scott M Nielson        |       |                   | —     |                                                                         |       |   | — |   |   |   | 41,157 |   |   |   | 3,117,181 |   |   |
|                        |            |                        |            |                                                                              |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

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(a)           Represents stockoptions exercised during 2006.

(b)          Represents thedifference between the exercise price and the closing market price of theCompany's common stock on the date of exercise multiplied by the number ofstock options exercised.

(c)           Represents restricted stockawards that vested during 2006.

(d)          Thevalue realized is the closing market price of our common stock on the date ofvesting multiplied by the number of shares vested.

**PENSIONBENEFITS AT DECEMBER 31, 2006**

The following tableprovides information as of December 31, 2006 with respect to the SupplementalExecutive Retirement Plan (the “SERP”) and the Supplemental ManagementRetirement Plan (the “SMRP”) for each of the Named Executive Officers.

| **Name**               | ** ** | ** ** | ** ** | **Plan Name  (a)** | ** ** | **Number of Years  Credited Service  (#) (b)** | ** ** | **Present Value of  Accumulated Benefit  ($)** | ** ** | **Payments During  Last Fiscal Year  ($)** | ** ** |
|------------------------|------------|------------|------------|-------------------------|------------|--------------------------------------------------------------------|------------|---------------------------------------------------------------|------------|-----------------------------------------------------------|------------|
| Frank J. Fertitta  III |       |       | SERP       |                    |       |                                                               | 12         |                                                          |       |                                                      | 5,942,311  |   |   |   | — |   |   |
| Glenn C.  Christenson  |       |       | SMRP       |                    |       |                                                               | 12         |                                                          |       |                                                      | 4,141,370  |   |   |   | — |   |   |
| Lorenzo J.  Fertitta   |       |       | SERP       |                    |       |                                                               | 6          |                                                          |       |                                                      | 1,550,556  |   |   |   | — |   |   |
| William W. Warner      |       |       | SMRP       |                    |       |                                                               | 11         |                                                          |       |                                                      | 890,324    |   |   |   | — |   |   |
| Scott M Nielson        |       |       | SMRP       |                    |       |                                                               | 12         |                                                          |       |                                                      | 1,573,605  |   |   |   | — |   |   |

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(a)           TheCompany adopted the SERP, effective November 30, 1994 and as amended on January21, 2005, with the Chief Executive Officer and the President as the soleparticipants. The remaining Named Executive Officers are participants in theSMRP which was also effective November 30, 1994.

(b)          Numberof years of credited service is calculated from the later of the adoption ofthe SERP and SMRP or the date the Named Executive Officer became a participantin the SERP or SMRP, as applicable, and does not reflect the Named ExecutiveOfficers' actual years of service with the Company.

**Discussion of Pension Benefits Table**

*Defined Benefit Plans*

The Company maintains twodefined benefit plans for its Named Executive Officers: the SERP, in whichFrank J. Fertitta III and Lorenzo J. Fertitta were participants during 2006,and the SMRP, in which the other Named Executive Officers were participantsduring 2006.

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*SupplementalExecutive Retirement Plan*

Effective as of November 30, 1994, the Companyadopted the SERP, which is a defined benefit plan. On January 21, 2005,the Company amended the SERP to (i) increase the Early Retirement Date (asdefined in the SERP) for participants from age 45 to age 50, (ii) increasethe Normal Retirement Date (as defined in the SERP) for participants from age55 to age 60, (iii) add the President of the Company as a participant, and(iv) include the average annual bonus (in addition to base salary) earnedby participants for the three most recent fiscal years in determining FinalAnnual Compensation (as defined in the SERP).

Table I below sets forththe total benefits payable to the Chief Executive Officer and the President asthe sole participants in the SERP (each, a “SERP Participant”). Amounts shownin Table I represent the annual benefits to which each SERP Participant isentitled under the SERP.

**TABLEI***

| **Remuneration ($)** | ** ** | ** ** | ** ** | **At Least 60 Years  Old and 10 or More  Years of Service** | ** ** |
|---------------------------|------------|------------|------------|----------------------------------------------------------------------------------------------------------|------------|
| 2,500,000                 |       |       | 1,250,000  |                                                                                                     |       |
| 2,750,000                 |       |       | 1,375,000  |                                                                                                     |       |
| 3,000,000                 |       |       | 1,500,000  |                                                                                                     |       |
| 3,250,000                 |       |       | 1,625,000  |                                                                                                     |       |
| 3,500,000                 |       |       | 1,750,000  |                                                                                                     |       |
| 3,750,000                 |       |       | 1,875,000  |                                                                                                     |       |
| 4,000,000                 |       |       | 2,000,000  |                                                                                                     |       |
| 4,250,000                 |       |       | 2,125,000  |                                                                                                     |       |

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*                    Assumes normalretirement, which means retirement at age 60.

Subject to the limitations set forth below, the SERPprovides a monthly supplemental retirement benefit (the “SERP SRB”), inaddition to any other qualified or non-qualified retirement plan of theCompany, equal to one-twelfth of the product of (a) 50% and (b) theaverage monthly regular base salary paid to the SERP Participant for the 36months immediately preceding (but not including) the month in which the SERPParticipant’s retirement or other termination of employment occurred,multiplied by 12), as determined under the SERP, as amended; provided, however,that the average annual bonus shall be limited to a maximum amount equal to100% of the product of (i) the average monthly regular base salary paid tothe SERP Participant for the 36 months immediately preceding (but not including)the month in which the SERP Participant’s retirement or other termination ofemployment occurred), multiplied by (ii) twelve. Amounts shown in Table Irepresent the annual benefits to which each SERP Participant is entitled underthe SERP, as amended, which amounts are then reduced by monthly benefitspayable under all qualified and non-qualified defined benefit retirement plansof the Company. The amounts listed in Table I are not currently subject to anydeductions for social security because the Company currently has no otherdefined benefit plans. Each SERP Participant will become vested in accrued SERPSRBs upon the later of (a) the attainment of age 50 and (b) thecompletion of ten years of service after the effective date of the plan, or, ifa Change of Control (as defined in the SERP) occurs, the SERP Participants willbecome fully vested in the SERP SRB. If the Merger Agreement described inItem 13 is consummated, such Merger will not be a Change of Control forpurposes of the SERP.

The SERP SRB is payable upon the later of the date onwhich the SERP Participant attains age 60 or the SERP Participant’s terminationof employment. Alternatively, the SERP Participant may elect to commencereceiving the SERP SRB upon the later of the date on which the SERP Participantattains age 50 or the SERP Participant’s termination of employment. In theevent of such an early retirement election, 

23

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the SERP SRB shall bereduced by 6% of such otherwise payable benefit for each year that the SERPParticipant is less than age 60.

The SERP SRB payments willbe made for no less than 15 years after the date on which the SERP Participantbegins to receive payments; provided, however, that in the event of a Change inControl (as defined in the Employment Agreement of the SERP Participant), theSERP Participant will be entitled to receive, in lieu of any other paymentsunder the SERP, a lump-sum payment of the economic equivalent of the SERPParticipant receiving payments under the SERP for a period of 15 years (withsuch amount determined as if the SERP Participant were immediately eligible forretirement under the SERP without penalty for early retirement). If the SERPParticipant dies after he becomes vested and prior to the date on which theSERP Participant begins to receive SERP SRB payments, the Company will pay asurvivors benefit to the SERP Participant’s spouse equal to the amount thatwould have been payable to such spouse if the SERP Participant had commencedreceiving the SERP SRB at age 60 in the form of a joint and 50% survivorannuity. The Company has no duty to set aside or invest any amounts under or inrespect to the SERP.

*SupplementalManagement Retirement Plan*

EffectiveNovember 30, 1994, the Company adopted the SMRP, which is a definedbenefit plan. Table II below sets forth the total benefits payable to the NamedExecutive Officers (other than the Chief Executive Officer and the President)selected by the Governance and Compensation Committee to participate in theSMRP. Amounts shown in Table II represent the annual benefits to which thecovered Named Executive Officers are entitled under the SMRP.

**TABLEII***

| **Remuneration  ($)** | ** ** | ** ** | ** ** | **At Least 60 Years  Old and 10 or More  Years of Service** | ** ** |
|---------------------------------|------------|------------|------------|----------------------------------------------------------------------------------------------------------|------------|
|   750,000             |       |       | 300,000    |                                                                                                     |       |
|   850,000             |       |       | 340,000    |                                                                                                     |       |
|   950,000             |       |       | 380,000    |                                                                                                     |       |
| 1,050,000                       |       |       | 420,000    |                                                                                                     |       |
| 1,150,000                       |       |       | 460,000    |                                                                                                     |       |
| 1,250,000                       |       |       | 500,000    |                                                                                                     |       |

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*                    Assumes normalretirement, which means retirement at age 60.

The SMRP provides a monthly supplemental retirementbenefit (the “SMRP SRB”), in addition to any other qualified or non-qualifiedretirement plan of the Company, equal to one-twelfth of the product of(a) 40% and (b) the Named Executive Officer’s final annualcompensation, as determined under the SMRP, which amounts are then reduced bymonthly benefits payable under all qualified and non-qualified defined benefitretirement plans of the Company. The amounts shown in Table II are notcurrently subject to any deductions for social security or other offset amountsbecause the Company currently has no other defined benefit plans. The NamedExecutive Officers will become vested in the accrued SMRP SRBs upon the laterof (a) the attainment of age 55 and (b) the completion of ten yearsof service after the effective date of the plan, or, if a Change of Control (asdefined in the SMRP) occurs, the Named Executive Officer will become fullyvested in the SMRP SRB. If the Merger Agreement described in Item 13 isconsummated, such Merger will not be a Change of Control for purposes of the SMRP.

The SMRP SRB is payable upon the later of the date onwhich the Named Executive Officer attains age 60 or the Named ExecutiveOfficer’s termination of employment. Alternatively, the Named Executive Officermay elect to commence receiving the SMRP SRB upon the later of the date onwhich the Named 

24

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Executive Officer attainsage 55 or the Named Executive Officer’s termination of employment. In the eventof an early retirement election, the SMRP SRB shall be reduced by 6% of suchotherwise payable benefit for each year that the Named Executive Officer is youngerthan age 60.

The SMRP SRB payments willbe made for no less than 15 years after the date on which the Named ExecutiveOfficer begins to receive payments. If the Named Executive Officer dies afterbecoming vested and prior to the date on which the Named Executive Officerbegins to receive SMRP SRB payments, the Company will pay a survivor’s benefitto the Named Executive Officer’s spouse equal to the amount that would havebeen payable to such spouse if the Named Executive Officer had commencedreceiving the SMRP SRB at age 60 in the form of a joint and 50% survivorannuity. The Company has no duty whatsoever to set aside or invest any amountsunder or in respect to the SMRP.

*Assumptions Made inCalculating the Present Value of Accumulated Pension Benefits*

In order to calculate thepresent value of accumulated benefits, the following assumptions were made:

*Assumed RetirementAge*

The assumed retirement ageis the normal retirement age defined in the applicable plan (age 60), and theearliest unreduced retirement age, if applicable. Since unreduced benefits arenot available prior to age 60 and all Named Executive Officers are under age60, age 60 was used for all Named Executive Officers.

*Discount Rates*

The discount rates used incalculating year-end 2006 and 2005 present values are 5.75% and 5.50%,respectively.

*Mortality*

The assumed mortality isthe RP-2000 mortality table for males and females, as developed andapproved by the Society of Actuaries, projected for 15 years of mortalityimprovement with a white collar adjustment. Because pre-retirement decrementsare not included in the calculation, the mortality assumption affects onlypost-retirement present values.

*Form ofPayment*

Consistent withassumptions used for financial statement purposes, 100% of married retirees areassumed to elect unreduced 50% joint and survivor annuity, with 15 years ofguaranteed payments. Actual spouse data was used in calculating present values.For unmarried participants, the annuity is a single life annuity with 15 yearsof guaranteed payments.

*Present Values*

Present values are calculated using the assumedretirement age, discount rates, mortality table and form of payment assumptionsdescribed above; no decrements are assumed prior to retirement. Further,benefits are based on average earnings on the valuation date, withoutprojection. The resulting benefit is prorated for current service as aparticipant divided by projected service through vesting date.

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**NONQUALIFIED DEFERRED COMPENSATION IN 2006**
| Name                  | ** ** | ** ** | ** ** | **Plan (a)** | ** ** | **Executive  Contributions  in Last FY  ($) (b)** | ** ** | **Company  Contributions  in Last FY  ($) (c)** | ** ** | **Aggregate  Earnings in  Last FY  ($) (d)** | ** ** | **Aggregate  Withdrawals/  Distributions ($)** | ** ** | **Aggregate  Balance at  Last FYE ($)** | ** ** |
|-----------------------|------------|------------|------------|-------------------|------------|------------------------------------------------------------------|------------|----------------------------------------------------------------|------------|-------------------------------------------------------------|------------|-----------------------------------------------------|------------|--------------------------------------------------------|------------|
| Glenn C.  Christenson |       | DCPE       |       |              | —     |                                                             |       |                                                           | —     |                                                        |       |                                                | 1,089,393  |                                                   |       |   | — |   |   | 14,071,813 |   |
| William W. Warner     |       | DCPM       |       |              | 231,346    |                                                             |       |                                                           | 87,115     |                                                        |       |                                                | 54,253     |                                                   |       |   | — |   |   | 743,978 |   |
| Scott M Nielson       |       | DCPM       |       |              | 69,692     |                                                             |       |                                                           | 69,692     |                                                        |       |                                                | 23,909     |                                                   |       |   | — |   |   | 323,448 |   |
| Scott M Nielson       |       | DCPE       |       |              | —     |                                                             |       |                                                           | —     |                                                        |       |                                                | 682,752    |                                                   |       |   | — |   |   | 9,517,141 |   |

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(a)           The Company offers boththe DCPE and DCPM.  See furtherdiscussion on details of the plans below.

(b)          Amounts include salarydeferred of $171,346 for Mr. Warner and $45,692 for Mr. Nielson as well asbonuses deferred of $60,000 and $24,000, respectively. Amounts are included inthe respective columns as it relates to salary and bonus for the respectiveNamed Executive Officer in the Summary Compensation Table.

(c)           Amounts included inSummary Compensation Table as Other Compensation for the respective NamedExecutive Officer.

(d)          Amountrepresents change in market value for investments. None of these amountsincluded in this column are included in the Summary Compensation Table.

**Discussion ofNonqualified Deferred Compensation Table**

In addition to the defined benefit plans that itmaintains for its executives, the Company also maintains two deferredcompensation plans in which the Named Executive Officers were eligible toparticipate in 2006: the Deferred Compensation Plan For Executives (the “DCPE”),in which Messrs. Christenson and Nielson have balances and the DeferredCompensation Plan For Management (the “DCPM”), which Messrs. Warner andNielson are contributing to.

The DCPE, in effect as of November 30, 1994, as amendedand restated as of September 12, 2001 and as further amended as ofDecember 4, 2002, is a deferred compensation plan for executive officerswhose base salaries are a rate in excess of the amount specified in Section 401(a) (17)of the Internal Revenue Code of 1986, as amended (the “Code”), and who areselected for participation by the Governance and Compensation Committee. Theseexecutive officers may defer up to 50% of their regular base salary and 100% ofany special and/or discretionary bonuses and receive a Company match of up to5% of any base salary and bonus deferred under the DCPE. If the executiveofficer is terminated without cause or if a Change of Control (as defined inthe DCPE) occurs prior to completion of five years of continuous service, anyaccrued balance existing under the matching and supplemental accounts becomesfully vested as of the date of such event. If the Merger Agreement described inItem 13 is consummated, such Merger will not be a Change of Control forpurposes of the DCPE. Hardship distributions are permitted under the plan inthe event of an unforeseeable emergency, and will be limited to the amountshown to be necessary to meet the emergency. An executive officer may specify adate, no earlier than 13 months after the date of such election, on which thevested accrued balances of his accounts under the DCPE will be paid. Absentsuch election, the vested accrued balances will be paid following the terminationof his employment with the Company.

26

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As of January 2005, deferrals were no longerbeing made into the DCPE as the Named Executive Officers elected to participatein the DCPM instead. As of December 31, 2006, Messrs. Christenson andNielson were the only Named Executive Officers with balances in the DCPE. Theparticipants’ account balances are invested in various money market funds,stocks (excluding Company common stock), bonds, government securities andmutual funds.

The DCPM, in effect as of November 30, 1994 andamended and restated as of January 1, 2001, is a deferred compensationplan for a select group of management and highly compensated employees who areselected for participation by the Governance and Compensation Committee.Participants may defer up to 90% of their regular base salary and 100% of anyspecial and/or discretionary bonuses and receive a Company match of up to 5% ofany base salary and bonus deferred under the DCPM. If the Named ExecutiveOfficer is terminated, any accrued balance existing under the matching andsupplemental accounts shall be paid to the Named Executive Officer as soon aspracticable after such termination. Hardship distributions are permitted underthe plan in the event of an unforeseeable emergency, and will be limited to theamount shown to be necessary to meet the emergency. The Named Executive Officerscurrently participating in the plan are Messrs. Warner and Nielson.

All contributions to theDCPM are invested in multiples of 1% as designated by the participant. Aparticipant may direct his or her contributions into a select group ofinvestment options, one of which is Company common stock, but may only investup to 20% of his or her account balance in Company common stock.

27

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**POTENTIAL PAYMENTSUPON TERMINATION OF EMPLOYMENT OR CHANGE OF CONTROL**

The following tables set forth the estimated currentvalue of benefits that could be paid to each of our Named Executive Officersupon the occurrence of various termination events. The tables reflect theamounts that would be payable under the various arrangements if the event inquestion occurred as of December 31, 2006. Actual amounts payable upon atriggering event could differ materially from the amounts reported in thefollowing table.

**Frank J. Fertitta III**
| Executive Benefits and  Payments Upon  Termination | ** ** | **Retirement  ($) (a)** | ** ** | **Death ($)** | ** ** | **Disability ($)** | ** ** | **Terminated  without Cause  prior to  Change in  Control ($)** | ** ** | **Change in  Control — No  Termination  ($) (b)** | ** ** | **Change in  Control —  Termination  without  Cause  ($) (b)** | ** ** | **Change in  Control —  Termination  by Executive  without Good  Reason ($)  (b) (c)** | ** ** |
|-------------------------------------------------------------------|------------|------------------------------|------------|--------------------|------------|-------------------------|------------|-------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------|------------|------------------------------------------------------------------------------------|------------|---------------------------------------------------------------------------------------------------------------------------|------------|
| Salary (d)                                                        |       |                         | —     |               |       | 4,500,000               |       |                                                                                | 4,500,000  |                                                                       |       |                                                                               | 19,800,000 |                                                                                                                      |       |   | 2,362,500 |   |   |   | 19,800,000 |   |   |   | 15,840,000 |   |   |
| Bonus                                                             |       |                         | —     |               |       | 2,250,000               |       |                                                                                | 2,250,000  |                                                                       |       |                                                                               | 2,250,000  |                                                                                                                      |       |   | 2,835,000 |   |   |   | 2,700,000 |   |   |   | 2,700,000 |   |   |
| Restricted Stock:                                                 |       |                         |       |               |       |                    |       |                                                                                |       |                                                                       |       |                                                                               |       |                                                                                                                      |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Vesting Accelerated (e)                            |       |                         | —     |               |       | 64,426,686              |       |                                                                                | 64,426,686 |                                                                       |       |                                                                               | 64,426,686 |                                                                                                                      |       |   | 64,426,686 |   |   |   | 64,426,686 |   |   |   | 64,426,686 |   |   |
| **Benefits and Perquisites**                                      |       |                         |       |               |       |                    |       |                                                                                |       |                                                                       |       |                                                                               |       |                                                                                                                      |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Post-employment Health Care  (f)                                  |       |                         | —     |               |       | —                  |       |                                                                                | 45,000     |                                                                       |       |                                                                               | 45,000     |                                                                                                                      |       |   | — |   |   |   | 45,000 |   |   |   | 45,000 |   |   |
| Supplemental Executive Retirement  Plan (g)                       |       |                         | —     |               |       | —                  |       |                                                                                | —     |                                                                       |       |                                                                               | —     |                                                                                                                      |       |   | 1,852,019 |   |   |   | 1,852,019 |   |   |   | — |   |   |
| Life Insurance (h)                                                |       |                         | —     |               |       | 70,000,000              |       |                                                                                | —     |                                                                       |       |                                                                               | —     |                                                                                                                      |       |   | 220,000 |   |   |   | 220,000 |   |   |   | — |   |   |

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(a)           Frank J.Fertitta III was not eligible to receive any retirement benefits as of December 31,2006.

(b)           If the MergerAgreement described in Item 13 is consummated, such Merger will not be a Changein Control of the Company for purposes of Frank J. Fertitta III’s EmploymentAgreement.

(c)            If thetermination by Frank J. Fertitta III without Good Reason (as defined inhis Employment Agreement) occurred anytime after the first twelve monthsfollowing a Change in Control, he would be entitled to a salary of $19.8million.

(d)          In the event ofdeath or disability, Frank J. Fertitta III or beneficiary would receivehis currently month salary for a period of 24 months. Amounts for death ordisability represent Frank J. Fertitta III’s monthly salary for the entire24 month period.

(e)           Amount isrepresentative of the market value of Frank J. Fertitta III’s unvestedrestricted stock awards which is based on the closing market price of theCompany’s stock on December 29, 2006 (the last day of trading for 2006). Thevesting of all restricted stock awards will be accelerated upon consummation ofthe Merger described in Item 13.

(f)             Frank J.Fertitta III is entitled to continuation of benefits for a period of 60months or a value-equivalent lump-sum payment. Amount is estimated based onprior year annual costs related to the Exec-U-Care program and represents theannual costs.

(g)           The SERPsupplemental retirement benefit payments will be made for no less than 15 yearsafter the date on which Frank J. Fertitta III begins to receive payments;provided, however, that in the event of a Change in Control (as defined in his EmploymentAgreement), Frank J. Fertitta III will be entitled to receive, in lieu ofanother payments under the SERP, a lump-sum payment of the economic equivalentof the SERP Participant receiving payments under the SERP for a period of 15years. Amount represents the annual payment to be paid to Frank J. Fertitta III.

(h)          In the event ofdeath a payment of $70.0 million will be made to the designated beneficiaryunder a third party insurance policy. Amounts for benefits provided in the caseof a Change in Control are estimated based on 2006 premiums paid by the Companyand represents the annual costs.

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**Glenn C.Christenson**
| Executive Benefits and  Payments Upon  Termination (a) | ** ** | ** ** | ** ** | **Retirement  ($)** | ** ** | **Death  ($)** | ** ** | **Disability  ($)** | ** ** | **Terminated  without Cause  prior to  Change in  Control ($)** | ** ** | **Change in  Control — No  Termination  ($) (b)** | ** ** | **Change in  Control —  Termination  without  Cause  ($) (b) (c)** | ** ** | **Change in  Control —  Termination  by Executive  without Good  Reason  ($) (b) (d)** | ** ** |
|----------------------------------------------------------------------------|------------|------------|------------|---------------------|------------|----------------|------------|---------------------|------------|-------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------|------------|---------------------------------------------------------------------------------------------|------------|---------------------------------------------------------------------------------------------------------------------------|------------|
| Salary (e)                                                                 |       |       | —     |                |       | —         |       |                | —     |                                                                                |       |                                                                       | 4,896,000  |                                                                                        |       |                                                                                                                      | —     |   |   |   | 4,896,000 |   |   |   | 4,896,000 |   |   |   |
| Bonus                                                                      |       |       | —     |                |       | 510,000        |       |                | 510,000    |                                                                                |       |                                                                       | 510,000    |                                                                                        |       |                                                                                                                      | 510,000    |   |   |   | 510,000 |   |   |   | 510,000 |   |   |   |
| Restricted  Stock:                                                         |       |       |       |                |       |           |       |                |       |                                                                                |       |                                                                       |       |                                                                                        |       |                                                                                                                      |       |   |   |   |   |   |   |   |   |   |   |   |
| Vesting Accelerated (f)                                                    |       |       | —     |                |       | —         |       |                | —     |                                                                                |       |                                                                       | —     |                                                                                        |       |                                                                                                                      | 22,713,652 |   |   |   | 22,713,652 |   |   |   | 22,713,652 |   |   |   |
| **Benefits and Perquisites**                                               |       |       |       |                |       |           |       |                |       |                                                                                |       |                                                                       |       |                                                                                        |       |                                                                                                                      |       |   |   |   |   |   |   |   |   |   |   |   |
| Post-employment Health Care (g)                                       |       |       | —     |                |       | —         |       |                | 15,000     |                                                                                |       |                                                                       | 15,000     |                                                                                        |       |                                                                                                                      | —     |   |   |   | 15,000 |   |   |   | 15,000 |   |   |   |
| Supplemental Management  Retirement Plan (h)                               |       |       | 280,688    |                |       | —         |       |                | —     |                                                                                |       |                                                                       | —     |                                                                                        |       |                                                                                                                      | —     |   |   |   | 336,154 |   |   |   | 336,154 |   |   |   |
| Special Long-Term  Disability Plan (i)                                     |       |       | —     |                |       |           |       |                | 1,592,250  |                                                                                |       |                                                                       | —     |                                                                                        |       |                                                                                                                      | —     |   |   |   | — |   |   |   | — |   |   |   |
| Life Insurance (j)                                                         |       |       | —     |                |       | 7,500,000      |       |                | —     |                                                                                |       |                                                                       | —     |                                                                                        |       |                                                                                                                      | —     |   |   |   | 25,000 |   |   |   | 25,000 |   |   |   |

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(a)           On March 29, 2007, theCompany and Mr. Christenson entered into a Separation Agreement andGeneral Release (the “Separation Agreement”), pursuant to which Mr. Christenson’semployment with the Company terminated effective March 30, 2007. TheSeparation Agreement provides that if the Merger Agreement described in Item 13is terminated in certain circumstances, the provisions of the SeparationAgreement shall terminate, and Mr. Christenson’s Employment Agreementshall be restored as if his employment with the Company had not beenterminated. The figures set forth in this table are calculated without regardto the Separation Agreement.

(b)           If the Merger Agreementdescribed in Item 13 is consummated, such Merger will not be a Change inControl of the Company for purposes of Mr. Christenson’s Employment Agreement.

(c)            Benefits are payable ifwithin five years following a Change in Control Mr. Christenson’semployment is terminated by the Company without Cause or by Mr. Christensonfor Good Reason (as each term is defined in his Employment Agreement).

(d)          Benefits are payable if Mr. Christensonterminates his employment with Good Reason within 90 days following the firstanniversary of a Change in Control.

(e)           In the event of terminationafter a Change in Control, Mr. Christenson would receive a lump sumpayment equal to the greater of (i) three times 160% of his base salary atthe time of the Change in Control or (ii) three times 160% of his basesalary at the time of termination of his employment.

(f)             Amount is representative ofthe market value of Mr. Christenson’s unvested restricted stock awardswhich is based on the closing market price of the Company’s stock on December 29,2006 (the last day of trading for 2006). The vesting of all restricted stockawards will be accelerated upon consummation of the Merger described in Item 13.

(g)           Mr. Christenson isentitled to continuation of benefits for a period of 36 months or avalue-equivalent lump-sum payment. Amount is estimated based on prior yearannual costs related to the Exec-U-Care program and represents the annual costs.

(h)          Amount represents reducedannual benefit payable as a 50% joint and survivor annuity with 15 years ofguaranteed payments. Mr. Christenson will be eligible for unreducedbenefits from the SMRP are age 60. In the case of a Change in Control theamount represents the annual benefit payable as a 50% joint and survivorannuity with 15 years of guaranteed payments beginning at age 60.

(i)              Amount represents 66% of theaverage base salary and bonus for the two plan years immediately preceding (butnot including) the year in which Mr. Christenson’s employment isterminated due to disability. Benefit will be reduced by any benefit Mr. Christensonreceives from all other disability plans sponsored by the Company, if any.

(j)              In the event ofdeath a payment of $7.5 million will be made to the designated beneficiaryunder a third party insurance policy. Amounts for benefits provided in the caseof a Change in Control are estimated based on 2006 premiums paid by the Companyand represents the annual costs.

29

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**Lorenzo J. Fertitta**
| Executive Benefits and  Payments Upon  Termination | ** ** | ** ** | ** ** | **Retirement  ($) (a)** | ** ** | **Death  ($)** | ** ** | **Disability  ($)** | ** ** | **Terminated  without Cause  prior to  Change in  Control ($)** | ** ** | **Change in  Control — No  Termination  ($) (b)** | ** ** | **Change in  Control -  Termination  by Company  without  Cause  ($) (b) (c)** | ** ** | **Change in  Control —  Termination  by Executive  without Good  Reason  ($) (c) (d)** | ** ** |
|-------------------------------------------------------------------|------------|------------|------------|------------------------------|------------|----------------|------------|---------------------|------------|-------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------|------------|---------------------------------------------------------------------------------------------------------|------------|---------------------------------------------------------------------------------------------------------------------------|------------|
| Salary (e)                                                        |       |       | —     |                         |       | 3,480,000      |       | 3,480,000           |       |                                                                                | 9,918,000  |                                                                       |       |                                                                                                    | 1,827,000  |                                                                                                                      |       |   | 13,224,000 |   |   |   | 10,579,200 |   |   |
| Bonus                                                             |       |       | —     |                         |       | 1,305,000      |       | 1,305,000           |       |                                                                                | 1,305,000  |                                                                       |       |                                                                                                    | 1,644,300  |                                                                                                                      |       |   | 1,566,000 |   |   |   | 1,566,000 |   |   |
| Restricted  Stock:                                                |       |       |       |                         |       |           |       |                |       |                                                                                |       |                                                                       |       |                                                                                                    |       |                                                                                                                      |       |   |   |   |   |   |   |   |   |
| Vesting Accelerated (f)                                           |       |       | —     |                         |       | 54,527,547     |       | 54,527,547          |       |                                                                                | 54,527,547 |                                                                       |       |                                                                                                    | 54,527,547 |                                                                                                                      |       |   | 54,527,547 |   |   |   | 54,527,547 |   |   |
| **Benefits and Perquisites**                                      |       |       |       |                         |       |           |       |                |       |                                                                                |       |                                                                       |       |                                                                                                    |       |                                                                                                                      |       |   |   |   |   |   |   |   |   |
| Post-employment Health  Care (g)                             |       |       | —     |                         |       | —         |       | 50,000              |       |                                                                                | 50,000     |                                                                       |       |                                                                                                    | —     |                                                                                                                      |       |   | 50,000 |   |   |   | 50,000 |   |   |
| Supplemental Executive Retirement  Plan (h)                       |       |       | —     |                         |       | —         |       | —              |       |                                                                                | —     |                                                                       |       |                                                                                                    | 1,406,859  |                                                                                                                      |       |   | 1,406,859 |   |   |   | — |   |   |
| Special Long-Term  Disability Plan                                |       |       | —     |                         |       | —         |       | —              |       |                                                                                | —     |                                                                       |       |                                                                                                    | —     |                                                                                                                      |       |   | — |   |   |   | — |   |   |
| Life Insurance (i)                                                |       |       | —     |                         |       | 35,000,000     |       | —              |       |                                                                                | —     |                                                                       |       |                                                                                                    | 29,000     |                                                                                                                      |       |   | 29,000 |   |   |   | 29,000 |   |   |
| Long-Term Stay-On  Performance Incentive   Plan                   |       |       | —     |                         |       | —         |       | —              |       |                                                                                | —     |                                                                       |       |                                                                                                    | 666,667    |                                                                                                                      |       |   | — |   |   |   | — |   |   |
| Gross-Up Payments For Excise Taxes (j)                            |       |       | —     |                         |       | —         |       | —              |       |                                                                                | —     |                                                                       |       |                                                                                                    | —     |                                                                                                                      |       |   | 23,143,000 |   |   |   | 23,143,000 |   |   |

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(a)           Lorenzo J.Fertitta was not eligible to receive any retirement benefits as of December 31,2006.

(b)           If the MergerAgreement described in Item 13 is consummated, such Merger will not be a Changein Control of the Company for purposes of Lorenzo J. Fertitta’s Employment Agreement.

(c)            Benefits arepayable if at any time subsequent to a Change in Control, Lorenzo J. Fertitta’semployment is terminated by the Company without Cause or by Lorenzo J.Fertitta for Good Reason (as each term is defined in his Employment Agreement).

(d)          If thetermination by Lorenzo J. Fertitta without Good Reason occurred anytime afterthe first twelve months following a Change in Control, Lorenzo J. Fertittawould be entitled to a salary of $13.2 million.

(e)           In the event ofdeath or disability, Lorenzo J. Fertitta or beneficiary would receive hiscurrently month salary for a period of 24 months. Amounts for death ordisability represent salary for the entire 24 month period. Disability benefitswill be reduced by any benefits Lorenzo J. Fertitta receives from all otherdisability plans sponsored by the Company, if any.

(f)             Amount isrepresentative of the market value of Lorenzo J. Fertitta’s unvested restrictedstock awards which is based on the closing market price of the Company’s stockon December 29, 2006 (the last day of trading for 2006). The vesting ofall restricted stock awards will be accelerated upon consummation of the Mergerdescribed in Item 13.

(g)           Lorenzo J.Fertitta is entitled to continuation of benefits for a period of 60 months or avalue-equivalent lump-sum payment. Amount is estimated based on prior yearannual costs related to the Exec-U-Care program and represents the annual costs.

(h)          Amountrepresents the annual payment to be paid to Lorenzo J. Fertitta. The SERPsupplemental retirement benefit payments will be made for no less than 15 yearsafter the date on which Lorenzo J. Fertitta begins to receive payments;provided, however, that in the event of a Change in Control (as defined in his EmploymentAgreement), Lorenzo J. Fertitta will be entitled to receive, in lieu of anotherpayments under the SERP, a lump-sum payment of the economic equivalent of LorenzoJ. Fertitta receiving payments under the SERP for a period of 15 years.

(i)              In the event ofdeath a payment of $35.0 million will be made to the designated beneficiaryunder a third party insurance policy. Amounts for benefits provided in the caseof a Change in Control are estimated based on 2006 premiums paid by the Companyand represents the annual costs.

(j)              Represents anestimate of excise tax pursuant to Section 280G of the Code and therelated contractual gross-up based on the value of amounts and benefits payableunder each termination scenario.

30

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**William W. Warner**
| Executive Benefits and  Payments Upon  Termination | ** ** | **Retirement  ($) (a)** | ** ** | **Death  ($)** | ** ** | **Disability  ($)** | ** ** | **Terminated  without Cause  prior to  Change in  Control ($)** | ** ** | **Change in  Control — No  Termination  ($) (b)** | ** ** | **Change in  Control —   Termination  without Cause  ($) (b) (c)** | ** ** | **Change in  Control —  Termination  by Executive  without Good  Reason  ($) (b) (d)** | ** ** |
|-------------------------------------------------------------------|------------|------------------------------|------------|----------------|------------|---------------------|------------|-------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------|------------|-------------------------------------------------------------------------------------------------------|------------|---------------------------------------------------------------------------------------------------------------------------|------------|
| Salary (e)                                                        |       |                         | —     |           |       | —              |       |                                                                                | —     |                                                                       |       |                                                                                                  | 5,760,000  |                                                                                                                      |       |   | — |   |   |   | 5,760,000 |   |   |   | 5,760,000 |   |   |
| Bonus                                                             |       |                         | —     |           |       | 600,000             |       |                                                                                | 600,000    |                                                                       |       |                                                                                                  | 600,000    |                                                                                                                      |       |   | 600,000 |   |   |   | 600,000 |   |   |   | 600,000 |   |   |
| Restricted Stock:                                                 |       |                         |       |           |       |                |       |                                                                                |       |                                                                       |       |                                                                                                  |       |                                                                                                                      |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Vesting Accelerated (f)                                           |       |                         | —     |           |       | —              |       |                                                                                | —     |                                                                       |       |                                                                                                  | —     |                                                                                                                      |       |   | 34,447,916 |   |   |   | 34,447,916 |   |   |   | 34,447,916 |   |   |
| Stock Options:                                                    |       |                         |       |           |       |                |       |                                                                                |       |                                                                       |       |                                                                                                  |       |                                                                                                                      |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Vesting Accelerated (g)                                           |       |                         | —     |           |       |                |       |                                                                                | —     |                                                                       |       |                                                                                                  | —     |                                                                                                                      |       |   | 2,710,800 |   |   |   | 2,710,800 |   |   |   | 2,710,800 |   |   |
| **Benefits and Perquisites**                                      |       |                         |       |           |       |                |       |                                                                                |       |                                                                       |       |                                                                                                  |       |                                                                                                                      |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Post-employment Health Care  (h)                                  |       |                         | —     |           |       | —              |       |                                                                                | 5,000      |                                                                       |       |                                                                                                  | 5,000      |                                                                                                                      |       |   | — |   |   |   | 5,000 |   |   |   | 5,000 |   |   |
| Supplemental Management  Retirement Plan (i)                      |       |                         | —     |           |       | —              |       |                                                                                | —     |                                                                       |       |                                                                                                  | —     |                                                                                                                      |       |   | — |   |   |   | 374,205 |   |   |   | 374,205 |   |   |
| Special Long-Term  Disability Plan (j)                            |       |                         | —     |           |       | —              |       |                                                                                | 1,122,000  |                                                                       |       |                                                                                                  | —     |                                                                                                                      |       |   | — |   |   |   | — |   |   |   | — |   |   |
| Life Insurance (k)                                                |       |                         | —     |           |       | 4,000,000           |       |                                                                                | —     |                                                                       |       |                                                                                                  | —     |                                                                                                                      |       |   | — |   |   |   | 7,500 |   |   |   | 7,500 |   |   |
| Long-Term Stay-On  Performance Incentive Plan                     |       |                         | —     |           |       | —              |       |                                                                                | —     |                                                                       |       |                                                                                                  | —     |                                                                                                                      |       |   | — |   |   |   | 500,000 |   |   |   | — |   |   |
| Gross-Up Payments For Excise Taxes (l)                            |       |                         | —     |           |       | —              |       |                                                                                | —     |                                                                       |       |                                                                                                  | —     |                                                                                                                      |       |   | — |   |   |   | 9,424,000 |   |   |   | 9,424,000 |   |   |

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(a)           William Warnerwas not eligible to receive any retirement benefits as of December 31,2006.

(b)           If the MergerAgreement described in Item 13 is consummated, such Merger will not be a Changein Control of the Company for purposes of Mr. Warner’s Employment Agreement.

(c)            Benefits arepayable if within five years following a Change in Control Mr. Warner’semployment is terminated by the Company without Cause or by Mr. Warner forGood Reason (as each term is defined in his Employment Agreement).

(d)          Benefits arepayable if Mr. Warner terminates his employment with Good Reason within90 days following the first anniversary of a Change in Control.

(e)           In the event oftermination after a Change in Control, Mr. Warner would receive a lump sumpayment equal to the greater of (i) three times 160% of his base salary atthe time of the Change in Control or (ii) three times 160% of his basesalary at the time of termination of his employment.

(f)             Amount isrepresentative of the market value of Mr. Warner’s unvested restrictedstock awards which is based on the closing market price of the Company’s stockon December 29, 2006 (the last day of trading for 2006). The vesting ofall restricted stock awards will be accelerated upon consummation of the Mergerdescribed in Item 13.

(g)           Amount isrepresentative of the intrinsic value of unvested stock options which is theamount by which the market value of the underlying stock exceeds the exerciseprice of the stock option. The market value is based on the closing marketprice of the Company’s stock on December 29, 2006 (the last day of tradingfor 2006).

(h)          Mr. Warneris entitled to continuation of benefits for a period of 36 months or avalue-equivalent lump-sum payment. Amount is estimated based on prior yearannual costs related to the Exec-U-Care program and represents the annual costs.

(i)              Amountrepresents annual benefit payable as a 50% joint and survivor annuity with 15years of guaranteed payments beginning at age 60.

(j)              Amountrepresents 66% of the average base salary and bonus for the two plan yearsimmediately preceding (but not including) the year in which Mr. Warner’semployment is terminated due to disability. Benefit will be reduced by anybenefit Mr. Warner receives from all other disability plans sponsored bythe Company, if any.

(k)           In the event ofdeath a payment of $4.0 million will be made to the designated beneficiary undera third party insurance policy. Amounts for benefits provided in the case of aChange in Control are estimated based on 2006 premiums paid by the Company andrepresents the annual costs.

(l)              Represents anestimate of excise tax pursuant to Section 280G of the Code and therelated contractual gross-up based on the value of amounts and benefits payableunder each termination scenario.

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**Scott M Nielson**
| Executive Benefits and  Payments Upon  Termination | ** ** | **Retirement  ($) (a)** | ** ** | **Death  ($)** | ** ** | **Disability  ($)** | ** ** | **Terminated  without Cause  prior to  Change in  Control ($)** | ** ** | **Change in  Control — No  Termination  ($)** | ** ** | **Change in  Control —  Termination  without Cause  ($) (b) (c)** | ** ** | **Change in  Control —  Termination  by Executive  without Good  Reason  ($) (b) (d)** | ** ** |
|-------------------------------------------------------------------|------------|------------------------------|------------|----------------|------------|---------------------|------------|-------------------------------------------------------------------------------------|------------|-------------------------------------------------------------------|------------|-------------------------------------------------------------------------------------------------|------------|---------------------------------------------------------------------------------------------------------------------------|------------|
| Salary (e)                                                        |       |                         | —     |           |       | —              |       |                                                                                | —     |                                                              |       |                                                                                            | 4,608,000  |                                                                                                                      |       |   | — |   |   |   | 4,608,000 |   |   |   | 4,608,000 |   |   |
| Bonus                                                             |       |                         | —     |           |       | 480,000             |       |                                                                                | 480,000    |                                                              |       |                                                                                            | 480,000    |                                                                                                                      |       |   | 480,000 |   |   |   | 480,000 |   |   |   | 480,000 |   |   |
| Restricted Stock:                                                 |       |                         |       |           |       |                |       |                                                                                |       |                                                              |       |                                                                                            |       |                                                                                                                      |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Vesting Accelerated (f)                                           |       |                         | —     |           |       | —              |       |                                                                                | —     |                                                              |       |                                                                                            | —     |                                                                                                                      |       |   | 21,201,450 |   |   |   | 21,201,450 |   |   |   | 21,201,450 |   |   |
| **Benefits and Perquisites**                                      |       |                         |       |           |       |                |       |                                                                                |       |                                                              |       |                                                                                            |       |                                                                                                                      |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Post-employment Health Care  (g)                                  |       |                         | —     |           |       | —              |       |                                                                                | 5,000      |                                                              |       |                                                                                            | 5,000      |                                                                                                                      |       |   | — |   |   |   | 5,000 |   |   |   | 5,000 |   |   |
| Supplemental Management  Retirement Plan (h)                      |       |                         | —     |           |       | —              |       |                                                                                | —     |                                                              |       |                                                                                            | —     |                                                                                                                      |       |   | — |   |   |   | 309,064 |   |   |   | 309,064 |   |   |
| Special Long-Term  Disability Plan (i)                            |       |                         | —     |           |       | —              |       |                                                                                | 1,468,500  |                                                              |       |                                                                                            | —     |                                                                                                                      |       |   | — |   |   |   | — |   |   |   | — |   |   |
| Life Insurance (j)                                                |       |                         | —     |           |       | 7,500,000           |       |                                                                                | —     |                                                              |       |                                                                                            | —     |                                                                                                                      |       |   | — |   |   |   | 10,000 |   |   |   | 10,000 |   |   |

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(a)           Mr. Nielson was not eligible toreceive any retirement benefits as of December 31, 2006.

(b)           If the Merger Agreement described in Item13 is consummated, such Merger will not be a Change in Control of the Companyfor purposes of Mr. Nielson’s Employment Agreement.

(c)            Benefits are payable if within five yearsfollowing a Change in Control Mr. Nielson’s employment is terminated bythe Company without Cause or by Mr. Nielson for Good Reason (as each termis defined in his Employment Agreement).

(d)          Benefits are payable if Mr. Nielsonterminates his employment with Good Reason within 90 days following the firstanniversary of a Change in Control.

(e)           In the event of termination after a Changein Control, Mr. Nielson would receive a lump sum payment equal to thegreater of (i) three times 160% of his base salary at the time of theChange in Control or (ii) three times 160% of his base salary at the timeof termination of his employment.

(f)             Amount is representative of the marketvalue of Mr. Warner’s unvested restricted stock awards which is based onthe closing market price of the Company’s stock on December 29, 2006 (thelast day of trading for 2006). The vesting of all restricted stock awards willbe accelerated upon consummation of the Merger described in Item 13.

(g)           Mr. Nielson is entitled tocontinuation of benefits for a period of 36 months or a value-equivalentlump-sum payment. Amount represents annual costs based on prior year costsrelated to the Exec-U-Care program and represents the annualcosts.

(h)          Amount represents annual benefit payableas a 50% joint and survivor annuity with 15 years of guaranteed paymentsbeginning at age 60.

(i)              Amount represents 66% of the average basesalary and bonus for the two plan years immediately preceding (but notincluding) the year in which Mr. Nielson’s employment is terminated due todisability. Benefit will be reduced by any benefit Mr. Nielson receivesfrom all other disability plans sponsored by the Company, if any.

(j)              In the event of death a payment of $7.5million will be made to the designated beneficiary under a third party insurancepolicy. Amounts for benefits provided in the case of a Change in Control areestimated based on 2006 premiums paid by the Company and representsthe annual costs.

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**Change in ControlEvents Under The Employment Arrangements**

As described in “Compensation Discussion and Analysis—EmploymentArrangements”, each of the Company’s Named Executive Officers is party to anEmployment Agreement that requires us to make payments and provide benefits tosuch Named Executive Officer upon the termination of his employment with usunder various scenarios. The Employment Agreements do not provide for anyadditional payments or benefits under a voluntary termination of employment bythe Named Executive Officer or involuntary termination by the Company for Cause(as defined in the Employment Agreements). Under those scenarios, the NamedExecutive Officers are only entitled to their accrued and unpaid obligations,such as salary and unused vacation.

A description of the payments and benefits that we arerequired to provide to the Named Executive Officers under their EmploymentAgreements upon various termination events is set forth below. If the Merger Agreementdescribed in Item13 is consummated, such Merger will not be a Change in Controlof the Company (as defined in the Employment Agreements) for purposes of theNamed Executive Officers’ employment agreements.

“Change in Control” is defined under the Employment Agreementsas any event in which:

·       any person, corporation,entity or group (other than certain existing equity holders) is or becomes thebeneficial owner, directly or indirectly, of securities representing 50%or more of the combined voting power of the Company’s voting stock (an“Acquisition Event”), or

theCompany consolidates with or merges into another corporation or entity, or anycorporation or entity consolidates with or merges into the Company, with theeffect that the beneficial owners of the Company’s voting stock heldimmediately prior to the consummation of such consolidation or merger cease tobeneficially own, directly or indirectly, securities representing 50% ormore of the combined voting power of the Company’s voting stock (or if theCompany is not the surviving entity, the surviving company’s voting securities)upon the consummation of such consolidation or merger (a “Merger Event”), or

·       theCompany sells, conveys, transfers or leases to any person, corporation, entityor group, directly or indirectly, in one transaction or series of relatedtransactions, properties and/or assets that accounted for 75% or more ofthe earnings (before interest, taxes, depreciation and amortization) of theCompany, on a consolidated basis for the four-fiscal quarter period immediatelypreceding the date of consummation of such transaction (a “Sale Event”); and

 

·       withinthirty-six (36) months following an Acquisition Event, Merger Event orSale Event, individuals who immediately prior to such Acquisition Event, MergerEvent or Sale Event constituted the Company’s Board, together with any new orreplacement directors whose election by the Company’s Board, or whose nominationfor election by the Company’s stockholders was approved by a vote of at least amajority of the directors then in office who were either directors on theCompany’s Board immediately prior to such Acquisition Event, Merger Event orSale Event (or whose election or nomination for election was previously soapproved), cease for any reason to constitute a majority of the directors ofthe Company’s Board then in office.

Notwithstanding the foregoing, a reincorporation,spin-off, split-off or other reorganization transaction (a “ReorganizationEvent”), or series of related transactions, in which either the “beneficialowners” of the Company’s voting stock or certain existing equity holdersbeneficially own securities representing 50% or more of the combined votingpower of the Company’s voting stock upon the consummation of such transactionshall not constitute an Acquisition Event, Merger Event or Sale Event. “Beneficialownership” shall have the same meaning as defined in Rules 13d-3and 13d-5 under the Exchange Act, except that a Person shall bedeemed to have “beneficial ownership” of all shares that any 

33

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such Person has the rightto acquire, whether such right is exercisable immediately or only after thepassage of time.

Upon consummation of an Acquisition Event, MergerEvent, Sale Event or Reorganization Event, the “Company’s Board” and the “Company’sStockholders” shall refer to (i) in the case of an Acquisition Event, theCompany, (ii) in the case of a Merger Event, the company surviving themerger or consolidation, (iii) in the case of a Sale Event, the transfereeof the properties, and/or assets, and (iv) in the case of a ReorganizationEvent, the entity or entities surviving such Reorganization Event on a consolidatedbasis.

“Cause” is definedunder the Employment Agreements as any event in which the executive officer:

·       hasbeen convicted of any felony;

·       hasbeen found unsuitable to hold a gaming license by a final non-appealabledecision of the Nevada Gaming Commission; or

·       incarrying out his duties under the Employment Agreement, has engaged in acts oromissions constituting gross negligence or willful misconduct resulting, ineither case, in material economic harm to the Company.

“Good Reason” isdefined under the Employment Agreements as the occurrence of one or more of thefollowing events following a Change in Control:

·       theNamed Executive Officer is assigned duties or responsibilities that areinconsistent, in any significant respect, with the position of a seniormanager;

·       theNamed Executive Officer is required to relocate from, or maintain his principaloffice outside of, Clark County, Nevada;

·       theNamed Executive Officer’s base salary is decreased by the Company;

·       theNamed Executive Officer is excluded from participation in any employee benefitor short-term incentive plan or program offered to other similarly executivesof the Company or his benefits under such plans or programs are materiallyreduced;

·       theCompany fails to pay the Named Executive Officer any deferred payments thathave become payable under the DCPE;

·       theCompany fails to reimburse the Named Executive Officer for business expenses inaccordance with the Company’s policies, procedures or practices;

·       theCompany fails to agree to or to actually indemnify the Named Executive Officer forhis actions and/or inactions, as either a director or an officer of theCompany, in accordance with the Employment Agreement, and/or the Company failsto maintain reasonably sufficient levels of directors’ and officers’ liabilityinsurance coverage for the Named Executive Officer when such insurance isavailable; or

·       theCompany fails to obtain a written agreement from any successor or assign of theCompany to assume the obligations under the Employment Agreement upon a Changein Control.

*Termination As AResult Of Death Or Disability*

In the event that a NamedExecutive Officer is terminated as a result of his death or Disability, he orhis legal representative will receive all salary due to the Named ExecutiveOfficer under his Employment Agreement as of the date of his death orDisability, and, in the case of Frank J. Fertitta III and Lorenzo J.Fertitta, his then current salary for 24 months. In addition, each NamedExecutive Officer will receive any awarded but unpaid annual bonus and apro-rated bonus for the year of death or Disability, plus, in the 

34

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event ofdeath, payment of any deferred compensation, and, in the event of Disability,immediate vesting of any deferred compensation or bonuses, and in the case ofFrank J. Fertitta III and Lorenzo J. Fertitta, immediate vestingof restricted stock and unvested stock options and continuation of health andwelfare benefits for 60 months.

*Termination WithoutCause Prior To A Change In Control*

In the event a NamedExecutive Officer (other than Frank J. Fertitta III and Lorenzo J.Fertitta) is terminated without Cause, other than due to death or Disability,prior to a Change in Control, the Named Executive Officer will receive apayment equal to three times 160% of such Named Executive Officer’s basesalary, a portion of which is conditioned upon the Named Executive Officer notengaging in certain competitive acts for a period of 24 months following thetermination of such Named Executive Officer’s employment with the Company. Theseprohibited competitive acts include diverting any existing business of theCompany or any of its affiliates, accepting a position with or rendering anyservices to any competitor of the Company, retaining any employee of theCompany or any of its affiliates, or causing or attempting to cause anyemployee or prospective employee of the Company or any of its affiliates to (i) terminatesuch person’s employment, or (ii) accept employment with anyone other thanthe Company or any of its affiliates. These conditions do not apply to Frank J.Fertitta III or Lorenzo J. Fertitta. In the event of Frank J. Fertitta III’stermination without Cause or for Good Reason (as defined in Frank J.Fertitta III’s Employment Agreement) prior to a Change in Control, he willreceive a payment equal to four times 220% of his base salary. If Lorenzo J.Fertitta is terminated without Cause prior to a Change in Control, he willreceive a payment equal to three times 190% of his base salary. If any NamedExecutive Officer (other than Frank J. Fertitta III or Lorenzo J.Fertitta) is terminated without Cause, other than due to death or Disability,prior a Change in Control, he will also receive any bonus awarded but not yetpaid, any deferred compensation, 180 days to exercise all vested options, andcontinuation of health and welfare benefits for 36 months. If the employment ofFrank J. Fertitta III or Lorenzo J. Fertitta is terminated withoutCause or for Good Reason (in the case of Frank J. Fertitta III only) priorto a Change in Control, he will also receive any bonus awarded but not yetpaid, any deferred compensation, continuation of health and welfare benefitsfor 60 months and immediate vesting of all restricted stock and unvested stockoptions and the ability to exercise the vested options for the remaining termof such stock options.

*Change In Control—NoTermination*

Immediately upon theoccurrence of a Change in Control, the Named Executive Officers will beentitled to immediate vesting of all restricted stock, stock options, phantomstock units and stock appreciation rights and each of Frank J. FertittaIII and Lorenzo J. Fertitta will also be entitled to (i) minimumannual salary increases of at least 5%, (ii) annual bonuses of at least120% of base salary in the case of Frank J. Fertitta III and 90% of basesalary in the case of Lorenzo J. Fertitta, (iii) immediate vestingand payout of all amounts awarded under the long-term stay-on performanceincentive agreement (in the case of Lorenzo J. Fertitta only), (iv) alump-sum payment equal to the economic equivalent of such Named ExecutiveOfficer receiving payments under the SERP for a period of fifteen years (withsuch amount determined as if the Named Executive Officer were immediatelyeligible for early retirement under the SERP as of the termination date withoutpenalty for early retirement), and (v) continued funding of life insurancepolicies.

*Change In Control—Termination By The Company WithoutCause Or By The Named Executive Officer With or Without Good Reason*

Additionally, if theemployment of any Named Executive Officer (other than Frank J. FertittaIII or Lorenzo J. Fertitta) is terminated following a Change in Control,either by the Company without Cause, by the Named Executive Officer for GoodReason or by the Named Executive Officer without Good Reason 

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within90 days following the first anniversary of a Change in Control, the NamedExecutive Officer will be entitled to a payment equal to the greater of threetimes 160% of his base salary at the time of the Change in Control or at thetime of termination, a pro-rata bonus, immediate vesting and payout of allshares or cash awarded under the Long-Term Stay-On Performance Incentive Plan(except in the event of a termination by the Named Executive Officer withoutGood Reason within 90 days following the first anniversary of a Change inControl), immediate vesting of his supplemental retirement benefits under theSMRP, continued funding of life insurance policies, and continuation of medicalinsurance for 36 months. In the event that Frank J. Fertitta III orLorenzo J. Fertitta’s employment is terminated following a Change inControl, either by the Company without Cause, by such Named Executive Officerwith Good Reason or by such Named Executive Officer without Good Reason at anytime following the first anniversary of a Change in Control, such NamedExecutive Officer will be entitled to receive, in the case of Frank J.Fertitta III, a payment equal to four times 220% of his base salary, and in thecase of Lorenzo J. Fertitta, a payment equal to four times 190% of hisbase salary, a pro-rata bonus and continuation of medical insurance for 60months.

*Additional AmountsPayable In Respect of Code Section 4999 Excise Tax*

If any payment or benefit paid or payable, or receivedor to be received, by or on behalf of the Named Executive Officer in connectionwith a Change in Control or the termination of the Named Executive Officer’semployment following a Change in Control, will be subject to the excise taximposed by Section 4999 of the Code, the Employment Agreements providethat the Company will pay the Named Executive Officer an additional amount suchthat, after payment by the Named Executive Officer of all taxes, the ExecutiveOfficer retains an amount of such additional payment equal to the excise taximposed on such payments and benefits paid or payable or received or to bereceived.

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**DIRECTORCOMPENSATION FOR 2006**
|                                    | ** ** | **Fees Earned  or Paid in  Cash** | ** ** | **Stock  Awards** | ** ** | **Option  Awards** | ** ** | **Non-Equity  Incentive  Plan  Compensation** | ** ** | **Change in  Pension Value  and Nonqualified  Deferred  Compensation  Earnings** | ** ** | **All Other  Compensation** | ** ** | **Total** | ** ** |
|------------------------------------|------------|--------------------------------------------------|------------|-------------------|------------|--------------------|------------|-----------------------------------------------|------------|-------------------------------------------------------------------------------------------------|------------|----------------------------------|------------|-----------|------------|
| **Name**                           | ** ** | ** **                                       | ** ** | **($)**           | ** ** | **($) (a)**   | ** ** | **($)**                                       | ** ** | **($)**                                                                                         | ** ** | **($)**                          | ** ** | **($)**   | ** ** | **($)** | ** ** |
| Lowell Lebermann, Jr.(b) |       |                                             | 172,504    |              |       | 151,340            |       |                                          | —     |                                                                                            |       |                             | —     |      |       |   | — |   |   |   | — |   |   | 323,844 |   |
| James E. Nave(c)         |       |                                             | 209,004    |              |       | 151,340            |       |                                          | —     |                                                                                            |       |                             | —     |      |       |   | — |   |   |   | — |   |   | 360,344 |   |
| Lee S. Isgur(d)          |       |                                             | 167,004    |              |       | 196,670            |       |                                          | —     |                                                                                            |       |                             | —     |      |       |   | — |   |   |   | — |   |   | 363,674 |   |
| Robert E. Lewis(e)       |       |                                             | 167,004    |              |       | 186,130            |       |                                          | —     |                                                                                            |       |                             | —     |      |       |   | — |   |   |   | — |   |   | 353,134 |   |
|                                    |            |                                                  |            |                   |            |                    |            |                                               |            |                                                                                                 |            |                                  |            |           |            |  |  |  |  |  |  |  |  |  |  |  |  |

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(a)           The values reported in the Stock Awards column for eachdirector is the aggregate cost recognized in the Company's financial statementsfor such awards for the year ended December 31, 2006, including awards grantedin prior years. The assumptions for making the valuation determinations areincluded in footnote 11 of the Company's Annual Report on Form 10-K for theyear ended December 31, 2006.  If theMerger Agreement described in Item 13 is consummated, all stock options underthe 2005 Plan and Prior Plans will become vested and all related unrecognizedcompensation cost will be recognized during the period in which the Merger isconsummated. No restricted stock awards were granted to directors in 2006.

(b)           Mr. Lebermann had 22,500 stock options outstandingwhich are exercisable and 9,000 shares of restricted stock that had not vestedas of December 31, 2006.

(c)            Dr. Nave had 30,000 stock options outstanding which areexercisable and 9,000 shares of restricted stock that had not vested as ofDecember 31, 2006.

(d)          Mr. Isgur had 12,000 shares of restricted stock that hadnot vested as of December 31, 2006.

(e)           Mr. Lewis had 11,500 shares of restrictedstock that had not vested as of December 31, 2006.

**Discussion ofDirector Compensation Table**

Directors who are not directly or indirectlyaffiliated with the Company receive a monthly fee of $4,167 and fees of $1,500for each Board meeting attended, and $1,500 for each committee meeting attended.The committee chairman receives an additional $1,000 for each committee meetingattended. Such directors are granted 7,500 shares of restricted stock upontheir nomination to the Board of Directors and are granted an additional 5,000shares of restricted stock annually. All of the restricted stock grants made tosuch directors vest equally over five years. During 2006, the annual grant of5,000 shares of restricted stock did not occur due to the receipt of the mergerproposal. All directors are reimbursed for expenses connected with attendanceat meetings of the Board of Directors. All directors are eligible toparticipate in the 2005 Stock Compensation Program. See “Discussion of SummaryCompensation Table and Grant of Plan-Based Awards Table—2005 Stock CompensationProgram.”

In response to the mergerproposal received by the Company on December 2, 2006, the Board ofDirectors established a special committee of independent directors to reviewthe proposal. The special committee has also been authorized to review anyalternative proposals that may be received by Station or the special committee.The Board of Directors appointed Dr. Nave (to serve as Chairman) andMessrs. Isgur, Lebermann and Lewis to serve on the Special Committee. Eachspecial committee member received a one time fee of $60,000 and Dr. Nave, thecommittee chairman, received $90,000. Additionally, each committee memberreceives $1,500 for each meeting attended and the committee chair receives$2,500 for each meeting attended.

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**GOVERNANCE ANDCOMPENSATION COMMITTEEINTERLOCKS AND INSIDER PARTICIPATION**

During 2006, the membersof the Governance and Compensation Committee were Mr. Lebermann, Chairman,and Messrs. Nave, Isgur and Lewis. Each person is an independent director(as independence is defined in Sections 303A.02 of the NYSE listing standards)of the Company. None of these individuals are current or former officers oremployees of the Company or any of our subsidiaries. During 2006, none of ourexecutive officers served as a director or member of a compensation committee(or other committee serving an equivalent function) of any other entity whoseexecutive officers served as a director or member of our Governance and CompensationCommittee.

**ITEM 12.**         SECURITYOWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERMATTERS

The following table lists all equity compensationplans that provide for the award of the Company’s securities or the grant ofoptions as of December 31, 2006:
| Plan category                                      | ** ** | ** ** | ** ** | **Number of securities  to be issued upon  exercise of  outstanding options(a)** | ** ** | **Weighted-average  exercise price of  outstanding options** | ** ** | **Number of securities  remaining available  for future issuance  under equity  compensation plans(b)** | ** ** |
|---------------------------------------------------------|------------|------------|------------|---------------------------------------------------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------|------------|--------------------------------------------------------------------------------------------------------------------------------------------|------------|
| Equity  compensation plans approved by stockholders     |       |       | 2,187,107  |                                                                                                                |       |                                                                        | $          | 12.07                                                                                                                                      |       |   |   | 1,108,632 |   |   |
| Equity  compensation plans not approved by stockholders |       |       | —     |                                                                                                                |       |                                                                        | —     |                                                                                                                                       |       |   | — |   |   |
| Total                                                   |       |       | 2,187,107  |                                                                                                                |       |                                                                        | $          | 12.07                                                                                                                                      |       |   |   | 1,108,632 |   | ** ** |

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(a)           This amount excludesrestricted stock awards issued. In addition to the above, there are 3,027,354shares of unvested restricted stock awards outstanding under equitycompensation plans approved by shareholders.

(b)          Eachfuture share grant subject to an award of restricted stock, restricted stockunit or other stock award shall reduce the shares available for grant by 1.9 shares to 1.

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**PRINCIPALSTOCKHOLDERS OF THE COMPANY**

Thefollowing table sets forth, as of February 28, 2007, certain informationregarding the shares of common stock beneficially owned by each stockholder whois known by the Company to beneficially own in excess of 5% of the outstandingshares of common stock (solely based on information reported on Forms 13Gfiled with the SEC), by each director and Named Executive Officer and by allNamed Executive Officers and directors as a group. 

| ** **                                                                          | ** ** | **Amount and Nature of  Beneficial Ownership** | ** ** | ** **              | ** ** |
|-------------------------------------------------------------------------------------|------------|--------------------------------------------------------------------|------------|-------------------------|------------|
| **Name and Address of Beneficial Owner (1) (2)** | ** ** | ** **                                                         | ** ** | **Currently  Owned(3)** | ** ** | **Acquirable  Within  60 days** | ** ** | **Percent  of  Class** | ** ** |
| Marsico Capital  Management (4)                                                     |       | 5,913,075                                                          |       |                    | —     |   |   |   | 10.3 |   |   |
| Frank J. Fertitta  III (5)                                                          |       | 5,719,344                                                          |       |                    | —     |   |   |   | 9.9 |   |   |
| Lorenzo J.  Fertitta (6)                                                            |       | 5,734,694                                                          |       |                    | —     |   |   |   | 9.9 |   |   |
| Highfields  Capital Management LP (7)                                               |       | 5,179,900                                                          |       |                    | —     |   |   |   | 9.0 |   |   |
| Janus Capital  Management LLC (8)                                                   |       | 4,133,215                                                          |       |                    | —     |   |   |   | 7.2 |   |   |
| Blake L. Sartini  (9)                                                               |       | 3,883,957                                                          |       |                    | —     |   |   |   | 6.8 |   |   |
| Delise F. Sartini  (9)                                                              |       | 3,846,054                                                          |       |                    | —     |   |   |   | 6.7 |   |   |
| Scott M Nielson  (10)                                                               |       | 714,882                                                            |       |                    | —     |   |   |   | 1.2 |   |   |
| Glenn C.  Christenson (11)                                                          |       | 588,857                                                            |       |                    | —     |   |   |   | 1.0 |   |   |
| William W. Warner  (12)                                                             |       | 555,815                                                            |       |                    | 40,000     |   |   |   | 1.0 |   |   |
| Richard J.  Haskins (13)                                                            |       | 214,202                                                            |       |                    | 10,000     |   |   |   | * |   |   |
| James E. Nave,  D.V.M.                                                              |       | 45,000                                                             |       |                    | —     |   |   |   | * |   |   |
| Lowell H.  Lebermann, Jr                                                            |       | 34,500                                                             |       |                    | —     |   |   |   | * |   |   |
| Lee S. Isgur (14)                                                                   |       | 24,500                                                             |       |                    | —     |   |   |   | * |   |   |
| Robert E. Lewis                                                                     |       | 17,500                                                             |       |                    | —     |   |   |   | * |   |   |
| Named Executive Officers  and Directors as a Group (10 persons)                     |       | 13,649,294                                                         |       |                    | 50,000     |   |   |   | 23.2 |   |   |
|                                                                                     |            |                                                                    |            |                         |            |  |  |  |  |  |  |  |  |

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                 * Less than one percent

       (1) Of the total number of shares reported in this table, the followingare the approximate number of vested stock options beneficially owned by eachindividual in the table: Frank J. Fertitta III 663,900; Lorenzo J. Fertitta661,400; Scott M Nielson 217,207; Glenn C. Christenson 110,000; William W.Warner 90,000; Richard J. Haskins 14,000, Lowell H. Lebermann, Jr. 22,500and James E. Nave, D.V.M. 30,000. Of the total number of shares reported inthis table, 381 shares beneficially owned by Mr. Warner are held by theCompany’s 401(k) Plan.

       (2) The address of each of the stockholders named in this table otherthan Marsico Capital Management, Highfields Capital Management LP, JanusCapital Management LLC and Blake and Delise Sartini is: c/o Station Casinos, Inc.,2411 West Sahara Avenue, Las Vegas, Nevada 89102.

       (3) Unless otherwise indicated in the footnotes to this table and subjectto the community property laws where applicable, each of the stockholders namedin this table has sole voting and investment power with respect to the sharesshown as beneficially owned.

       (4) The address of Marsico Capital Management is 1200 17th Street, Suite 1600, Denver, Colorado80202 and the SEC filing date is February 12, 2007.

       (5) 3,084,460 shares owned by Frank J. Fertitta III have been pledged toBear Stearns Securities Corp. and 624,418 shares owned by Frank J. Fertitta IIIhave been pledged to Citibank, N.A.

       (6) 2,500,000 shares owned by Lorenzo J. Fertitta have been pledged toOppenheimer & Co. and 602,970 shares owned by Lorenzo J. Fertitta havebeen pledged to Citibank, N.A.

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       (7) The address of Highfields Capital Management LP is c/o HighfieldsCapital Management, John Hancock Tower, 200 Clarendon Street, 51st Floor, Boston, Massachusetts 02116 and the SECfiling date is February 14, 2007.

       (8) The address of Janus Capital Management LLC is 151 Detroit Street,Denver, Colorado 80206 and the SEC filing date is February 14, 2007.

       (9) Reflects 3,842,094 shares in which beneficial ownership is shared byBlake and Delise Sartini. Blake and Delise Sartini do not, however, sharebeneficial ownership of certain shares owned by Mr. Sartini or familytrusts in which Mr. Sartini is trustee and shares of stock owned by familytrusts of which Delise Sartini is trustee and thus have different totalownership figures. Delise Sartini is a sister of Frank J. Fertitta III andLorenzo J. Fertitta and is married to Blake Sartini. The address for Blake andDelise Sartini is 6595 South Jones Blvd., Las Vegas, Nevada 89118. 436,426shares owned by a family trust in which Blake and Delise Sartini are trusteeshave been pledged to Merrill Lynch Bank USA and 2,451,000 shares owned by asecond family trust in which Blake and Delise Sartini are trustees have beenpledged to ML Private Finance LLC.

(10) Includes 188,753 shares owned by Mr. Nielson who shares votingand investment power with his wife and 31,683 shares in which his wife has solevoting and investment power.

(11) Includes 214,743 shares owned by Mr. Christenson who sharesvoting and investment power with his wife. On March 29, 2007, the Companyand Mr. Christenson entered into a Separation Agreement and GeneralRelease, pursuant to which Mr. Christenson’s employment with the Companyterminated effective March 30, 2007.

(12) Includes 64,990 shares owned by Mr. Warner who shares votingand investment power with his wife.

(13) Includes 26,690 shares owned by Mr. Haskins who shares votingand investment power with his wife.

(14) Includes 12,500 shares owned by Mr. Isgurwho shares voting and investment power with his wife.

**CHANGE OF CONTROL—SECURITYOWNERSHIP OF CERTAIN BENEFICIAL OWNERS OF THE COMPANY AND OF ITS OFFICERS ANDDIRECTORS AFTER THE MERGER**

As discussed in moredetail in “Certain Relationships and Related Transactions, and DirectorIndependence—Merger Agreement” below, the Company entered into a Merger Agreementwith FCP and Merger Sub on February 23, 2007. Pursuant to the terms of theMerger Agreement, Merger Sub will be merged with and into the Company and as aresult the Company will continue as the surviving corporation and as a director indirect wholly-owned subsidiary of FCP. Immediately prior to theconsummation of the Merger, FCP will be owned by affiliates of Frank J.Fertitta III, Chairman and Chief Executive Officer of the Company, Lorenzo J.Fertitta, Vice Chairman and President of the Company, Blake L. Sartini, DeliseF. Sartini and Colony Capital Acquisitions, LLC. If the Merger Agreement isapproved and the Merger is consummated, each share of the Company’s commonstock, including any rights associated therewith (other than shares of the Company’scommon stock owned by FCP, Merger Sub or any wholly-owned subsidiary of theCompany or shares of common stock held in treasury by the Company), will becancelled and converted into the right to receive $90.00 in cash, withoutinterest.

**ITEM 13.**         CERTAINRELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

**Merger Agreement**

On February 23, 2007, we entered into anAgreement and Plan of Merger (the “Merger Agreement”) with Fertitta ColonyPartners LLC (“FCP”), a Nevada limited liability company, and FCP AcquisitionSub, a Nevada corporation and a wholly-owned subsidiary of FCP (“Merger Sub”). Pursuantto the terms of the 

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Merger Agreement, MergerSub will be merged with and into the Company, and as a result the Company willcontinue as the surviving corporation and as a direct or indirect wholly-ownedsubsidiary of FCP (the “Merger”). FCP is owned by FC Investor, LLC, a Delawarelimited liability company and a wholly-owned subsidiary of Colony CapitalAcquisitions, LLC (the “Sponsor”), Frank J. Fertitta III, the Chairman andChief Executive Officer of the Company, and Lorenzo J. Fertitta, the ViceChairman and President of the Company.

At the effective time of the Merger, each outstandingshare of our common stock, including any rights associated therewith (otherthan shares of our common stock owned by FCP, Merger Sub or any wholly-ownedsubsidiary of the Company or shares of Company common stock held in treasury byus) will be cancelled and converted into the right to receive $90 in cash,without interest.

Our Board of Directors (with Frank J. Fertitta III andLorenzo J. Fertitta taking no part in the deliberations or the vote), actingupon the unanimous recommendation of special committee  composed entirely of disinterested directors(the “Special Committee”), has approved the Merger Agreement and hasrecommended that our stockholders vote in favor of the Merger Agreement.

Frank J. Fertitta III, Lorenzo J. Fertitta, BlakeL. Sartini and Delise F. Sartini (the “Rollover Stockholders”) have agreed tocontribute a portion of their shares of our common stock to FCP and, subject tospecified exceptions, to vote their shares of Common Stock in favor of theMerger pursuant to a voting agreement entered into on February 23, 2007,by and among the Rollover Stockholders, the Company and FCP. Mr. Sartiniis the brother-in-law to Frank J. Fertitta III and Lorenzo J.Fertitta, and in September 2001, he resigned his position as ExecutiveVice President and Chief Operating Officer of the Company concurrent with hispurchase of Golden Gaming, Inc. Delise F. Sartini is the sister ofFrank J. Fertitta III and Lorenzo J. Fertitta and is married toBlake L. Sartini.

The Merger Agreement provides that, upon terminationunder specified circumstances related to a competing acquisition proposal, theCompany would be required to pay a termination fee of $160 million to FCP,except in the case of a termination resulting from a superior proposal receivedwithin 30 business days following the execution of the Merger Agreement, inwhich case the termination fee payable to FCP will be $106 million. If theCompany’s stockholders do not approve the Merger under certain circumstances,the Company must reimburse FCP for reasonable out-of-pocket fees and expenses(including reasonable legal fees and expenses) incurred by FCP, Merger Sub andtheir respective affiliates in connection with the transactions contemplated bythe Merger Agreement. The Company’s reimbursement of FCP’s expenses wouldreduce the amount of any required termination fee that becomes payable by theCompany. The Merger Agreement further provides that upon termination underspecified circumstances related to a breach of any representation, warranty,covenant or agreement on the part of FCP or Merger Sub or failure to obtaingaming approvals, FCP would be required to pay to the Company a reversetermination fee of $160 million or a regulatory termination fee of $106million, respectively. Pursuant to a limited guarantee, dated as of February 23,2007, affiliates of the Sponsor guaranteed the payment of the reversetermination fee, the regulatory termination fee and amounts arising fromindemnification and expense reimbursement obligations of FCP or Merger Subunder the Merger Agreement, up to $175 million in the aggregate.

FCP has obtained equity and debt financing commitmentsfor the transactions contemplated by the Merger Agreement, the proceeds ofwhich will be used by FCP to pay the aggregate merger consideration and relatedfees and expenses of the transactions contemplated by the Merger Agreement. Inconnection with the debt financing commitments, the Company and certain of itssubsidiaries (the “Operating Subs”) entered into a purchase and sale agreementwith a newly created wholly-owned subsidiary of the Company (“NewCo”), pursuantto which the Operating Subs’ interests in certain real property will be sold toNewCo and leased back to the Company and the Operating Subs (the “Sale andLeaseback Transaction”). The Sale and Leaseback Transaction was approved by theSpecial Committee, which obtained a fairness 

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opinion in connectiontherewith. The closing of the Sale and Leaseback Transaction is contingent uponthe consummation of the Merger. Consummation of the Merger is not subject to afinancing condition but is subject to various other conditions to closing,including approval of the Merger by our stockholders and regulatory approvals. TheMerger is expected to be completed in the second half of 2007.

The total value ofthe Merger transaction is estimated to be approximately $5.7 billion,consisting of approximately $4.5 billion to pay the Company’s stockholders andholders of options or restricted shares amounts due to them under the MergerAgreement assuming a purchase price of $90.00 per share (net of the exerciseprice for options and net of equity rollover shares), approximately $1.1billion to repay certain existing indebtedness, and approximately $106 millionto pay fees and expenses in connection with the Merger. The approximate valueof the Merger transaction to each of the Rollover Stockholders is as follows:

·       FrankJ. Fertitta III will (A) contribute 3,979,884 shares of the Company’scommon stock to FCP in exchange for Class A Units of FCP valued at $358,189,560based on the Merger consideration of $90.00 per share and (B) receive cashconsideration of approximately $96,717,240 in respect of his 1,074,636 sharesof the Company’s common stock that will be converted into the right to receivecash payments upon consummation of the Merger; and (C) receive cashconsideration of approximately $117,310,415 in respect of his restricted stockand option awards in the Company that will vest, be cancelled and convertedinto the right to receive cash payments upon consummation of the Merger;

·       LorenzoJ. Fertitta will (A) contribute 4,038,153 shares of the Company’s commonstock to FCP immediately prior to the consummation of the Merger in exchangefor Class A Units of FCP valued at $363,433,770 based on the Mergerconsideration of $90.00 per share; (B) receive cash consideration ofapproximately $93,236,850 in respect of his 1,035,965 shares of the Company’scommon stock that will be converted into the right to receive cash paymentsupon consummation of the Merger; and (C) receive cash consideration ofapproximately $107,305,490 in respect of his restricted stock and option awardsin the Company that will vest, be cancelled and converted into the right toreceive cash payments upon consummation of the Merger; and

·       Blakeand Delise Sartini will (A) contribute 1,653,984 shares of the Company’scommon stock to FCP immediately prior to the consummation of the Merger inexchange for Class A Units of FCP valued at $148,858,560 based on theMerger consideration of $90.00 per share; and (B) receive cashconsideration of approximately $222,572,970 in respect of their 2,473,033shares of the Company’s common stock that will be converted into the right toreceive cash payments upon consummation of the Merger.

**Boulder StationLease**

The Company entered into aground lease for 27 acres of land on which Boulder Station is located. TheCompany leases this land from KB Enterprises, a company owned by Frank J.Fertitta, Jr. and Victoria K. Fertitta (the “Related Lessor”), theparents of Frank J. Fertitta III, Chairman of the Board and ChiefExecutive Officer of the Company and Lorenzo J. Fertitta, Vice Chairman ofthe Board and President of the Company. The lease has a maximum term of 65years, ending in June 2058. The lease provides for monthly payments of$183,333 through June 2008. In July 2008, and every ten years thereafter,the rent will be adjusted by a cost of living factor. In July 2013, andevery ten years thereafter, the rent will be adjusted to the product of thefair market value of the land and the greater of (i) the then prevailingannual rate of return for comparably situated property or (ii) 8% peryear. In no event will the rent for any period be less than the immediatelypreceding period. Pursuant to the ground lease, the Company has an option,exercisable at five-year intervals with the next option in June 2008, topurchase the land at fair market value. The Company’s leasehold interest in theproperty is subject to a lien to secure borrowings 

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underthe Revolving Facility. The Company believes that the terms of the ground leaseare as fair to the Company as could be obtained from an independent thirdparty.

**Texas Station Lease**

The Company entered into aground lease for 47 acres of land on which Texas Station is located. TheCompany leases this land from Texas Gambling Hall & Hotel, Inc.,a company owned by the Related Lessor. The lease has a maximum term of 65years, ending in July 2060. The lease provides for monthly rental paymentsof $337,417 through June 2010. In July 2010, and every ten yearsthereafter, the rent will be adjusted to the product of the fair market valueof the land and the greater of (i) the then prevailing annual rate ofreturn being realized for owners of comparable land in Clark County or (ii) 8%per year. In July 2015, and every ten years thereafter, the rent will beadjusted by a cost of living factor. In no event will the rent for any periodbe less than the immediately preceding period. Pursuant to the ground lease,the Company has an option, exercisable at five-year intervals with the nextoption in May 2010, to purchase the land at fair market value. The Company’sleasehold interest in the property is subject to a lien to secure borrowingsunder the Revolving Facility. The Company believes that the terms of the groundlease are as fair to the Company as could be obtained from an independent thirdparty.

**Zuffa, LLC**

We have purchased ticketsto events held by Zuffa, LLC (“Zuffa”) which is the parent company of theUltimate Fighting Championship (“UFC”) and is owned by Frank J. Fertitta IIIand Lorenzo J. Fertitta.  For the yearended December 31, 2006, ticket purchases totaled $198,191. In July 2006,the Company entered into an agreement with Zuffa for Red Rock Casino Resort Spato serve as the host hotel and venue for a UFC event held on August 17,2006. The Company expended approximately $89,000 in goods and services inconnection with the event. However, the Company believes that the valuereceived from hosting the event exceeded the costs expended by the Company inconnection with such event.

**PROCEDURES FOR REVIEW,APPROVAL OR RATIFICATIONOF TRANSACTIONS WITH RELATED PERSONS**

Our Board of Directors hasapproved the related party transaction policy and procedures which gives ourAudit Committee the power to approve or disapprove potential related partytransactions of our directors and executive officers, and their immediatefamily members. The Audit Committee is charged with reviewing all relevantfacts and circumstances of a related party transaction, including if thetransaction is on terms comparable to those that could be obtained in arm’slength dealings with an unrelated third party and the extent of the person’sinterest in the transaction.

**DIRECTORINDEPENDENCE**

The Board of Directors hasdetermined that each of Messrs. Lebermann, Nave, Isgur and Lewis areindependent directors (as independence is defined in Section 303A.02 ofthe NYSE Listing Standards). As part of its analysis, the Board of Directorsdetermined that none of Messrs. Lebermann, Nave, Isgur or Lewis has adirect or indirect material relationship with the Company.

**ITEM 14.**         PRINCIPALACCOUNTING FEES AND SERVICES

**AUDITOR FEES ANDSERVICES**

Inaddition to performing the audit of the Company’s consolidated financial statementsfor the years ended December 31, 2006 and 2005, Ernst & Young LLPalso performed quarterly reviews of the Company’s consolidated financialstatements and various other services during 2006 and 2005 (including 

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services incurred under Section 404 of theSarbanes-Oxley Act of 2002). The aggregate fees billed or accrued for 2006 and2005 for each of the following categories of services are set forth below:

| ** **          | ** ** | **2006** | ** ** | **2005** | ** ** |
|---------------------|------------|----------|------------|----------|------------|
| Audit Fees          |       | $        | 1,080,371  |     | $          | 846,360 |   |
| Audit-Related  Fees |       | 38,613   |       | 20,600   |       |
| Tax Fees            |       | 69,388   |       | 19,655   |       |
| All Other Fees      |       | —   |       | —   |       |
|                     |            |          |            |          |            |  |  |

 

Ernst & Young LLPdid not provide any services related to financial information systems designand implementation during 2006 or 2005. The fees paid for tax services wereprimarily related to reviews of the Company’s tax returns, IRS examinations andtechnical services. Audit-related fees include fees paid for audits ofemployee benefit plans and consultation in relation to the pending MergerAgreement.

**PRE-APPROVALPOLICIES AND PROCEDURES**

The Audit Committee hasadopted a policy that requires advance approval of all audit, audit-related,tax and other services performed by the independent auditors. The policyprovides for pre-approval by the Audit Committee of specifically defined auditand non-audit services. Unless the specific service has been previouslypre-approved with respect to that year, the Audit Committee must approve thepermitted service before the independent auditor is engaged to perform it. TheAudit Committee has delegated to the Chairman of the Audit Committee authorityto approve permitted services provided that the Chairman reports any decisionsto the Committee at its next scheduled meeting.

**The Audit Committee approved allservices provided by Ernst & Young LLP.**

**CERTIFICATIONS**

In May 2006, theCompany submitted an NYSE “Section 12(a) CEO Certification” to theNYSE. The Chief Executive Officer and the Chief Financial Officercertifications required by Section 302 of the Sarbanes-Oxley Act of 2002were filed as exhibits to the Company’s Annual Report on Form 10-Kfor the year ended December 31, 2006.

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**PART IV**

**ITEM 15.**         EXHIBITSAND FINANCIAL STATEMENT SCHEDULES

(a)(3) Exhibits

The following exhibits are being filed herewith:

| Exhibit 31.1 |   | Certification pursuant to Section 302 of the  Sarbanes-Oxley Act of 2002. |
|--------------|--------|---------------------------------------------------------------------------|
| Exhibit 31.2 |   | Certification pursuant to Section 302 of the  Sarbanes-Oxley Act of 2002. |
| Exhibit 32.1 |   | Certification pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002. |
| Exhibit 32.2 |   | Certification pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002. |

 

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**SIGNATURES**

Pursuantto the requirements of Section 13 or 15(d) of the Securities ExchangeAct of 1934, the Registrant has duly caused this report to be signed on itsbehalf by the undersigned, thereunto duly authorized.
|                             |   | STATION CASINOS, INC. |
|-----------------------------|--------|-----------------------|
| Dated:  April 26, 2007 |   | By:                   |   | /s/  FRANK J. FERTITTA III |
|                        |   | * *              | * * | *Frank  J. Fertitta III  Chairman of the Board and Chief Executive  Officer (Principal Executive Officer)* |

 

Pursuantto the requirements of the Securities Exchange Act of 1934, this report hasbeen signed below by the following persons on behalf of the Registrant and inthe capacities and on the dates indicated.
| Signature                          | ** ** | **Title**                                                           | ** ** | **Date**            | ** ** | ** ** |
|------------------------------------|------------|---------------------------------------------------------------------|------------|---------------------|------------|------------|
| /s/  Frank J. Fertitta III         |       | Chairman of the Board  and Chief Executive                          |       | April 26, 2007 |       |       |
| Frank J. Fertitta  III             |       | Officer  (Principal Executive Officer)                              |       |                |       |       |
| /s/  Lorenzo J. Fertitta           |       | Vice Chairman, President  and Director                              |       | April 26, 2007 |       |       |
| Lorenzo J.  Fertitta               |       |                                                                |       |                |       |       |
| /s/  Thomas M. Friel               |       | Executive Vice  President, Chief Accounting                         |       | April 26, 2007 |       |       |
| Thomas M. Friel                    |       | Officer and Treasurer  (Principal Financial and Accounting Officer) |       |                |       |       |
| /s/  Lowell H. Lebermann, Jr. |       | Director                                                            |       | April 26, 2007 |       |       |
| Lowell H.  Lebermann, Jr.     |       |                                                                |       |                |       |       |
| /s/  James E. Nave                 |       | Director                                                            |       | April 26, 2007 |       |       |
| James E. Nave                      |       |                                                                |       |                |       |       |
| /s/  Lee S. Isgur                  |       | Director                                                            |       | April 26, 2007 |       |       |
| Lee S. Isgur                       |       |                                                                |       |                |       |       |
| /s/  Robert E. Lewis               |       | Director                                                            |       | April 26, 2007 |       |       |
| Robert E. Lewis                    |       |                                                                |       |                |       |       |

 

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