Document:

Exhibit
10.10

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS
EMPLOYMENT AGREEMENT (this “Agreement”)
is made and entered into as of the 7th day of November, 2007, by and between STATION CASINOS, INC., a Nevada corporation, with its
principal offices located at 1505 South Pavilion Center Drive, Las Vegas,
Nevada  89135 (the “Company”),
and THOMAS M. FRIEL (the “Executive”).

 

WHEREAS,
the Company and the Executive are parties to an Executive Employment Agreement
dated as of March 30, 2007 (the “Former Agreement”);
and

 

WHEREAS,
the Executive has agreed to continue his employment with the Company on the
terms and conditions set forth herein; and

 

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

 

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

 

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

 

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

 

1.2           “Base Salary” shall mean the salary provided for in Section 3.1 of this Agreement, as the same may be
increased from time to time thereunder.

 

1.3           “Board” shall mean the Board of Directors of the Company.

 

1.4           “Cause” shall mean that the Executive:

 

(a)           has
been convicted of any felony;

 

(b)           has
been found unsuitable to hold a gaming license by a final non-appealable
decision of the Nevada Gaming Commission; or

 

(c)           in
carrying out his duties under this Agreement, has engaged in acts or omissions
constituting gross negligence or willful misconduct resulting, in either case,
in material economic harm to the Company.

 

1.5           “Change in Control” shall mean the following:  (A) prior to the occurrence of an Initial Public
Offering (as defined in the LLC Agreement), the consummation of any transaction
(including, without limitation, any merger or consolidation) as a result of
which any “person” or “group” (in each case, as such term is used in Section
13(d)(3) of the 

 

 

Exchange Act), other than any Member of HoldCo LLC who is an Existing
Equity Holder or Permitted Transferee (as defined in the LLC Agreement) of such
a Member of HoldCo LLC, or an Affiliate thereof, becomes the “beneficial owner”
(as such term is defined in rule 13d-3 promulgated under the Exchange Act) of
more than fifty percent (50%) of the total issued and outstanding Class A Units
and Class B Units of HoldCo LLC; (B) after the occurrence of an Initial Public
Offering, the consummation of any transaction (including, without limitation,
any merger or consolidation) as a result of which any person or group, other
than a Member of HoldCo LLC who is an Existing Equity Holder or Permitted
Transferee of such a Member of HoldCo LLC, or any Affiliate thereof, becomes
the beneficial owner of more than thirty-five percent (35%) of the total issued
and outstanding shares of Voting Stock of the IPO Corporation; or (C) the sale,
lease, transfer, conveyance or other disposition (other than by way of merger
or consolidation) in one or a series of related transactions, of more than
fifty percent (50%) (as measured by fair market value at the time of transfer)
of the assets of the Company to any person (other than the Company or a Company
subsidiary), other than (x) any Member of HoldCo LLC on the date hereof or
Permitted Transferee of such a Member of HoldCo LLC or Affiliate thereof or (y)
as part of any financing transaction engaged in by the Company or a Company
subsidiary. In addition, no Change of Control shall be deemed to have occurred
as a result of any reorganization of or similar transaction engaged in by the
Company or any subsidiary of the Company (including in respect of an Initial
Public Offering). The Executive acknowledges and agrees that the consummation of
the transactions contemplated by that Agreement and Plan of Merger dated
February 23, 2007, and amended as of May 4, 2007, among HoldCo LLC, FCP
Acquisition Sub and the Company shall not constitute a “Change in Control”
hereunder.

 

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

 

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

 

1.8           “Competing Business” shall mean any Person engaged in the
gaming industry that directly or through an affiliate or subsidiary conducts
its business within the Restricted Area.

 

1.9           “Confidential Information” shall mean all nonpublic and/or
proprietary information respecting the business of the Company or any
Affiliate, including, without limitation, its products, programs, projects,
promotions, marketing plans and strategies, business plans or practices,
business operations, employees, research and development, intellectual
property, software, databases, trademarks, pricing information and accounting
and financing data. Confidential Information also includes information
concerning the Company’s or any Affiliate’s customers, such as their identity,
address, preferences, playing patterns and ratings or any other information
kept by the Company or any Affiliate concerning its customers whether or not
such information has been reduced to documentary form. Confidential Information
does not 

 

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include information that is, or becomes, available to the public unless
such availability occurs through an unauthorized act on the part of the
Executive.

 

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

 

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

 

1.12         “ERISA” shall mean the Employee Retirement Income Security
Act of 1974, as amended.

 

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

 

1.14         “Good Reason,” as used in Section 7.2, shall mean and
exist if there has been a Change in Control and, thereafter, without the
Executive’s prior written consent, one or more of the following events occurs:

 

(a)           the
Executive is assigned duties or responsibilities that are inconsistent, in any
significant respect, with the position of a senior manager;

 

(b)           the
Executive is required to relocate from, or maintain his principal office
outside of, Clark County, Nevada;

 

(c)           the
Executive’s Base Salary is decreased by the Company;

 

(d)           the
Executive is excluded from participation in any employee benefit or short-term
incentive plan or program offered to other similarly situated 

 

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executives
of the Company or his benefits under such plans or programs or opportunities
under any employee benefit or incentive plan or program of the Company is or
are materially reduced;

 

(e)           the
Company fails to pay the Executive any deferred payments that have become
payable under the Deferred Compensation Plan for Executives or other bonus or
incentive plans;

 

(f)            the  Company fails to reimburse the Executive for
business expenses in accordance with the Company’s policies, procedures or
practices;

 

(g)           the
Company fails to agree to or to actually indemnify the Executive for his
actions and/or inactions, as either a director or an officer of the Company, in
accordance with Section 10, and/or the Company fails to maintain
reasonably sufficient levels of directors’ and officers’ liability insurance
coverage for the Executive when such insurance is available; or

 

(h)           the
Company fails to obtain a written agreement from any successor or assign of the
Company to assume the obligations under this Agreement upon a Change in
Control.

 

For purposes of this Agreement, a determination by the
Executive that the Executive has “Good Reason” shall be final and binding on
the Company and the Executive absent a showing of bad faith on the part of the
Executive.

 

1.15         “HoldCo LLC” shall mean Fertitta Colony Partners LLC.

 

1.16         “IPO Corporation” shall mean the Company (or Affiliate
thereof) which is the issuer of the equity interests offered and sold in the
Initial Public Offering.

 

1.17         “LLC Agreement” shall mean that Second Amended and Restated
Operating Agreement of Fertitta Colony Partners LLC, dated of even date
herewith, as the same may be amended from time to time in accordance with the
terms thereof.

 

1.18         “Long-Term Stay-On Agreement” shall mean that Long-Term
Stay-On Performance Incentive Agreement dated June 1, 2004, between the Company
and the Executive.

 

1.19         “Person” shall mean any individual, firm, partnership,
association, trust, company, corporation or other entity.

 

1.20         “Pro Rata Annual Bonus” shall mean the amount of Annual Bonus,
multiplied by a fraction, the numerator of which is the number of days in such
year during which the Executive was actually employed by the Company and the
denominator of which is 365.

 

1.21         “Restricted Area” shall mean (a) the City of Las Vegas,
Nevada, and the area within a forty-five (45) mile radius of that city, and (b)
any area in or within a one hundred fifty (150) mile radius of any other location
in which the Company or any of its Affiliates are directly or indirectly
engaged in the development, ownership, operation or management of any 

 

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gaming activities or is actively pursuing any such activities; provided,
however, that in the event the Executive voluntarily terminates this
Agreement pursuant to Sections 6.3, 7.2 or 7.3, the Restricted Area
shall (a) after the first twelve (12) months of the Restriction Period, exclude
the Las Vegas Strip (which is defined as that area bounded by Koval Lane and
straight extensions thereof on the East, Charleston Boulevard on the North,
I-15 on the West, and Sunset Road on the South) and (b) after a Change in
Control, exclude Downtown Las Vegas (which is defined as that area bounded by
Eastern Avenue and straight extensions thereof on the East, I-515 (U.S. Highway
93/95) on the North, I-15 on the West, and Charleston Boulevard on the South).

 

1.22         “Restriction Period” shall mean the period ending twenty-four
(24) months after the termination or expiration of the Term of Employment,
regardless of the reason for such termination or expiration.

 

1.23         “Special Long-Term Disability Plan” shall mean the Company’s
Special Long-Term Disability Plan, effective as of November 30, 1994, as the
same may be amended from time to time.

 

1.24         “Sponsor Equity Holder” shall mean the affiliates of Colony
Capital, LLC, including FC Investor, LLC and its affiliated funds and
controlled accounts.

 

1.25         “Supplemental Management Retirement Plan” shall mean the
Company’s Supplemental Management Retirement Plan, effective as of November 30,
1994, as the same may be amended from time to time.

 

1.26         “Target Annual Bonus” shall mean an amount that is no less
than one hundred percent (100%) of the Executive’s then current Base Salary.

 

1.27         “Term of Employment” shall mean the period specified in Section 2.2.

 

1.28         “Voting Stock” shall mean capital stock or other equity
interests of any class or classes whose holders are entitled under ordinary
circumstances (irrespective of whether at the time stock or other equity
interests of any other class or classes shall have or might have voting power
by reason of the happening of any contingency) to vote for the election of a
majority of the directors, managers, trustees or other governing body of such
Person.

 

2.             TERM OF
EMPLOYMENT, POSITION AND RESPONSIBILITIES.

 

2.1           Employment  Accepted. The Company hereby employs the
Executive, and the Executive hereby accepts employment with the Company, for
the Term of Employment, in the position and with the responsibilities set forth
in Section 2.3 and upon such other
terms and conditions as are stated in this Agreement.

 

2.2           Term of Employment.
The initial Term of Employment shall commence upon the date of this
Agreement and, unless earlier terminated pursuant to the provisions of this
Agreement, shall terminate upon the close of business on the day immediately
preceding the fifth anniversary of the date of this Agreement; provided,
however, that the initial Term of Employment shall automatically be
extended for successive five-year periods if neither Party has 

 

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advised the other in writing in accordance with Section 14 at
least six (6) months prior to the end of the then current Term of Employment
that such Term of Employment will not be extended for an additional five year
period. In the event that such notice is given, (i) the Executive’s employment
shall terminate upon the close of business on the day immediately preceding the
expiration of the then current Term of Employment, and (ii) the Executive shall
not be entitled to any additional compensation hereunder after the expiration
thereof, but such termination of employment shall not otherwise affect accrued
but unpaid compensation or benefits provided under this Agreement or pursuant
to any Company plan or program.

 

2.3           Responsibilities. During the Term
of Employment, the Executive shall be employed as Executive Vice President,
Chief Accounting Officer and Treasurer, or in such other capacity as the
Company may direct, and shall have such responsibilities as the Company may
direct from time to time. During the Term of Employment, the Executive shall
devote his full time and attention to the business and affairs of the Company
and shall use his best efforts, skills and abilities to promote the Company’s
interests. Anything herein to the contrary notwithstanding, the Executive shall
not be precluded from engaging in charitable and community affairs and managing
his personal investments. It is expressly understood and agreed that, to the
extent any such activities have been conducted by the Executive prior to the
date of this Agreement and disclosed to the Board, the continued conduct of
such activities (or activities similar in nature and scope thereto) after the
date of this Agreement shall be deemed not to interfere with the Executive’s
duties and obligations to the Company under this Agreement. The Executive also
may serve as a member of the board of directors of other corporations, subject
to the approval of a majority of the Board, which approval shall not be
unreasonably withheld or delayed.

 

3.             COMPENSATION.

 

3.1           Base Salary. During the Term of
Employment, the Executive shall be entitled to receive a base salary (the “Base Salary”) payable no less frequently than in equal bi-weekly
installments at an annualized rate of no less than $500,000. The Base Salary
shall be reviewed annually for increase (but not decrease) in the discretion of
the Board. In conducting any such annual review, the Board shall take into
account any change in the Executive’s responsibilities, increases in the
compensation of other executives of the Company or any Affiliate (or any
competitor(s) of either or both), the performance of the Executive and/or other
pertinent factors. Such increased Base Salary shall then constitute the
Executive’s “Base Salary” for purposes of this Agreement.

 

3.2           Annual Bonus. The Company may pay
the Executive an annual bonus (the “Annual Bonus”)
for each calendar year ending during the Term of Employment in an amount that
will be determined by the Board based on the Executive’s performance. Any Annual
Bonus that may be awarded to the Executive shall be paid at the same time as
annual bonuses are paid to other senior officers of the Company, and in any
event no later than March 1 of the year following the calendar year in which
such bonus is earned, unless the Executive has elected to defer receipt of all
or part of the bonus amounts to which he is entitled in respect of any such
calendar year in accordance with the terms and provisions of any deferred
compensation program maintained by the Company.

 

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3.3           Stay-On Incentives. The Executive
shall be eligible to receive a long-term stay-on performance incentive payment
pursuant to the terms of the Long-Term Stay-On Agreement.

 

3.4           Deferred Compensation. The
Executive shall be eligible to participate in the Company’s Deferred
Compensation Plan for Executives, and any other deferred compensation plans
that the Company may adopt for executives, pursuant to the terms of the plans.

 

4.             EMPLOYEE
BENEFIT PROGRAMS.

 

4.1           Pension and Welfare Benefit Plans. During the Term of Employment, the
Executive shall be entitled to participate in all employee benefit programs
made available to the Company’s executives or salaried employees generally, as
such programs may be in effect from time to time, including, without
limitation, pension and other retirement plans, profit sharing plans, group
life insurance, group health insurance, accidental death and dismemberment
insurance, long-term disability, sick leave (including salary continuation
arrangements), vacations, holidays and other employee benefit programs
sponsored by the Company.

 

4.2           Additional Pension and Welfare Benefits.
In addition to the foregoing, the Company shall provide the Executive with the
following benefits:

 

(a)           Executive
Group Health Insurance Coverage pursuant to such other plan or plans as the
Company may select, and which shall be fully paid for by the Company;

 

(b)           full
salary continuation during the first ninety (90) days of any physical or mental
incapacity that prevents the Executive from performing his duties and, for any
Disability that continues thereafter, benefits pursuant to the Company’s
Special Long-Term Disability Plan and any other long-term disability benefits
pursuant to any other disability plan of which the Executive is a participant;

 

(c)           an
annual supplemental retirement benefit as set forth in the Supplemental
Management Retirement Plan, in addition to any other benefit pursuant to any
other retirement plan under which the Executive is covered; provided, however,
that the Supplemental Management Retirement Plan may not be amended or modified
in any respect without the prior written consent of the Executive; and

 

(d)           term
life insurance coverage, through individual and/or group policies, in an
aggregate amount of not less than $4.0 million.

 

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5.             BUSINESS
EXPENSE REIMBURSEMENT AND PERQUISITES.

 

5.1           Expense Reimbursement. During the
Term of Employment, the Executive shall be entitled to receive reimbursement by
the Company for all reasonable out-of-pocket expenses incurred by him in
performing services under this Agreement, subject to providing the proper
documentation of said expenses.

 

5.2           Perquisites. During
the Term of Employment, the Executive shall also be entitled to any of the
Company’s executive perquisites in accordance with the terms and provisions of
the applicable policies, including, without limitation:

 

(a)           vacation
of four weeks per year;

 

(b)           payment
or reimbursement of the cost of an annual physical examination;

 

(c)           payment
or reimbursement of initiation fees and annual membership fees and assessments
for a country club, a luncheon club and a physical fitness program of the
Executive’s choice; and

 

(d)           payment
or reimbursement of fees and expenses, up to a maximum amount of $2500.00,
incurred in connection with having this Agreement reviewed by legal counsel
prior to execution.

 

6.             TERMINATION
OF EMPLOYMENT.

 

6.1           Termination Due to Death or Disability.
The Executive’s employment shall be terminated immediately in the event of
his death or Disability. In the event of a termination due to the Executive’s
death or Disability, the Executive or his estate, as the case may be, shall be
entitled, in lieu of any other compensation whatsoever, to:

 

(a)           Base
Salary at the rate in effect at the time of his termination until the date of
death or Disability;

 

(b)           any
Annual Bonus awarded but not yet paid;

 

(c)           a
Pro Rata Annual Bonus for the fiscal year in which death or Disability occurs;

 

(d)           immediate
vesting of any deferred compensation or bonuses, including interest or other
credits on the deferred amounts to the extent provided in the plans or programs
providing for deferral;

 

(e)           reimbursement of expenses incurred but not paid
prior to such termination of employment; and

 

(f)            such
rights to other benefits as may be provided in applicable plans and programs of
the Company, including, without limitation, applicable employee benefit plans
and programs, according to the terms and provisions of such plans and programs.

 

8

 

6.2           Termination by the Company for Cause. The Company may terminate the
Executive’s employment for Cause at any time during the Term of Employment by
giving written notice to the Executive. In the event of a termination for
Cause, the Executive shall be entitled, in lieu of any other compensation and
benefits whatsoever, to:

 

(a)           Base
Salary at the rate in effect at the time of his termination through the date of
termination of employment;

 

(b)           any
Annual Bonus awarded but not yet paid;

 

(c)           immediate
vesting of any deferred compensation or bonuses, including interest or other
credits on the deferred amounts to the extent provided in the plans or programs
providing for deferral;

 

(d)           reimbursement
for expenses incurred but not paid prior to such termination of employment; and

 

(e)           such
rights to other benefits as may be provided in applicable plans and programs of
the Company, including, without limitation, applicable employee benefit plans
and programs, according to the terms and conditions of such plans and programs.

 

Notwithstanding anything to the contrary in this Section
6.2, if the Executive’s employment is terminated for Cause (i) due to his
having been formally charged pursuant to Section 1.4(a) but thereafter
said charges are dismissed or the Executive is acquitted, or (ii) due to
his having been convicted pursuant to Section 1.4(a) but said conviction
is subsequently overturned on appeal and he is not required to submit to
re-trial within six (6) months thereafter, the Company shall have the option of
reinstating the Executive with payment of all base salary payments that would
have been paid to him had his employment not been terminated and restoration of
all benefits provided for pursuant to Section 4, or making a
payment to him of an amount equal to three times one hundred sixty percent
(160%) of the Executive’s Base Salary at the rate in effect at the time of his
termination.

 

6.3           Termination by the Executive. The
Executive may terminate his employment on his own initiative for any reason
prior to a Change in Control upon thirty (30) days prior written notice to the
Company. Such termination shall have the same consequences as a termination for
Cause under Section 6.2.

 

6.4           Termination by the Company Without Cause. Notwithstanding any other provision
of this Agreement, the Company may terminate the Executive’s employment without
Cause, other than due to death or Disability, at any time during the Term of
Employment by giving written notice to the Executive. In the event that the
Company terminates the Executive’s employment without Cause prior to a Change
in Control, the Executive shall be entitled, in lieu of any other compensation
and benefits whatsoever, to:

 

(a)           an
amount equal to three times one hundred sixty percent (160%) of the Executive’s
Base Salary at the rate in effect at the time of his termination, one-third of
which shall be paid in a lump sum upon satisfaction of the 

 

9

 

conditions
set forth in Section 8.3, and the other two-thirds of which shall be
paid out in equal bi-weekly installments for the duration of the Restriction
Period;

 

(b)           any
Annual Bonus awarded but not yet paid and a Pro Rata Annual Bonus for the
fiscal year in which such termination of employment occurs;

 

(c)           immediate
vesting of any deferred compensation or bonuses, including interest or other
credits on the deferred amounts, to the extent provided in the plans or
programs providing for deferral;

 

(d)           exercise,
within one hundred eighty (180) days, all vested stock options, phantom stock
units, stock appreciation rights and other exercisable stock-based or
performance-based interests, and shall forfeit all stock options, phantom stock
units, stock appreciation rights and other exercisable stock-based or
performance-based interests that have not vested;

 

(e)           reimbursement
for expenses incurred but not paid prior to such termination of employment; and

 

(f)            continuation
of the Executive’s medical insurance, at the Company’s expense, for thirty-six
(36) months following such termination or, at the Company’s option, payment to
the Executive of the economic equivalent thereof.

 

6.5           Termination Due to Expiration of the Term of
Employment. If either Party elects not to extend the initial
Term of Employment or any successive Term of Employment, the Executive shall
not be entitled to any additional compensation after the expiration thereof,
but such termination of employment shall not otherwise affect accrued but
unpaid compensation or benefits provided under this Agreement or pursuant to
any Company plan or program.

 

7.             CHANGE IN
CONTROL.

 

7.1           Change in Control. Immediately upon
a Change in Control, in addition to any other compensation or benefits payable
pursuant to this Agreement or otherwise, the Executive shall be entitled to
immediate vesting of all restricted stock, stock options, phantom stock units,
stock appreciation rights and similar stock-based or performance-based
interests.

 

7.2           Termination by the Company Without Cause or by the
Executive for Good Reason After a Change in Control. If within
five years following a Change in Control, the Executive’s employment is
terminated by the Company without Cause or by the Executive for Good Reason,
the Executive shall be entitled, in addition to any compensation and benefits
provided pursuant to Section 7.1, but in lieu of any other compensation
and benefits whatsoever, to:

 

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(a)           a
lump sum payment equal to the greater of (i) three times one hundred sixty
percent (160%) of the Executive’s Base Salary at the time of the Change in
Control or (ii) three times one hundred sixty percent (160%) of the
Executive’s Base Salary at the time of the termination of his employment;

 

(b)           a
Pro Rata Annual Bonus for the fiscal year in which such termination of
employment occurs;

 

(c)           any
deferred compensation or bonuses, including interest or other credits on the
deferred amounts to the extent provided in the plans or programs providing for
deferral;

 

(d)           exercise,
within one hundred eighty (180) days, all vested stock options, phantom stock
units, stock appreciation rights and other exercisable stock-based or
performance-based interests;

 

(e)           immediate
vesting and pay out of all amounts set forth in the Long-Term Stay-On Agreement
as if the Executive had fully satisfied all of the terms and conditions
thereof;

 

(f)            immediate
vesting of the Executive’s supplemental retirement benefit as set forth in the
Supplemental Management Retirement Plan;

 

(g)           (i)
continued funding of the Executive’s term life insurance policy as if the
Executive were employed by the Company through the maturity date of such policy
or payment in full of all premium obligations under such policy, or (ii) at the
Executive’s option, a lump-sum payment to the Executive of the economic
equivalent thereof, as if the Executive were employed by the Company through
the maturity date of such policy; and

 

(h)           (i)
continuation of the Executive’s medical insurance, at the Company’s expense,
for thirty-six (36) months following such termination, or (ii) at the Executive’s
option, a lump-sum payment to the Executive of the economic equivalent thereof.

 

7.3           Termination by Executive without Good Reason After
a Change in Control. If the Executive terminates his employment
without Good Reason within ninety (90) days following the first anniversary of
a Change in Control, the Executive shall be entitled, in addition to any
compensation and benefits provided pursuant to Section 7.1, but in lieu
of any other compensation and benefits whatsoever, to:

 

(a)           an
amount equal to the greater of (i) three times one hundred sixty percent (160%)
of the Executive’s Base Salary at the time of the Change in Control or
(ii) three times one hundred sixty percent (160%) of the Executive’s Base
Salary at the time of the termination of his employment;

 

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(b)           a
Pro Rata Annual Bonus for the fiscal year in which such termination of
employment occurs;

 

(c)           any
deferred compensation or bonuses, including interest or other credits on the
deferred amounts to the extent provided in the plans or programs providing for
deferral;

 

(d)           exercise,
within one hundred eighty (180) days, all vested stock options, phantom stock
units, stock appreciation rights and other exercisable stock-based or
performance-based interests;

 

(e)           immediate
vesting of the Executive’s supplemental retirement benefit as set forth in the
Supplemental Management Retirement Plan;

 

(f)            (i)
continued funding of the Executive’s term life insurance policy as if the
Executive were employed by the Company through the maturity date of such policy
or payment in full of all premium obligations under such policy, or (ii) at the
Executive’s option, a lump-sum payment to the Executive of the economic
equivalent thereof, as if the Executive were employed by the Company through
the maturity date of such policy; and

 

(g)           (i)
continuation of the Executive’s medical insurance, at the Company’s expense,
for thirty-six (36) months following such termination, or (ii) at the Executive’s
option, a lump-sum payment to the Executive of the economic equivalent thereof.

 

7.4           Termination for Other Reasons After a Change in
Control. If the Executive’s employment is terminated by the
Company after a Change in Control for any reason not otherwise provided for by Section
7.2 or Section 7.3, his rights shall be determined in accordance
with the applicable subsection of Section 6.

 

8.             CONDITIONS
TO PAYMENTS.

 

8.1           Timing of Payments. Unless
otherwise provided herein, any payments to which the Executive shall be
entitled under Sections 6 and 7 shall be payable upon the
satisfaction of the conditions set forth in Section 8.3.

 

8.2           No Mitigation; No Offset. In the
event of any termination of employment under Sections 6 or 7, the
Executive shall be under no obligation to seek other employment and there shall
be no offset against amounts due to the Executive on account of any
remuneration attributable to any subsequent employment that the Executive may
obtain. Notwithstanding any contrary provision contained herein, in the event
of any termination of employment of the Executive, the exclusive remedies
available to the Executive shall be the amounts due under Sections 6 or 7,
which are in the nature of severance payments, or liquidated damages, or both,
and are not in the nature of a penalty. In the event of a termination of this
Agreement, neither Party shall publish in any way or make any negative comment
or statement 

 

12

 

about the other Party or concerning the reasons for such termination. The
provisions of this Section 8.2 shall survive the expiration or earlier
termination of this Agreement.

 

8.3           General Release. No payments or
benefits payable to the Executive upon the termination of his employment
pursuant to Sections 6 or 7 shall be made to the Executive unless and
until he executes a general release substantially in the form annexed to this
Agreement as Exhibit A and such general release becomes effective pursuant to
its terms.

 

8.4           Compliance with the Agreement. No
payments or benefits payable to the Executive upon the termination of his
employment pursuant to Sections 6 or 7 shall be made to the Executive if
he fails to comply with all of the terms and conditions of this Agreement,
including, without limitation, Sections 11 and 12.

 

8.5           Continuing Obligations of Executive.
No act or omission by the Executive in breach of this Agreement, including,
without limitation his failure to execute the general release and the resulting
forfeiture of termination payments, shall be deemed to permit the Executive to
forego or waive such payments in order to avoid his obligations under Section 11.

 

9.             SPECIAL
REIMBURSEMENT.

 

9.1           If
any payment or benefit paid or payable, or received or to be received, by or on
behalf of the Executive , whether any such payments or benefits are pursuant to
the terms of this Agreement or any other plan, program, arrangement or
agreement of or with the Company, any Affiliate, any Person, or otherwise (the “Total Payments”), will or would be subject to the excise tax
imposed under Section 4999 of the Code (the “Excise Tax”),
the Company shall pay to the Executive an additional amount (the “Gross-Up Payment”) such that, after payment by the Executive
of all taxes (including any interest or penalties imposed with respect to such
taxes) imposed upon or in respect of the Total Payments and the Gross-Up Payments,
including, without limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and any Excise Tax imposed thereon, the Executive
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon
the Total Payments.

 

9.2           For
purposes of determining whether any of the Total Payments will be subject to
the Excise Tax and the amount of such Excise Tax,

 

(a)           the
Total Payments shall be treated as “parachute payments” within the meaning of
Section 280G(b)(2) of the Code, and all “excess parachute payments” within the
meaning of Section 280G(b)(1) of the Code shall be treated as subject to
the Excise Tax, unless in the opinion of tax counsel selected by the Company
and reasonably acceptable to the Executive (which opinion shall be provided to
the Executive) such Total Payments (in whole or in part) (i) do not constitute
parachute payments, including (without limitation) by reason of
Section 280G(b)(4)(A) of the Code, (ii) such excess parachute payments
(in whole or in part) represent reasonable compensation for services actually
rendered, within the 

 

13

 

meaning
of Section 280G(b)(4)(B) of the Code, or (iii) are not, in the
opinion of legal counsel, otherwise subject to the Excise Tax, and

 

(b)           the
value of any non-cash benefits or any deferred payment or benefit shall be
determined by the Company’s independent auditors in accordance with the
principles of Sections 280G(d)(3) and (4) of the Code.

 

9.3           In
the event that the Excise Tax is subsequently determined to be less than the
amount taken into account hereunder, the Executive shall repay to the Company,
at the time that the amount of such reduction in Excise Tax is finally
determined, the portion of the Gross-Up Payment attributable to such reduction
plus interest on the amount of such repayment at the rate provided in Section
1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined to
exceed the amount taken into account hereunder at the time of the termination
of the Executive’s employment (including by reason of any payment the existence
or amount of which cannot be determined at the time of the initial Gross-Up
Payment), the Company shall make an additional Gross-Up Payment in accordance
with Section 9.1 in respect of such excess Excise Tax (plus any
interest, penalties or additions payable by the Executive with respect to such
excess Excise Tax) at the time that the amount of such excess Excise Tax is
finally determined. The Executive and the Company shall each reasonably
cooperate with each other in connection with any administrative or judicial
proceedings concerning the existence or amount of any such subsequent liability
for Excise Tax with respect to the Total Payments.

 

10.           INDEMNIFICATION.

 

10.1         General. The Company agrees that if
the Executive is made a party or is threatened to be made a party to any
action, suit or proceeding, whether civil, criminal, administrative or
investigative (an “Indemnifiable Action”),
by reason of the fact that he is or was a director or officer of the Company or
is or was serving at the request of the Company as a director, officer, member,
employee or agent of another corporation or of a partnership, joint venture,
trust or other enterprise, including service with respect to employee benefit
plans, whether or not the basis of such Indemnifiable Action is alleged action
in an official capacity as a director, officer, member, employee or agent, he
shall be indemnified and held harmless by the Company to the fullest extent authorized
by Nevada law and the Company’s bylaws, as the same exist or may hereafter be
amended (but, in the case of any such amendment to the Company’s bylaws, only
to the extent such amendment permits the Company to provide broader indemnification
rights than the Company’s bylaws permitted the Company to provide before such
amendment), against all expense, liability and loss (including, without
limitation, attorneys’ fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement) reasonably incurred or suffered
by the Executive in connection therewith.

 

10.2         Procedure. The indemnification
provided pursuant to this Section 10 shall be subject to the following
conditions:

 

(a)           The
Executive must promptly give the Company written notice of any actual or
threatened Indemnifiable Action and, upon providing such notice, the Executive
shall be presumed to be entitled to indemnification 

 

14

 

under
this Agreement and the Company shall have the burden of proof to overcome that
presumption in reaching any contrary determination; provided, however,
that the Executive’s failure to give such notice shall not affect the Company’s
obligations hereunder;

 

(b)           The
Company will be permitted, at its option, to participate in, or to assume, the
defense of any Indemnifiable Action, with counsel reasonably approved by the
Executive; provided, however, that (i) the Executive shall have
the right to employ his own counsel in such Indemnifiable Action at the
Executive’s expense, and (ii) if (A) the retention of counsel by the Executive
has been previously authorized in writing by the Company, (B) the Company shall
have reasonably concluded, based on the advice of independent legal counsel mutually
selected by the Company and the Executive, that there may be a conflict of
interest between the Company and the Executive in the conduct of any such
defense, or (C) the Company shall not, in fact, have retained counsel to assume
the defense of such Indemnifiable Action, the fees and expenses of the
Executive’s counsel shall be at the expense of the Company; and provided,
further, that the Company shall not settle any action or claim that
would impose any limitation or penalty on the Executive without obtaining the
Executive’s prior written consent, which consent shall not be unreasonably
withheld;

 

(c)           The
Executive must provide reasonable cooperation to the Company in the defense of
any Indemnifiable Action; and

 

(d)           The
Executive must refrain from settling any Indemnifiable Action without obtaining
the Company’s prior written consent, which consent shall not be unreasonably
withheld.

 

10.3         Advancement of Costs and Expenses. The
Company agrees to advance all costs and expenses referred to in Sections
10.1 and 10.6; provided, however, that the Executive
agrees to repay to the Company any amounts so advanced only if, and to the
extent that, it shall ultimately be determined by a court of competent
jurisdiction that the Executive is not entitled to be indemnified by the
Company as authorized by this Agreement. The advances to be made hereunder
shall be paid by the Company to or on behalf of the Executive within twenty
(20) days following delivery of a written request therefore by the Executive to
the Company. The Executive’s entitlement to advancement of costs and expenses
hereunder shall include those incurred in connection with any action, suit or
proceeding by the Executive seeking a determination, adjudication or
arbitration award with respect to his rights and/or obligations under this Section
10.

 

10.4         Non-Exclusivity of Rights. The
right to indemnification and the payment of expenses incurred in defending an
Indemnifiable Action in advance of its final disposition conferred in this Section 10
shall not be exclusive of any other right which the Executive may have or
hereafter may acquire under any statute, provision of the certificate of
incorporation or by-laws of the Company, agreement, vote of stockholders or
disinterested directors or otherwise.

 

15

 

10.5         D&O Insurance. The Company will
maintain a directors’ and officers’ liability insurance policy covering the
Executive that provides coverage that is reasonable in relation to the
Executive’s position during the Term of Employment.

 

10.6         Witness Expenses. Notwithstanding
any other provision of this Agreement, the Company shall indemnify the
Executive if and whenever he is a witness or threatened to be made a witness to
any action, suit or proceeding to which the Executive is not a party, by reason
of the fact that the Executive is or was a director or officer of the Company
or its Affiliates or by reason of anything done or not done by him in such
capacity, against all expense, liability and loss incurred or suffered by the
Executive in connection therewith; provided, however, that if the
Executive is no longer employed by the Company, the Company will compensate
him, on an hourly basis, for all time spent, at either his then current
compensation rate or his Base Salary at the rate in effect as of the
termination of his employment, whichever is higher.

 

10.7         Survival. The provisions of
this Section 10 shall survive the expiration or earlier termination of
this Agreement, regardless of the reason for such termination.

 

11.           COVENANT
NOT ENGAGE IN CERTAIN ACTS.

 

11.1         General. The Parties understand and
agree that the purpose of the restrictions contained in this Section 11
is to protect the goodwill and other legitimate business interests of the
Company, and that the Company would not have entered into this Agreement in the
absence of such restrictions. The Executive acknowledges and agrees that the
restrictions are reasonable and do not, and will not, unduly impair his ability
to make a living after the termination of his employment with the Company. The
provisions of this Section 11 shall survive the expiration or sooner
termination of this Agreement.

 

11.2         Non-assistance; Non-diversion. In
consideration for this Agreement to employ the Executive and the other valuable
consideration provided hereunder, the Executive agrees and covenants that
during the Term of Employment and during the Restriction Period, and except
when acting on behalf of the Company or on behalf of any Affiliate, the
Executive shall not, directly or indirectly, for himself or any third party, or
alone or as a member of a partnership, or as an officer, director, shareholder
or otherwise, engage in the following acts:

 

(a)           divert
or attempt to divert any existing business of the Company or any Affiliate;

 

(b)           accept
any position or affiliation with, or render any services on behalf of, any
Competing Business; or

 

(c)           hire
or retain any employee of the Company or any Affiliate to provide services for
any other Person or induce, solicit, attempt to solicit, encourage, divert,
cause or attempt to cause any employee or prospective employee of the Company
or any Affiliate to (i) terminate and/or leave such employment, or (ii)
accept employment with anyone other than the Company or an Affiliate.

 

16

 

11.3         Cessation/Reimbursement of Payments. If
the Executive violates any provision of this Section 11, the Company
may, upon giving written notice to the Executive, immediately cease all
payments and benefits that it may be providing to the Executive pursuant to Section
3, Section 6 or Section 7.2, and the Executive may be
required to reimburse the Company for any payments received from, and the cash
value of any benefits provided by, the Company between the first day of the
violation and the date such notice is given; provided, however,
that the foregoing shall be in addition to such other remedies as may be
available to the Company and shall not be deemed to permit the Executive to
forego or waive such payments in order to avoid his obligations under this Section
11.

 

11.4         Survival. The Executive agrees that
the provisions of this Section 11 shall survive the termination of
this Agreement and the termination of the Executive’s employment.

 

12.           CONFIDENTIAL
INFORMATION.

 

12.1         Confidential Information. The
Executive understands and acknowledges that Confidential Information
constitutes a valuable asset of the Company and its Affiliates and may not be
converted to the Executive’s own or any third party’s use. Accordingly, the
Executive hereby agrees that he shall not directly or indirectly, during the
Term of Employment or any time thereafter, disclose any Confidential
Information to any Person not expressly authorized by the Company to receive
such Confidential Information. The Executive further agrees that he shall not
directly or indirectly, during the Term of Employment or any time thereafter,
use or make use of any Confidential Information in connection with any business
activity other than that of the Company. The Parties acknowledge and agree that
this Agreement is not intended to, and does not, alter either the Company’s
rights or the Executive’s obligations under any state or federal statutory or
common law regarding trade secrets and unfair trade practices.

 

12.2         Company Property. All Company
Property is and shall remain exclusively the property of the Company. Unless
authorized in writing to the contrary, the Executive shall promptly, and
without charge, deliver to the Company on the termination of employment
hereunder, or at any other time the Company may so request, all Company
Property that the Executive may then possess or have under his control.

 

12.3         Required Disclosure. In the event
the Executive is required by law or court order to disclose any Confidential
Information or to produce any Company Property, the Executive shall promptly
notify the Company of such requirement and provide the Company with a copy of
any court order or of any law which requires such disclosure and, if the
Company so elects, to the extent permitted by applicable law, give the Company
an adequate opportunity, at its own expense, to contest such law or court order
prior to any such required disclosure or production by the Executive.

 

12.4         Survival. The Executive agrees that
the provisions of this Section 12 shall survive the termination of
this Agreement and the termination of the Executive’s employment to the extent
provided above.

 

17

 

13.           MUTUAL
ARBITRATION AGREEMENT.

 

13.1         Arbitrable Claims. All disputes
between the Executive (and his attorneys, successors, and assigns) and the
Company (and its trustees, beneficiaries, officers, directors, managers,
affiliates, employees, agents, successors, attorneys, and assigns) relating in
any manner whatsoever to the employment or termination of the Executive,
including, without limitation, all disputes arising under this Agreement (“Arbitrable Claims”), shall be resolved by binding
arbitration as set forth in this Section 13 (the “Mutual Arbitration
Agreement”). Arbitrable Claims shall include, but are not limited
to, claims for compensation, claims for breach of any contract or covenant
(express or implied), and tort claims of all kinds, as well as all claims based
on any federal, state, or local law, statute or regulation, but shall not
include the Company’s right to seek injunctive relief as provided in Section
15. Arbitration shall be final and binding upon the Parties and shall be
the exclusive remedy for all Arbitrable Claims. THE PARTIES HEREBY
WAIVE ANY RIGHTS THEY MAY HAVE TO TRIAL BY JUDGE OR JURY IN REGARD TO
ARBITRABLE CLAIMS, EXCEPT AS PROVIDED BY SECTION 13.4.

 

13.2         Procedure. Arbitration of
Arbitrable Claims shall be in accordance with the National Rules for the
Resolution of Employment Disputes of the American Arbitration Association, as
amended, and as augmented in this Agreement. Either Party may bring an action
in court to compel arbitration under this Agreement and to enforce an
arbitration award. Otherwise, neither Party shall initiate or prosecute any
lawsuit, appeal or administrative action in any way related to an Arbitrable
Claim. The initiating Party must file and serve an arbitration claim within
sixty (60) days of learning the facts giving rise to the alleged claim. All arbitration
hearings under this Agreement shall be conducted in Las Vegas, Nevada. The
Federal Arbitration Act shall govern the interpretation and enforcement of this
Agreement. The fees of the arbitrator shall be divided equally between both
Parties.

 

13.3         Confidentiality. All proceedings
and all documents prepared in connection with any Arbitrable Claim shall be
confidential and, unless otherwise required by law, the subject matter and
content thereof shall not be disclosed to any Person other than the parties to
the proceedings, their counsel, witnesses and experts, the arbitrator and, if
involved, the court and court staff.

 

13.4         Applicability. This Section 13
shall apply to all disputes under this Agreement other than disputes relating
to the enforcement of the Company’s rights under Sections 11 and 12 of
this Agreement.

 

13.5         Acknowledgements. The Executive
acknowledges that he:

 

(a)           has
carefully read this Section 13;

 

(b)           understands
its terms and conditions; and

 

(c)           has
entered into this Mutual Arbitration Agreement voluntarily and not in reliance
on any promises or representations made by the Company other than those
contained in this Mutual Arbitration Agreement.

 

18

 

14.           Notices. All notices,
demands and requests required or permitted to be given to either Party under
this Agreement shall be in writing and shall be deemed to have been given when
delivered personally or sent by certified or registered mail, postage prepaid,
return receipt requested, duly addressed to the Party concerned at the address
indicated below or to such changed address as such Party may subsequently give
notice of:

 

	
  If
  to the Company:

  	
  Station Casinos,
  Inc.

  
	
   

  	
  1505 S. Pavilion
  Center Drive

  
	
   

  	
  Las Vegas, NV
  89135

  
	
   

  	
  Attention:
  Richard J. Haskins

  
	
   

  	
   

  
	
  With
  a copy to:

  	
  Milbank, Tweed,
  Hadley & McCloy

  
	
   

  	
  601 South
  Figueroa Street, 30th Floor

  
	
   

  	
  Los Angeles, CA
  90017

  
	
   

  	
  Attention:
  Kenneth J. Baronsky

  
	
   

  	
   

  
	
  If
  to the Executive:

  	
  Thomas M. Friel

  
	
   

  	
  1505 S. Pavilion
  Center Drive

  
	
   

  	
  Las Vegas, NV
  89135

  
	
   

  	
   

  

 

15.           Right to Seek Injunctive Relief.
The Executive acknowledges that a violation on his part of any of the
covenants contained in Sections 11 and 12 would cause immeasurable and
irreparable damage to the Company. The Executive accordingly agrees and hereby
grants his consent that, without limiting the remedies available to the
Company, any actual or threatened violation of such covenants may be enforced
by injunctive relief or by other equitable remedies issued or ordered by any
court of competent jurisdiction.

 

16.           Employee Benefit Plan Documents.
In the event that any provision of this Agreement conflicts with the terms
and provisions of any employee benefit plan document, the provisions of this
Agreement shall govern; and the Company shall take any and all actions that may
be necessary, including amendment of any plan document, to effect the provision
of benefits expressly provided upon termination of the Executive’s employment
pursuant to Sections 6 and 7.

 

17.           Beneficiaries/References. The Executive shall be
entitled to select a beneficiary or beneficiaries to receive any compensation
or benefit payable hereunder following the Executive’s death, and may change
such election, by giving the Company written notice thereof. In the event of
the Executive’s death or a judicial determination of his incompetence,
reference in this Agreement to the Executive shall be deemed, where
appropriate, to refer to his beneficiary, estate or other legal representative.

 

18.           SURVIVORSHIP.
The respective rights and obligations of the Parties hereunder shall
survive the termination of this Agreement to the extent necessary to the
intended preservation of such rights and obligations. The provisions of this Section
18 are in addition to the survivorship provisions of any other Section of
this Agreement.

 

19

 

19.           REPRESENTATIONS
AND WARRANTIES. Each Party represents and warrants that he or it
is fully authorized and empowered to enter into this Agreement and that the
performance of his or its obligations under this Agreement will not violate any
agreement between that Party and any other Person.

 

20.           Entire Agreement.
This Agreement contains the entire agreement between the Parties concerning
the subject matter hereof and supersedes all prior agreements, understandings,
discussions, negotiations and undertakings, whether written or oral, between
the Parties with respect thereto. No representations, inducements, promises or
agreements not embodied herein shall be of any force or effect.

 

21.           Assignability; Binding Nature. This Agreement shall be
binding upon and inure to the benefit of the Parties and their respective
successors, heirs and assigns; provided, however, that no rights
or obligations of the Executive under this Agreement may be assigned or
transferred by the Executive, other than rights to compensation and benefits
hereunder, which may be transferred only by will or operation of law and
subject to the limitations of this Agreement; and provided, further,
that no rights or obligations of the Company under this Agreement may be
assigned or transferred by the Company, except that such rights or obligations
may be assigned or transferred pursuant to a merger or consolidation in which
the Company is not the continuing entity, or the sale or liquidation of all or
substantially all of the assets of the Company, provided that the assignee or
transferee is the successor to all or substantially all of the assets of the
Company and such assignee or transferee assumes the liabilities, obligations
and duties of the Company under this Agreement, either contractually or as a
matter of law. Upon the consummation of the Initial Public Offering, this
Agreement shall be assumed by the IPO Corporation and the Company and any other
Company Affiliate having obligations hereunder shall thereupon be released from
any liabilities or obligations hereunder.

 

22.           AMendment or Waiver. No provision in this Agreement may
be amended or waived unless such amendment or waiver is agreed to in writing,
signed by both Parties. No waiver by one Party of any breach by the other Party
of any condition or provision of this Agreement to be performed by such other
Party shall be deemed a waiver of a similar or dissimilar condition or
provision at the same or any prior or subsequent time. No failure of the
Company to exercise any power given it hereunder or to insist upon strict
compliance by the Executive with any obligation hereunder, and no custom or
practice at variance with the terms hereof, shall constitute a waiver of the
right of the Company to demand strict compliance with the terms hereof.

 

23.           Severability. In the event that any provision or portion
of this Agreement shall be determined to be invalid or unenforceable for any
reason, in whole or in part, the remaining provisions of this Agreement shall
be unaffected thereby and shall remain in full force and effect to the fullest
extent permitted by law.

 

24.           SECTION
409A. Notwithstanding anything in this Agreement to the
contrary, no payment under this Agreement shall be made to the Executive at a
time or in a form that would subject Executive to the penalty tax of Section
409A of the Code (the “409A Tax”). If
any payment under any other provision of this Agreement would, if paid at the
time or in the form called for under such provision, subject the Executive to
the 409A Tax, such payment (the 

 

20

 

“Deferred Amount”)
shall instead be paid at the earliest time that it could be paid without
subjecting the Executive to the 409A Tax, and shall be paid in a form that
would not subject the Executive to the 409A Tax. The Deferred Amount shall
accrue simple interest at the prime rate of interest as published by Bank of
America N.A. (or its successor) during the deferral period and shall be paid
with the Deferred Amount. The Company will place an amount in a “rabbi trust”
with Towers Perrin (or such other trustee mutually acceptable to the Company
and the Executive) equal to the Deferred Amount, plus the interest that will accrue
thereon

 

25.           Governing Law. This Agreement shall be governed by and
construed and interpreted in accordance with the laws of the State of Nevada
without reference to the principles of conflict of laws thereof. In the event
of any dispute or controversy arising out of or relating to this Agreement that
is not an arbitrable claim, the Parties mutually and irrevocably consent to,
and waive any objection to, the exclusive jurisdiction of any court of
competent jurisdiction in Clark County, Nevada, to resolve such dispute or
controversy.

 

26.           Headings. The headings of the Sections contained in this
Agreement are for convenience only and shall not be deemed to control or affect
the meaning or construction of any provision of this Agreement.

 

27.           Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same Agreement with the same effect as if all Parties
had signed the same signature page. Any signature page of this Agreement may be
detached from any counterpart of this Agreement and reattached to any other
counterpart of this Agreement identical in form hereto but having attached to
it one or more additional signature pages.

 

28.           ACKNOWLEDGEMENT.
The Executive represents and acknowledges the following: 

 

(a)           he
has carefully read this Agreement in its entirety;

 

(b)           he
understands the terms and conditions contained herein;

 

(c)           he
has had the opportunity to review this Agreement with legal counsel of his own
choosing and has not relied on any statements made by the Company or its legal
counsel as to the meaning of any term or condition contained herein or in
deciding whether to enter into this Agreement; and

 

(d)           he
is entering into this Agreement knowingly and voluntarily.

 

21

 

IN
WITNESS WHEREOF, the undersigned have executed this Agreement
as of the date first written above.

 

 

	
   

  	
  STATION
  CASINOS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard J.
  Haskins

  	
   

  
	
   

  	
  Name:

  	
  Richard J.
  Haskins

  
	
   

  	
  Title:

  	
  Executive Vice
  President,

  
	
   

  	
   

  	
  General Counsel
  and Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Thomas M. Friel

  	
   

  
	
   

  	
  THOMAS
  M. FRIEL

  
					

 

 

GUARANTEE

 

Fertitta Colony Partners LLC, a Nevada limited
liability company, hereby, to the fullest extent permitted by applicable law,
irrevocably and unconditionally guarantees to the Executive the prompt
performance and payment in full when due of all obligations of the Company to
the Executive under this Employment Agreement; provided, however,
that upon an Initial Public Offering, such Guarantee shall automatically
terminate and be of no further force or effect.

 

	
   

  	
  FERTITTA
  COLONY PARTNERS LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lorenzo J. Fertitta

  	
   

  
	
   

  	
  Name:

  	
  Lorenzo J. Fertitta

  
	
   

  	
  Title:

  	
  Vice President

  

 

22

 

EXHIBIT “A”

 

GENERAL RELEASE AND COVENANT NOT TO SUE

 

This
GENERAL RELEASE AND COVENANT NOT TO SUE
(this “Release”) is executed and delivered by THOMAS M. FRIEL (the “Executive”) to STATION CASINOS, INC., a Nevada corporation
(the “Company”).

 

In
consideration of the agreement by the Company to provide the separation
payments and benefits in Section 6 and Section 7 of the
Employment Agreement between the Executive and the Company, dated as of November
7, 2007 (the “Employment Agreement”), and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Executive hereby agrees as follows:

 

1.             RELEASE AND COVENANT.
THE EXECUTIVE, OF HIS OWN FREE WILL, VOLUNTARILY RELEASES AND FOREVER
DISCHARGES THE COMPANY AND ITS SUBSIDIARIES AND AFFILIATES, AND EACH OF THEIR
RESPECTIVE PAST AND PRESENT AGENTS, EMPLOYEES, MANAGERS, REPRESENTATIVES,
OFFICERS, DIRECTORS, ATTORNEYS, ACCOUNTANTS, TRUSTEES, SHAREHOLDERS, PARTNERS,
INSURERS, HEIRS, PREDECESSORS-IN-INTEREST, ADVISORS, SUCCESSORS AND ASSIGNS
(COLLECTIVELY, THE “RELEASED PARTIES”) FROM, AND COVENANTS NOT TO SUE OR
PROCEED AGAINST ANY OF THE FOREGOING ON THE BASIS OF, ANY AND ALL PAST OR
PRESENT CAUSES OF ACTION, SUITS, AGREEMENTS OR OTHER RIGHTS OR CLAIMS WHICH THE
EXECUTIVE, HIS DEPENDENTS, RELATIVES, HEIRS, EXECUTORS, ADMINISTRATORS,
SUCCESSORS AND ASSIGNS HAS OR HAVE AGAINST ANY OF THE RELEASED PARTIES UPON OR
BY REASON OF ANY MATTER ARISING OUT OF HIS EMPLOYMENT BY THE COMPANY AND THE
CESSATION OF SAID EMPLOYMENT, AND INCLUDING, BUT NOT LIMITED TO, ANY ALLEGED
VIOLATION OF THE CIVIL RIGHTS ACTS OF 1964 AND 1991, THE EQUAL PAY ACT OF 1963,
THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967 (INCLUDING THE OLDER WORKERS
BENEFIT PROTECTION ACT OF 1990), THE REHABILITATION ACT OF 1973, THE FAMILY AND
MEDICAL LEAVE ACT OF 1993, THE AMERICANS WITH DISABILITIES ACT OF 1990, THE
EMPLOYMENT RETIREMENT INCOME SECURITY ACT OF 1974, THE NEVADA FAIR EMPLOYMENT
PRACTICES ACT, THE LABOR LAWS OF THE UNITED STATES AND NEVADA, AND ANY OTHER
FEDERAL, STATE OR LOCAL LAW, REGULATION OR ORDINANCE, OR PUBLIC POLICY,
CONTRACT OR TORT LAW, HAVING ANY BEARING WHATSOEVER ON THE TERMS AND CONDITIONS
OR CESSATION OF HIS EMPLOYMENT WITH THE COMPANY.

 

2.             DUE CARE. THE
EXECUTIVE ACKNOWLEDGES THAT HE HAS RECEIVED A COPY OF THIS RELEASE PRIOR TO ITS
EXECUTION AND HAS BEEN ADVISED HEREBY OF HIS OPPORTUNITY TO REVIEW AND CONSIDER
THIS 

 

 

RELEASE FOR TWENTY-ONE (21) DAYS PRIOR TO ITS EXECUTION.
THE EXECUTIVE FURTHER ACKNOWLEDGES THAT HE HAS BEEN ADVISED HEREBY TO CONSULT
WITH AN ATTORNEY PRIOR TO EXECUTING THIS RELEASE. THE EXECUTIVE ENTERS INTO
THIS RELEASE HAVING FREELY AND KNOWINGLY ELECTED, AFTER DUE CONSIDERATION, TO
EXECUTE THIS RELEASE AND TO FULFILL THE PROMISES SET FORTH HEREIN. THIS RELEASE
SHALL BE REVOCABLE BY THE EXECUTIVE DURING THE SEVEN (7) DAY PERIOD FOLLOWING
ITS EXECUTION, AND SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE
EXPIRATION OF SUCH SEVEN (7) DAY PERIOD. IN THE EVENT OF SUCH A REVOCATION, THE
EXECUTIVE SHALL NOT BE ENTITLED TO THE CONSIDERATION FOR THIS RELEASE SET FORTH
ABOVE.

 

3.             RELIANCE BY THE
EXECUTIVE. THE EXECUTIVE ACKNOWLEDGES THAT, IN
HIS DECISION TO ENTER INTO THIS RELEASE, HE HAS NOT RELIED ON ANY
REPRESENTATIONS, PROMISES OR ARRANGEMENT OF ANY KIND, INCLUDING ORAL STATEMENTS
BY REPRESENTATIVES OF THE COMPANY, EXCEPT AS SET FORTH IN THIS RELEASE.

 

4.             MISCELLANEOUS. THE
EXECUTIVE SHALL NOT DISCLOSE THE EXISTENCE OR CONTENTS OF THIS RELEASE TO
ANYONE OTHER THAN HIS IMMEDIATE FAMILY, ACCOUNTANTS OR ATTORNEYS, AND THE
EXECUTIVE SHALL INSTRUCT SUCH THIRD PARTIES NOT TO DISCLOSE THE SAME. THIS
RELEASE SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEVADA WITHOUT REFERENCE TO THE PRINCIPLES OF CONFLICT
OF LAWS THEREOF. IF ANY PROVISION OF THIS RELEASE IS HELD INVALID OR
UNENFORCEABLE FOR ANY REASON, THE REMAINING PROVISIONS SHALL BE CONSTRUED AS IF
THE INVALID OR UNENFORCEABLE PROVISION HAD NOT BEEN INCLUDED.

 

This
GENERAL RELEASE AND COVENANT NOT TO SUE is executed by the Executive and
delivered to the Company on                            .

 

 

	
   

  	
  “Executive”

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THOMAS M. FRIEL

  

 

 

	
  STATE OF

  	
  )

  
	
   

  	
  ) ss:

  
	
  COUNTY OF

  	
  )

  

 

On this           day
of                    ,          ,
before me, a Notary Public of the State of                      ,
personally appeared Thomas M. Friel, to me known and known to me to be the
person described and who executed the foregoing release and did then and there
acknowledge to me that he voluntarily executed the same.

 

 

	
   

  	
   

  
	
  NOTARY PUBLIC

  

 

[Not to
be signed or notarized upon execution of Employment Agreement]Exhibit
10.11

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of
the 7th day of November, 2007, by and between STATION CASINOS, INC., a Nevada
corporation, with its principal offices located at 1505 South Pavilion Center
Drive, Las Vegas, Nevada  89135 (the “Company”), and SCOTT M NIELSON (the “Executive”).

 

WHEREAS, the Company and the Executive are
parties to an Executive Employment Agreement dated as of May 20, 2003, as
amended by that First Amendment dated as of July 13, 2004 (collectively, the “Former Agreement”); and

 

WHEREAS, the Executive has agreed to
continue his employment with the Company on the terms and conditions set forth
herein; and

 

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

 

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

 

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

 

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

 

1.2           “Base Salary” shall mean the salary provided
for in Section 3.1 of this
Agreement, as the same may be increased from time to time thereunder.

 

1.3           “Board” shall mean the Board of Directors of
the Company.

 

1.4           “Cause” shall mean that the Executive:

 

(a)           has been convicted of
any felony;

 

(b)           has been found
unsuitable to hold a gaming license by a final non-appealable decision of the
Nevada Gaming Commission; or

 

(c)           in carrying out his
duties under this Agreement, has engaged in acts or omissions constituting
gross negligence or willful misconduct resulting, in either case, in material
economic harm to the Company.

 

1.5           “Change in Control” shall mean the
following:  (A) prior to the occurrence
of an Initial Public Offering (as defined in the LLC Agreement), the
consummation of any transaction (including, without limitation, any merger or
consolidation) as a result of 

 

 

which any “person” or “group”
(in each case, as such term is used in Section 13(d)(3) of the Exchange Act),
other than any Member of HoldCo LLC who is an Existing Equity Holder or
Permitted Transferee (as defined in the LLC Agreement) of such a Member of
HoldCo LLC, or an Affiliate thereof, becomes the “beneficial owner” (as such
term is defined in rule 13d-3 promulgated under the Exchange Act) of more than
fifty percent (50%) of the total issued and outstanding Class A Units and Class
B Units of HoldCo LLC; (B) after the occurrence of an Initial Public Offering,
the consummation of any transaction (including, without limitation, any merger
or consolidation) as a result of which any person or group, other than a Member
of HoldCo LLC who is an Existing Equity Holder or Permitted Transferee of such
a Member of HoldCo LLC, or any Affiliate thereof, becomes the beneficial owner
of more than thirty-five percent (35%) of the total issued and outstanding
shares of Voting Stock of the IPO Corporation; or (C) the sale, lease, transfer,
conveyance or other disposition (other than by way of merger or consolidation)
in one or a series of related transactions, of more than fifty percent (50%)
(as measured by fair market value at the time of transfer) of the assets of the
Company to any person (other than the Company or a Company subsidiary), other
than (x) any Member of HoldCo LLC on the date hereof or Permitted Transferee of
such a Member of HoldCo LLC or Affiliate thereof or (y) as part of any
financing transaction engaged in by the Company or a Company subsidiary. In
addition, no Change of Control shall be deemed to have occurred as a result of
any reorganization of or similar transaction engaged in by the Company or any
subsidiary of the Company (including in respect of an Initial Public Offering).
The Executive acknowledges and agrees that the consummation of the transactions
contemplated by that Agreement and Plan of Merger dated February 23, 2007, and
amended as of May 4, 2007, among HoldCo LLC, FCP Acquisition Sub and the
Company shall not constitute a “Change in Control” hereunder.

 

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

 

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

 

1.8           “Competing Business” shall mean any Person
engaged in the gaming industry that directly or through an affiliate or
subsidiary conducts its business within the Restricted Area.

 

1.9           “Confidential Information” shall mean all
nonpublic and/or proprietary information respecting the business of the Company
or any Affiliate, including, without limitation, its products, programs,
projects, promotions, marketing plans and strategies, business plans or
practices, business operations, employees, research and development,
intellectual property, software, databases, trademarks, pricing information and
accounting and financing data. Confidential Information also includes
information concerning the Company’s or any Affiliate’s customers, such as
their identity, address, preferences, playing patterns and ratings or any other
information kept by the Company or any Affiliate concerning its customers
whether or not such information has been reduced to documentary form. Confidential
Information does not 

 

2

 

include information that
is, or becomes, available to the public unless such availability occurs through
an unauthorized act on the part of the Executive.

 

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

 

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

 

1.12         “ERISA” shall mean the Employee Retirement
Income Security Act of 1974, as amended.

 

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

 

1.14         “Good Reason,” as used in Section 7.2,
shall mean and exist if there has been a Change in Control and, thereafter,
without the Executive’s prior written consent, one or more of the following
events occurs:

 

(a)           the Executive is
assigned duties or responsibilities that are inconsistent, in any significant
respect, with the position of a senior manager;

 

(b)           the Executive is
required to relocate from, or maintain his principal office outside of, Clark
County, Nevada;

 

(c)           the Executive’s Base
Salary is decreased by the Company;

 

(d)           the Executive is
excluded from participation in any employee benefit or short-term incentive
plan or program offered to other similarly situated 

 

3

 

executives of the Company
or his benefits under such plans or programs or opportunities under any
employee benefit or incentive plan or program of the Company is or are
materially reduced;

 

(e)           the Company fails to
pay the Executive any deferred payments that have become payable under the
Deferred Compensation Plan for Executives or other bonus or incentive plans;

 

(f)            the  Company fails to reimburse the Executive for
business expenses in accordance with the Company’s policies, procedures or
practices;

 

(g)           the Company fails to
agree to or to actually indemnify the Executive for his actions and/or
inactions, as either a director or an officer of the Company, in accordance
with Section 10, and/or the Company fails to maintain reasonably
sufficient levels of directors’ and officers’ liability insurance coverage for
the Executive when such insurance is available; or

 

(h)           the Company fails to
obtain a written agreement from any successor or assign of the Company to
assume the obligations under this Agreement upon a Change in Control.

 

For purposes of this
Agreement, a determination by the Executive that the Executive has “Good Reason”
shall be final and binding on the Company and the Executive absent a showing of
bad faith on the part of the Executive.

 

1.15         “HoldCo LLC” shall mean Fertitta Colony
Partners LLC.

 

1.16         “IPO Corporation” shall mean the Company
(or Affiliate thereof) which is the issuer of the equity interests offered and
sold in the Initial Public Offering.

 

1.17         “LLC Agreement” shall mean that Second
Amended and Restated Operating Agreement of Fertitta Colony Partners LLC, dated
of even date herewith, as the same may be amended from time to time in
accordance with the terms thereof.

 

1.18         [Intentionally omitted.]

 

1.19         “Person” shall mean any individual, firm,
partnership, association, trust, company, corporation or other entity.

 

1.20         “Pro Rata Annual Bonus” shall mean the
amount of Annual Bonus, multiplied by a fraction, the numerator of which is the
number of days in such year during which the Executive was actually employed by
the Company and the denominator of which is 365.

 

1.21         “Restricted Area” shall mean (a) the City
of Las Vegas, Nevada, and the area within a forty-five (45) mile radius of that
city, and (b) any area in or within a one hundred fifty (150) mile radius of
any other location in which the Company or any of its Affiliates are directly
or indirectly engaged in the development, ownership, operation or management of
any gaming activities or is actively pursuing any such activities; provided,
however, that in the event 

 

4

 

the Executive voluntarily
terminates this Agreement pursuant to Sections 6.3, 7.2 or 7.3, the
Restricted Area shall (a) after the first twelve (12) months of the Restriction
Period, exclude the Las Vegas Strip (which is defined as that area bounded by
Koval Lane and straight extensions thereof on the East, Charleston Boulevard on
the North, I-15 on the West, and Sunset Road on the South) and (b) after a
Change in Control, exclude Downtown Las Vegas (which is defined as that area
bounded by Eastern Avenue and straight extensions thereof on the East, I-515
(U.S. Highway 93/95) on the North, I-15 on the West, and Charleston Boulevard
on the South).

 

1.22         “Restriction Period” shall mean the period
ending twenty-four (24) months after the termination or expiration of the Term
of Employment, regardless of the reason for such termination or expiration.

 

1.23         “Special Long-Term Disability Plan” shall
mean the Company’s Special Long-Term Disability Plan, effective as of November
30, 1994, as the same may be amended from time to time.

 

1.24         “Sponsor Equity Holder” shall mean the
affiliates of Colony Capital, LLC, including FC Investor, LLC and its
affiliated funds and controlled accounts.

 

1.25         “Supplemental Management Retirement Plan”
shall mean the Company’s Supplemental Management Retirement Plan, effective as
of November 30, 1994, as the same may be amended from time to time.

 

1.26         “Target Annual Bonus” shall mean an amount
that is no less than one hundred percent (100%) of the Executive’s then current
Base Salary.

 

1.27         “Term of Employment” shall mean the period
specified in Section 2.2.

 

1.28         “Voting Stock” shall mean capital stock or
other equity interests of any class or classes whose holders are entitled under
ordinary circumstances (irrespective of whether at the time stock or other
equity interests of any other class or classes shall have or might have voting
power by reason of the happening of any contingency) to vote for the election
of a majority of the directors, managers, trustees or other governing body of
such Person.

 

2.             TERM OF EMPLOYMENT, POSITION AND RESPONSIBILITIES.

 

2.1           Employment  Accepted. The Company hereby employs the
Executive, and the Executive hereby accepts employment with the Company, for
the Term of Employment, in the position and with the responsibilities set forth
in Section 2.3 and upon such other
terms and conditions as are stated in this Agreement.

 

2.2           Term of Employment.
The initial Term of Employment shall commence upon the date of this
Agreement and, unless earlier terminated pursuant to the provisions of this
Agreement, shall terminate upon the close of business on the day immediately
preceding the fifth anniversary of the date of this Agreement; provided,
however, that the initial Term of Employment shall automatically be
extended for successive five-year periods if neither Party has advised the
other in writing in accordance with Section 14 at least six (6) months
prior to the end of the then current Term of Employment that such Term of
Employment will not be extended for 

 

5

 

an additional five year
period. In the event that such notice is given, (i) the Executive’s employment
shall terminate upon the close of business on the day immediately preceding the
expiration of the then current Term of Employment, and (ii) the Executive shall
not be entitled to any additional compensation hereunder after the expiration
thereof, but such termination of employment shall not otherwise affect accrued
but unpaid compensation or benefits provided under this Agreement or pursuant
to any Company plan or program.

 

2.3           Responsibilities. During the Term of
Employment, the Executive shall be employed as Executive Vice President and
Chief Development Officer, or in such other capacity as the Company may direct,
and shall have such responsibilities as the Company may direct from time to
time. During the Term of Employment, the Executive shall devote his full time
and attention to the business and affairs of the Company and shall use his best
efforts, skills and abilities to promote the Company’s interests. Anything
herein to the contrary notwithstanding, the Executive shall not be precluded
from engaging in charitable and community affairs and managing his personal
investments. It is expressly understood and agreed that, to the extent any such
activities have been conducted by the Executive prior to the date of this
Agreement and disclosed to the Board, the continued conduct of such activities
(or activities similar in nature and scope thereto) after the date of this
Agreement shall be deemed not to interfere with the Executive’s duties and
obligations to the Company under this Agreement. The Executive also may serve
as a member of the board of directors of other corporations, subject to the
approval of a majority of the Board, which approval shall not be unreasonably
withheld or delayed.

 

3.             COMPENSATION.

 

3.1           Base Salary. During the Term of
Employment, the Executive shall be entitled to receive a base salary (the “Base
Salary”) payable no less frequently than in equal bi-weekly installments at an
annualized rate of no less than $960,000. The Base Salary shall be reviewed
annually for increase (but not decrease) in the discretion of the Board. In
conducting any such annual review, the Board shall take into account any change
in the Executive’s responsibilities, increases in the compensation of other
executives of the Company or any Affiliate (or any competitor(s) of either or
both), the performance of the Executive and/or other pertinent factors. Such
increased Base Salary shall then constitute the Executive’s “Base Salary” for
purposes of this Agreement.

 

3.2           Annual Bonus. The Company may pay the
Executive an annual bonus (the “Annual Bonus”)
for each calendar year ending during the Term of Employment in an amount that
will be determined by the Board based on the Executive’s performance. Any
Annual Bonus that may be awarded to the Executive shall be paid at the same
time as annual bonuses are paid to other senior officers of the Company, and in
any event no later than March 1 of the year following the calendar year in
which such bonus is earned, unless the Executive has elected to defer receipt
of all or part of the bonus amounts to which he is entitled in respect of any
such calendar year in accordance with the terms and provisions of any deferred
compensation program maintained by the Company.

 

3.3           Deferred Compensation. The Executive
shall be eligible to participate in the Company’s Deferred Compensation Plan
for Executives, and any other deferred 

 

6

 

compensation plans that
the Company may adopt for executives, pursuant to the terms of the plans.

 

4.             EMPLOYEE BENEFIT PROGRAMS.

 

4.1           Pension and Welfare Benefit Plans. During the Term of Employment, the
Executive shall be entitled to participate in all employee benefit programs
made available to the Company’s executives or salaried employees generally, as
such programs may be in effect from time to time, including, without
limitation, pension and other retirement plans, profit sharing plans, group
life insurance, group health insurance, accidental death and dismemberment
insurance, long-term disability, sick leave (including salary continuation
arrangements), vacations, holidays and other employee benefit programs
sponsored by the Company.

 

4.2           Additional Pension and Welfare Benefits.
In addition to the foregoing, the Company shall provide the Executive with the
following benefits:

 

(a)           Executive Group Health
Insurance Coverage pursuant to such other plan or plans as the Company may
select, and which shall be fully paid for by the Company;

 

(b)           full salary
continuation during the first ninety (90) days of any physical or mental
incapacity that prevents the Executive from performing his duties and, for any
Disability that continues thereafter, benefits pursuant to the Company’s
Special Long-Term Disability Plan and any other long-term disability benefits
pursuant to any other disability plan of which the Executive is a participant;

 

(c)           an annual supplemental
retirement benefit as set forth in the Supplemental Management Retirement Plan,
in addition to any other benefit pursuant to any other retirement plan under
which the Executive is covered; provided, however, that the
Supplemental Management Retirement Plan may not be amended or modified in any
respect without the prior written consent of the Executive; and

 

(d)           term life insurance
coverage, through individual and/or group policies, in an aggregate amount of
not less than $7.5 million.

 

5.             BUSINESS EXPENSE REIMBURSEMENT AND PERQUISITES.

 

5.1           Expense Reimbursement. During the Term
of Employment, the Executive shall be entitled to receive reimbursement by the
Company for all reasonable out-of-pocket expenses incurred by him in performing
services under this Agreement, subject to providing the proper documentation of
said expenses.

 

5.2           Perquisites. During the
Term of Employment, the Executive shall also be entitled to any of the Company’s
executive perquisites in accordance with the terms and provisions of the
applicable policies, including, without limitation:

 

7

 

(a)           vacation of four weeks
per year;

 

(b)           payment or
reimbursement of the cost of an annual physical examination;

 

(c)           payment or
reimbursement of initiation fees and annual membership fees and assessments for
a country club, a luncheon club and a physical fitness program of the Executive’s
choice; and

 

(d)           payment or
reimbursement of fees and expenses, up to a maximum amount of $2500.00,
incurred in connection with having this Agreement reviewed by legal counsel
prior to execution.

 

6.             TERMINATION OF EMPLOYMENT.

 

6.1           Termination Due to Death or Disability. The
Executive’s employment shall be terminated immediately in the event of his
death or Disability. In the event of a termination due to the Executive’s death
or Disability, the Executive or his estate, as the case may be, shall be
entitled, in lieu of any other compensation whatsoever, to:

 

(a)           Base Salary at the rate
in effect at the time of his termination until the date of death or Disability;

 

(b)           any Annual Bonus
awarded but not yet paid;

 

(c)           a Pro Rata Annual Bonus
for the fiscal year in which death or Disability occurs;

 

(d)           immediate vesting of
any deferred compensation or bonuses, including interest or other credits on
the deferred amounts to the extent provided in the plans or programs providing
for deferral;

 

(e)           reimbursement of
expenses incurred but not paid prior to such termination of employment; and

 

(f)            such rights to other
benefits as may be provided in applicable plans and programs of the Company,
including, without limitation, applicable employee benefit plans and programs,
according to the terms and provisions of such plans and programs.

 

6.2           Termination by the Company for Cause. The Company may terminate the
Executive’s employment for Cause at any time during the Term of Employment by
giving written notice to the Executive. In the event of a termination for
Cause, the Executive shall be entitled, in lieu of any other compensation and
benefits whatsoever, to:

 

(a)           Base Salary at the rate
in effect at the time of his termination through the date of termination of
employment;

 

(b)           any Annual Bonus
awarded but not yet paid;

 

8

 

(c)           immediate vesting of
any deferred compensation or bonuses, including interest or other credits on
the deferred amounts to the extent provided in the plans or programs providing
for deferral;

 

(d)           reimbursement for
expenses incurred but not paid prior to such termination of employment; and

 

(e)           such rights to other
benefits as may be provided in applicable plans and programs of the Company,
including, without limitation, applicable employee benefit plans and programs,
according to the terms and conditions of such plans and programs.

 

Notwithstanding anything
to the contrary in this Section 6.2, if the Executive’s employment is
terminated for Cause (i) due to his having been formally charged pursuant to Section
1.4(a) but thereafter said charges are dismissed or the Executive is
acquitted, or (ii) due to his having been convicted pursuant to Section
1.4(a) but said conviction is subsequently overturned on appeal and he is
not required to submit to re-trial within six (6) months thereafter, the
Company shall have the option of reinstating the Executive with payment of all
base salary payments that would have been paid to him had his employment not
been terminated and restoration of all benefits provided for pursuant to Section 4,
or making a payment to him of an amount equal to three times one hundred sixty
percent (160%) of the Executive’s Base Salary at the rate in effect at the time
of his termination.

 

6.3           Termination by the Executive. The
Executive may terminate his employment on his own initiative for any reason
prior to a Change in Control upon thirty (30) days prior written notice to the
Company. Such termination shall have the same consequences as a termination for
Cause under Section 6.2, except that the Executive shall not be entitled
to immediate vesting of any deferred compensation or bonuses as provided or
permitted is Section 6.2(c).

 

6.4           Termination by the Company Without Cause. Notwithstanding any other provision
of this Agreement, the Company may terminate the Executive’s employment without
Cause, other than due to death or Disability, at any time during the Term of
Employment by giving written notice to the Executive. In the event that the
Company terminates the Executive’s employment without Cause prior to a Change
in Control, the Executive shall be entitled, in lieu of any other compensation
and benefits whatsoever, to:

 

(a)           an amount equal to three
times one hundred sixty percent (160%) of the Executive’s Base Salary at the
rate in effect at the time of his termination, one-third of which shall be paid
in a lump sum upon satisfaction of the conditions set forth in Section 8.3,
and the other two-thirds of which shall be paid out in equal bi-weekly
installments for the duration of the Restriction Period;

 

(b)           any Annual Bonus
awarded but not yet paid and a Pro Rata Annual Bonus for the fiscal year in
which such termination of employment occurs;

 

9

 

(c)           immediate vesting of
any deferred compensation or bonuses, including interest or other credits on
the deferred amounts, to the extent provided in the plans or programs providing
for deferral;

 

(d)           exercise, within one
hundred eighty (180) days, all vested stock options, phantom stock units, stock
appreciation rights and other exercisable stock-based or performance-based
interests, and shall forfeit all stock options, phantom stock units, stock
appreciation rights and other exercisable stock-based or performance-based
interests that have not vested;

 

(e)           reimbursement for
expenses incurred but not paid prior to such termination of employment; and

 

(f)            continuation of the
Executive’s medical insurance, at the Company’s expense, for thirty-six (36)
months following such termination or, at the Company’s option, payment to the
Executive of the economic equivalent thereof.

 

6.5           Termination Due to Expiration of the Term of
Employment. If either Party elects not to extend the initial
Term of Employment or any successive Term of Employment, the Executive shall
not be entitled to any additional compensation after the expiration thereof,
but such termination of employment shall not otherwise affect accrued but
unpaid compensation or benefits provided under this Agreement or pursuant to
any Company plan or program.

 

7.             CHANGE IN CONTROL.

 

7.1           Change in Control. Immediately upon a
Change in Control, in addition to any other compensation or benefits payable
pursuant to this Agreement or otherwise, the Executive shall be entitled to (a)
immediate vesting of all restricted stock, stock options, phantom stock units,
stock appreciation rights and similar stock-based or performance-based
interests and (b) immediate vesting of any deferred compensation or bonuses,
including interest or other credits on the deferred amounts to the extent
provided for in the plans or programs providing for deferral.

 

7.2           Termination by the Company Without Cause or by the
Executive for Good Reason After a Change in Control. If within
five years following a Change in Control, the Executive’s employment is
terminated by the Company without Cause or by the Executive for Good Reason,
the Executive shall be entitled, in addition to any compensation and benefits
provided pursuant to Section 7.1, but in lieu of any other compensation
and benefits whatsoever, to:

 

(a)           a lump sum payment
equal to the greater of (i) three times one hundred sixty percent (160%) of the
Executive’s Base Salary at the time of the Change in Control or (ii) three
times one hundred sixty percent (160%) of the Executive’s Base Salary at the
time of the termination of his employment;

 

10

 

(b)           a Pro Rata Annual Bonus
for the fiscal year in which such termination of employment occurs;

 

(c)           any deferred bonus,
including interest or other credits on the deferred amounts to the extent
provided in the plans or programs providing for deferral;

 

(d)           exercise, within one
hundred eighty (180) days, all vested stock options, phantom stock units, stock
appreciation rights and other exercisable stock-based or performance-based
interests;

 

(e)           immediate vesting of
the Executive’s supplemental retirement benefit as set forth in the
Supplemental Management Retirement Plan;

 

(f)            (i) continued funding
of the Executive’s term life insurance policy as if the Executive were employed
by the Company through the maturity date of such policy or payment in full of
all premium obligations under such policy, or (ii) at the Executive’s option, a
lump-sum payment to the Executive of the economic equivalent thereof, as if the
Executive were employed by the Company through the maturity date of such
policy; and

 

(g)           (i) continuation of the
Executive’s medical insurance, at the Company’s expense, for thirty-six (36)
months following such termination, or (ii) at the Executive’s option, a
lump-sum payment to the Executive of the economic equivalent thereof.

 

7.3           Termination by Executive without Good Reason After a
Change in Control. If the Executive terminates his employment
without Good Reason within ninety (90) days following the first anniversary of
a Change in Control, the Executive shall be entitled, in addition to any
compensation and benefits provided pursuant to Section 7.1, but in lieu
of any other compensation and benefits whatsoever, to:

 

(a)           an amount equal to the
greater of (i) three times one hundred sixty percent (160%) of the Executive’s
Base Salary at the time of the Change in Control or (ii) three times one
hundred sixty percent (160%) of the Executive’s Base Salary at the time of the
termination of his employment;

 

(b)           a Pro Rata Annual Bonus
for the fiscal year in which such termination of employment occurs;

 

(c)           any deferred bonus,
including interest or other credits on the deferred amounts to the extent
provided in the plans or programs providing for deferral;

 

(d)           exercise, within one
hundred eighty (180) days, all vested stock options, phantom stock units, stock
appreciation rights and other exercisable stock-based or performance-based
interests;

 

11

 

(e)           immediate vesting of
the Executive’s supplemental retirement benefit as set forth in the
Supplemental Management Retirement Plan;

 

(f)            (i) continued funding
of the Executive’s term life insurance policy as if the Executive were employed
by the Company through the maturity date of such policy or payment in full of
all premium obligations under such policy, or (ii) at the Executive’s option, a
lump-sum payment to the Executive of the economic equivalent thereof, as if the
Executive were employed by the Company through the maturity date of such
policy; and

 

(g)           (i) continuation of the
Executive’s medical insurance, at the Company’s expense, for thirty-six (36)
months following such termination, or (ii) at the Executive’s option, a
lump-sum payment to the Executive of the economic equivalent thereof.

 

7.4           Termination for Other Reasons After a Change in
Control. If the Executive’s employment is terminated by the
Company after a Change in Control for any reason not otherwise provided for by Section
7.2 or Section 7.3, his rights shall be determined in accordance
with the applicable subsection of Section 6.

 

8.             CONDITIONS TO PAYMENTS.

 

8.1           Timing of Payments. Unless otherwise provided
herein, any payments to which the Executive shall be entitled under Sections 6
and 7 shall be payable upon the satisfaction of the conditions set forth in
Section 8.3.

 

8.2           No Mitigation; No Offset. In the event
of any termination of employment under Sections 6 or 7, the Executive
shall be under no obligation to seek other employment and there shall be no
offset against amounts due to the Executive on account of any remuneration
attributable to any subsequent employment that the Executive may obtain. Notwithstanding
any contrary provision contained herein, in the event of any termination of
employment of the Executive, the exclusive remedies available to the Executive
shall be the amounts due under Sections 6 or 7, which are in the nature
of severance payments, or liquidated damages, or both, and are not in the
nature of a penalty. In the event of a termination of this Agreement, neither
Party shall publish in any way or make any negative comment or statement about
the other Party or concerning the reasons for such termination. The provisions
of this Section 8.2 shall survive the expiration or earlier termination
of this Agreement.

 

8.3           General Release. No payments or
benefits payable to the Executive upon the termination of his employment
pursuant to Sections 6 or 7 shall be made to the Executive unless and
until he executes a general release substantially in the form annexed to this
Agreement as Exhibit A and such general release becomes effective pursuant to
its terms.

 

8.4           Compliance with the Agreement. No
payments or benefits payable to the Executive upon the termination of his
employment pursuant to Sections 6 or 7 shall be made to the Executive if
he fails to comply with all of the terms and conditions of this Agreement,
including, without limitation, Sections 11 and 12.

 

12

 

8.5           Continuing Obligations of Executive. No
act or omission by the Executive in breach of this Agreement, including,
without limitation his failure to execute the general release and the resulting
forfeiture of termination payments, shall be deemed to permit the Executive to
forego or waive such payments in order to avoid his obligations under Section 11.

 

9.             SPECIAL REIMBURSEMENT.

 

9.1           If any payment or
benefit paid or payable, or received or to be received, by or on behalf of the
Executive , whether any such payments or benefits are pursuant to the terms of
this Agreement or any other plan, program, arrangement or agreement of or with
the Company, any Affiliate, any Person, or otherwise (the “Total Payments”), will or would be subject
to the excise tax imposed under Section 4999 of the Code (the “Excise Tax”), the Company shall pay to the
Executive an additional amount (the “Gross-Up
Payment”) such that, after payment by the Executive of all taxes
(including any interest or penalties imposed with respect to such taxes)
imposed upon or in respect of the Total Payments and the Gross-Up Payments,
including, without limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and any Excise Tax imposed thereon, the Executive
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon
the Total Payments.

 

9.2           For purposes of
determining whether any of the Total Payments will be subject to the Excise Tax
and the amount of such Excise Tax,

 

(a)           the Total Payments
shall be treated as “parachute payments” within the meaning of Section
280G(b)(2) of the Code, and all “excess parachute payments” within the meaning
of Section 280G(b)(1) of the Code shall be treated as subject to the
Excise Tax, unless in the opinion of tax counsel selected by the Company and
reasonably acceptable to the Executive (which opinion shall be provided to the
Executive) such Total Payments (in whole or in part) (i) do not constitute
parachute payments, including (without limitation) by reason of
Section 280G(b)(4)(A) of the Code, (ii) such excess parachute
payments (in whole or in part) represent reasonable compensation for services
actually rendered, within the meaning of Section 280G(b)(4)(B) of the
Code, or (iii) are not, in the opinion of legal counsel, otherwise subject
to the Excise Tax, and

 

(b)           the value of any
non-cash benefits or any deferred payment or benefit shall be determined by the
Company’s independent auditors in accordance with the principles of
Sections 280G(d)(3) and (4) of the Code.

 

9.3           In the event that the
Excise Tax is subsequently determined to be less than the amount taken into
account hereunder, the Executive shall repay to the Company, at the time that
the amount of such reduction in Excise Tax is finally determined, the portion
of the Gross-Up Payment attributable to such reduction plus interest on the
amount of such repayment at the rate provided in Section 1274(b)(2)(B) of the
Code. In the event that the Excise Tax is determined to exceed the amount taken
into account hereunder at the time of the termination of the Executive’s
employment (including by reason of any payment the existence or amount of 

 

13

 

which cannot be
determined at the time of the initial Gross-Up Payment), the Company shall make
an additional Gross-Up Payment in accordance with Section 9.1 in respect
of such excess Excise Tax (plus any interest, penalties or additions payable by
the Executive with respect to such excess Excise Tax) at the time that the
amount of such excess Excise Tax is finally determined. The Executive and the
Company shall each reasonably cooperate with each other in connection with any
administrative or judicial proceedings concerning the existence or amount of
any such subsequent liability for Excise Tax with respect to the Total
Payments.

 

10.           INDEMNIFICATION.

 

10.1         General. The Company agrees that if the
Executive is made a party or is threatened to be made a party to any action,
suit or proceeding, whether civil, criminal, administrative or investigative
(an “Indemnifiable Action”), by
reason of the fact that he is or was a director or officer of the Company or is
or was serving at the request of the Company as a director, officer, member,
employee or agent of another corporation or of a partnership, joint venture,
trust or other enterprise, including service with respect to employee benefit
plans, whether or not the basis of such Indemnifiable Action is alleged action
in an official capacity as a director, officer, member, employee or agent, he
shall be indemnified and held harmless by the Company to the fullest extent
authorized by Nevada law and the Company’s bylaws, as the same exist or may
hereafter be amended (but, in the case of any such amendment to the Company’s
bylaws, only to the extent such amendment permits the Company to provide
broader indemnification rights than the Company’s bylaws permitted the Company
to provide before such amendment), against all expense, liability and loss
(including, without limitation, attorneys’ fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid or to be paid in settlement) reasonably
incurred or suffered by the Executive in connection therewith.

 

10.2         Procedure. The indemnification provided
pursuant to this Section 10 shall be subject to the following
conditions:

 

(a)           The Executive must
promptly give the Company written notice of any actual or threatened
Indemnifiable Action and, upon providing such notice, the Executive shall be
presumed to be entitled to indemnification under this Agreement and the Company
shall have the burden of proof to overcome that presumption in reaching any
contrary determination; provided, however, that the Executive’s
failure to give such notice shall not affect the Company’s obligations
hereunder;

 

(b)           The Company will be
permitted, at its option, to participate in, or to assume, the defense of any
Indemnifiable Action, with counsel reasonably approved by the Executive; provided,
however, that (i) the Executive shall have the right to employ his own
counsel in such Indemnifiable Action at the Executive’s expense, and (ii) if
(A) the retention of counsel by the Executive has been previously authorized in
writing by the Company, (B) the Executive shall have concluded, based on the
advice of his legal counsel, that there may be a conflict of interest between
the Company and the Executive in the conduct of any such defense, or (C) the
Company shall not, in fact, have retained counsel to assume the defense of such

 

14

 

Indemnifiable Action, the
fees and expenses of the Executive’s counsel shall be at the expense of the
Company; and provided, further, that the Company shall not settle
any action or claim that would impose any limitation or penalty on the
Executive without obtaining the Executive’s prior written consent, which
consent shall not be unreasonably withheld;

 

(c)           The Executive must
provide reasonable cooperation to the Company in the defense of any
Indemnifiable Action; and

 

(d)           The Executive must
refrain from settling any Indemnifiable Action without obtaining the Company’s
prior written consent, which consent shall not be unreasonably withheld.

 

10.3         Advancement of Costs and Expenses. The
Company agrees to advance all costs and expenses referred to in Sections
10.1 and 10.6; provided, however, that the Executive
agrees to repay to the Company any amounts so advanced only if, and to the
extent that, it shall ultimately be determined by a court of competent
jurisdiction that the Executive is not entitled to be indemnified by the
Company as authorized by this Agreement. The advances to be made hereunder
shall be paid by the Company to or on behalf of the Executive within twenty
(20) days following delivery of a written request therefore by the Executive to
the Company. The Executive’s entitlement to advancement of costs and expenses
hereunder shall include those incurred in connection with any action, suit or
proceeding by the Executive seeking a determination, adjudication or
arbitration award with respect to his rights and/or obligations under this Section
10.

 

10.4         Non-Exclusivity of Rights. The right to
indemnification and the payment of expenses incurred in defending an Indemnifiable
Action in advance of its final disposition conferred in this Section 10
shall not be exclusive of any other right which the Executive may have or
hereafter may acquire under any statute, provision of the certificate of
incorporation or by-laws of the Company, agreement, vote of stockholders or
disinterested directors or otherwise.

 

10.5         D&O Insurance. The Company will
maintain a directors’ and officers’ liability insurance policy covering the
Executive that provides coverage that is reasonable in relation to the
Executive’s position during the Term of Employment.

 

10.6         Witness Expenses. Notwithstanding any
other provision of this Agreement, the Company shall indemnify the Executive if
and whenever he is a witness or threatened to be made a witness to any action,
suit or proceeding to which the Executive is not a party, by reason of the fact
that the Executive is or was a director or officer of the Company or its
Affiliates or by reason of anything done or not done by him in such capacity,
against all expense, liability and loss incurred or suffered by the Executive
in connection therewith; provided, however, that if the Executive
is no longer employed by the Company, the Company will compensate him, on an
hourly basis, for all time spent, at either his then current compensation rate
or his Base Salary at the rate in effect as of the termination of his
employment, whichever is higher.

 

15

 

10.7         Survival. The provisions of this Section
10 shall survive the expiration or earlier termination of this Agreement,
regardless of the reason for such termination.

 

11.           COVENANT NOT ENGAGE IN CERTAIN ACTS.

 

11.1         General. The Parties understand and
agree that the purpose of the restrictions contained in this Section 11
is to protect the goodwill and other legitimate business interests of the
Company, and that the Company would not have entered into this Agreement in the
absence of such restrictions. The Executive acknowledges and agrees that the
restrictions are reasonable and do not, and will not, unduly impair his ability
to make a living after the termination of his employment with the Company. The
provisions of this Section 11 shall survive the expiration or sooner
termination of this Agreement.

 

11.2         Non-assistance; Non-diversion. In
consideration for this Agreement to employ the Executive and the other valuable
consideration provided hereunder, the Executive agrees and covenants that
during the Term of Employment and during the Restriction Period, and except
when acting on behalf of the Company or on behalf of any Affiliate, the
Executive shall not, directly or indirectly, for himself or any third party, or
alone or as a member of a partnership, or as an officer, director, shareholder
or otherwise, engage in the following acts:

 

(a)           divert or attempt to
divert any existing business of the Company or any Affiliate;

 

(b)           accept any position or
affiliation with, or render any services on behalf of, any Competing Business;
or

 

(c)           hire or retain any
employee of the Company or any Affiliate to provide services for any other
Person or induce, solicit, attempt to solicit, encourage, divert, cause or
attempt to cause any employee or prospective employee of the Company or any
Affiliate to (i) terminate and/or leave such employment, or (ii) accept
employment with anyone other than the Company or an Affiliate.

 

Notwithstanding
the foregoing, the Executive’s private practice of law (in which he shall be
permitted to represent any Competing Business so long as (i) the Executive obtains
the prior written consent of the Company after full disclosure in each case in
which such representation could be adverse to or in conflict with the interests
of the Company and (ii) the Executive does not divulge or use any Confidential
Information in connection with such representation) during the Restriction
Period shall not be deemed to be a violation of Section 11.2(a) or (b)

 

11.3         Cessation/Reimbursement of Payments. If
the Executive violates any provision of this Section 11, the Company
may, upon giving written notice to the Executive, immediately cease all
payments and benefits that it may be providing to the Executive pursuant to Section
3, Section 6 or Section 7.2, and the Executive may be
required to reimburse the Company for any payments received from, and the cash
value of any benefits provided by, the Company between the first day of the
violation and the date such notice is given; provided, however,
that the foregoing shall be in addition to such other remedies as may be
available to the 

 

16

 

Company and shall not be
deemed to permit the Executive to forego or waive such payments in order to
avoid his obligations under this Section 11.

 

11.4         Survival. The Executive agrees that the
provisions of this Section 11 shall survive the termination of this
Agreement and the termination of the Executive’s employment.

 

12.           CONFIDENTIAL INFORMATION.

 

12.1         Confidential Information. The Executive
understands and acknowledges that Confidential Information constitutes a
valuable asset of the Company and its Affiliates and may not be converted to
the Executive’s own or any third party’s use. Accordingly, the Executive hereby
agrees that he shall not directly or indirectly, during the Term of Employment
or any time thereafter, disclose any Confidential Information to any Person not
expressly authorized by the Company to receive such Confidential Information. The
Executive further agrees that he shall not directly or indirectly, during the
Term of Employment or any time thereafter, use or make use of any Confidential
Information in connection with any business activity other than that of the
Company. The Parties acknowledge and agree that this Agreement is not intended
to, and does not, alter either the Company’s rights or the Executive’s
obligations under any state or federal statutory or common law regarding trade
secrets and unfair trade practices.

 

12.2         Company Property. All Company Property
is and shall remain exclusively the property of the Company. Unless authorized
in writing to the contrary, the Executive shall promptly, and without charge,
deliver to the Company on the termination of employment hereunder, or at any
other time the Company may so request, all Company Property that the Executive
may then possess or have under his control.

 

12.3         Required Disclosure. In the event the
Executive is required by law or court order to disclose any Confidential
Information or to produce any Company Property, the Executive shall promptly
notify the Company of such requirement and provide the Company with a copy of
any court order or of any law which requires such disclosure and, if the
Company so elects, to the extent permitted by applicable law, give the Company
an adequate opportunity, at its own expense, to contest such law or court order
prior to any such required disclosure or production by the Executive.

 

12.4         Survival. The Executive agrees that the
provisions of this Section 12 shall survive the termination of this
Agreement and the termination of the Executive’s employment to the extent
provided above.

 

13.           MUTUAL ARBITRATION AGREEMENT.

 

13.1         Arbitrable Claims. All disputes between
the Executive (and his attorneys, successors, and assigns) and the Company (and
its trustees, beneficiaries, officers, directors, managers, affiliates,
employees, agents, successors, attorneys, and assigns) relating in any manner
whatsoever to the employment or termination of the Executive, including,
without limitation, all disputes arising under this Agreement (“Arbitrable Claims”), shall be resolved by
binding arbitration as set forth in this Section 13 (the “Mutual Arbitration Agreement”). 

 

17

 

Arbitrable Claims shall
include, but are not limited to, claims for compensation, claims for breach of
any contract or covenant (express or implied), and tort claims of all kinds, as
well as all claims based on any federal, state, or local law, statute or
regulation, but shall not include the Company’s right to seek injunctive relief
as provided in Section 15. Arbitration shall be final and binding upon
the Parties and shall be the exclusive remedy for all Arbitrable Claims. THE PARTIES HEREBY WAIVE ANY RIGHTS THEY MAY HAVE TO
TRIAL BY JUDGE OR JURY IN REGARD TO ARBITRABLE CLAIMS, EXCEPT AS PROVIDED BY SECTION
13.4.

 

13.2         Procedure. Arbitration of Arbitrable
Claims shall be in accordance with the National Rules for the Resolution of
Employment Disputes of the American Arbitration Association, as amended, and as
augmented in this Agreement. Either Party may bring an action in court to
compel arbitration under this Agreement and to enforce an arbitration award. Otherwise,
neither Party shall initiate or prosecute any lawsuit, appeal or administrative
action in any way related to an Arbitrable Claim. The initiating Party must
file and serve an arbitration claim within sixty (60) days of learning the
facts giving rise to the alleged claim. All arbitration hearings under this
Agreement shall be conducted in Las Vegas, Nevada. The Federal Arbitration Act
shall govern the interpretation and enforcement of this Agreement. The fees of
the arbitrator shall be divided equally between both Parties.

 

13.3         Confidentiality. All proceedings and
all documents prepared in connection with any Arbitrable Claim shall be confidential
and, unless otherwise required by law, the subject matter and content thereof
shall not be disclosed to any Person other than the parties to the proceedings,
their counsel, witnesses and experts, the arbitrator and, if involved, the
court and court staff.

 

13.4         Applicability. This Section 13
shall apply to all disputes under this Agreement other than disputes relating
to the enforcement of the Company’s rights under Sections 11 and 12 of
this Agreement.

 

13.5         Acknowledgements. The Executive acknowledges
that he:

 

(a)           has carefully read this
Section 13;

 

(b)           understands its terms
and conditions; and

 

(c)           has entered into this
Mutual Arbitration Agreement voluntarily and not in reliance on any promises or
representations made by the Company other than those contained in this Mutual
Arbitration Agreement.

 

14.           NOTICES. All notices, demands and
requests required or permitted to be given to either Party under this Agreement
shall be in writing and shall be deemed to have been given when delivered
personally or sent by certified or registered mail, postage prepaid, return
receipt requested, duly addressed to the Party concerned at the address
indicated below or to such changed address as such Party may subsequently give
notice of:

 

	
  If
  to the Company:

  	
  Station Casinos,
  Inc.

  
	
   

  	
  1505 S. Pavilion
  Center Drive

  

 

18

 

	
   

  	
  Las Vegas, NV
  89135

  
	
   

  	
  Attention:
  Richard J. Haskins

  
	
   

  	
   

  
	
  With
  a copy to:

  	
  Milbank, Tweed,
  Hadley & McCloy

  
	
   

  	
  601 South
  Figueroa Street, 30th Floor

  
	
   

  	
  Los Angeles, CA
  90017

  
	
   

  	
  Attention:
  Kenneth J. Baronsky

  
	
   

  	
   

  
	
  If
  to the Executive:

  	
  Scott M Nielson

  
	
   

  	
  1505 S. Pavilion
  Center Drive

  
	
   

  	
  Las Vegas, NV
  89135

  

 

15.           RIGHT TO SEEK INJUNCTIVE RELIEF. The
Executive acknowledges that a violation on his part of any of the covenants
contained in Sections 11 and 12 would cause immeasurable and irreparable
damage to the Company. The Executive accordingly agrees and hereby grants his
consent that, without limiting the remedies available to the Company, any
actual or threatened violation of such covenants may be enforced by injunctive
relief or by other equitable remedies issued or ordered by any court of
competent jurisdiction.

 

16.           EMPLOYEE BENEFIT PLAN DOCUMENTS. In the
event that any provision of this Agreement conflicts with the terms and
provisions of any employee benefit plan document, the provisions of this
Agreement shall govern; and the Company shall take any and all actions that may
be necessary, including amendment of any plan document, to effect the provision
of benefits expressly provided upon termination of the Executive’s employment
pursuant to Sections 6 and 7.

 

17.           BENEFICIARIES/REFERENCES. The Executive
shall be entitled to select a beneficiary or beneficiaries to receive any
compensation or benefit payable hereunder following the Executive’s death, and
may change such election, by giving the Company written notice thereof. In the
event of the Executive’s death or a judicial determination of his incompetence,
reference in this Agreement to the Executive shall be deemed, where
appropriate, to refer to his beneficiary, estate or other legal representative.

 

18.           SURVIVORSHIP. The respective rights and
obligations of the Parties hereunder shall survive the termination of this
Agreement to the extent necessary to the intended preservation of such rights
and obligations. The provisions of this Section 18 are in addition to
the survivorship provisions of any other Section of this Agreement.

 

19.           REPRESENTATIONS AND WARRANTIES. Each
Party represents and warrants that he or it is fully authorized and empowered
to enter into this Agreement and that the performance of his or its obligations
under this Agreement will not violate any agreement between that Party and any
other Person.

 

20.           ENTIRE AGREEMENT. This Agreement
contains the entire agreement between the Parties concerning the subject matter
hereof and supersedes all prior agreements, understandings, discussions,
negotiations and undertakings, whether written or oral, between the 

 

19

 

Parties with respect
thereto. No representations, inducements, promises or agreements not embodied
herein shall be of any force or effect.

 

21.           ASSIGNABILITY; BINDING NATURE. This
Agreement shall be binding upon and inure to the benefit of the Parties and
their respective successors, heirs and assigns; provided, however,
that no rights or obligations of the Executive under this Agreement may be
assigned or transferred by the Executive, other than rights to compensation and
benefits hereunder, which may be transferred only by will or operation of law
and subject to the limitations of this Agreement; and provided, further,
that no rights or obligations of the Company under this Agreement may be
assigned or transferred by the Company, except that such rights or obligations
may be assigned or transferred pursuant to a merger or consolidation in which
the Company is not the continuing entity, or the sale or liquidation of all or
substantially all of the assets of the Company, provided that the assignee or transferee
is the successor to all or substantially all of the assets of the Company and
such assignee or transferee assumes the liabilities, obligations and duties of
the Company under this Agreement, either contractually or as a matter of law. Upon
the consummation of the Initial Public Offering, this Agreement shall be
assumed by the IPO Corporation and the Company and any other Company Affiliate
having obligations hereunder shall thereupon be released from any liabilities
or obligations hereunder.

 

22.           AMENDMENT OR WAIVER. No provision in
this Agreement may be amended or waived unless such amendment or waiver is
agreed to in writing, signed by both Parties. No waiver by one Party of any
breach by the other Party of any condition or provision of this Agreement to be
performed by such other Party shall be deemed a waiver of a similar or
dissimilar condition or provision at the same or any prior or subsequent time. No
failure of the Company to exercise any power given it hereunder or to insist
upon strict compliance by the Executive with any obligation hereunder, and no
custom or practice at variance with the terms hereof, shall constitute a waiver
of the right of the Company to demand strict compliance with the terms hereof.

 

23.           SEVERABILITY. In the event that any
provision or portion of this Agreement shall be determined to be invalid or
unenforceable for any reason, in whole or in part, the remaining provisions of
this Agreement shall be unaffected thereby and shall remain in full force and
effect to the fullest extent permitted by law.

 

24.           SECTION 409A. Notwithstanding anything
in this Agreement to the contrary, no payment under this Agreement shall be
made to the Executive at a time or in a form that would subject Executive to
the penalty tax of Section 409A of the Code (the “409A Tax”). If any payment under any other provision of this
Agreement would, if paid at the time or in the form called for under such
provision, subject the Executive to the 409A Tax, such payment (the “Deferred Amount”) shall instead be paid at
the earliest time that it could be paid without subjecting the Executive to the
409A Tax, and shall be paid in a form that would not subject the Executive to
the 409A Tax. The Deferred Amount shall accrue simple interest at the prime
rate of interest as published by Bank of America N.A. (or its successor) during
the deferral period and shall be paid with the Deferred Amount. The Company
will place an amount in a “rabbi trust” with Towers Perrin (or such other
trustee mutually acceptable to the Company and the Executive) equal to the
Deferred Amount, plus the interest that will accrue thereon

 

20

 

25.           GOVERNING LAW. This Agreement shall be
governed by and construed and interpreted in accordance with the laws of the
State of Nevada without reference to the principles of conflict of laws thereof.
In the event of any dispute or controversy arising out of or relating to this
Agreement that is not an arbitrable claim, the Parties mutually and irrevocably
consent to, and waive any objection to, the exclusive jurisdiction of any court
of competent jurisdiction in Clark County, Nevada, to resolve such dispute or
controversy.

 

26.           HEADINGS. The headings of the Sections
contained in this Agreement are for convenience only and shall not be deemed to
control or affect the meaning or construction of any provision of this
Agreement.

 

27.           COUNTERPARTS. This Agreement may be
executed in counterparts, each of which shall be deemed an original and all of
which shall constitute one and the same Agreement with the same effect as if
all Parties had signed the same signature page. Any signature page of this
Agreement may be detached from any counterpart of this Agreement and reattached
to any other counterpart of this Agreement identical in form hereto but having
attached to it one or more additional signature pages.

 

28.           ACKNOWLEDGEMENT. The Executive
represents and acknowledges the following: 

 

(a)           he has carefully read
this Agreement in its entirety;

 

(b)           he understands the
terms and conditions contained herein;

 

(c)           he has had the
opportunity to review this Agreement with legal counsel of his own choosing and
has not relied on any statements made by the Company or its legal counsel as to
the meaning of any term or condition contained herein or in deciding whether to
enter into this Agreement; and

 

(d)           he is entering into
this Agreement knowingly and voluntarily.

 

IN WITNESS WHEREOF, the undersigned have
executed this Agreement as of the date first written above.

 

 

	
   

  	
  STATION
  CASINOS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard J.
  Haskins

  	
   

  
	
   

  	
  Name:

  	
  Richard J. Haskins

  
	
   

  	
  Title:

  	
  Executive Vice
  President,

  
	
   

  	
   

  	
  General Counsel and
  Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Scott M Nielson

  	
   

  
	
   

  	
  SCOTT
  M NIELSON

  
					

 

21

 

GUARANTEE

 

Fertitta
Colony Partners LLC, a Nevada limited liability company, hereby, to the fullest
extent permitted by applicable law, irrevocably and unconditionally guarantees
to the Executive the prompt performance and payment in full when due of all
obligations of the Company to the Executive under this Employment Agreement; provided,
however, that upon an Initial Public Offering, such Guarantee shall
automatically terminate and be of no further force or effect.

 

	
   

  	
  FERTITTA
  COLONY PARTNERS LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lorenzo J.
  Fertitta

  	
   

  
	
   

  	
  Name:

  	
  Lorenzo J.
  Fertitta

  
	
   

  	
  Title:

  	
  Vice President

  

 

22

 

EXHIBIT
“A”

 

GENERAL
RELEASE AND COVENANT NOT TO SUE

 

This GENERAL RELEASE AND COVENANT NOT TO SUE
(this “Release”) is executed and delivered
by SCOTT M NIELSON (the “Executive”) to STATION CASINOS, INC., a Nevada corporation (the “Company”).

 

In consideration of the
agreement by the Company to provide the separation payments and benefits in Section
6 and Section 7 of the Employment Agreement between the Executive
and the Company, dated as of November 7, 2007 (the “Employment Agreement”), and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Executive hereby agrees as follows:

 

1.             RELEASE AND COVENANT. THE
EXECUTIVE, OF HIS OWN FREE WILL, VOLUNTARILY RELEASES AND FOREVER DISCHARGES
THE COMPANY AND ITS SUBSIDIARIES AND AFFILIATES, AND EACH OF THEIR RESPECTIVE
PAST AND PRESENT AGENTS, EMPLOYEES, MANAGERS, REPRESENTATIVES, OFFICERS, DIRECTORS,
ATTORNEYS, ACCOUNTANTS, TRUSTEES, SHAREHOLDERS, PARTNERS, INSURERS, HEIRS,
PREDECESSORS-IN-INTEREST, ADVISORS, SUCCESSORS AND ASSIGNS (COLLECTIVELY, THE
“RELEASED PARTIES”) FROM, AND COVENANTS NOT TO SUE OR PROCEED AGAINST ANY OF
THE FOREGOING ON THE BASIS OF, ANY AND ALL PAST OR PRESENT CAUSES OF ACTION,
SUITS, AGREEMENTS OR OTHER RIGHTS OR CLAIMS WHICH THE EXECUTIVE, HIS
DEPENDENTS, RELATIVES, HEIRS, EXECUTORS, ADMINISTRATORS, SUCCESSORS AND ASSIGNS
HAS OR HAVE AGAINST ANY OF THE RELEASED PARTIES UPON OR BY REASON OF ANY MATTER
ARISING OUT OF HIS EMPLOYMENT BY THE COMPANY AND THE CESSATION OF SAID
EMPLOYMENT, AND INCLUDING, BUT NOT LIMITED TO, ANY ALLEGED VIOLATION OF THE
CIVIL RIGHTS ACTS OF 1964 AND 1991, THE EQUAL PAY ACT OF 1963, THE AGE DISCRIMINATION
IN EMPLOYMENT ACT OF 1967 (INCLUDING THE OLDER WORKERS BENEFIT PROTECTION ACT
OF 1990), THE REHABILITATION ACT OF 1973, THE FAMILY AND MEDICAL LEAVE ACT OF
1993, THE AMERICANS WITH DISABILITIES ACT OF 1990, THE EMPLOYMENT RETIREMENT
INCOME SECURITY ACT OF 1974, THE NEVADA FAIR EMPLOYMENT PRACTICES ACT, THE
LABOR LAWS OF THE UNITED STATES AND NEVADA, AND ANY OTHER FEDERAL, STATE OR
LOCAL LAW, REGULATION OR ORDINANCE, OR PUBLIC POLICY, CONTRACT OR TORT LAW,
HAVING ANY BEARING WHATSOEVER ON THE TERMS AND CONDITIONS OR CESSATION OF HIS
EMPLOYMENT WITH THE COMPANY.

 

2.             DUE CARE. THE EXECUTIVE ACKNOWLEDGES THAT HE HAS RECEIVED A COPY OF THIS
RELEASE PRIOR TO ITS EXECUTION AND HAS BEEN ADVISED HEREBY OF HIS OPPORTUNITY
TO REVIEW AND CONSIDER 

 

 

THIS RELEASE FOR TWENTY-ONE (21) DAYS PRIOR TO ITS EXECUTION. THE
EXECUTIVE FURTHER ACKNOWLEDGES THAT HE HAS BEEN ADVISED HEREBY TO CONSULT WITH
AN ATTORNEY PRIOR TO EXECUTING THIS RELEASE. THE EXECUTIVE ENTERS INTO THIS
RELEASE HAVING FREELY AND KNOWINGLY ELECTED, AFTER DUE CONSIDERATION, TO
EXECUTE THIS RELEASE AND TO FULFILL THE PROMISES SET FORTH HEREIN. THIS RELEASE
SHALL BE REVOCABLE BY THE EXECUTIVE DURING THE SEVEN (7) DAY PERIOD FOLLOWING
ITS EXECUTION, AND SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE
EXPIRATION OF SUCH SEVEN (7) DAY PERIOD. IN THE EVENT OF SUCH A REVOCATION, THE
EXECUTIVE SHALL NOT BE ENTITLED TO THE CONSIDERATION FOR THIS RELEASE SET FORTH
ABOVE.

 

3.             RELIANCE BY THE EXECUTIVE. THE EXECUTIVE ACKNOWLEDGES THAT, IN
HIS DECISION TO ENTER INTO THIS RELEASE, HE HAS NOT RELIED ON ANY
REPRESENTATIONS, PROMISES OR ARRANGEMENT OF ANY KIND, INCLUDING ORAL STATEMENTS
BY REPRESENTATIVES OF THE COMPANY, EXCEPT AS SET FORTH IN THIS RELEASE.

 

4.             MISCELLANEOUS. THE EXECUTIVE SHALL NOT DISCLOSE THE EXISTENCE OR CONTENTS OF
THIS RELEASE TO ANYONE OTHER THAN HIS IMMEDIATE FAMILY, ACCOUNTANTS OR
ATTORNEYS, AND THE EXECUTIVE SHALL INSTRUCT SUCH THIRD PARTIES NOT TO DISCLOSE
THE SAME. THIS RELEASE SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEVADA WITHOUT REFERENCE TO THE
PRINCIPLES OF CONFLICT OF LAWS THEREOF. IF ANY PROVISION OF THIS RELEASE IS
HELD INVALID OR UNENFORCEABLE FOR ANY REASON, THE REMAINING PROVISIONS SHALL BE
CONSTRUED AS IF THE INVALID OR UNENFORCEABLE PROVISION HAD NOT BEEN INCLUDED.

 

This GENERAL RELEASE AND
COVENANT NOT TO SUE is executed by the Executive and delivered to the Company
on                               .

 

 

	
   

  	
  “Executive”

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SCOTT M NIELSON

  

 

 

	
  STATE OF

  	
  )

  
	
   

  	
  ) ss:

  
	
  COUNTY OF

  	
  )

  

 

On this           day
of                       ,        ,
before me, a Notary Public of the State of                       ,
personally appeared Scott M Nielson, to me known and known to me to be the
person described and who executed the foregoing release and did then and there
acknowledge to me that he voluntarily executed the same.

 

 

	
   

  	
   

  
	
  NOTARY PUBLIC

  

 

[Not
to be signed or notarized upon execution of Employment Agreement]

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