EXHIBIT 7
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "AGREEMENT"), is
made and entered into as of the 22nd day of December, 1997, by and between
Station Casinos, Inc., a Nevada corporation, with its principal offices located
at 2411 West Sahara Avenue, Las Vegas, Nevada 89102 (the "COMPANY"), and
MR. SCOTT M. NIELSON (the "EXECUTIVE").
WHEREAS, the Company and the Executive are parties to an Employment
Agreement dated as of November 30, 1994 (such agreement, as so amended, the
"FORMER AGREEMENT"); and
WHEREAS, the Company has proposed a plan (the "REORGANIZATION PLAN)
to, among other things, convert to a real estate investment trust (REIT) for
federal income tax purposes and spin-off the stock of a newly formed subsidiary
(the "MANAGEMENT COMPANY");
WHEREAS, the Executive has agreed to continue his employment with the
Company on the terms and conditions set forth herein; PROVIDED that if the
Reorganization Plan is consummated, and subject to (i) the Management Company
and the Executive entering into an effective employment agreement on
substantially the same terms and conditions set forth herein as if all
references to the "Company" were to the Management Company or (ii) the Company
effectively assigning or transferring this Agreement to the Management Company
pursuant to Section 17 hereof, the Executive has agreed to resign from his
positions with the Company and assume new positions with the Management Company
on the terms and conditions set forth herein and to release the Company from any
liability hereunder; and
WHEREAS, the parties to this Agreement desire to amend and restate 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:
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1.1. "AFFILIATE" shall mean any Person controlling, controlled by or
under common control with the Company.
1.2. "BASE AMOUNT" shall have the meaning ascribed to such term in
Section 280G of the Code.
1.3. "BASE SALARY" shall mean the salary provided for in SECTION 3 of
this Agreement or any increased salary (a) granted to the Executive by the Board
or (b) pursuant to the provisions of SECTION 3.
1.4. "BOARD" shall mean the Board of Directors of the Company.
1.5. "CAUSE" shall mean (a) the Executive is convicted of a felony
involving moral turpitude or is found unsuitable to hold a gaming license, or
(b) the Executive, in carrying out his duties under this Agreement, is guilty of
continued willful gross neglect or continued willful gross misconduct resulting,
in either case, in material economic harm to the Company, unless such act, or
failure to act, was believed by the Executive in good faith to be in the best
interests of the Company or any Affiliate.
1.6. A "CHANGE OF CONTROL" shall be deemed to have occurred if (i) the
Company sells, conveys, transfers or leases, directly or indirectly, all or
substantially all of the properties and assets of the Company to any person,
corporation, entity or group, (ii) any "person" (as such term is used in
Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended)
(other than "qualified institutional buyers" as defined in Rule 144A of the
Securities Act of 1933, as amended, approved by the Board within 10 days of
being notified of such ownership by such qualified institutional buyer, and the
Existing Equity Holders) is or becomes the "beneficial owner" (as defined in
Rules 13d-3 and 13d-5 under the Section Exchange Act of 1934, as amended, except
that a person shall be deemed to have "beneficial ownership" of all shares that
any such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly of
securities representing 15% (or after the consummation of the Reorganization
Plan, 10%) or more of the combined voting power of the Company's Voting Stock,
(iii) the Company consolidates with or merges into another corporation, or any
corporation consolidates with or merges into the Company, in either event
pursuant to a transaction in which the outstanding Voting Stock of the Company
is changed into or exchanged for cash, securities or other property, other than
any such transactions between the Company and its wholly-owned subsidiaries,
with the effect that any "person" (other than "qualified institutional buyers"
as
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defined in Rule 144A of the Securities Act of 1933, as amended, approved by
the Board within 10 days of being notified of such ownership by such qualified
institutional buyer, and the Existing Equity Holders) becomes the "beneficial
owner," directly or indirectly, of securities representing 15% (or after the
consummation of the Reorganization Plan, 10%) or more of the combined voting
power of the Company's Voting Stock or (iv) during any period of 36 consecutive
months, individuals who at the beginning of such period constituted the Board
(together with any new or replacement directors whose election by the Board, or
whose nomination for election by the Company's stockholders, was approved by a
vote of at least a majority of the directors then in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved), cease for any reason to constitute a
majority of the directors then in office.
1.7. "CODE" shall the Internal Revenue Code of 1986, as amended.
1.8. "CONFIDENTIAL INFORMATION" shall mean all nonpublic information
respecting the Company's business including, but not limited to, its products,
research and development, processes, customer lists, intellectual property,
software, trademarks, marketing plans and strategies. Confidential Information
does not include information that is, or becomes, available to the public unless
such availability occurs through an unauthorized act on the part of the
Executive.
1.9. "DISABILITY" shall mean the Executive's inability to render, for
a period of six consecutive months, full and effective services hereunder by
reason of permanent mental or physical disability, whether resulting from
illness, accident or otherwise; PROVIDED, HOWEVER, that in no event will the
Executive be considered disabled for the purposes of this Agreement unless he is
deemed disabled pursuant to the Special Long-Term Disability Plan.
1.10. "EXISTING EQUITY HOLDERS" shall mean Frank J. Fertitta, Blake L.
Sartini, Delise F. Sartini, Lorenzo J. Fertitta, Glenn C. Christenson and Scott
M. Nielson 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 Voting Stock held by such lineal descendants was
directly received by gift, trust or sale from any such person).
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1.11. "GOOD REASON" shall mean and exist if, without the Executive's
prior written consent, one or more of the following events occurs:
(a) the Executive is not appointed to or is otherwise removed
from the office(s) provided for in SUBSECTION 2.3, for any reason
other than the termination of his employment;
(b) the Executive is assigned any duties or responsibilities that
are inconsistent, in any significant respect, with the scope of duties
and responsibilities associated with the Executive's position as
described in SUBSECTION 2.3 or is required to be located or maintain
an office outside of Las Vegas;
(c) the Executive suffers a reduction in the authorities, duties
or responsibilities associated with his position as described in
SUBSECTION 2.3, on the basis of which he makes a determination in good
faith that he can no longer carry out such position in the manner
contemplated at the time this Agreement was entered into;
(d) the Executive's Base Salary is decreased by the Company, or
his benefits 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
under any 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 actually indemnify the
Executive for his actions and/or inactions, as either a director or
officer of the Company, to the fullest extent permitted by Nevada law,
and/or the Company fails to maintain satisfactory levels of directors'
and officers' liability insurance coverage for the Executive when such
insurance is available;
(h) the Company fails to obtain a written agreement satisfactory
to the Executive from any successor or assign of the Company to assume
and perform this Agreement; or
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(i) the Company purports to terminate the Executive's employment
for Cause and such purported termination of employment is not effected
in accordance with the procedures required by this Agreement, and for
purposes of this Agreement, such purported termination of employment
shall be invalid and of no force and effect.
1.12. "PERSON" shall mean any individual, firm, partnership,
association, trust, company, corporation or other entity.
1.13. "PRO RATA BONUS" shall mean an amount equal to the annual bonus
otherwise payable with respect to the year in question, calculated as if the
Executive had been employed by the Company for the full year, multiplied by a
fraction, the numerator of which is the number of days in such year during which
the Executive is actually employed by the Company and the denominator of which
is 365.
1.14. "RESTRICTION PERIOD" shall mean either (i) the period after the
termination of the Term of Employment during which the Executive is entitled to
continued payments of Base Salary pursuant to this Agreement or (ii) if the
Executive is terminated for any reason for which continued payments are not
provided, then a period of two years.
1.15. "SPECIAL LONG-TERM DISABILITY PLAN" shall mean the Company's
Special Long-Term Disability Plan, effective as of November 30, 1994.
1.16. "SUPPLEMENTAL MANAGEMENT RETIREMENT PLAN" shall mean the
Company's Supplemental Management Retirement Plan, effective as of November 30,
1994.
1.17. "TERM OF EMPLOYMENT" shall mean the period specified in
Subsection 2.2.
1.18. "VOTING STOCK" shall mean capital stock of any class or classes
having general voting power under ordinary circumstances, in the absence of
contingencies, to elect the directors of a corporation.
2. TERM OF EMPLOYMENT, POSITIONS AND DUTIES.
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 duties and responsibilities set forth
in SUBSECTION 2.3, and upon such other terms and conditions as are hereinafter
stated.
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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 hereof, shall terminate upon the close of business on the day
immediately preceding the fifth anniversary of the date of this Agreement;
provided that such initial term of employment shall automatically be extended
thereafter for successive five year periods if neither Party has advised the
other in writing in accordance with Section 19 at least one year prior to the
end of the then current Term of Employment that such Term of Employment shall
not be extended for an additional five year period. If the Term of Employment
is terminated on any date pursuant to the provisions hereof, the same date shall
be the last day of the Term of Employment.
2.3. DUTIES AND RESPONSIBILITIES. During the Term of Employment, the
Executive shall be employed as Executive Vice President, General Counsel and
Secretary of the Company and shall serve on the Board; PROVIDED that after the
consummation of the Reorganization Plan, the Executive shall be employed as
Executive Vice President, General Counsel and Secretary of the Management
Company. During the Term of Employment, the Executive shall devote reasonable
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. The Executive 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. BASE SALARY. During the Term of Employment, the Executive shall be
entitled to receive a Base Salary payable no less frequently than in equal
semi-monthly installments at an annualized rate of no less than $395,000.
Such Base Salary shall be reviewed annually for increase (but not decrease)
in the discretion of the Human Resources Committee. 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.
4. ANNUAL BONUS. The Company may pay the Executive an annual bonus for
each calendar year ending during the Term of Employment in an amount that will
be determined by the performance of the Executive in achieving predetermined
goals
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that have been determined by the Human Resources Committee. Any bonuses
due the Executive shall be paid to the Executive at the same time bonuses are
paid to other senior officers of the Company, 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.
5. EMPLOYMENT BENEFIT PROGRAMS.
5.1. 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, accidental death and dismemberment
insurance, hospitalization, surgical, major medical coverage, long-term
disability, sick leave (including salary continuation arrangements), vacations,
holidays and other employee benefit programs sponsored by the Company.
5.2. SPECIAL LTD BENEFIT. The Executive shall also be entitled to a
special disability benefit as set forth in the Special Long-Term Disability
Plan, in addition to any other benefit pursuant to any other disability plan
under which the Executive is covered.
5.3. SPECIAL SMRP BENEFIT. The Executive shall also be entitled to 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.
5.4. LIFE INSURANCE. During the Term of Employment, the Company shall
provide the Executive with supplemental life insurance coverage, through an
individual policy, a group policy or a combination thereof, in an amount of no
less than $7,000,000. In the event of termination of the Executive's employment
with the Company, the Executive shall have the right to assume without any
payment to the Company and continue at his own expense whatever individual
policy or policies of insurance as are then maintained by the Company pursuant
to this SUBSECTION 5.4 and his coverage under the Company's group insurance
policy or policies to the extent permitted thereunder. Any right under the
policies to reimbursement of premiums paid shall be reimbursed to the Executive
if they were paid by the Executive.
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6. BUSINESS EXPENSE REIMBURSEMENT AND PERQUISITES.
6.1. 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.
6.2. 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 such arrangements, including, without
limitation:
(a) use of an automobile;
(b) payment or reimbursement of the cost of an annual physical
examination;
(c) vacation of at least four weeks per year;
(d) 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
(e) payment or reimbursement of legal fees and expenses incurred in
connection with this Agreement.
7. TERMINATION OF EMPLOYMENT.
7.1. TERMINATION DUE TO DEATH OR DISABILITY. In the event of the
Executive's death or a termination of the Executive's employment by the Company
due to the Executive's Disability, in addition to any other compensation or
benefits payable pursuant to this Agreement or otherwise, the Executive or his
legal representative, as the case may be, shall be entitled to:
(a) Base Salary at the rate in effect at the time of his termination,
through (x) in the case of death, for a period of 12 months following the
termination of employment, and (y) in the case of Disability, for the
period between the date of his termination and the date by which the
Special Long-Term Disability Plan has commenced paying its benefits;
(b) any bonus awarded but not yet paid;
(c) a Pro Rata Bonus for the fiscal year in which death or Disability
occurs;
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(d) any deferred bonuses including interest or other credits on the
deferred amounts;
(e) reimbursement for expenses incurred but not paid prior to such
termination of employment;
(f) in the case of death, the Executive's beneficiary's rights to
other compensation and benefits as may be provided in applicable plans and
programs of the Company shall be determined according to the terms and
provisions of such plans and programs; and
(g) in the case of Disability, the Company shall continue the
Executive's health and welfare benefits at the level in effect on the date
of termination through the end of the 36th month following the termination
of the Executive's employment or provide the economic equivalent thereof,
and the Executive's rights to other compensation and benefits as may be
provided in applicable plans and programs of the Company shall be
determined according to the terms and provisions of such plans and
programs.
7.2. TERMINATION BY THE COMPANY FOR CAUSE. In the event the Company
terminates the Executive's employment for Cause, in addition to any other
compensation or benefits payable pursuant to this Agreement or otherwise, the
Executive shall be entitled to:
(a) Base Salary at the rate in effect at the time of his termination
through the date of termination of employment;
(b) any bonus awarded but not yet paid;
(c) any deferred bonus, including interest or other credits on the
deferred amounts;
(d) reimbursement for expenses incurred, but not paid prior to such
termination of employment; and
(e) such rights to other compensation and 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.
In any case described in this SUBSECTION 7.2, the Executive shall be
given written notice authorized by a vote of at least a majority of the members
of the Board that the Company intends to terminate his employment for Cause.
Such written
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notice shall specify the particular act or acts, or failure to act, which is
or are the basis for the decision to so terminate the Executive's employment
for Cause. The Executive shall be given the opportunity within 30 days of
the receipt of such notice to meet with the Board to defend such act or acts,
or failure to act, and the Executive shall be given 30 days after such
meeting to correct such act or failure to act. Upon failure of the
Executive, within 30 days, to correct such act or failure to act, the
Executive's employment by the Company shall automatically be terminated under
this SUBSECTION 7.2 for Cause.
Anything herein to the contrary notwithstanding, if, following a
termination of the Executive's employment by the Company for Cause based upon
the conviction of the Executive for a felony, such conviction is overturned on
appeal, the Executive shall be entitled to the payments and the economic
equivalent of the benefits he would have received if his employment had been
terminated without Cause under SUBSECTION 7.3.
In the event the Executive terminates employment on his own initiative
for any reason other than as set forth in Section 7.7 below, then such
termination shall be treated as a termination for Cause without regard to the
preceding two paragraphs.
7.3. TERMINATION BY THE COMPANY WITHOUT CAUSE. In the event that the
Company terminates the Executive's employment without Cause whether prior to or
after a Change in Control, other than due to death or Disability, in addition to
any other compensation or benefits payable pursuant to this Agreement or
otherwise, the Executive shall thereupon be entitled to:
(a) a lump sum payment in an amount equal to three times his Base
Amount;
(b) any bonus awarded but not yet paid;
(c) any deferred bonus, including interest or other credits on the
deferred amounts;
(d) reimbursement for expenses incurred, but not paid prior to such
termination of employment; and
(e) continuation of the health and welfare benefits of the Executive,
including, without limitation, benefits under his Special Long-Term
Disability Plan and any other long-term disability insurance generally
provided to senior executives of the Company, at the level in effect at the
time of his termination of employment through the end of the 36th month
following such termination of the Executive's
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employment or provide the economic equivalent thereof, as if such
Executive were employed during such period (so that, for example,
any Disability during such period shall be deemed a termination for
Disability), and the Executive's rights to other compensation and
benefits as may be provided in applicable plans and programs of the
Company shall be determined according to the terms and provisions
of such plans and programs.
Any payments to which the Executive shall be entitled under this
SUBSECTION 7.3, including any economic equivalent of any benefit, shall be made
as promptly as possible following the termination of the Executive's employment
hereunder and in no event later than 90 days following such termination of
employment.
7.4. NO MITIGATION; NO OFFSET. In the event of any termination of
employment under this SECTION 7, the Executive shall be under no obligation to
seek other employment and there shall be no offset against amounts due the
Executive under this Agreement on account of any remuneration attributable to
any subsequent employment that the Executive may obtain. Any amounts due under
this SECTION 7 are in the nature of severance payments, or liquidated damages,
or both, and are not in the nature of a penalty.
7.5. SPECIAL REIMBURSEMENT. If any payment or benefit paid or
payable, or received or to be received, by or on behalf of the Executive in
connection with a Change of Control or the termination of the Executive's
employment, whether any such payments or benefits are pursuant to the terms of
this Agreement or any other plan, arrangement or agreement 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),
including, without limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and any Excise Tax imposed upon the Gross-Up
Payment, the Executive retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Total Payments.
(a) For purposes of determining whether any of the Total
Payments will be subject to the Excise Tax and the amount of such
Excise Tax, (i) 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
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of section 280G(b)(1) of the Code shall be treated as subject to the
Excise Tax, unless in the opinion of tax counsel (delivered to the
Executive) selected by the Company and reasonably acceptable to the
Executive such Total Payments (in whole or in part) (a) do not
constitute parachute payments, including (without limitation) by reason
of section 280G(b)(4)(A) of the Code, (b) 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 (c) are otherwise not subject to the Excise Tax, and (ii) 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.
(b) In the event that the Excise Tax is subsequently determined to be
less than the amount taken into account hereunder at the time of
termination of the Executive's employment, 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 Gross-Up Payment), the Company shall make an additional
Gross-Up Payment in respect of such excess (plus any interest, penalties or
additions payable by the Executive with respect to such excess) at the time
that the amount of such excess is finally determined. The Executive and
the Company shall each reasonably cooperate with the 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
Severance Payments.
7.6. CHANGE OF CONTROL. Immediately upon a Change of Control, in
addition to any other compensation or benefits payable pursuant to this
Agreement or otherwise, the Executive shall be entitled to a payment in cash
equal to three times his Base Amount, less one dollar ($1.00). The Executive's
rights upon a Change of Control to benefits under programs, plans and policies
of the Company shall be determined according to the terms and provisions of such
programs, plans and policies.
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7.7. TERMINATION OF THE EXECUTIVE'S EMPLOYMENT AFTER A CHANGE OF
CONTROL. In the event of a Change of Control during the Term of Employment, if
the Executive's employment with the Company is terminated following such Change
of Control (i) by the Company for any reason other than for Cause or (ii) by
Executive's termination on his own initiative for Good Reason, in addition to
any other compensation or benefits payable pursuant to this Agreement or
otherwise the Executive shall be entitled to:
(a) an amount of cash equal to the greater of (x) five times his Base
Amount at the time of the Change of Control or (y) five times his Base
Amount at the time of the termination of his employment;
(b) immediate vesting of any restricted stock of the Company held in
the Executive's name or to his benefit;
(c) immediate vesting of any stock options and stock appreciation
rights granted by the Company which stock options and stock appreciation
rights shall continue to be and shall remain exercisable for the remaining
term of such stock options and stock appreciation rights as set forth in
the agreement granting, or otherwise under the award of, such stock option
or stock appreciation right as if no termination had taken place;
(d) immediate vesting and cash-out of any phantom stock units granted
to the Executive;
(e) immediate vesting and pay out of any incentive share units;
(f) unless already covered by Section 7.3, continuation of all
employee benefits and perquisites for a period of 36 months following such
termination of employment, or the economic equivalent thereof as if such
employee were an employee of the Company during such period (so that, for
example, any Disability during such period shall be deemed a termination
for Disability);
(g) immediate vesting of the Executive's supplemental retirement
benefit as set forth in the Supplemental Management Retirement Plan and
continued funding of the Executive's split dollar insurance as if the
Executive were employed by the Company through the maturity date of such
policies or payment in full of all premium obligations under such
insurance; and
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(h) immediate cash-out of the Company's Long-Term Stay-On Performance
Incentive Plan approved by the Company's stockholders on September 27,
1994.
8. INDEMNIFICATION.
8.1. 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 (a "PROCEEDING"), 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 Proceeding is alleged action in an
official capacity as a director, officer, member, employee or agent while
service 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, as the same exists or may hereafter be amended, against all expense,
liability and loss (including 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.
8.2. NON-EXCLUSIVITY OF RIGHTS. The right to indemnification and the
payment of expenses incurred in defending a Proceeding in advance of its final
disposition conferred in this Section 8 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.
8.3. D&O INSURANCE. The Company agrees to obtain a directors' and
officers' liability insurance policy covering the Executive and that this policy
shall be maintained and provide coverage that is reasonable in relation to the
Executive's position during the Term of Employment.
9. COVENANT NOT ENGAGE IN CERTAIN ACTS.
9.1. NON-ASSISTANCE; NON-DIVERSION. During the Term of Employment and
for the Restriction Period, the Executive shall not, directly or indirectly,
except when acting on behalf of the Company or on behalf of any Affiliate of the
Company:
(a) compete with the Company or assist any other entity to enter into
any business relating to or competing
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with the hotel or casino business or any other line of business that the
Company was actively conducting or was actively considering during the
Term of Employment;
(b) take any action to divert any business from the Company or any
business which was under active consideration by the Company during the
Term of Employment;
(c) induce customers, agents, franchisees or other Persons under
contract or franchise or otherwise doing business with the Company, to
terminate, reduce or alter business with or from the Company; or
(d) induce any Persons in the employment of the Company to (i)
terminate such employment, (ii) accept employment with anyone other than
the Company or an Affiliate of the Company or (iii) interfere with the
business of the Company in any material manner.
9.2. WAIVER; SURVIVAL. Notwithstanding anything to the contrary in
this SECTION 9, in the event the Executive waives all right to payments and
other compensation under this Agreement upon termination, then the restriction
of this SECTION 9 shall be inapplicable to the Executive with respect to the
period for which compensation is so waived; PROVIDED that the such waiver shall
be ineffective for such purposes in the case of termination of the Executive for
any reason other than without cause. The Executive agrees that the provisions
of this SECTION 9 shall survive the termination of this Agreement and the
termination of the Executive's employment.
10. COVENANTS TO PROTECT CONFIDENTIAL INFORMATION.
10.1. GENERAL. The Executive shall not, during the Term of Employment
or for a period of one year thereafter, without the prior written consent of the
Company, divulge, disclose or make accessible to any other Person Confidential
Information except while employed by the Company in the business of and for the
benefit of the Company or when required to do so by a court of competent
jurisdiction.
10.2. NOTES, MEMORANDA AND OTHER ITEMS. Except as may be otherwise
consented to in writing by the Company, the Executive shall proffer to an
appropriate officer of the Company, at the termination of his employment, all
memoranda, diaries, notes, records, cost information, customer lists, marketing
plans and strategies, and any other documents relating or referring to any
Confidential Information made available to the Executive by the Company in his
possession at such time.
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11. DISPUTE RESOLUTION. The Company agrees that in the event the Executive
finds it necessary to initiate any legal action to obtain any payments, benefits
or rights provided by this Agreement to him, the Company shall reimburse the
Executive for all attorney's fees and other related expenses incurred by him to
the extent the Executive is successful in such action.
(a) ARBITRABLE CLAIMS. All disputes between Executive (and his or
her attorneys, successors, and assigns) and Employer (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 Executive, including,
without limitation, all disputes arising under this Agreement ("ARBITRABLE
CLAIMS"), shall be resolved by binding arbitration. Arbitrable Claims
shall include, but are not limited to, claims for compensation, claims for
breach of any contract or covenant (express or implied), tort claims of all
kinds, claims of discrimination (including, but not limited to, claims
based on race, gender, sexual preference, sexual harassment, religion,
national origin, age, marital status, medical condition, handicap or
disability), as well as all claims based on any federal, state, or local
law, statute, or regulation (excepting only claims under applicable
workers' compensation law and unemployment insurance claims). 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.
(b) 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. If the party initiating arbitration alleges a statutory
violation, the party initiating arbitration must file and serve an
arbitration claim within the time limit established by the applicable
statue of limitations for the statute that has allegedly been violated.
If the party initiating arbitration does not allege a statutory violation,
then the initiating party must file and serve an arbitration claim within
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
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Federal Arbitration Act shall govern the interpretation and enforcement
of this Agreement. The fees of the arbitrator shall be split between both
parties equally.
(c) 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 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.
(d) ACKNOWLEDGEMENTS. Executive acknowledges that he (1) has
carefully read the foregoing Section 12 (the "MUTUAL ARBITRATION
AGREEMENT"), (2) understands its terms, (3) has entered into the Mutual
Arbitration Agreement voluntarily and not in reliance on any promises or
representations by Employer other than those contained in the Mutual
Arbitration Agreement itself.
12. EFFECT OF AGREEMENT ON OTHER BENEFITS. Nothing in this Agreement shall
curtail the Executive's entitlement to full participation during the Term of
Employment in the executive compensation, employee benefit and other plans or
programs in which senior executives of the Company are eligible to participate.
13. BENEFICIARIES/REFERENCES. The Executive shall be entitled to select
(and change) a beneficiary or beneficiaries to receive any compensation or
benefit payable hereunder following the Executive's death, and may change such
election, in either case 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. Any
reference to the masculine gender in this Agreement shall include, where
appropriate, the feminine.
14. SURVIVORSHIP. The respective rights and obligations of the Parties
hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations. The
provisions of this SECTION 14 are in addition to the survivorship provisions of
any other Section of this Agreement.
15. REPRESENTATION. The Company represents and warrants that it is fully
authorized and empowered to enter into this Agreement and that the performance
of its obligations under this
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Agreement will not violate any agreement between the Company and any other
Person.
16. 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.
17. ASSIGNABILITY; BINDING NATURE. This Agreement shall be binding upon
and inure to the benefit of the Parties and their respective successors, heirs
and assigns. 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 (i) to the Management Company
pursuant to the Reorganization Plan, provided that the Management Company
assumes all of the liabilities, obligations and duties of the Company under this
Agreement or (ii) 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 (including the liabilities, obligations and duties of the Company under
this Agreement), either contractually or as a matter of law.
18. 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 the
Executive. No waiver by the Executive 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.
19. SEVERABILITY. In the event that any provision or portion of this
Agreement, except SECTION 7, 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. If SECTION 7 is determined to be invalid or
unenforceable for any reason, in whole or in part, the Executive may terminate
his employment with the Company and he shall immediately be released by the
Company from any obligations or duties under this Agreement.
20. NOTICES. Any notice given to either Party shall be in writing and
shall be deemed to have been given when delivered personally or sent by
certified or registered mail, postage
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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.
2411 West Sahara Avenue
Las Vegas, NV 89102
Attn: Scott M. Nielson
With a copy to: Milbank, Tweed, Hadley & McCloy
601 South Figueroa Street, 30th Floor
Los Angeles, CA 90017
Attn: Eric H. Schunk
If to the Executive: Scott M Nielson
2411 West Sahara Avenue
Las Vegas, NV 89102
21. GOVERNING LAW. This Agreement shall be governed by and construed and
interpreted in accordance with the laws of Nevada without reference to the
principles of conflict of laws thereof.
22. 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.
23. 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.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
STATION CASINOS, INC.
/s/ Glenn C. Christenson
------------------------
By:
Name: Glenn C. Christenson
Title: Executive Vice President, Chief Financial
Officer, Chief Administrative Officer and
Treasurer
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/s/ Scott M Nielson
-------------------
Scott M Nielson
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