Vice President of Finance Employment Agreement

EXHIBIT 10.16


EXECUTIVE EMPLOYMENT AGREEMENT


THIS EMPLOYMENT AGREEMENT (this "AGREEMENT") is made and entered into as of the 1st day of December, 1999, 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 WILLIAM W. WARNER (the "EXECUTIVE").


WHEREAS, the Company and the Executive are parties to an Amended and Restated Employment Agreement dated as of December 22, 1997 (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 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 SUBSECTION 3.1 of this Agreement.


1.4 "BOARD" shall mean the Board of Directors of the Company.


1.5 "CAUSE" shall mean that the Executive:


(a) has been formally charged with or convicted of any felony or any
crime involving fraud, theft, embezzlement, dishonesty or moral
turpitude;


(b) has been found unsuitable to hold a gaming license; or


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(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.


1.6 "CHANGE IN CONTROL" shall be deemed to have occurred if:


(a) (1) any Person, corporation, entity or group (other than the
Existing Equity Holders) is or becomes the beneficial owner,
directly or indirectly, of securities representing 50% or more of
the combined voting power of the Company's Voting Stock (an
"Acquisition Event"), or


(2) the Company consolidates with or merges into another
corporation or entity, or any corporation or entity consolidates
with or merges into the Company, with the effect that the
beneficial owners of the Company's Voting Stock held immediately
prior to the consummation of such consolidation or merger cease
to beneficially own, directly or indirectly, securities
representing 50% or more of the combined voting power of the
Company's Voting Stock (or if the Company is not the surviving
entity, the surviving company's voting securities) upon the
consummation of such consolidation or merger (a "Merger Event"),
or


(3) the Company sells, conveys, transfers or leases to any
person, corporation, entity or group, directly or indirectly, in
one transaction or series of related transactions, properties
and/or assets that accounted for 75% or more of the earnings
(before interest, taxes, depreciation and amortization) of the
Company, on a consolidated basis for the four-fiscal quarter
period immediately preceding the date of consummation of such
transaction (a "Sale Event"); AND


(b) within thirty-six (36) months following an Acquisition Event,
Merger Event or Sale Event, individuals who immediately prior to
such Acquisition Event, Merger Event or Sale Event constituted
the Company's Board, together with any new or replacement
directors whose election by the Company's 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 on the Company's Board
immediately prior to such Acquisition Event, Merger Event or Sale
Event (or whose election or nomination for election was
previously so approved), cease for any reason to constitute a
majority of the directors of the Company's Board then in office.


Notwithstanding the foregoing, a reincorporation, spin-off, split-off or other reorganization transaction (a "Reorganization Event"), or series of related transactions, in which either the "beneficial owners" of the Company's Voting Stock or the Existing Equity Holders beneficially own securities representing 50% or more of the combined voting power of the Company's Voting Stock upon the consummation of such transaction shall not constitute an Acquisition


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Event, Merger Event or Sale Event for purposes of this definition. For purposes of this definition, "beneficial ownership" shall have the same meaning as defined in Rules 13d-3 and 13d-5 under the Securities 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.


For the purposes of this definition, upon consummation of an Acquisition Event, Merger Event, Sale Event or Reorganization Event, the "Company's Board" and the "Company's Shareholders" shall refer to (i) in the case of an Acquisition Event, the Company, (ii) in the case of a Merger Event, the company surviving the merger or consolidation, (iii) in the case of a Sale Event, the transferee of the properties, and/or assets, and (iv) in the case of a Reorganization Event, the entity or entities surviving such Reorganization Event on a consolidated basis.


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


1.8 "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.


1.9 "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.


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


1.11 "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.


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1.12 "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.


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


1.14 "EXISTING EQUITY HOLDERS" shall mean Frank J. Fertitta III, 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).


1.15 "GOOD REASON," as used in SUBSECTION 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 executives of the Company or his benefits under such
plans or programs 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;


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(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.


1.16 "LONG-TERM STAY-ON PERFORMANCE INCENTIVE PLAN" shall mean the Company's Long-Term Stay-On Performance Incentive Plan, effective as of April 1, 1999, as the same may be amended from time to time.


1.17 "PERSON" shall mean any individual, firm, partnership, association, trust, company, corporation or other entity.


1.18 "PRO RATA BONUS" shall mean an amount equal to sixty percent (60%) of the Executive's current Base Salary, 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.


1.19 "RESTRICTED AREA" shall mean:


(a) the City of Las Vegas, Nevada, and the area within a twenty-five
(25) mile radius of that city; and


(b) the Cities of Kansas City, Missouri and St. Louis, Missouri, and
the areas within a fifty (50) mile radius of each of those
cities;


PROVIDED, HOWEVER, that in the event the Executive voluntarily terminates this Agreement pursuant to SUBSECTION 6.3, the Restricted Area shall exclude the Las Vegas Strip (which is defined as that area bounded by Paradise Road and straight extensions thereof on the East, Charleston Boulevard on the North, I-15 on the West, and Sunset Road on the South, as outlined in red on Exhibit A attached hereto) and 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, as outlined in red on Exhibit A attached hereto).


1.20 "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.


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1.21 "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.


1.22 "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.


1.23 "TERM OF EMPLOYMENT" shall mean the period specified in SUBSECTION 2.2.


1.24 "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, 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 SUBSECTION 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 twelve (12) 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, the Executive's employment shall terminate upon the close of business on the day immediately preceding the fifth anniversary of the then current Term of Employment.


2.3 RESPONSIBILITIES. During the Term of Employment, the Executive shall be employed as Vice President of Finance of the Company, 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. 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.


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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 $375,000. The Base Salary shall be reviewed annually for increase (but not decrease) in the discretion of the Human Resources Committee of the Board. In conducting any such annual review, the Human Resources Committee 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 discretionary bonus for each fiscal year ending during the Term of Employment in an amount that will be determined by the Human Resources Committee 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, 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 STAY-ON INCENTIVES. The Executive shall be eligible to participate in the Company's Long-Term Stay-On Performance Incentive Plan pursuant to the terms of the Plan.


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 PLANS AND 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.


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4.2 ADDITIONAL PENSION AND WELFARE BENEFITS. In addition to the foregoing, the Company shall provide the Executive with the following benefits:


(a) group health insurance coverage through the Company's Exec-U-Care
Medical Plan, effective as of July 1, 1994, or pursuant to such
other plan or plans as the Company may select from time to time,
and which shall be fully paid for by the Company;


(b) full salary continuation during the first 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; and


(d) supplemental life insurance coverage, through an individual
policy, a group policy or a combination thereof, in an aggregate
amount of not less than $4.0 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:


(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 of his own choosing prior to
execution.


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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 Bonus for the fiscal year in which death or Disability
occurs;


(d) in the case of death, 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, and in the case of Disability, immediate vesting of any
deferred compensation or bonuses, including interest or other
credits on the deferred amounts;


(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;


(c) any defer ...