<PAGE>
As filed with the Securities and Exchange Commission on June 17, 1999
Registration No. 333-_______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
-----------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
STATION CASINOS, INC.
------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
NEVADA 88-0136443
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
2411 WEST SAHARA AVENUE
LAS VEGAS, NEVADA 89102
(702) 367-2411
(Address, Including Zip Code, and Telephone Number, Including Area Code,)
of Registrant's Principal Executive Offices)
STATION CASINOS, INC.
STOCK COMPENSATION PROGRAM
(Full title of Plan)
---------------------------
MR. GLENN C. CHRISTENSON
STATION CASINOS, INC.
2411 WEST SAHARA AVENUE
LAS VEGAS, NEVADA 89102
(702) 367-2411
(Name, Address, Including Zip Code, and Telephone Number, Including
Area Code, of Agent For Service)
COPIES TO:
KENNETH J. BARONSKY, ESQ.
MILBANK, TWEED, HADLEY & MCCLOY LLP
601 SOUTH FIGUEROA STREET
LOS ANGELES, CALIFORNIA 90017
(213) 892-4000
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Proposed maximum Proposed maximum
Title of Securities to Amount to be Offering price per aggregate offering Amount of registration
be Registered registered Share (1) price fee (2)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock par
value 4,500,000 $16.8125 $75,656,250 $21,033
$.01 per share
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) There are also registered hereby such indeterminate number of
shares of the Registrant's Common Stock, par value $.01 per share, as may
become issuable by reason of operation of the anti-dilution provisions of the
Registrant's Stock Compensation Program.
(2) Pursuant to Rule 457(c) under the Securities Act of 1933, as
amended, the proposed maximum offering price per share and the proposed
maximum aggregate offering price are estimated solely for purposes of
calculating the registration fee. The basis for calculating the registration
fee for the future options to be issued by the Registrant is the average of
the high and low prices of the Common Stock of the Registrant on the New York
Stock Exchange on June 11, 1999.
<PAGE>
PART I
ITEM 1. REQUIRED STATEMENT
This Registration Statement filed under the Securities Act of 1933 by Station
Casinos, Inc. (the "Company") with the Securities and Exchange Commission
(the "Commission") relates to and registers an additional 4,500,000 shares of
Common Stock, $.01 par value of the company for issuance under the Station
Casinos, Inc. Stock Compensation Program. Pursuant to Form S-8 General
Instruction E, this Registration Statement hereby incorporates by reference
the contents of the Registration Statement relating to the registration of
3,000,000 Shares of Common Stock of the Company (File No. 33-63752) filed
with the Commission on June 2, 1993, as amended by the Registration Statement
relating to the registration of 3,307,000 Shares of Common Stock of the
Company filed with the Commission on September 13, 1996. The securities
registered hereunder are the same class as the securities previously
registered.
ITEM 2. EXHIBITS
See Exhibit Index on page 4.
<PAGE>
SIGNATURES
THE REGISTRANT. Pursuant to the requirements of the Securities Act
of 1933, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-8, and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Las Vegas, State of
Nevada, on the 17th day of June 1999.
STATION CASINOS, INC.
By: /s/ FRANK J. FERTITTA III
--------------------------------------
Frank J. Fertitta III
Chairman of the Board,
President, and Chief Executive Officer
Pursuant to the requirements of the Securities Act, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/ FRANK J. FERTITTA III
- --------------------------- Chairman of the Board, President, June 17, 1999
Frank J. Fertitta III Chief Executive Officer and Director
(Principal Executive Officer)
/s/ GLENN C. CHRISTENSON
- --------------------------- Executive Vice President, Chief June 17, 1999
Glenn C. Christenson Financial Officer, Chief
Administrative Officer, Treasurer
and Director (Principal Financial
and Accounting Officer)
/s/ SCOTT M NIELSON
- --------------------------- Executive Vice President, General June 17, 1999
Scott M Nielson Counsel and Secretary
/s/ BLAKE L. SARTINI
- --------------------------- Executive Vice President, Chief June 17, 1999
Blake L. Sartini Operating Officer and Director
/s/ DELISE F. SARTINI
- --------------------------- Director June 17, 1999
Delise F. Sartini
/s/ LORENZO J. FERTITTA
- --------------------------- Director June 17, 1999
Lorenzo J. Fertitta
- --------------------------- Director June 17, 1999
Lowell H. Lebermann, Jr.
- --------------------------- Director June 17, 1999
R. Hal Dean
- --------------------------- Director June 17, 1999
Richard Heckman
</TABLE>
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
- -------
NO. DESCRIPTION OF EXHIBIT
- --- ----------------------
<S> <C>
4.1 Amended and Restated Articles of Incorporation of the Registrant (Incorporated herein by
reference to Registration Statement No. 33-76156)
4.2 Restated Bylaws of the Registrant (Incorporated herein by reference to Registration Statement
No. 33-76156)
4.3 Specimen Common Stock Certificate of the Registrant (Incorporated herein by reference to
Registration Statement No. 33-59300)
5.1 Opinion of Schreck Morris
23.1 Consent of Arthur Andersen LLP.
23.3 Consent of Schreck Morris (included in Exhibit 5.1).
99.1 Registrant's Amended and Restated Stock Compensation Program.
</TABLE>
<PAGE>
EXHIBIT 5.1
OPINION OF SCHRECK
June 17, 1999
Station Casinos, Inc.
2411 West Sahara Avenue
Las Vegas, NV 89102
Re: REGISTRATION STATEMENT ON FORM S-8 (THE "REGISTRATION STATEMENT")
Ladies and Gentlemen:
We have acted as counsel for Station Casinos, Inc. (the "Company") in
connection with the registration under the Securities Act of 1933, as amended
(the "Securities Act"), of 4,500,000 additional shares of the Company's Common
Stock, par value $.01 per share ("Common Stock") issuable under the Company's
Stock Compensation Program (the "Program"), and subject to adjustment as
provided therein, under the Registration Statement about to be filed with the
Securities and Exchange Commission (the "Commission").
We have made such legal and factual examinations and inquiries,
including an examination of originals, or copies certified or otherwise
identified to our satisfaction as being true reproductions of originals, of all
such corporate records of the Company, agreements and other instruments,
certificates of public officials and officers and representatives of the Company
and such other documents as we have deemed necessary as a basis for the opinions
hereafter expressed.
Without limiting the generality of the foregoing, in our examination,
we have assumed without independent verification, that (i) each natural person
executing any such instrument, document, or agreement is legally competent to do
so, (ii) all documents submitted to us as originals are authentic, the
signatures on all documents we examine are genuine and all documents submitted
to us as certified conforming photostatic or facsimile copies conform to the
original, and (iii) all corporate records made available to us by the Company
and all public records reviewed are accurate and complete.
Based upon the foregoing and having regard to legal considerations and
other information that we deem relevant, we are of the opinion that, when the
shares of Common Stock have been registered under the Securities Act, and when
the Company has received the consideration to be received for said shares in
accordance with the provisions of the Program and said shares of Common Stock
have been issued by the Company as provided under the Program, said shares of
Common Stock will be duly authorized, validly issued, fully paid and
nonassessable.
We are qualified to practice law in the State of Nevada. The opinions
set forth herein are expressly limited to the laws of the State of Nevada and we
do not purport to be experts on, or to express any opinion herein concerning any
laws other than the laws of the State of Nevada. We express no opinion
concerning, and we assume no responsibility as to laws or judicial decisions
related to, or any orders, consents or other authorizations or approvals as may
be required by, any federal law, including any federal securities law, or any
state securities or blue sky laws.
<PAGE>
We hereby consent to the filing of this opinion in as an exhibit to the
Registration Statement and the reference to this firm therein. In giving this
consent, we do not admit that we are in the category of persons whose consent is
required under Section 7 of the Securities Act or the rules and regulations of
the Commission promulgated thereunder.
Very truly yours,
SCHRECK MORRIS
/s/ Schreck Morris
------------------
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated January 21, 1999
(except for Note 6, as to which the date is February 3, 1999) included in
Station Casinos, Inc.'s Annual Report on Form 10-K for the nine months ended
December 31, 1998 and to all references to our Firm included in this
registration statement.
/s/ Arthur Andersen LLP
-----------------------
ARTHUR ANDERSEN LLP
Las Vegas, Nevada
June 7, 1999
<PAGE>
EXHIBIT 99.1
STATION CASINOS, INC.
STOCK COMPENSATION PROGRAM
(AMENDED AND RESTATED AS OF MAY 24, 1999)
1. PURPOSE. This Station Casinos, Inc. Stock Compensation Program
("Program") is intended to secure for Station Casinos, Inc. ("Company") and its
subsidiaries and its stockholders the benefits arising from ownership of the
Company's common stock ("Common Stock") by those selected key individuals of the
Company and its subsidiaries who will be responsible for the future growth of
such corporations. The Program is designed to help attract and retain superior
personnel for positions of substantial responsibility with the Company and its
subsidiaries, and to provide key individuals with an additional incentive to
contribute to the success of the corporations.
2. ELEMENTS OF THE PROGRAM. In order to maintain flexibility in the award
of stock benefits, the Program is composed of four parts. The first part is the
Incentive Stock Option Plan ("Incentive Plan") under which are granted incentive
stock options ("Incentive Options"). The second part is the Compensatory Stock
Option Plan ("Nonqualified Plan") under which are granted nonqualified stock
options ("Nonqualified Options"). The third part is the Restricted Shares Plan
("Restricted Plan") under which are granted restricted shares of Common Stock.
The fourth part is the Nonemployee Directors Stock Option Plan ("Nonemployee
Plan") under which nonemployee directors are granted nonqualified stock options.
The Incentive Plan, Nonqualified Plan, Restricted Plan, and Nonemployee Plan are
included herein as Part I, Part II, Part III, and Part IV respectively, and are
collectively referred to herein as the "Plans". The grant of an option or
restricted share under one of the Plans shall not be construed to prohibit the
grant of an option or restricted share under any of the other Plans, except that
a grant to a nonemployee director may only be made under Part IV.
3. APPLICABILITY OF GENERAL PROVISIONS. Unless any Plan specifically
indicates to the contrary, all Plans shall be subject to the General Provisions
of the Stock Compensation Program set forth below.
4. ADMINISTRATION OF THE PLANS. The Plans shall be administered,
construed, governed, and amended in accordance with their respective terms
PROVIDED, HOWEVER, in no case shall any action be taken by the Program
Administrators (as defined below) if such action would result in the loss of
"disinterested administrator" status, within the meaning of Rule 16b-3, as
promulgated by the Securities and Exchange Commission ("SEC") under Section
16(b) of the Securities Exchange Act of 1934 ("Exchange Act"), or any successor
rule or regulation thereto, as such Rule is amended or applied from time to time
("SEC Rule 16b-3"), of any director who is a member of the Committee (as defined
below).
GENERAL PROVISIONS OF STOCK COMPENSATION PROGRAM
Article 1. ADMINISTRATION. The program shall be administered by the Board
of Directors of the Company (the "Board") or by a committee appointed by the
Board, consisting of not less than two directors of the Company who are
"disinterested" directors within the meaning of SEC Rule 16b-3 (the
"Committee"); provided, however, that if not all members of the Board are
"disinterested" directors, then the Board shall appoint such a Committee;
PROVIDED, FURTHER, HOWEVER, that the Committee may be comprised solely of two or
more "outside directors" within the meaning of Code Section 162(m) and the
regulations thereunder, as amended from time to time, ("Code Section 162(m)") to
effect grants that are intended to qualify as "performance-based compensation"
within the meaning of Code Section 162(m)". Notwithstanding the foregoing, prior
to the date the Company first registers the Common Stock under Section 12 of the
Exchange Act, as amended, the Program shall be administered by the Board or by a
1
<PAGE>
committee thereof without regard to the "disinterestedness" of members of the
Board or such committee. Subject to the foregoing limitations, as applicable,
the Board may from time to time remove members from the Committee, fill all
vacancies on the Committee, however caused, and may select one of the members of
the Committee as its Chairman. The members of the Board or Committee, when
acting to administer the Program, are herein collectively referred to as the
"Program Administrators."
The Program Administrators shall hold meetings at such times and places as
they may determine, shall keep minutes of their meetings, and shall adopt,
amend, and revoke such rules and procedures as they may deem proper with respect
to the Program. Any action of the Program Administrators shall be taken by
majority vote or the unanimous written consent of the Program Administrators.
Article 2. AUTHORITY OF PROGRAM ADMINISTRATORS. Subject to the other
provisions of this Program, and with a view to effecting its purpose, the
Program Administrators shall have sole authority, in their absolute
discretion, to, except with regard to awards under Part IV: (a) construe and
interpret the Program; (b) define the terms used herein; (c) determine the
individuals to whom options and restricted shares shall be granted under the
Program; (d) determine the time or times at which options and restricted
shares shall be granted under the Program; (e) determine the number of shares
subject to each option and restricted share, the option price, and the
duration of each option granted under the Program; (f) determine all of the
other terms and conditions of options and restricted shares granted under the
Program; and (g) make all other determinations necessary or advisable for the
administration of the Program and to do everything necessary or appropriate
to administer the Program; PROVIDED, HOWEVER, in no case shall any action be
taken by the Program Administrators if such action would result in the loss
of the SEC Rule 16b-3 "disinterested administrator" status of any director
who is a member of the Committee. All decisions, determinations, and
interpretations made by the Program Administrators shall be binding and
conclusive on all participants in the Program and on their legal
representatives, heirs, and beneficiaries; PROVIDED, HOWEVER, that without
approval by the stockholders of the Company representing a majority of the
voting power, no amendment or revision shall (a) materially increase the
maximum number of shares that may be issued under this Program; (b) change
the minimum purchase price for shares under Section 4 of Plans I, II and IV;
(c) increase the maximum term established under the Plans for any option or
restricted share; (d) materially modify the requirements as to eligibility
for participation in the Program; (e) change the term of the Program
described in Article 5 of these General Provisions; or (f) materially
increase the benefits accruing to participants under the Program; provided
that no stockholder approval shall be required to materially increase the
benefits accruing to participants under the Nonemployee Plan.
Article 3. MAXIMUM NUMBER OF SHARES SUBJECT TO THE PROGRAM. The maximum
aggregate number of shares of Common Stock subject to the Program shall be
10,807,000 shares. The shares of Common Stock to be issued upon exercise of an
option, to the extent exercised for shares of Common Stock, or issued as
restricted shares may be authorized but unissued shares, shares issued and
reacquired by the Company or shares purchased by the Company on the open market.
If any of the options granted under the Program expire or terminate for any
reason before they have been exercised in full, the unpurchased shares subject
to those expired or terminated options shall cease to reduce the number of
shares available for purposes of the Program. If the conditions associated with
the grant of restricted shares are not achieved within the period specified for
satisfaction of the applicable conditions, or if the restricted share grant
terminates for any reason before the date on which the conditions must be
satisfied, the shares of Common Stock associated with such restricted shares
shall cease to reduce the number of shares available for purposes of the
Program.
The proceeds received by the Company from the sale of its Common Stock
pursuant to the exercise of options or transfer of restricted shares under the
Program, if in the form of cash, shall be added to the Company's general funds
and used for general corporate purposes.
2
<PAGE>
Article 4. ELIGIBILITY AND PARTICIPATION. Officers, key employees,
directors (whether employees or nonemployees), and independent contractors or
consultants of the Company or its subsidiaries who are responsible for or
contribute to the management, growth, or profitability of the business of the
Company or its subsidiaries shall be eligible for selection by the Program
Administrators to participate in Part I, Part II and/or Part III of the Program.
However, Incentive Options may be granted under the Incentive Plan only to a
person who is an employee of the Company or its subsidiaries. An employee may be
granted Nonqualified Options under the Program; provided, however, that the
grant of Nonqualified Options and Incentive Options to an employee shall be the
grant of separate options and each Nonqualified Option and each Incentive Option
shall be specifically designated as such in accordance with applicable
provisions of the Treasury regulations. Only nonemployee directors are eligible
to receive grants under Part IV of the Program.
Article 5. EFFECTIVE DATE AND TERM OF PROGRAM. The Program shall become
effective upon its adoption by the Board of Directors of the Company subject to
approval of the Program by a majority of the stockholders of the Company voting
in person or by proxy at a meeting of stockholders following adoption of the
Program by the Board of Directors, which vote shall be taken within 12 months of
adoption of the Program by the Company's Board of Directors; provided, however,
that options and restricted shares may be granted under this Program prior to
obtaining stockholder approval of the Program, but any such options or
restricted shares shall be contingent upon such stockholder approval being
obtained and may not be exercised prior to such approval. The Program shall
continue in effect for a term of 10 years unless sooner terminated under Article
7 of these General Provisions.
Article 6. ADJUSTMENTS. If the outstanding shares of Common Stock are
increased, decreased, changed into, or exchanged for a different number or kind
of shares or securities through merger, consolidation, combination, exchange of
shares, other reorganization, recapitalization, reclassification, stock
dividend, stock split or reverse stock split, an appropriate and proportionate
adjustment shall be made in the maximum number and kind of shares as to which
options and restricted shares may be granted under this Program. A corresponding
adjustment changing the number and kind of shares allocated to unexercised
options, restricted shares, or portions thereof, which shall have been granted
prior to any such change, shall likewise be made. Any such adjustment in
outstanding options shall be made without change in the aggregate purchase price
applicable to the unexercised portion of the option, but with a corresponding
adjustment in the price for each share or other unit of any security covered by
the option.
Article 7. TERMINATION AND AMENDMENT OF PROGRAM. The Program shall
terminate 10 years from the date such program is adopted by the Board of
Directors, or the date such program is approved by the stockholders, whichever
is earlier, or shall terminate at such earlier time as the Board of Directors
may so determine. No options or restricted shares shall be granted under the
Program after that date. Subject to the limitation contained in Article 8 of
these General Provisions, the Plan Administrators may at any time amend or
revise the terms of the Program, including the form and substance of the option
and restricted share agreements to be used hereunder; PROVIDED, HOWEVER, that
the terms and provisions of the Program which determine the eligibility of
nonemployee directors to receive grants under Part IV and the amount, price and
timing of the formula grants under such Part IV shall not be amended more than
once every six months, other than to comport with changes in the Internal
Revenue Code of 1986, as amended, (the "Code"), the Employee Retirement Income
Security Act of 1974, as amended, or the rules thereunder; PROVIDED, FURTHER,
HOWEVER, that without approval by the stockholders of the Company representing a
majority of the voting power (as contained in Article 5 of these General
Provisions) no amendment or revision shall (a) materially increase the maximum
number of shares that may be issued under this Program; (b) change the minimum
purchase price for shares under Section 4 of Plans I, II and IV; (c) increase
the maximum term established under the Plans for any option or restricted share;
(d) materially modify the requirements as to eligibility for participation in
the Program; (e) change the term of the Program described in Article 5 of these
General Provisions; or (f) materially increase the
3
<PAGE>
benefits accruing to participants under the Program; provided that no
stockholder approval shall be required to materially increase the benefits
accruing to participants under the Nonemployee Plan. In addition, no such
amendment or revision shall be effective if it would disqualify the Program
from the exemptions provided by SEC Rule 16b-3.
Article 8. PRIOR RIGHTS AND OBLIGATIONS. No amendment, suspension, or
termination of the Program shall, without the consent of the individual who has
received an option or restricted share, alter or impair any of that person's
rights or obligations under any option or restricted share granted under the
Program prior to that amendment, suspension, or termination.
Article 9. PRIVILEGES OF STOCK OWNERSHIP. Notwithstanding the exercise of
any option granted pursuant to the terms of this Program or the achievement of
any conditions specified in any restricted share granted pursuant to the terms
of this Program, no individual shall have any of the rights or privileges of a
stockholder of the Company in respect of any shares of stock issuable upon the
exercise of his or her option or the satisfaction of his or her restricted share
conditions until certificates representing the shares have been issued and
delivered. No shares shall be required to be issued and delivered upon exercise
of any option or satisfaction of any conditions with respect to a restricted
share unless and until all of the requirements of law and of all regulatory
agencies having jurisdiction over the issuance and delivery of the securities
shall have been fully complied with.
Article 10. RESERVATION OF SHARES OF COMMON STOCK. The Company, during the
term of this Program, will at all times reserve and keep available such number
of shares of its Common Stock as shall be sufficient to satisfy the requirements
of the Program. In addition, the Company will from time to time, as is necessary
to accomplish the purposes of this Program, seek or obtain from any regulatory
agency having jurisdiction any requisite authority in order to issue and sell
shares of Common Stock hereunder. The inability of the Company to obtain from
any regulatory agency having jurisdiction the authority deemed by the Company's
counsel to be necessary to the lawful issuance and sale of any shares of its
stock hereunder shall relieve the Company of any liability in respect of the
nonissuance or sale of the stock as to which the requisite authority shall not
have been obtained.
Article 11. TAX WITHHOLDING. The exercise of any option or the
satisfaction of the conditions imposed upon any restricted share granted under
this Program is subject to the condition that if at any time the Company shall
determine, in its discretion, that the satisfaction of withholding tax or other
withholding liabilities under any state or federal law is necessary or desirable
as a condition of, or in connection with, such exercise or the delivery or
purchase of shares pursuant thereto, then in such event, the exercise of the
option or the satisfaction of the conditions imposed upon the restricted share
shall not be effective unless such withholding shall have been effected or
obtained in a manner acceptable to the Company.
Article 12. SEC COMPLIANCE. With respect to persons subject to Section 16
of the Exchange Act, transactions under the Program are intended to comply with
all applicable conditions of SEC Rule 16b-3. To the extent any provision of the
Program or any action of the Program Administrators fails to comply with such
rule, it shall be deemed null and void, to the extent permitted by law and
deemed advisable by the Committee. If a person subject to Section 16 of the
Exchange Act exercises his or her rights under a grant under the Program or
receives unrestricted Common Stock through a grant under Part III of the Program
before six months have passed from the date of the grant, the Company shall hold
in its custody any resulting stock certificate until six months has passed from
the date of the grant.
Article 13. GOVERNING LAW. The validity, construction, interpretation and
effect of the Program shall exclusively be governed by and determined in
accordance with the law of the State of Nevada (without reference to the
principles of conflict of laws thereof), except to the extent preempted by
federal law which shall govern to that extent.
Article 14. MAXIMUM NUMBER OF OPTIONS GRANTED IN ANY CALENDAR YEAR.
Notwithstanding any other provision of the Program, the number of shares of
Common Stock underlying Incentive Options and Nonqualified Options granted
under the Incentive Plan and the Nonqualified Plan of the Program,
respectively, in any calendar year to any individual participating in the
Program shall not exceed the maximum number of shares issuable under the
Program.
4
<PAGE>
PLAN I
STATION CASINOS, INC.
INCENTIVE STOCK OPTION PLAN
Section 1. PURPOSE. The purpose of this Station Casinos, Inc. Incentive
Stock Option Plan ("Plan") is to promote the growth and general prosperity of
the Company by permitting the Company to grant options to purchase shares of its
Common Stock. The Plan is designed to help attract and retain superior personnel
for positions of substantial responsibility with the Company and its
subsidiaries, and to provide key individuals with an additional incentive to
contribute to the success of the Company. The Company intends that options
granted pursuant to the provisions of the Plan (the "Incentive Options") will
qualify as "incentive stock options" within the meaning of Code Section 422 or
any successor to such section. This Plan is Part I of the Program. Unless any
provision herein indicates to the contrary, this Plan shall be subject to the
General Provisions of the Program.
Section 2. INCENTIVE OPTION TERMS AND CONDITIONS. The terms and conditions
of Incentive Options granted under the Plan may differ from one another as the
Program Administrators shall, in their discretion, determine as long as all
Incentive Options granted under the Plan satisfy the requirements of the Plan.
Section 3. DURATION OF INCENTIVE OPTIONS. Each Incentive Option and all
rights thereunder granted pursuant to the terms of the Plan shall expire on the
date determined by the Program Administrators, but in no event shall any
Incentive Option granted under the Plan expire later than 10 years from the date
on which the Incentive Option is granted. However, notwithstanding the above
portion of this Section 3, if at the time the Incentive Option is granted the
grantee ("Optionee") owns or would be considered to own by reason of Code
Section 424(d) more than 10% of the total combined voting power of all classes
of stock of the Company or its subsidiaries, such Incentive Option shall expire
not more than 5 years from the date the Incentive Option is granted. In
addition, each Incentive Option shall be subject to early termination as
provided in the Plan.
Section 4. PURCHASE PRICE. The purchase price for shares acquired pursuant
to the exercise, in whole or in part, of any Incentive Option shall not be less
than the fair market value of the shares at the time of the grant of the
Incentive Option. Fair market value ("Fair Market Value") shall be determined by
the Program Administrators on the basis of such factors as they deem
appropriate; provided, however, that Fair Market Value on any day shall be
deemed to be, if the Common Stock is traded on a national securities exchange,
the closing price (or, if no reported sale takes place on such day, the mean of
the reported bid and asked prices) of the Common Stock on such day on the
principal such exchange, or, if the stock is included on the composite tape, the
composite tape. In each case, the Plan Administrators' determination of Fair
Market Value shall be conclusive.
Notwithstanding the above portion of this Section 4, if at the time an
Incentive Option is granted the Optionee owns or would be considered to own by
reason of Code Section 424(d) more than 10% of the total combined voting power
of all classes of stock of the Company or its subsidiaries, the purchase price
of the shares covered by such Incentive Option shall not be less than 110% of
the Fair Market Value of a share of Common Stock on the date the Incentive
Option is granted.
Section 5. MAXIMUM AMOUNT OF INCENTIVE OPTIONS EXERCISABLE IN ANY CALENDAR
YEAR. Notwithstanding any other provision of this Plan, the aggregate Fair
Market Value (determined at the time any Incentive Option is granted) of the
Common Stock with respect to which Incentive Options become exercisable for the
first time by any employee during any calendar year under all stock option plans
of the Company and its subsidiaries shall not exceed $100,000.
Section 6. EXERCISE OF INCENTIVE OPTIONS. Each Incentive Option shall be
exercisable in one or more installments during its term, and the right to
exercise may be cumulative as determined by the Program Administrators. No
Incentive Option may be exercised for a fraction of a share of Common Stock. The
5
<PAGE>
purchase price of any shares purchased shall be paid in full in cash or by
certified or cashier's check payable to the order of the Company or by shares of
Common Stock, if permitted by the Program Administrators, or by a combination of
cash, check, or shares of Common Stock, at the time of exercise of the Incentive
Option. If any portion of the purchase price is paid in shares of Common Stock,
those shares shall be tendered at their then Fair Market Value as determined by
the Program Administrators in accordance with Section 4 of this Plan. Payment in
shares of Common Stock includes the automatic application of shares of Common
Stock received upon exercise of an Incentive Option to satisfy the exercise
price for additional Incentive Options.
Section 7. REORGANIZATION. In the event of the dissolution or liquidation
of the Company, any Incentive Option granted under the Plan shall terminate as
of a date to be fixed by the Plan Administrators; provided that not less than 30
days' written notice of the date so fixed shall be given to each Optionee and
each such Optionee shall have the right during such period (unless such
Incentive Option shall have previously expired) to exercise any Incentive
Option, including any Incentive Option that would not otherwise be exercisable
by reason of an insufficient lapse of time.
In the event of a Reorganization (as defined below) in which the Company is
not the surviving or acquiring company, or in which the Company is or becomes a
subsidiary of another company after the effective date of the Reorganization,
then:
(a) if there is no plan or agreement respecting the Reorganization
("Reorganization Agreement") or if the Reorganization Agreement does not
specifically provide for the change, conversion or exchange of the
outstanding Incentive Options for options of another corporation, then
exercise and termination provisions equivalent to those described in this
Section 7 shall apply; or
(b) if there is a Reorganization Agreement and if the Reorganization
Agreement specifically provides for the change, conversion, or exchange of
the outstanding Incentive Options for options of another corporation, then
the Plan Administrators shall adjust the outstanding unexercised Incentive
Options (and shall adjust the Incentive Options remaining under the Plan
which have not yet been granted if the Reorganization Agreement makes
specific provision for such an adjustment) in a manner consistent with the
applicable provisions of the Reorganization Agreement.
The term "Reorganization" as used in this Section 7 shall mean any statutory
merger, statutory consolidation, sale of all or substantially all of the assets
of the Company or a sale of the Common Stock pursuant to which the Company is or
becomes a subsidiary of another company after the effective date of the
Reorganization.
Adjustments and determinations under this Section 7 shall be made by the
Plan Administrators, whose decisions as to such adjustments or determinations
shall be final, binding, and conclusive.
Section 8. WRITTEN NOTICE REQUIRED. Any Incentive Option granted pursuant
to the terms of the Plan shall be exercised when written notice of that exercise
has been given to the Company at its principal office by the person entitled to
exercise the Incentive Option and full payment for the shares with respect to
which the Incentive Option is exercised has been received by the Company.
Section 9. COMPLIANCE WITH SECURITIES AND GAMING LAWS. Shares of Common
Stock shall not be issued with respect to any Incentive Option granted under the
Plan unless the exercise of that Incentive Option and the issuance and delivery
of those shares pursuant to that exercise shall comply with all relevant
provisions of state and federal law including, without limitation, the
Securities Act of 1933, as amended, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the shares may
then be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance. The Program Administrators may also
require an Optionee to furnish evidence satisfactory to the Company, including a
written and signed representation letter and consent to be bound by any transfer
restriction imposed by law, legend, condition, or otherwise, that the shares are
being purchased only for investment and without any present intention to sell or
distribute the
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<PAGE>
shares in violation of any state or federal law, rule, or regulation. Further,
each Optionee shall consent to the imposition of a legend on the shares of
Common Stock subject to his or her Incentive Option restricting their
transferability as required by law or by this section 9. Finally, shares of
Common Stock shall not be issued with respect to any Incentive Option granted
under the Plan unless the exercise of that Incentive Option and the issuance and
delivery of those shares pursuant to that exercise shall comply with all
relevant provisions of gaming laws or regulations and any registration,
approval, or action thereunder.
Section 10. EMPLOYMENT OF OPTIONEE. Each Optionee, if requested by the
Program Administrators, must agree in writing as a condition of receiving his or
her Incentive Option, that he or she will remain in the employment of the
Company or its subsidiary corporations following the date of the granting of
that Incentive Option for a period specified by the Program Administrators.
Nothing in the Plan or in any Incentive Option granted hereunder shall confer
upon any Optionee any right to continued employment by the Company or its
subsidiary corporations or limit in any way the right of the Company or its
subsidiary corporations at any time to terminate or alter the terms of that
employment.
Section 11. INCENTIVE OPTION RIGHTS UPON TERMINATION OF EMPLOYMENT. If an
Optionee ceases to be employed by the Company or any subsidiary corporation for
any reason other than death or disability, his or her Incentive Option shall
immediately terminate; provided, however, that the Program Administrators may,
in their discretion, allow the Incentive Option to be exercised (to the extent
exercisable on the date of termination of employment) at any time within three
months after the date of termination of employment, unless either the Incentive
Option or the Plan otherwise provides for earlier termination.
Section 12. INCENTIVE OPTION RIGHTS UPON DISABILITY. If an Optionee
becomes disabled within the meaning of Code Section 22(e)(3) while employed by
the Company or any subsidiary corporation, the Program Administrators, in their
discretion, may allow the Incentive Option to be exercised, to the extent
exercisable on the date of termination of employment, at any time within one
year after the date of termination of employment due to disability, unless
either the Incentive Option or the Plan otherwise provides for earlier
termination.
Section 13. INCENTIVE OPTION RIGHTS UPON DEATH OF OPTIONEE. Except as
otherwise limited by the Program Administrators at the time of the grant of an
Incentive Option, if an Optionee dies while employed by the Company or any
subsidiary corporation, or within three months after ceasing to be an employee
thereof, his or her Incentive Option shall expire one year after the date of
death unless by its terms it expires sooner. During this one year or shorter
period, the Incentive Option may be exercised, to the extent that it remains
unexercised on the date of death, by the person or persons to whom the
Optionee's rights under the Incentive Option shall pass by will or by the laws
of descent and distribution, but only to the extent that the Optionee is
entitled to exercise the Incentive Option at the date of death.
Section 14. INCENTIVE OPTIONS NOT TRANSFERABLE. Incentive Options granted
pursuant to the terms of the Plan may not be sold, pledged, assigned, or
transferred in any manner otherwise than by will or the laws of descent or
distribution and may be exercised during the lifetime of an Optionee only by
that Optionee. No such Incentive Options shall be pledged or hypothecated in any
way nor shall they be subject to execution, attachment, or similar process.
Section 15. ADJUSTMENTS TO NUMBER AND PURCHASE PRICE OF OPTIONED
SHARES. All Incentive Options granted pursuant to the terms of this Plan shall
be adjusted in the manner prescribed by Article 6 of the General Provisions of
this Program.
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<PAGE>
PLAN II
STATION CASINOS, INC.
COMPENSATORY STOCK OPTION PLAN
Section 1. PURPOSE. The purpose of this Station Casinos, Inc. Compensatory
Stock Option Plan ("Plan") is to permit the Company to grant options to purchase
shares of its Common Stock. The Plan is designed to help attract and retain
superior personnel for positions of substantial responsibility with the Company
and its subsidiaries, and to provide key individuals with an additional
incentive to contribute to the success of the Company. Any option granted
pursuant to this Plan (a "Nonqualified Option") shall be clearly and
specifically designated as not being an incentive stock option, as defined in
Code Section 422. This Plan is Part II of the Program. Unless any provision
herein indicates to the contrary, this Plan shall be subject to the General
Provisions of the Program.
Section 2. NONQUALIFIED OPTION TERMS AND CONDITIONS. The terms and
conditions of Nonqualified Options granted under this Plan may differ from one
another as the Program Administrators shall in their discretion determine as
long as all Nonqualified Options granted under the Plan satisfy the requirements
of the Plan.
Section 3. DURATION OF NONQUALIFIED OPTIONS. Each Nonqualified Option and
all rights thereunder granted pursuant to the terms of this Plan shall expire on
the date determined by the Program Administrators, but in no event shall any
Nonqualified Option granted under the Plan expire later than 10 years from the
date on which the Nonqualified Option is granted. In addition, each Nonqualified
Option shall be subject to early termination as provided in the Plan.
Section 4. PURCHASE PRICE. The purchase price for shares acquired pursuant
to the exercise, in whole or in part, of any Nonqualified Option shall not be
less than the fair market value of the shares at the time of the grant of the
Nonqualified Option. Fair market value ("Fair Market Value") shall be determined
by the Program Administrators on the basis of such factors as they deem
appropriate; provided, however, that Fair Market Value on any day shall be
deemed to be, if the Common Stock is traded on a national securities exchange,
the closing price (or, if no reported sale takes place on such day, the mean of
the reported bid and asked prices) of the Common Stock on such day on the
principal such exchange, or, if the stock is included on the composite tape, the
composite tape. In each case, the Program Administrators' determination of Fair
Market Value shall be conclusive.
Section 5. EXERCISE OF NONQUALIFIED OPTIONS. Each Nonqualified Option
shall be exercisable in one or more installments during its term and the right
to exercise may be cumulative as determined by the Program Administrators. No
Nonqualified Option may be exercised for a fraction of a share of Common Stock.
The purchase price of any shares purchased shall be paid in full in cash or by
certified or cashier's check payable to the order of the Company or by shares of
Common Stock, if permitted by the Program Administrators, or by a combination of
cash, check, or shares of Common Stock, at the time of exercise of the
Nonqualified Option. If any portion of the purchase price is paid in shares of
Common Stock, those shares shall be tendered at their then Fair Market Value as
determined by the Program Administrators in accordance with Section 4 of this
Plan. Payment in shares of Common Stock includes the automatic application of
shares of Common Stock received upon exercise of a Nonqualified Option to
satisfy the exercise price for additional Nonqualified Options.
Section 6. REORGANIZATION. In the event of the dissolution or liquidation
of the Company, any Nonqualified Option granted under the Plan shall terminate
as of a date to be fixed by the Program Administrators; provided that not less
than 30 days' written notice of the date so fixed shall be given to each
Optionee and each such Optionee shall have the right during such period (unless
such Nonqualified Option shall have previously expired) to exercise any
Nonqualified Option, including any Nonqualified Option that would not otherwise
be exercisable by reason of an insufficient lapse of time.
8
<PAGE>
In the event of a Reorganization (as defined below) in which the Company is
not the surviving or acquiring company, or in which the Company is or becomes a
subsidiary of another company after the effective date of the Reorganization,
then:
(a) if there is no plan or agreement respecting the Reorganization
("Reorganization Agreement") or if the Reorganization Agreement does not
specifically provide for the change, conversion or exchange of the
outstanding Nonqualified Options for options of another corporation, then
exercise and termination provisions equivalent to those described in this
Section 6 shall apply; or
(b) if there is a Reorganization Agreement and if the Reorganization
Agreement specifically provides for the change, conversion, or exchange of
the outstanding Nonqualified Options for options of another corporation,
then the Program Administrators shall adjust the outstanding unexercised
Nonqualified Options (and shall adjust the Nonqualified Options remaining
under the Plan which have not yet been granted if the Reorganization
Agreement makes specific provision for such an adjustment) in a manner
consistent with the applicable provisions of the Reorganization Agreement.
The term "Reorganization" as used in this Section 6 shall mean any statutory
merger, statutory consolidation, sale of all or substantially all of the assets
of the Company or a sale of the Common Stock pursuant to which the Company is or
becomes a subsidiary of another company after the effective date of the
Reorganization.
Adjustments and determinations under this Section 6 shall be made by the
Program Administrators, whose decisions as to such adjustments or determinations
shall be final, binding, and conclusive.
Section 7. WRITTEN NOTICE REQUIRED. Any Nonqualified Option granted
pursuant to the terms of this Plan shall be exercised when written notice of
that exercise has been given to the Company at its principal office by the
person entitled to exercise the Nonqualified Option and full payment for the
shares with respect to which the Nonqualified Option is exercised has been
received by the Company.
Section 8. COMPLIANCE WITH SECURITIES AND GAMING LAWS. Shares shall not be
issued with respect to any Nonqualified Option granted under the Plan unless the
exercise of that Nonqualified Option and the issuance and delivery of the shares
pursuant thereto shall comply with all relevant provisions of state and federal
law, including, without limitation, the Securities Act of 1933, as amended, the
rules and regulations promulgated thereunder and the requirements of any stock
exchange upon which the shares may then be listed, and shall be further subject
to the approval of counsel for the Company with respect to such compliance. The
Program Administrators may also require an Optionee to furnish evidence
satisfactory to the Company, including a written and signed representation
letter and consent to be bound by any transfer restrictions imposed by law,
legend, condition, or otherwise, that the shares are being purchased only for
investment purposes and without any present intention to sell or distribute the
shares in violation of any state or federal law, rule, or regulation. Further,
each Optionee shall consent to the imposition of a legend on the shares of
Common Stock subject to his or her Incentive Option restricting their
transferability as required by law or by this Section 8. Finally, shares of
Common Stock shall not be issued with respect to any Nonqualified Option granted
under the Plan unless the exercise of that Nonqualified Option and the issuance
and delivery of those shares pursuant to that exercise shall comply with all
relevant provisions of gaming laws or regulations and any registration,
approval, or action thereunder.
Section 9. CONTINUED EMPLOYMENT OR SERVICE. Each Optionee, if requested by
the Program Administrators, must agree in writing as a condition of the granting
of his or her Nonqualified Option, to remain in the employment of, or service
to, the Company or any of its subsidiaries following the date of the granting of
that Nonqualified Option for a period specified by the Program Administrators.
Nothing in this Plan or in any Nonqualified Option granted hereunder shall
confer upon any Optionee any right to continued employment by, or service to,
the Company or any of its subsidiaries, or limit in any way the right of the
Company or any subsidiary at any time to terminate or alter the terms of that
employment or service arrangement.
9
<PAGE>
Section 10. NONQUALIFIED OPTION RIGHTS UPON TERMINATION OF EMPLOYMENT OR
SERVICE. If an Optionee under this Plan ceases to be employed by, or provide
services to, the Company or any of its subsidiaries for any reason other than
death or disability, his or her Nonqualified Option shall immediately terminate;
provided, however, that the Program Administrators may, in their discretion,
allow the Nonqualified Option to be exercised, to the extent exercisable on the
date of termination of employment or service, at any time within three months
after the date of termination of employment or service, unless either the
Nonqualified Option or this Plan otherwise provides for earlier termination.
Section 11. NONQUALIFIED OPTION RIGHTS UPON DISABILITY. If an Optionee
becomes disabled within the meaning of Code Section 22(e)(3) while employed by
the Company or any subsidiary corporation, the Program Administrators, in their
discretion, may allow the Nonqualified Option to be exercised, to the extent
exercisable on the date of termination of employment, at any time within one
year after the date of termination of employment due to disability, unless
either the Nonqualified Option or the Plan otherwise provides for earlier
termination.
Section 12. NONQUALIFIED OPTION RIGHTS UPON DEATH OF OPTIONEE. Except as
otherwise limited by the Program Administrators at the time of the grant of a
Nonqualified Option, if an Optionee dies while employed by, or providing
services to, the Company or any of its subsidiaries, his or her Nonqualified
Option shall expire one year after the date of death unless by its terms it
expires sooner. During this one year or shorter period, the Nonqualified Option
may be exercised, to the extent that it remains unexercised on the date of
death, by the person or persons to whom the Optionee's rights under the
Nonqualified Option shall pass by will or by the laws of descent and
distribution, but only to the extent that the Optionee is entitled to exercise
the Nonqualified Option at the date of death.
Section 13. NONQUALIFIED OPTIONS NOT TRANSFERABLE. Nonqualified Options
granted pursuant to the terms of this Plan may not be sold, pledged, assigned,
or transferred in any manner otherwise than by will or the laws of descent or
distribution and may be exercised during the lifetime of an Optionee only by
that Optionee. No such Nonqualified Options shall be pledged or hypothecated in
any way nor shall they be subject to execution, attachment, or similar process.
Section 14. ADJUSTMENTS TO NUMBER AND PURCHASE PRICE OF OPTIONED
SHARES. All Nonqualified Options granted pursuant to the terms of this Plan
shall be adjusted in a manner prescribed by Article 6 of the General Provisions
of the Program.
PLAN III
STATION CASINOS, INC.
RESTRICTED SHARE PLAN
Section 1. PURPOSE. The purpose of this Station Casinos, Inc. Restricted
Share Plan ("Plan") is to promote the growth and general prosperity of the
Company by permitting the Company to grant restricted shares to help attract and
retain superior personnel for positions of substantial responsibility with the
Company and its subsidiaries and to provide key individuals with an additional
incentive to contribute to the success of the Company. The Plan is Part III of
the Program. Unless any provision herein indicates to the contrary, this Plan
shall be subject to the general provisions of the Program.
Section 2. TERMS AND CONDITIONS. The terms and conditions of restricted
shares granted under the Plan ("Restricted Shares") may differ from one another
as the Program Administrators shall, in their discretion, determine as long as
all Restricted Shares granted under the Plan satisfy the requirements of the
Plan.
Each grant of Restricted Shares shall provide to the recipient ("Holder")
the transfer of a specified number of shares of Common Stock of the Company that
shall become nonforfeitable upon the achievement of specified service or
performance conditions within a specified period ("Restriction Period") as
determined by the Program Administrators. At the time that the Restricted Share
is granted, the Program
10
<PAGE>
Administrators shall specify the service or performance conditions and the
period of duration over which the conditions apply.
The Holder of Restricted Shares shall not have any rights with respect to
such award, unless and until such Holder has executed an agreement evidencing
the terms and conditions of the award ("Restricted Share Award Agreement"). Each
individual who is awarded Restricted Shares shall be issued a stock certificate
in respect of such shares. Such certificate shall be registered in the name of
the Holder and shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such award, substantially in the
following form:
The transferability of this certificate and the shares of stock represented
hereby are subject to the terms and conditions (including forfeiture) of the
Station Casinos, Inc., Restricted Share Plan and Restricted Share Award
Agreement entered into between the registered owner and Station Casinos,
Inc. Copies of such Plan and Agreement are on file in the offices of Station
Casinos, Inc.
The Program Administrators shall require that the stock certificates
evidencing such shares be held in the custody of the Company until the
restrictions thereon shall have lapsed, and that, as a condition of any grant of
Restricted Shares, the Holder shall have delivered a stock power, endorsed in
blank, relating to the stock covered by such award. At the expiration of each
Restriction Period, the Company shall redeliver to the Holder certificates held
by the Company representing the shares with respect to which the applicable
conditions have been satisfied.
Section 3. AWARDS NOT TRANSFERABLE. During the Restriction Period, the
Holder shall not be permitted to sell, transfer, pledge, or assign shares of
Restricted Shares awarded under the Plan, other than by will and the laws of
descent and distribution.
Section 4. RESTRICTED SHARE RIGHTS UPON EMPLOYMENT OR SERVICE. If a Holder
terminates employment or service with the company prior to the expiration of the
Restriction Period, any Restricted Shares granted to him subject to such
Restriction Period shall be forfeited by the Holder and shall be transferred to
the Company. The Plan Administrators may, in their sole discretion, accelerate
the lapsing of, or waive, such restrictions in whole or in part based upon such
factors and such circumstances as the Plan Administrators may determine, in
their sole discretion, including, but not limited to, the Holder's retirement,
death, or disability.
Section 5. STOCKHOLDER RIGHTS. The Holder shall have, with respect to the
Restricted Shares granted, all of the rights of a stockholder of the Company,
including the right to vote the shares, and the right to receive any dividends
thereon. Certificates for shares of unrestricted stock shall be delivered to the
grantee promptly after, and only after, the Restriction Period in respect of
such Restricted Shares shall expire without forfeiture, and any conditions with
respect to such shares shall have been satisfied.
Section 6. COMPLIANCE WITH SECURITIES AND GAMING LAWS. Shares shall not be
issued under the Plan unless the issuance and delivery of the shares pursuant
thereto shall comply with all relevant provisions of state and federal law,
including, without limitation, the Securities Act of 1933, as amended, the rules
and regulations promulgated thereunder and the requirements of any stock
exchange upon which the shares may then be listed, and shall be further subject
to the approval of counsel for the Company with respect to such compliance. The
Program Administrators may also require a Holder to furnish evidence
satisfactory to the Company, including a written and signed representation
letter and consent to be bound by any transfer restrictions imposed by law,
legend, condition, or otherwise, that the shares are being purchased only for
investment purposes and without any present intention to sell or distribute the
shares in violation of any state or federal law, rule, or regulation. Further,
each Holder shall consent to the imposition of a legend on the shares of Common
Stock subject to his or her grant of Restricted Shares restricting their
transferability as required by law or by this Section 6. Finally, shares of
Common Stock shall not be issued and delivered under the Plan unless the
issuance and delivery of those shares shall comply with all relevant provisions
of gaming laws or regulations and any registration, approval, or action
thereunder.
11
<PAGE>
Section 7. CONTINUED EMPLOYMENT OR SERVICE. Each Holder, if requested by
the Program Administrators, must agree in writing as a condition of the granting
of his or her Restricted Shares, to remain in the employment of, or service to,
the Company or any of its subsidiaries following the date of the granting of
that Restricted Share for a period specified by the Program Administrators.
Nothing in this Plan or in any Restricted Share granted hereunder shall confer
upon any Holder any right to continued employment by, or service to, the Company
or any of its subsidiaries, or limit in any way the right of the Company or any
subsidiary at any time to terminate or alter the terms of that employment or
service arrangement.
Section 8. ADJUSTMENTS TO NUMBER OF RESTRICTED SHARES. All Restricted
Shares granted pursuant to the terms of this Plan shall be adjusted in a manner
prescribed by Article 6 of the General Provisions of the Program.
Section 9. PERFORMANCE-BASED RESTRICTED SHARES. The Committee may also
grant Restricted Shares that are subject to a risk of forfeiture if specified
performance criteria are not met within a specified period ("Performance-Based
Restricted Shares"). Performance-Based Restricted Shares shall be forfeited
unless preestablished performance criteria specified by the Committee are met
during the applicable restriction period. Performance-Based Restricted Shares
subject to performance criteria are intended to be "qualified performance-based
compensation" within the meaning of Code Section 162(m) and shall be paid solely
on account of the attainment of one or more preestablished, objective
performance goals within the meaning of Code Section 162(m). Until otherwise
determined by the Committee, Performance-Based Restricted Shares shall become
nonforfeitable upon the attainment of one or more preestablished levels of net
income, earnings per share, total shareholder return, return on equity employed
or cash flow. The payout of any Performance-Based Restricted Shares to any
individual may be reduced, but not increased, based on the degree of attainment
of the performance criteria or otherwise at the discretion of the Committee.
Subject to adjustment under Section 8 of this Plan, all individuals in the
aggregate may not receive in any calendar year Performance-Based Restricted
Shares exceeding, in the aggregate, 1,000,000 shares of Common Stock and any one
individual may not receive in any calendar year Performance-Based Restricted
Shares exceeding 500,000 shares of Common Stock.
PLAN IV
STATION CASINOS, INC.
NONEMPLOYEE DIRECTOR STOCK OPTION PLAN
Section 1. PURPOSE. The purpose of this Station Casinos, Inc. Nonemployee
Directors Stock Option Plan ("Plan") is to permit the Company to grant options
to purchase shares of its Common Stock. The Plan is designed to help attract and
retain the services of experienced and knowledgeable nonemployee directors and
to provide such nonemployee directors with an additional incentive to contribute
to the success of the Company. The Plan is intended to constitute a "formula
plan" for purposes of SEC Rule 16b-3. Any option granted pursuant to this Plan
(a "Director Option") shall be clearly and specifically designated as not being
an incentive stock option, as defined in Code Section 422. This Plan is Part IV
of the Program. Unless any provision herein indicates to the contrary, this Plan
shall be subject to the General Provisions of the Program.
Section 2. OPTION TERMS AND CONDITIONS. Each nonemployee director shall
receive (a) a Director Option to acquire 10,000 shares of Common Stock upon his
or her acceptance of an initial appointment to serve as a member of the Board
and (b) a Director Option to acquire an additional 2,500 shares on each
anniversary of such date if the nonemployee director is a member of the Board on
such anniversary.
Section 3. DURATION OF DIRECTOR OPTIONS. Each Director Option and all
rights thereunder granted pursuant to the terms of this Plan shall expire 10
years from the date on which the Director Option is granted. In addition, each
Director Option shall be subject to early termination as provided in the Plan.
12
<PAGE>
Section 4. PURCHASE PRICE. The purchase price for shares acquired pursuant
to the exercise, in whole or in part, of any Director Option shall be the fair
market value of the shares at the time of the grant of the Director Option. Fair
market value ("Fair Market Value") shall be the closing price (or, if no
reported sale takes place on such day, the mean of the reported bid and asked
prices) of the Common Stock on such day on the principal national securities
exchange on which the Common Stock is traded, or if the stock is included on the
composite tape, the composite tape. Notwithstanding the immediately preceding
sentence, if a nonemployee director becomes a member of the Board prior to or
upon the closing of the initial public offering of the Common Stock by the
Company, the Fair Market Value of the shares at the time of the nonemployee
director's initial appointment to the Board will be the initial public offering
price of the Common Stock.
Section 5. EXERCISE OF DIRECTOR OPTIONS. Each Director Option shall be
exercisable upon the date of grant. The Director Option may be exercised for all
or a portion of the shares of Common Stock subject to such Director Option, but
no Director Option may be exercised for a fraction of a share of Common Stock.
The purchase price of any shares purchased shall be paid in full in cash, by
certified or cashier's check payable to the order of the Company, by shares of
Common Stock, or by a combination of cash, check, or shares of Common Stock, at
the time of exercise of the Director Option. If any portion of the purchase
price is paid in shares of Common Stock, those shares shall be tendered at their
then Fair Market Value as determined in accordance with Section 4 of this Plan.
Payment in shares of Common Stock includes the automatic application of shares
of Common Stock received upon exercise of a Director Option to satisfy the
exercise price for additional Director Options.
Section 6. REORGANIZATION. In the event of the dissolution or liquidation
of the Company, any Director Option granted under the Plan shall terminate as of
the date of such dissolution or liquidation; provided that not less than 30
days' written notice of such date shall be given to each nonemployee director
and each such nonemployee director shall have the right during such period
(unless such Director Option shall have previously expired) to exercise any
Director Option.
In the event of a Reorganization (as defined below) in which the Company is
not the surviving or acquiring company, or in which the Company is or becomes a
subsidiary of another company after the effective date of the Reorganization,
then:
(a) if there is no plan or agreement respecting the Reorganization
("Reorganization Agreement") or if the Reorganization Agreement does not
specifically provide for the change, conversion or exchange of the
outstanding Director Options for options of another corporation, then
exercise and termination provisions equivalent to those described in this
Section 6 shall apply; or
(b) if there is a Reorganization Agreement and if the Reorganization
Agreement specifically provides for the change, conversion, or exchange of
the outstanding Director Options for options of another corporation, then
the outstanding unexercised Director Options shall be adjusted (as well the
Director Options remaining under the Plan which have not yet been granted if
the Reorganization Agreement makes specific provision for such an
adjustment) in a manner consistent with the applicable provisions of the
Reorganization Agreement.
The term "Reorganization" as used in this Section 6 shall mean any statutory
merger, statutory consolidation, sale of all or substantially all of the assets
of the Company or a sale of the Common Stock pursuant to which the Company is or
becomes a subsidiary of another company after the effective date of the
Reorganization.
Adjustments and determinations under this Section 6 shall be final, binding,
and conclusive.
Section 7. WRITTEN NOTICE REQUIRED. Any Director Option granted pursuant
to the terms of this Plan shall be exercised when written notice of that
exercise has been given to the Company at its principal office by the person
entitled to exercise the Director Option and full payment for the shares with
respect to which the Director Option is exercised has been received by the
Company.
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<PAGE>
Section 8. COMPLIANCE WITH SECURITIES AND GAMING LAWS. Shares shall not be
issued with respect to any Director Option granted under the Plan unless the
exercise of that Director Option and the issuance and delivery of the shares
pursuant thereto shall comply with all relevant provisions of state and federal
law, including, without limitation, the Securities Act of 1933, as amended, the
rules and regulations promulgated thereunder and the requirements of any stock
exchange upon which the shares may then be listed, and shall be further subject
to the approval of counsel for the Company with respect to such compliance. The
nonemployee directors may also be required to furnish evidence satisfactory to
the Company, including a written and signed representation letter and consent to
be bound by any transfer restrictions imposed by law, legend, condition, or
otherwise, that the shares are being purchased only for investment purposes and
without any present intention to sell or distribute the shares in violation of
any state or federal law, rule, or regulation. Further, each nonemployee
director shall consent to the imposition of a legend on the shares of Common
Stock subject to his or her Director Option restricting their transferability as
required by law or by this Section 8. Finally, shares of Common Stock shall not
be issued with respect to any Director Option granted under the Plan unless the
exercise of that Director Option and the issuance and delivery of those shares
pursuant to that exercise shall comply with all relevant provisions of gaming
laws or regulations and any registration, approval, or action thereunder.
Section 9. CONTINUED SERVICE. Nothing in this Plan or in any Director
Option granted hereunder shall confer upon any nonemployee director any right to
continued membership on the Board.
Section 10. DIRECTOR OPTION RIGHTS UPON TERMINATION OF BOARD SERVICE. If a
nonemployee director who receives Director Options under this Plan ceases to be
a member of the Board for any reason other than death or disability, his or her
Director Option shall be exercisable at any time within three months after such
date.
Section 11. DIRECTOR OPTION RIGHTS UPON DISABILITY. If a nonemployee
director who receives Director Options under this Plan becomes disabled within
the meaning of Code Section 22(e)(3) while a member of the Board, his or her
Director Option shall be exercisable at any time within one year after such
date.
Section 12. DIRECTOR OPTION RIGHTS UPON DEATH. If a nonemployee director
who receives Director Options under this Plan dies while a member of the Board,
his or her Director Option shall expire one year after the date of death unless
by its terms it expires sooner. During this one year period, the Director Option
may be exercised, to the extent that it remains unexercised on the date of
death, by the person or persons to whom the nonemployee director's rights under
the Director Option shall pass by will or by the laws of descent and
distribution, but only to the extent that the nonemployee director is entitled
to exercise the Director Option at the date of death.
Section 13. DIRECTOR OPTIONS NOT TRANSFERABLE. Director Options granted
pursuant to the terms of this Plan may not be sold, pledged, assigned, or
transferred in any manner otherwise than by will or the laws of descent or
distribution and may be exercised during the lifetime of a nonemployee director
only by that nonemployee director. No such Director Options shall be pledged or
hypothecated in any way nor shall they be subject to execution, attachment, or
similar process.
Section 14. ADJUSTMENTS TO NUMBER AND PURCHASE PRICE OF OPTIONED
SHARES. All Director Options granted pursuant to the terms of this Plan shall
be adjusted in a manner prescribed by Article 6 of the General Provisions of the
Program.
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