Exhibit 10.1

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of the
14th day of December, 2007, by and between STATION CASINOS, INC., a Nevada
corporation, with its principal offices located at 1505 South Pavilion Center
Drive, Las Vegas, Nevada 89135 (the “Company”), and KEVIN L. KELLEY (the
“Executive”).

 

WHEREAS, the Company desires to employ the Executive on the terms and conditions
set forth herein; and

 

WHEREAS, the Executive desires to accept employment with the Company on the
terms and conditions set forth herein; and

 

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

 

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

 

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

 

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

 

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

 

1.4                                 “Cause” shall mean that the Executive:

 

(a)                                  has been convicted of any felony;

 

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

 

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

 

1.5                                 “Change in Control” shall mean the
following:  (A) prior to the occurrence of an Initial Public Offering (as
defined in the LLC Agreement), the consummation of any transaction (including,
without limitation, any merger or consolidation) as a result of which any
“person” or “group” (in each case, as such term is used in Section 13(d)(3) of
the Exchange Act), other than any Member of HoldCo LLC who is an Existing Equity
Holder or Permitted Transferee (as defined in the LLC Agreement) of such a
Member of HoldCo LLC, or an Affiliate thereof, becomes the “beneficial owner”
(as such term is defined in rule 13d-3

 

--------------------------------------------------------------------------------

 

promulgated under the Exchange Act) of more than fifty percent (50%) of the
total issued and outstanding Class A Units and Class B Units of HoldCo LLC;
(B) after the occurrence of an Initial Public Offering, the consummation of any
transaction (including, without limitation, any merger or consolidation) as a
result of which any person or group, other than a Member of HoldCo LLC who is an
Existing Equity Holder or Permitted Transferee of such a Member of HoldCo LLC,
or any Affiliate thereof, becomes the beneficial owner of more than thirty-five
percent (35%) of the total issued and outstanding shares of Voting Stock of the
IPO Corporation; or (C) the sale, lease, transfer, conveyance or other
disposition (other than by way of merger or consolidation) in one or a series of
related transactions, of more than fifty percent (50%) (as measured by fair
market value at the time of transfer) of the assets of the Company to any person
(other than the Company or a Company subsidiary), other than (x) any Member of
HoldCo LLC on the date hereof or Permitted Transferee of such a Member of HoldCo
LLC or Affiliate thereof or (y) as part of any financing transaction engaged in
by the Company or a Company subsidiary.  In addition, no Change of Control shall
be deemed to have occurred as a result of any reorganization of or similar
transaction engaged in by the Company or any subsidiary of the Company
(including in respect of an Initial Public Offering).

 

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

 

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

 

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

 

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

 

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

 

2

--------------------------------------------------------------------------------

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(d)                                 the Executive is excluded from participation
in any employee benefit or short-term incentive plan or program offered to other
similarly situated executives of the Company or his benefits under such plans or
programs or opportunities under any employee benefit or incentive plan or
program of the Company is or are materially reduced;

 

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

 

3

--------------------------------------------------------------------------------

 

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

 

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

 

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

 

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

 

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

 

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

 

1.17                           “LLC Agreement” shall mean that Second Amended
and Restated Operating Agreement of Fertitta Colony Partners LLC, dated as of
November 7, 2007, as the same may be amended from time to time in accordance
with the terms thereof.

 

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

 

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

 

1.20                           “Restricted Area” shall mean (a) the City of Las
Vegas, Nevada, and the area within a forty-five (45) mile radius of that city,
and (b) any area in or within a one hundred fifty (150) mile radius of any other
location in which the Company or any of its Affiliates are directly or
indirectly engaged in the development, ownership, operation or management of any
gaming activities or is actively pursuing any such activities; provided,
however, that in the event the Executive voluntarily terminates this Agreement
pursuant to Sections 6.3, 7.2 or 7.3, the Restricted Area shall (a) after the
first twelve (12) months of the Restriction Period, exclude the Las Vegas Strip
(which is defined as that area bounded by Koval Lane and straight extensions
thereof on the East, Charleston Boulevard on the North, I-15 on the West, and
Sunset Road on the South) and (b) after a Change in Control, exclude Downtown
Las Vegas (which is defined as that area bounded by Eastern Avenue and straight
extensions thereof on the East, I-515 (U.S. Highway 93/95) on the North, I-15 on
the West, and Charleston Boulevard on the South).

 

4

--------------------------------------------------------------------------------

 

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

 

1.22                           “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.

 

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

 

1.24                           “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.

 

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

 

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

 

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

 

2.                                       TERM OF EMPLOYMENT, POSITION AND
RESPONSIBILITIES.

 

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

 

2.2                                 Term of Employment.  The initial Term of
Employment shall commence on January 7, 2008 (the “Commencement Date”) 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 Commencement Date; provided, however, that the initial Term
of Employment shall automatically be extended for successive five-year periods
if neither Party has advised the other in writing in accordance with Section 14
at least six (6) months prior to the end of the then current Term of Employment
that such Term of Employment will not be extended for an additional five year
period.  In the event that such notice is given, (i) the Executive’s employment
shall terminate upon the close of business on the day immediately preceding the
expiration of the then current Term of Employment, and (ii) the Executive shall
not be entitled to any additional compensation hereunder after the expiration
thereof, but such termination of employment shall not otherwise affect accrued
but unpaid compensation or benefits provided under this Agreement or pursuant to
any Company plan or program.

 

5

--------------------------------------------------------------------------------

 

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

 

3.                                       COMPENSATION.

 

3.1                                 Base Salary.  During the Term of Employment,
the Executive shall be entitled to receive a base salary (the “Base Salary”)
payable no less frequently than in equal bi-weekly installments at an annualized
rate of no less than $1,000,000.  The Base Salary shall be reviewed annually for
increase (but not decrease) in the discretion of the Board.  In conducting any
such annual review, the Board shall take into account any change in the
Executive’s responsibilities, increases in the compensation of other executives
of the Company or any Affiliate (or any competitor(s) of either or both), the
performance of the Executive and/or other pertinent factors.  Such increased
Base Salary shall then constitute the Executive’s “Base Salary” for purposes of
this Agreement.

 

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

 

3.3                                 Equity Awards.  Not later than ten (10) days
following the Commencement Date, the Company shall award, or shall cause to be
awarded, to the Executive (a) 1.667 Class B units of FCP Class B Holdco LLC,
which owns Class B units in each of HoldCo LLC and Fertitta Partners LLC,
(b) 92,893 Class C units of Holdco LLC, and (c) 29,431 Class C units of Fertitta
Partners, LLC (collectively, the “Equity Awards”); provided, however, that the
Equity Awards shall be subject to the approval (administrative or otherwise) of
the Nevada Gaming Commission.  The Equity Awards shall vest 20% per year for
five (5) years, commencing on the first anniversary of the Commencement Date.

 

6

--------------------------------------------------------------------------------

 

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

 

4.                                       EMPLOYEE BENEFIT PROGRAMS.

 

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

 

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

 

(a)                                  Executive Group Health Insurance Coverage
pursuant to such other plan or plans as the Company may select, which shall be
fully paid for by the Company, and for which the Company shall waive the
standard ninety (90) day period for benefits thereunder;

 

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

 

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

 

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

 

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
(a) relocating from Macao Special Administrative Region to

 

7

--------------------------------------------------------------------------------

 

Las Vegas, Nevada, and (b) performing services under this Agreement, subject to
providing the proper documentation of said expenses.

 

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

 

(a)                                  vacation of four weeks per year;

 

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

 

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

 

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

 

6.                                       TERMINATION OF EMPLOYMENT.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

8

--------------------------------------------------------------------------------

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

9

--------------------------------------------------------------------------------

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

7.                                       CHANGE IN CONTROL.

 

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

 

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

 

10

--------------------------------------------------------------------------------

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

11

--------------------------------------------------------------------------------

 

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

 

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

 

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

 

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

 

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

 

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

 

8.                                       CONDITIONS TO PAYMENTS.

 

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

 

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

 

12

--------------------------------------------------------------------------------

 

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

 

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

 

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

 

9.                                       SPECIAL REIMBURSEMENT.

 

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

 

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

 

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

 

13

--------------------------------------------------------------------------------

 

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

 

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

 

10.                                 INDEMNIFICATION.

 

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

 

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

 

(a)                                  The Executive must promptly give the
Company written notice of any actual or threatened Indemnifiable Action and,
upon providing such notice, the Executive shall be presumed to be entitled to
indemnification under this Agreement and the Company shall have the burden of
proof to overcome that presumption in reaching any contrary determination;

 

14

--------------------------------------------------------------------------------

 

provided, however, that the Executive’s failure to give such notice shall not
affect the Company’s obligations hereunder;

 

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

 

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

 

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

 

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

 

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

 

15

--------------------------------------------------------------------------------

 

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

 

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

 

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

 

11.                                 COVENANT NOT ENGAGE IN CERTAIN ACTS.

 

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

 

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

 

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

 

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

 

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

 

16

--------------------------------------------------------------------------------

 

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

 

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

 

12.                                 CONFIDENTIAL INFORMATION.

 

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

 

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

 

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

 

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

 

17

--------------------------------------------------------------------------------

 

13.                                 MUTUAL ARBITRATION AGREEMENT.

 

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

 

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

 

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

 

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

 

13.5                           Acknowledgements.  The Executive acknowledges
that he:

 

(a)                                  has carefully read this Section 13;

 

(b)                                 understands its terms and conditions; and

 

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

 

18

--------------------------------------------------------------------------------

 

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

 

If to the Company:

 

Station Casinos, Inc.

 

 

1505 S. Pavilion Center Drive

 

 

Las Vegas, NV 89135

 

 

Attention: Richard J. Haskins

 

 

 

With a copy to:

 

Milbank, Tweed, Hadley & McCloy

 

 

601 South Figueroa Street, 30th Floor

 

 

Los Angeles, CA 90017

 

 

Attention: Kenneth J. Baronsky

 

 

 

If to the Executive:

 

Kevin L. Kelley

 

 

1505 S. Pavilion Center Drive

 

 

Las Vegas, NV 89135

 

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

 

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

 

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

 

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

 

19

--------------------------------------------------------------------------------

 

19.                                 REPRESENTATIONS AND WARRANTIES.  Each Party
represents and warrants that he or it is fully authorized and empowered to enter
into this Agreement and that the performance of his or its obligations under
this Agreement will not violate any agreement between that Party and any other
Person.  The Executive also represents and warrants that he has not and will
not, by entering into or performing his obligations under this Agreement, or
otherwise, (a) violate the terms of that separation agreement dated as of
December 14, 2007, between Las Vegas Sands Corp. and the Executive, nor
(b) cause the Company to violate the terms of that letter agreement dated as of
December 14, 2007, between Las Vegas Sands Corp. and the Company.

 

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

 

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

 

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

 

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

 

20

--------------------------------------------------------------------------------

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

21

--------------------------------------------------------------------------------

 

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

 

 

 

STATION CASINOS, INC.

 

 

 

 

 

By:

/s/ Richard J. Haskins

 

 

Name:

Richard J. Haskins

 

Title:

Executive Vice President,

 

 

General Counsel and Secretary

 

 

 

/s/ Kevin L. Kelley

 

 

KEVIN L. KELLEY

 

GUARANTEE

 

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

 

 

FERTITTA COLONY PARTNERS LLC

 

 

 

By:

/s/ Frank J. Fertitta III

 

 

Name:

Frank J. Fertitta III

 

 

Title:

Authorized Member

 

 

22

--------------------------------------------------------------------------------

 

EXHIBIT “A”

 

GENERAL RELEASE AND COVENANT NOT TO SUE

 

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

 

In consideration of the agreement by the Company to provide the separation
payments and benefits in Section 6 and Section 7 of the Employment Agreement
between the Executive and the Company, dated as of December 14, 2007 (the
“Employment Agreement”), and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Executive hereby
agrees as follows:

 

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

 

2.                                       DUE CARE.  THE EXECUTIVE ACKNOWLEDGES
THAT HE HAS RECEIVED A COPY OF THIS RELEASE PRIOR TO ITS EXECUTION AND HAS BEEN
ADVISED HEREBY OF HIS OPPORTUNITY TO REVIEW AND CONSIDER THIS RELEASE FOR
TWENTY-ONE (21) DAYS PRIOR TO ITS EXECUTION.  THE

 

--------------------------------------------------------------------------------

 

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

 

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

 

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

 

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

 

 

“EXECUTIVE”

 

 

 

 

 

 

 

 

KEVIN L. KELLEY

 

--------------------------------------------------------------------------------

 

STATE OF

)

 

) ss:

COUNTY OF

)

 

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

 

 

 

 

NOTARY PUBLIC

 

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

 

--------------------------------------------------------------------------------