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]