**UNITED STATESSECURITIES AND EXCHANGE COMMISSION**WASHINGTON, D.C. 20549

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**FORM 10-K/A**Amendment No. 2
| (Mark One) | ** ** | ** **                                                                                             |
|------------|------------|--------------------------------------------------------------------------------------------------------|
| **x**      | ** ** | **ANNUAL  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE  ACT OF 1934**   |
| ** ** | ** ** | ** **                                                                                             |
| ** ** | ** ** | **for the  fiscal year ended December 31, 2006**                                                  |
| ** ** | ** ** | ** **                                                                                             |
| ** ** | ** ** | **OR**                                                                                                 |
| ** ** | ** ** | ** **                                                                                             |
| **o**      | ** ** | **TRANSITION  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE**SECURITIES EXCHANGE ACT OF 1934 |

 

**forthe transition period from                             to                             .**

**Commissionfile number 000-21640**

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**STATION CASINOS, INC.**

(Exact name of registrantas specified in its charter)

| **Nevada**                                                        |   | **88-0136443**                          |
|-------------------------------------------------------------------|--------|-----------------------------------------|
| (State or other  jurisdiction of   incorporation or organization) |   | (I.R.S. Employer    Identification No.) |

 

**2411West Sahara Avenue, Las Vegas, Nevada 89102**(Address of principalexecutive offices, Zip Code)

Registrant’stelephone number, including area code: **(702) 367-2411**

Securitiesregistered pursuant to Section 12(b) of the Act:

| Title of each class                 | ** ** | **Name of each exchange on which  registered** |
|-------------------------------------|------------|------------------------------------------------|
| **Common  Stock, $0.01  Par Value** |       | **New  York Stock  Exchange**                  |

 

Securitiesregistered pursuant to Section 12(g) of the Act: **None**

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Indicate by check mark ifthe registrant is a well-known seasoned issuer, as defined in Rule 405 ofthe Securities Act. Yes x  No o

Indicate by check mark ifthe registrant is not required to file reports pursuant to Section 13 orSection 15(d) of the Act. Yes o  No x

Indicate by check markwhether the registrant (1) has filed all reports required to be filed bySection 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant wasrequired to file such reports), and (2) has been subject to such filingrequirements for the past 90 days. Yes x  No o

Indicate by check mark ifdisclosure of delinquent filers pursuant to Item 405 of Regulation S-K is notcontained herein, and will not be contained, to the best of registrant’sknowledge, in definitive proxy or information statements incorporated byreference in Part III of this Form 10-K or any amendment to theForm 10-K. x

Indicate by check markwhether the registrant is a large accelerated filer, an accelerated filer, or anon-accelerated file. See definition of “accelerated filer and largeaccelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):Large accelerated filer x  Acceleratedfiler o  Non-accelerated filer o

Indicate by check markwhether the registrant is a shell company (as defined in Rule 12b-2of the Act). Yes  o No x

The aggregate marketvalue of the voting stock held by non-affiliates (all persons other thanexecutive officers or directors) of the registrant as of June 30, 2006,based on the closing price per share of $68.08 as reported on the New YorkStock Exchange was $3,163,811,105.

As of January 31,2007, the registrant has 57,260,989 shares of common stock outstanding.

**Documents Incorporated by Reference**

None.

 

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**EXPLANATORY NOTE**

**The registrant filed with the Securities andExchange Commission (the “SEC”) (i) an Annual Report on Form 10-K for the yearended December 31, 2006 on March 1, 2007 (the “Initially Filed Form 10-K”), and(ii) an Amendment No. 1 on Form 10-K/A to the Initially Filed Form 10-K onApril 27, 2007 (“Amendment No. 1”).  Theregistrant is filing this Amendment No. 2 on Form 10-K/A to amend and restateItem 13, “Certain Relationships and Related Transactions, and DirectorIndependence”, of Part III of Amendment No. 1. We are amending and restating Item 13 to (i) amend and restate thedescription of the Agreement and Plan of Merger entered into by and among theregistrant, Fertitta Colony Partners LLC and FCP Acquisition Sub, dated as ofFebruary 23, 2007 (the “Merger Agreement”), to reflect an amendment to theMerger Agreement and (ii) correct numerical errors in the summary of theapproximate value of the consideration to be received as a result of theproposed merger transaction by each of Frank J. Fertitta III, Lorenzo J.Fertitta, Blake L. Sartini and Delise F. Sartini.  In addition, as required by Rule 12b-15under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), newcertifications by our principal executive officer and principal financialofficer are being filed or furnished as exhibits to this Amendment No. 2on Form 10-K/A under Item 15 of Part IV hereof.**

**No attempt has been made in this Amendment No. 2 onForm 10-K/A to modify or update the other disclosures presented in theInitially Filed Form 10-K and Amendment No. 1. Except as presented in thisAmendment No. 2 on Form 10-K/A and except for Exhibits 31.1, 31.2, 32.1 and32.2, this Amendment No. 2 on Form 10-K/A does not reflect events occurringafter the filing of the Initially Filed Form 10-K or Amendment No. 1 or modifyor update those disclosures. Accordingly, this Amendment No. 2 on Form 10-K/A should be read inconjunction with the Initially Filed Form 10-K, Amendment No. 1 and our otherfilings with the SEC.**

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**ITEM 13. CERTAIN RELATIONSHIPS AND RELATEDTRANSACTIONS, AND DIRECTOR INDEPENDENCE**

**Merger Agreement**

On February 23, 2007, we entered into anAgreement and Plan of Merger with Fertitta Colony Partners LLC (“FCP”), aNevada limited liability company, and FCP Acquisition Sub, a Nevada corporationand a wholly-owned subsidiary of FCP (“Merger Sub”).  The Merger Agreement was amended by theCompany, FCP and Merger Sub as of May 4, 2007. Pursuant to the terms of the Merger Agreement, Merger Sub will be mergedwith and into the Company, and as a result the Company will continue as thesurviving corporation (such transaction, the “Merger”).

Following theconsummation of the Merger, FCP will indirectly own approximately 75% of theissued and outstanding shares of non-voting common stock of the Company.  Immediately prior to the Merger, FCP will beowned by affiliates of Frank J. Fertitta III, Chairman and Chief ExecutiveOfficer of the Company, Lorenzo J. Fertitta, Vice Chairman and President of theCompany, and FC Investor, LLC (“FC Investor”), a Delaware limited liabilitycompany and an affiliate of Colony Capital, LLC (“Colony”).

Following theconsummation of the Merger, Fertitta Partners LLC, a Nevada limited liabilitycompany (“Fertitta Partners”), will own approximately 25% of the issued andoutstanding shares of non-voting common stock of the Company.  Immediately prior to the consummation of theMerger, Fertitta Partners will be owned by affiliates of Frank J. Fertitta III,Lorenzo J. Fertitta, Blake L. Sartini and Delise F. Sartini.  FCP VoteCo LLC, a Nevada limited liabilitycompany (“FCP VoteCo”), will, following the consummation of the Merger and thesubstantially simultaneous issuance and sale of voting common stock of theCompany for nominal consideration, own all of the issued and outstanding sharesof voting common stock of the Company. It is currently anticipated that there will be 1,000,000 shares ofnon-voting common stock of the Company for each outstanding share of votingcommon stock of the Company.  Immediatelyprior to the consummation of the Merger, each of Frank J. Fertitta III, LorenzoJ. Fertitta and Thomas J. Barrack, Jr., the Chairman and Chief ExecutiveOfficer of Colony, will own a one-third interest in FCP VoteCo.

At the effective time of the Merger, each outstandingshare of our common stock, including any rights associated therewith (otherthan shares of our common stock owned by FCP, Merger Sub, FCP Holding, Inc., awholly-owned subsidiary of FCP, Fertitta Partners or any wholly-owned subsidiaryof the Company or shares of Company common stock held in treasury by us) willbe cancelled and converted into the right to receive $90 in cash, withoutinterest.  Following the consummation ofthe Merger, the Company will be privately owned through FCPHoldCo, FertittaPartners and FCP VoteCo.  Certain membersof management may be granted or otherwise acquire membership interests in FCPand Fertitta Partners.

Our Board of Directors (with Frank J. Fertitta III andLorenzo J. Fertitta taking no part in the vote), acting upon the unanimousrecommendation of a special committee composed entirely of disinteresteddirectors (the “Special Committee”), has approved the Merger Agreement and hasrecommended that our stockholders vote in favor of the Merger Agreement.

Pursuant to rollovercommitments entered into on February 23, 2007, Frank J. Fertitta III,Lorenzo J. Fertitta, Blake L. Sartini and Delise F. Sartini (collectively, the “RolloverStockholders”) agreed to contribute a portion of their shares of our commonstock to FCP.  FCP subsequently assignedsuch rollover commitments to Fertitta Partners as of May 4, 2007.  In addition, subject to specified exceptions,the Rollover Stockholders have agreed to vote their shares of our common stockin favor of the Merger pursuant to a voting agreement entered into onFebruary 23, 2007, by and among the Rollover Stockholders, the Company andFCP.  Mr. Sartini is thebrother-in-law to Frank J. Fertitta III and Lorenzo J. Fertitta, andin September 2001, he resigned his position as Executive Vice Presidentand Chief Operating Officer of the Company concurrent with his purchase ofGolden Gaming, Inc. Delise F. Sartini is the sister of Frank J.Fertitta III and Lorenzo J. Fertitta and is married to Blake L.Sartini.

The Merger Agreement provides that, upon terminationunder specified circumstances related to a competing acquisition proposal, theCompany would be required to pay a termination fee of $160 million to FCP,except in the case of a termination resulting from a superior proposal receivedwithin 30 business days following the execution of the Merger Agreement, inwhich case the termination fee payable to FCP will be $106 million. If theCompany’s stockholders do not approve the Merger under certain

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circumstances, the Company must reimburse FCP for reasonableout-of-pocket fees and expenses (including reasonable legal fees and expenses)incurred by FCP, Merger Sub and their respective affiliates in connection withthe transactions contemplated by the Merger Agreement. The Company’sreimbursement of FCP’s expenses would reduce the amount of any requiredtermination fee that becomes payable by the Company. The Merger Agreementfurther provides that upon termination under specified circumstances related toa breach of any representation, warranty, covenant or agreement on the part ofFCP or Merger Sub or failure to obtain gaming approvals, FCP would be requiredto pay to the Company a reverse termination fee of $160 million or a regulatorytermination fee of $106 million, respectively. Pursuant to a limited guarantee,dated as of February 23, 2007, affiliates of the Sponsor guaranteed thepayment of the reverse termination fee, the regulatory termination fee andamounts arising from indemnification and expense reimbursement obligations ofFCP or Merger Sub under the Merger Agreement, up to $175 million in theaggregate.

FCP has obtained equity and debt financing commitmentsfor the transactions contemplated by the Merger Agreement, the proceeds ofwhich will be used by FCP to pay the aggregate merger consideration and relatedfees and expenses of the transactions contemplated by the Merger Agreement. Inconnection with the debt financing commitments, the Company and certain of itssubsidiaries (the “Operating Subs”) entered into a purchase and sale agreementwith a newly created wholly-owned subsidiary of the Company (“NewCo”), pursuantto which the Operating Subs’ interests in certain real property will be sold toNewCo and leased back to the Company and the Operating Subs (the “Sale andLeaseback Transaction”). The Sale and Leaseback Transaction was approved by theSpecial Committee, which obtained a fairness opinion in connection therewith.The closing of the Sale and Leaseback Transaction is contingent upon theconsummation of the Merger. Consummation of the Merger is not subject to afinancing condition but is subject to various other conditions to closing,including approval of the Merger by our stockholders and regulatory approvals.The Merger is expected to be completed in the second half of 2007.

The total value of the Merger transaction is estimatedto be approximately $5.7 billion, consisting of approximately $4.5 billion topay the Company’s stockholders and holders of options or restricted sharesamounts due to them under the Merger Agreement assuming a purchase price of$90.00 per share (net of the exercise price for options and net of the value ofthe equity rollover shares of Company common stock contributed to FertittaPartners by the Rollover Stockholders), approximately $1.1 billion to repaycertain existing indebtedness, and approximately $100 million to pay fees andexpenses in connection with the Merger. The approximate value of the Mergertransaction to each of the Rollover Stockholders is as follows:

·                  Frank J.Fertitta III will (A) contribute 3,979,884 shares of Company common stockto Fertitta Partners in exchange for Class A Units of Fertitta Partnersvalued at $358,189,560 based on the Merger consideration of $90.00 per shareand (B) receive cash consideration of approximately $148,654,355 inrespect of his 1,074,636 shares of Company common stock (including restrictedstock) that will be converted into the right to receive cash payments uponconsummation of the Merger and his outstanding options to purchase 663,900shares of Company common stock that will vest, be cancelled and converted intothe right to receive cash payments upon consummation of the Merger;

·                  Lorenzo J.Fertitta will (A) contribute 4,038,153 shares of Company common stock toFertitta Partners immediately prior to the consummation of the Merger inexchange for Class A Units of Fertitta Partners valued at $363,433,770based on the Merger consideration of $90.00 per share and (B) receive cashconsideration of approximately $145,077,950 in respect of his 1,035,965 sharesof Company common stock (including restricted stock) that will be convertedinto the right to receive cash payments upon consummation of the Merger and hisoutstanding options to purchase 661,400 shares of Company common stock thatwill vest, be cancelled and converted into the right to receive cash paymentsupon consummation of the Merger; and

·                  Blakeand Delise Sartini will (A) contribute 1,653,984 shares of Company commonstock to Fertitta Partners immediately prior to the consummation of the Mergerin exchange for Class A Units of Fertitta Partners valued at $148,858,560based on the Merger consideration of $90.00 per share and (B) receive cashconsideration of approximately $201,062,970 in respect of their 2,234,033shares of Company common stock that will be converted into the

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right to receive cash payments upon consummation ofthe Merger.

**Boulder Station Lease**

The Company entered into a ground lease for 27 acresof land on which Boulder Station is located. The Company leases this land fromKB Enterprises, a company owned by Frank J. Fertitta, Jr. andVictoria K. Fertitta (the “Related Lessor”), the parents of Frank J.Fertitta III, Chairman of the Board and Chief Executive Officer of theCompany and Lorenzo J. Fertitta, Vice Chairman of the Board and Presidentof the Company. The lease has a maximum term of 65 years, ending inJune 2058. The lease provides for monthly payments of $183,333 throughJune 2008. In July 2008, and every ten years thereafter, the rentwill be adjusted by a cost of living factor. In July 2013, and every tenyears thereafter, the rent will be adjusted to the product of the fair marketvalue of the land and the greater of (i) the then prevailing annual rateof return for comparably situated property or (ii) 8% per year. In noevent will the rent for any period be less than the immediately precedingperiod. Pursuant to the ground lease, the Company has an option, exercisable atfive-year intervals with the next option in June 2008, to purchase theland at fair market value. The Company’s leasehold interest in the property issubject to a lien to secure borrowings under the Revolving Facility. TheCompany believes that the terms of the ground lease are as fair to the Companyas could be obtained from an independent third party.

**Texas Station Lease**

The Company entered into a ground lease for 47 acresof land on which Texas Station is located. The Company leases this land fromTexas Gambling Hall & Hotel, Inc., a company owned by the RelatedLessor. The lease has a maximum term of 65 years, ending in July 2060. Thelease provides for monthly rental payments of $337,417 through June 2010.In July 2010, and every ten years thereafter, the rent will be adjusted tothe product of the fair market value of the land and the greater of(i) the then prevailing annual rate of return being realized for owners ofcomparable land in Clark County or (ii) 8% per year. In July 2015,and every ten years thereafter, the rent will be adjusted by a cost of livingfactor. In no event will the rent for any period be less than the immediatelypreceding period. Pursuant to the ground lease, the Company has an option,exercisable at five-year intervals with the next option in May 2010, topurchase the land at fair market value. The Company’s leasehold interest in theproperty is subject to a lien to secure borrowings under the RevolvingFacility. The Company believes that the terms of the ground lease are as fairto the Company as could be obtained from an independent third party.

**Zuffa, LLC**

We have purchased tickets to events held by Zuffa, LLC(“Zuffa”) which is the parent company of the Ultimate Fighting Championship (“UFC”)and is owned by Frank J. Fertitta III and Lorenzo J. Fertitta.  For theyear ended December 31, 2006, ticket purchases totaled $198,191. In July2006, the Company entered into an agreement with Zuffa for Red Rock CasinoResort Spa to serve as the host hotel and venue for a UFC event held onAugust 17, 2006. The Company expended approximately $89,000 in goods and servicesin connection with the event. However, the Company believes that the valuereceived from hosting the event exceeded the costs expended by the Company inconnection with such event.

**PROCEDURESFOR REVIEW, APPROVAL OR RATIFICATIONOF TRANSACTIONS WITH RELATED PERSONS**

Our Board of Directors has approved the related partytransaction policy and procedures which gives our Audit Committee the power toapprove or disapprove potential related party transactions of our directors andexecutive officers, and their immediate family members. The Audit Committee ischarged with reviewing all relevant facts and circumstances of a related partytransaction, including if the transaction is on terms comparable to those thatcould be obtained in arm’s length dealings with an unrelated third party andthe extent of the person’s interest in the transaction.

**DIRECTORINDEPENDENCE**

The Board of Directors has determined that each ofMessrs. Lebermann, Nave, Isgur and Lewis are independent directors (asindependence is defined in Section 303A.02 of the NYSE Listing Standards).As part of its analysis, the Board of Directors determined that none ofMessrs. Lebermann, Nave, Isgur or Lewis has a direct or indirect materialrelationship with the Company.

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**PARTIV**

**ITEM 15.****        EXHIBITS AND FINANCIAL STATEMENT SCHEDULES**

(a)(3) Exhibits

The followingexhibits are being filed herewith:
| Exhibit 31.1 |   | Certification pursuant to Section 302 of the  Sarbanes-Oxley Act of 2002. |
|--------------|--------|---------------------------------------------------------------------------|
| Exhibit 31.2 |   | Certification pursuant to Section 302 of the  Sarbanes-Oxley Act of 2002. |
| Exhibit 32.1 |   | Certification pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002. |
| Exhibit 32.2 |   | Certification pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002. |

 

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**SIGNATURES**

Pursuant to therequirements of Section 13 or 15(d) of the Securities Exchange Act of1934, the Registrant has duly caused this report to be signed on its behalf bythe undersigned, thereunto duly authorized.
|                     |   | STATION CASINOS, INC. |
|---------------------|--------|-----------------------|
| Dated: May 4,  2007 |   | By:                   | /s/ Thomas M. Friel |
|                |   |                  | Thomas M. Friel |
|                |   |                  | Executive Vice President, Chief Accounting |
|                |   |                  | Officer and Treasurer (Principal Accounting |
|                |   |                  | Officer) |

 

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