<PAGE>   1
 
                                                                    EXHIBIT 2.04
 
                                THIRD AMENDMENT
                        TO AGREEMENT AND PLAN OF MERGER
 
     This THIRD AMENDMENT TO AGREEMENT AND PLAN OF MERGER (this "Amendment") is
dated as of June 26, 1998 and entered into by and between Station Casinos, Inc.,
a Nevada corporation (the "Company") and Crescent Real Estate Equities Company,
a Texas real estate investment trust ("Crescent"), with reference to that
certain Agreement and Plan of Merger, dated as of January 16, 1998, as amended,
by and between the Company and Crescent (the "Merger Agreement"). Capitalized
terms used in this Amendment without definition shall have the meanings set
forth in the Merger Agreement.
 
                         AMENDMENTS TO MERGER AGREEMENT
 
     1.1  Amendment to Section 4.1(c). Section 4.1(c) of the Merger Agreement is
hereby amended by inserting the words "except as set forth in Section 1.1," at
the beginning of the first line thereof.
 
     1.2  Amendment to Section 4.1(g). Section 4.1(g) of the Merger Agreement is
hereby amended by replacing the words "except as set forth in Section 5.23" at
the beginning of the first line thereof, with the words "except as set forth in
Sections 1.1 and 5.23".
 
     1.3  Addition of Section 5.26. Article V of the Merger Agreement is hereby
amended by adding a new Section 5.26, as follows:
 
     Section 5.26  Agreement to Designate Additional Parties to Merger
     Agreement.
 
     At any time prior to the Effective Time, Crescent shall have the right, by
     written notice to the Company, to designate one or more corporations, a
     majority of the capital stock of which shall be owned by Crescent, as
     additional parties to this Agreement, for the limited purposes described in
     this paragraph, and to designate that the shares of certain subsidiaries of
     the Company shall be transferred by Crescent to such additional parties at
     the Effective Time. Such written notice shall be effective as an amendment
     to this Agreement for such limited purpose, shall be executed by such
     additional parties solely in order to become parties to this Agreement for
     such limited purpose, and shall grant to the additional parties the right
     to acquire from Crescent, upon the Effective Time, the shares of the
     subsidiaries so designated by Crescent.
 
     1.4  Amendment to Section 8.5. Section 8.5 of the Merger Agreement is
hereby amended by deleting the last sentence thereof in its entirety and
substituting for such sentence the following:
 
     Except as set forth in Sections 5.8, 5.13 and 5.20, this Agreement is not
     intended to confer upon any person other than the parties hereto any rights
     or remedies hereunder.
 
     1.5  Amendment to Section 8.7. Section 8.7 of the Merger Agreement is
hereby amended by deleting such section in its entirety and substituting for
such section the following:
 
     Neither this Agreement nor any of the rights, interests or obligations
     hereunder shall be assigned by any of the parties hereto (whether by
     operation of law or otherwise) without the prior written consent of the
     other parties; provided, that upon the merger of the Company into a wholly
     owned subsidiary to be formed as a Delaware corporation ("Delaware
     Station"), in accordance with Section 1.1 of this Agreement, Delaware
     Station, as successor-in-interest to the Company, automatically will become
     a party to this Agreement and succeed to all of the rights, interests and
     obligations of the Company hereunder; and further provided, that upon the
     merger of the Company into Delaware Station, (i) references herein and in
     the Company's disclosure letter delivered in connection herewith to the
     Company shall be deemed also to include a reference to Delaware Station,
     (ii) references herein to the State of Nevada shall be deemed to include,
     or be replaced with, as the context requires, a reference to the State of
     Delaware, and (iii) references herein to the NGCL and the provisions
     thereof shall be
<PAGE>   2
 
     deemed to include, or be replaced with, as the context requires, a
     reference to the corresponding provision or provisions of the Delaware
     General Corporation Law, as amended; provided further, that the parties
     hereto agree that prior to the twentieth day prior to such merger of the
     Company and Delaware Station, the parties hereto shall have obtained
     resolutions from their respective governing boards and the board of
     directors and stockholders of Delaware Station approving, and the parties
     hereto and Delaware Station shall have executed and delivered, an
     assignment agreement assigning the rights and obligations of the Company
     hereunder to Delaware Station, in a form constituting a merger agreement
     between Delaware Station and Crescent for purposes of Delaware law.
 
     1.6  Amendment to Exhibit B. Exhibit B to the Merger Agreement (as first
included in Exhibit B to the Second Amendment to the Agreement and Plan of
Merger) is hereby amended by deleting the last sentence of Paragraph 3 of
Exhibit B in its entirety and substituting for such sentence with the following:
 
     The same number of unit purchase rights will entitle a holder to purchase
     one unit of Crescent Real Estate Equities Limited Partnership for $62 1/4.
 
                                 MISCELLANEOUS
 
     2.1  Effect on Merger Agreement. On and after the date of this Amendment,
each reference in the Merger Agreement to "this Agreement," "hereunder,"
"hereof," "herein," or words of like import referring to the Merger Agreement
shall mean and be a reference to the Merger Agreement as amended by this
Amendment. Except as specifically amended by this Amendment, the Merger
Agreement shall remain in full force and effect and is hereby ratified and
confirmed.
 
     2.2  Applicable Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to contracts made
and to be performed entirely within such State.
 
     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
 
                                            STATION CASINOS, INC.
 
                                            By:  /s/ Glenn C. Christenson
                                                ------------------------------
                                                Glenn C. Christenson
                                                Executive Vice President,
                                                Chief Financial Officer

 
                                            CRESCENT REAL ESTATE EQUITIES
                                            COMPANY
 
                                            By:  /s/ David M. Dean
                                                ------------------------------
                                                David M. Dean
                                                SVP, Law

 
                                        2