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Exhibit 10.17    
  

 
  EXECUTIVE EMPLOYMENT AGREEMENT    
  

    THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and
entered into as of the 19th day of June, 2001, by and between STATION CASINOS, INC., a Nevada corporation, with its principal offices located at
2411 West Sahara Avenue, Las Vegas, Nevada 89102 (the "Company"), and Stephen L. Cavallaro (the  "Executive"). 

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

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

    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 Amount"  shall have the meaning ascribed to such term in Section 280G of the Code. 

    1.3  "Base Salary"  shall mean the salary provided for in Subsection
3.1 of this Agreement. 

    1.4  "Board"  shall mean the Board of Directors of the Company. 

    1.5  "Cause"  shall mean that the Executive: 

	(a)
	has
been formally charged with or convicted of any felony or any crime involving fraud, theft, embezzlement, dishonesty or moral turpitude; 
	(b)
	has
been found unsuitable to hold a gaming license; 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. 

    1.6  "Change in Control"  shall be deemed to have occurred if: 

	(a)
	(1)  any
Person, corporation, entity or group (other than the Existing Equity Holders) is or becomes the beneficial owner, directly or indirectly, of securities
representing 50% or more of the combined voting power of the Company's Voting Stock (an "Acquisition Event"), or 

(2)  the
Company consolidates with or merges into another corporation or entity, or any corporation or entity consolidates with or merges into the Company, with the effect that the
beneficial owners of the Company's Voting Stock held immediately prior to the consummation of such consolidation or merger cease to beneficially own, directly or indirectly, securities representing
50% or more of the combined voting power of the Company's Voting Stock (or if the Company is not the surviving entity, the surviving company's voting securities) upon the consummation of such
consolidation or merger (a "Merger Event"), or 

(3)  the
Company sells, conveys, transfers or leases to any person, corporation, entity or group, directly or indirectly, in one transaction or series of related transactions,
properties and/or assets that accounted for 75% or more of the earnings (before interest, taxes, depreciation and amortization) of the Company, on a consolidated 

 

basis for the four-fiscal quarter period immediately preceding the date of consummation of such transaction (a "Sale Event"); and

	(b)
	within
sixty (60) months following an Acquisition Event, Merger Event or Sale Event, individuals who immediately prior to such Acquisition Event, Merger Event or Sale Event
constituted the Company's Board, together with any new or replacement directors whose election by the Company's Board, or whose nomination for election by the Company's stockholders was approved by a
vote of at least a majority of the directors then in office who were either directors on the Company's Board immediately prior to such Acquisition Event, Merger Event or Sale Event (or whose election
or nomination for election was previously so approved), cease for any reason to constitute a majority of the directors of the Company's Board then in office. 

Notwithstanding
the foregoing, a reincorporation, spin-off, split-off or other reorganization transaction (a "Reorganization Event"), or series of related transactions, in
which either the "beneficial owners" of the Company's Voting Stock or the Existing Equity Holders beneficially own securities representing 50% or more of the combined voting power of the Company's
Voting Stock upon the consummation of such transaction shall not constitute an Acquisition Event, Merger Event or Sale Event for purposes of this definition. For purposes of this definition,
"beneficial ownership" shall have the same meaning as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended, except that a Person shall
be deemed to have "beneficial ownership" of all shares that any such Person has the right to acquire, whether such right is exercisable immediately or only after the passage of time. 

For
the purposes of this definition, upon consummation of an Acquisition Event, Merger Event, Sale Event or Reorganization Event, the "Company's Board" and the "Company's Shareholders" shall refer to
(i) in the case of an Acquisition Event, the Company, (ii) in the case of a Merger Event, the company surviving the merger or consolidation, (iii) in the case of a Sale Event, the
transferee of the properties, and/or assets, and (iv) in the case of a Reorganization Event, the entity or entities surviving such Reorganization Event on a consolidated basis. 

    1.7  "Code"  shall mean the Internal Revenue Code of 1986, as amended. 

    1.8  "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. 

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

    1.10  "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. 

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    1.11  "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. 

    1.12  "Disability"  shall mean a physical or mental incapacity that prevents the Executive from
performing, with reasonable accommodation, the essential functions of his position with the Company for a minimum 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, and (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. 

    1.13  "ERISA"  shall mean the Employee Retirement Income Security Act of 1974, as amended. 

    1.14  "Existing Equity Holders"  shall mean Frank J. Fertitta III, Blake L. Sartini, Delise F. Sartini,
Lorenzo J. Fertitta, Glenn C. Christenson and Scott M Nielson 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 Voting Stock held by such lineal descendants was directly received by gift, trust or sale from any such person). 

    1.15  "Good Reason,"  as used in Subsection 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 executive; 
	(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 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; 
	(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 

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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. 

    1.16  [Intentionally omitted.]  

    1.17  "Person"  shall mean any individual, firm, partnership, association, trust, company, corporation or
other entity. 

    1.18  "Pro Rata Bonus"  shall mean an amount equal to sixty percent (60%) of the Executive's current Base
Salary, 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. 

    1.19  "Restricted Area"  shall mean the City of Las Vegas, Nevada, and the area within a
twenty-five (25) mile radius of that city; provided, however, that in the event the Executive voluntarily terminates this Agreement
pursuant to Subsection 6.3, the Restricted Area shall, after the first twelve (12) months of the Restriction Period, exclude the Las Vegas Strip
(which is defined as that area bounded by Paradise Road and straight extensions thereof on the East, Charleston Boulevard on the North, I-15 on the West, and Sunset Road on the south). 

    1.20  "Restriction Period"  shall mean the period ending twenty-four (24) months after
(a) the termination of the Term of Employment, regardless of the reason for such termination, or (b) the expiration of the Term of Employment in the event such expiration is based upon
the Executive's election not to extend the Term of Employment pursuant to Subsection 2.2; provided,
however, that if the expiration of the Term of Employment is based upon the Company's election not to extend the Term of Employment pursuant to  Subsection 2.2, the Restriction
Period shall not apply. 

    1.21  "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. 

    1.22  "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. 

    1.23  "Term of Employment"  shall mean the period specified in Subsection
2.2. 

    1.24  "Voting Stock"  shall mean capital stock of any class or classes having general voting power under
ordinary circumstances, in the absence of contingencies, to elect the directors of a corporation. 

    2.  TERM OF EMPLOYMENT, POSITION AND RESPONSIBILITIES.  

    2.1  Employment Accepted.  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 Subsection 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 upon the date of this Agreement
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 date of this
Agreement; 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 twelve (12) months prior to the end of the then
current Term of Employment that such Term of Employment will not be extended for an 

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additional five year period. In the event that such notice is given, the Executive's employment shall terminate upon the close of business on the day immediately preceding the fifth anniversary of the
then current Term of Employment. 

    2.3  Responsibilities.  During the Term of Employment, the Executive shall be employed as Executive Vice
President and Chief Operating Officer of the Company, 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. 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 $700,000. The Base Salary shall be reviewed annually for
increase (but not decrease) in
the discretion of the Human Resources Committee of the Board. In conducting any such annual review, the Human Resources Committee 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 discretionary bonus for each fiscal year
ending during the Term of Employment in an amount that will be determined in accordance with the bonus matrix then applicable to similarly situated executives of the Company and approved by the
Company's Human Resources Committee; provided, however, that the Executive's annual bonus for the calendar year ending December 31, 2001, shall
not be less than $350,000. 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, 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  Option Grant.  Concurrently with the execution of this Agreement and pursuant to the Company's
Compensatory Stock Option Plan, (the "Option Grant"), the Company shall grant the Executive an option to purchase 500,000 shares of the Company's common
stock at a price to be determined by the Board at the time of the Option Grant. Such Option Grant shall vest twenty percent (20%) per year for five (5) years, commencing upon the first
anniversary of the date of the Option Grant. 

    3.4  Stock Award.  Concurrently with the execution of this Agreement and pursuant to the Company's Stock
Compensation Program, the Company shall grant the Executive a restricted stock award of 116,800 shares of the Company's common stock (the "Restricted Stock
Award") at a price to be determined by the Board at the time of the Restricted Stock Award. Such Restricted Stock Award shall vest twenty percent (20%) per year for five
(5) years, commencing upon the first anniversary of the date of the Restricted Stock Award. 

    3.5  Stay-On Incentives.  The Executive shall be eligible to receive a Long-Term
Stay-On Performance Incentive Payment pursuant to the terms of a separate letter agreement (the "Stay-On Agreement") entered
into between the Executive and the Company. 

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    3.6  Deferred Compensation.  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 PLANS AND 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: 

	(a)
	group
health insurance coverage through the Company's Exec-U-Care Medical Plan, effective as of July 1, 1994, or pursuant to such other plan or plans
as the Company may select from time to time, and which shall be fully paid for by the Company; 
	(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; and 
	(d)
	supplemental
life insurance coverage, through an individual policy, a group policy or a combination thereof, 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 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 (i) four (4) weeks per year during the first two (2) years of the Term of Employment, and (ii) five (5) weeks per year during the
remainder of the Term of Employment; 
	(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 of his own choosing
prior to execution. 

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    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 Bonus for the fiscal year in which death or Disability occurs; 
	(d)
	in
the case of death, 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, and in the case of Disability, immediate vesting of any deferred compensation or bonuses, including interest or other credits on the deferred amounts; 
	(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. 

    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, authorized by a vote of at least a majority of the members of the Board, that the Company intends to
terminate his employment for Cause. Such written notice shall specify the particular act or acts, or failure to act, providing the basis for termination. The Executive shall be given the opportunity
within thirty (30) days of the receipt of such notice to meet with the Board to defend such act or acts, or failure to act. If at the conclusion of the Executive's presentation of his defense,
a majority of the Board, nonetheless, determines that the Executive's employment is terminable for Cause, the Executive shall be given thirty (30) days after such meeting to correct such acts
or failure to act, unless the Board also determines that the Executive's acts or failure to act are incapable of correction. Upon failure of the Executive, within thirty (30) days, to correct
such acts or failure to act, or upon the Board's determination that correction is not possible, the Executive's employment by the Company shall automatically be terminated under this  Subsection 6.2 for
Cause. During the pendency of the foregoing process, the Executive shall continue to be paid his Base Salary, but shall be placed on
leave of absence status. 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)
	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 

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	(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 Subsection 6.2, if the Executive's employment is terminated for Cause (i) due to his having been
formally charged pursuant to Subsection 1.5(a) but thereafter said charges are dismissed or the Executive is acquitted, or (ii) due to his having
been convicted pursuant to Subsection 1.5(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 be required to, at the Company's option, (a) reinstate 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
(b) make a payment to him of an amount equal to three times 160 percent 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 upon thirty (30) days prior written notice to the Company. Except as otherwise provided in Subsections 7.2 and 7.3, such termination
shall have the same consequences as a termination for Cause under Subsection 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, the Executive shall be entitled, in lieu of any other compensation and benefits whatsoever, to: 

	(a)
	an
amount equal to three times 160 percent 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 conditions set forth in Subsection 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; 
	(c)
	any
deferred bonus, 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 stock options that have vested prior to termination, and shall forfeit all stock options 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 twenty-four (24) months 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 Payment.  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 a payment in cash equal to three times 160 percent of his Base Salary. Unless 

8

 

otherwise provided for in this Agreement, the Executive's rights upon a Change in Control to benefits under programs, plans and policies of the Company shall be determined according to the terms and
provisions of such programs, plans and policies. 

    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 payment paid or payable pursuant to Subsection 7.1, but in lieu of any other compensation
and benefits whatsoever, to: 

	(a)
	an
amount equal to the greater of (i) five times 160 percent of the Executive's Base Salary at the time of the Change in Control or (ii) five times
160 percent of the Executive's Base Salary at the time of the termination of his employment, three-fifths of which shall be paid in a lump sum upon satisfaction of
the conditions set forth in Subsection 8.3 and two-fifths of which shall be paid out in equal bi-weekly
installments for the duration of the Restriction Period, 
	(b)
	immediate
vesting of any restricted stock of the Company held in the Executive's name or for his benefit; 
	(c)
	immediate
vesting of any stock options and stock appreciation rights granted by the Company, which stock options and stock appreciation rights shall continue to be and shall remain
exercisable until the earlier of (i) five years and (ii) the remaining term of such stock options and stock appreciation rights as set forth in the agreement granting, or otherwise
awarding, such stock option or stock appreciation right as if no termination had taken place; 
	(d)
	immediate
vesting and cash-out of any phantom stock units granted to the Executive; 
	(e)
	immediate
vesting and pay out of all amounts set forth in the Stay-On Agreement as if the Executive had fully satisfied all of the terms and conditions thereof; 
	(f)
	immediate
vesting of the Executive's supplemental retirement benefit as set forth in the Supplemental Management Retirement Plan; 
	(g)
	continued
funding of the Executive's split dollar life insurance policy as if the Executive were employed by the Company through the maturity date of such policy or, at the
Company's option, payment in full of all premium obligations under such policy; and 
	(h)
	continuation
of the Executive's medical insurance, at the Company's expense, for twenty-four (24) months or, at the Company's option, 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 payment paid or payable
pursuant to Subsection 7.1, but in lieu of any other compensation and benefits whatsoever, to: 

	(a)
	an
amount equal to the greater of (i) three times 160 percent of the Executive's Base Salary at the time of the Change in Control or (ii) three times
160 percent of the Executive's Base Salary at the time of the termination of his employment, one-third of which shall be paid in a lump sum upon satisfaction
of the conditions set forth in Subsection 8.3 and two-thirds of which shall be paid out in equal bi-weekly
installments for the duration of the Restriction Period; 

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	(b)
	immediate
vesting of any stock options and stock appreciation rights granted by the Company, which stock options and stock appreciation rights shall continue to be and shall remain
exercisable until the earlier of (i) three years and (ii) the remaining term of such stock options and stock appreciation rights as set forth in the agreement granting, or otherwise
awarding, such stock option or stock appreciation right as if no termination had taken place; 
	(c)
	immediate
vesting and cash-out of any phantom stock units granted to the Executive; 
	(d)
	immediate
vesting of the Executive's supplemental retirement benefit as set forth in the Supplemental Management Retirement Plan; 
	(e)
	continued
funding of the Executive's split dollar life insurance policy as if the Executive were employed by the Company through the maturity date of such policy or, at the
Company's option, payment in full of all premium obligations under such policy; and 
	(f)
	continuation
of the Executive's medical insurance, at the Company's expense, for 18 months or, at the Company's option, 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 after a Change in Control for any reason not otherwise provided for in this Section 7, his rights shall be determined in accordance
with the applicable subsection of Section 6. 

    8.  CONDITIONS TO PAYMENTS UPON TERMINATION.  

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

    8.2  No Mitigation; No Offset.  In the event of any termination of the Executive's 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 Subsection 8.2 shall survive
the expiration or earlier termination of this Agreement. 

    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 the Company establishes that the Executive has materially
breached any material, post-employment obligation contained in this Agreement, including, without limitation, any material, post-employment obligation contained in  Sections 11 or 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 

10

 

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 in connection with a Change in Control pursuant to  Subsection 7.1 or the termination of the
Executive's employment pursuant to Subsection 7.2, whether any
such payments or benefits are pursuant to the terms of this Agreement or any other plan, arrangement or agreement 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 
	(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 Subsection 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 

11

 

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, while serving as a director,
officer, member, employee or agent, he shall be indemnified and held harmless by the Company to the fullest extent permitted by Nevada law and the Company's by-laws, as the same exist or
may hereafter be amended, against all expense, liability and loss (including 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. The Company shall provide such indemnification against all expenses covered by this  Section 10 concurrently as such expenses are
incurred. 

    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; 
	(b)
	The
Company will be permitted, at its option, to participate in, or to assume, the defense of any Indemnifiable Action; 
	(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 Subsection 10.1; provided, however, that the Executive agrees to repay to the Company all amounts so advanced to the extent that a court of
competent jurisdiction finds that any acts or omissions by the Executive were: 

	(a)
	in
knowing violation of any agreement between the Executive and the Company; 
	(b)
	in
bad faith or involving intentional misconduct or a knowing violation of law or that the Executive personally gained a financial profit or other advantage to which he was not
legally entitled; or 
	(c)
	for
which a court, having jurisdiction in the matter, determines that indemnification is not lawful. 

    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. 

    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. 

12

  

    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 in the Restricted
Area, 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 (with the exception of the Executive's executive assistant or secretary) 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. 

    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 Subsection
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  Survivale  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 AND COMPANY PROPERTY.  

    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. 

13

 

    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. 

    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 claims based on the statutes enumerated in Subsection
13.4 or 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: 

	(a)
	disputes
relating to the enforcement of the Company's rights under Sections 11 and 12 of this Agreement; and 

14

 

	(b)
	claims
brought under Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1866, the Age Discrimination in Employment Act of 1967 (including the Older Workers Benefit
Protection Act), and the Americans with Disabilities Act, the Fair Labor Standards Act, the Equal Pay Act, the Family and
Medical Leave Act and the Employee Retirement Income Security Act of 1974, the Nevada Fair Employment Practices Act or any other applicable state or local fair employment law. 

    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. 

    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.
	 	 	2411 West Sahara Ave
	 	 	Las Vegas, NV 89102
	 	 	Attn: Scott M Nielson
	

With a copy to:	
 	

Milbank, Tweed, Hadley & McCloy
	 	 	601 South Figueroa Street, 30th Floor
	 	 	Los Angeles, CA 90017
	 	 	Attn: Kenneth J. Baronsky
	

If to the Executive:	
 	

Stephen L. Cavallaro
	 	 	8824 Montagna Drive
	 	 	Las Vegas, Nevada 89134

    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 terms and provisions of this Agreement
conflict with the terms and provisions of any employee benefit plan document, the terms and 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 

15

 

this Agreement to the Executive shall be deemed, where appropriate, to refer to his beneficiaries, estate or other legal representative. 

    18.  SURVIVORSHIP.  The respective rights and obligations of the Parties hereunder shall survive the
expiration or earlier 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.  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. 

    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, express or implied, between the Parties with respect
hereto. 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. 

    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, except  Section 6, Section 7 and
Section 11, 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. If either Section 6, Section 7 or Section 11 is determined to be invalid or
unenforceable for any reason, in whole or in part, either Party may terminate this Agreement without further obligations or duties hereunder. 

    24.  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. 

16

 

    25.  HEADINGS.  The headings of the sections and subsections 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. 

    26.  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. 

    27.  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. 

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

	 	 	 	 	 
	 	 	STATION CASINOS, INC.
	

 	
 	

 	
 	

 
	 	 	By	 	/s/ GLENN C. CHRISTENSON
	 	 	

	 	 	Name:	 	Glenn C. Christenson
	 	 	Title:	 	Executive Vice President, Chief Financial Officer, Chief Administrative Officer and Treasurer
	

 	
 	

 	
 	

 
	

 	
 	

/s/ STEPHEN L. CAVALLARO
	 	 	

	 	 	 	 	Stephen L. Cavallaro

17

 
 

EXHIBIT "A"
  
    General Release and Covenant Not to Sue    
  

    This GENERAL RELEASE AND COVENANT NOT TO SUE (this "Release") is executed and delivered by  STEPHEN L. CAVALLARO
(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 June 19, 2001 (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, T/HE "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 MISSOURI HUMAN RIGHTS 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"	
 	

 
	

 Stephen L. Cavallaro	

 	

 	

 	

 

STATE
OF                      ) 

                                        
 )
ss: 

COUNTY
OF                   ) 

    On
this  day of         ,  , before me, a Notary Public of the State of            , personally appeared Stephen L. Cavallaro,
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]

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Exhibit 10.17

EXECUTIVE EMPLOYMENT AGREEMENT

EXHIBIT "A" General Release and Covenant Not to SuePrepared by MERRILL CORPORATION

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Exhibit 10.23    
  

    
June 19, 2001 

Mr
Steven L. Cavallaro

8824 Montagna Drive

Las Vegas, Nevada 89134 

    Re:  Long-Term Stay-On Performance Incentive Payment.

Dear
Steve: 

    This
letter (the "Agreement") sets forth the terms and conditions pursuant to which Station Casinos, Inc. (the
"Company") has decided to award you a Long-Term Stay-On Performance Incentive Payment (the "LTSO
Payment"). 

	1.
	Purpose. The purpose of the LTSO Payment is to advance the interests of the Company by providing you with a cash incentive to remain
with the Company through June 19, 2008.

	2.
	Amount. Subject to the conditions contained herein, the Company will provide you with a LTSO Payment in the amount of $500,000 as
follows: 
	(a)
	On
June 19, 2005 (the "First Award Date"), you will be paid one-half of the LTSO Payment, minus the deductions
required by law, provided that you have remained continuously employed by the Company from June 19, 2001 through June 18, 2005. In the event that your employment with the Company is
terminated for any reason, including, but not limited to, your death, disability, resignation or retirement, at any time before the First Award Date, you will forfeit any and all eligibility for
payments pursuant to this Agreement.

	(b)
	On
June 19, 2008 (the "Second Award Date"), you will be paid the second half of the LTSO Payment, minus the deductions
required by law, provided that you have remained continuously employed by the
Company from June 19, 2001 through June 18, 2008. In the event that your employment with the Company is terminated for any reason, including, but not limited to, your death, disability,
resignation or retirement, at any time after the First Award Date but before the Second Award Date, you will forfeit any and all eligibility for remaining payments pursuant to this Agreement. 

	3.
	Employment Agreement. The LTSO Payment is conditioned upon your signing an employment agreement with the Company, which shall be
dated as of June 19, 2001 (the "Employment Agreement"). If prior to the First Award Date or the Second Award Date, you materially breach any term
of the Employment Agreement, you will forfeit any and all rights to any and all remaining payments under this Agreement as of the date of such breach.

	4.
	Right to Continued Employment. Nothing in this Agreement shall confer on you any right to continue in the employ of the Company
except as otherwise provided in the Employment Agreement.

	5.
	Confidentiality. As a condition of your receipt of the LTSO Payment, you agree that you will not disclose the contents of this
Agreement, including the amount of the LTSO Payment, to anyone except your immediate family, accountant or attorney without the prior written consent of the Company. If the Company establishes that
you have materially breached this obligation, you will forfeit any and all rights to any and all remaining payments under this Agreement.

	6.
	Governing Law. The validity, construction, interpretation and effect of this Agreement shall exclusively be governed by and
determined in accordance with the law of the State of Nevada (without reference to the principles of conflict of laws thereof), except to the extent preempted by federal law, which shall govern to
that extent. 

Long-Term
Stay-On Performance Plan

June 19, 2001

Page 2 

	7.
	Assignability; Binding Nature. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their
respective successors, heirs and assigns; provided, however, that none of your rights or obligations under this Agreement may be assigned or transferred by you, 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. 

	

 	
 	

STATION CASINOS, INC.

a Nevada corporation
	

 	
 	

By:	
 	

/s/ GLENN C. CHRISTENSON   
 Glenn C. Christenson

Executive Vice President

Chief Financial Officer

Chief Administrative Officer

    By
signing below, you hereby acknowledge and agree to all of the foregoing terms and conditions of this Agreement. 

	
Agreed to and Accepted By:	
 	

 
	

 	
 	

 	
 	

 	
 	

 
	/s/ STEPHEN L. CAVALLARO   
 Stephen L. Cavallaro	 	 	 	 

QuickLinks

Exhibit 10.23

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