Document:

Exhibit
10.3

EXECUTIVE
EMPLOYMENT AGREEMENT

THIS
EMPLOYMENT AGREEMENT (this “Agreement”)
is made and entered into as of the 30th day of March, 2007, by and between STATION CASINOS, INC., a Nevada corporation, with its
principal offices located at 10973 W. Summerlin Centre Drive, Las Vegas,
Nevada  89135 (the “Company”),
and THOMAS M. FRIEL (the “Executive”).

WHEREAS, the Company and the
Executive are parties to an Employment Agreement dated as of May 23, 2005 (the “Former Agreement”); and

WHEREAS, the Executive has
agreed to continue his employment with the Company on the terms and conditions
set forth herein; and

WHEREAS, the parties to this
Agreement desire to replace the Former Agreement in its entirety with this
Agreement, and the Former Agreement shall no longer be of any force or effect;

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

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

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

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

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

1.4           “Cause” shall
mean that the Executive:

(a)                                  has
been convicted of any felony;

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

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

1.5           “Change in Control”
shall be deemed to have occurred if:

Executive’s
Initials        

Company’s Initials  
     

(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
thirty-six (36) 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”

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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.  The Executive acknowledges and agrees that
the consummation of the transactions contemplated by that Merger Agreement
dated February 23, 2007, between Fertitta Colony Partners LLC and the Company
shall not constitute a “Change in Control” hereunder.

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

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

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

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

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

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

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professional, the other Party may submit subsequent
documentation relating to the existence of a Disability from a licensed
healthcare professional selected by such other Party.  In the event that the medical opinions of
such licensed healthcare professionals conflict, such licensed healthcare
professionals shall appoint a third licensed healthcare professional to examine
the Executive, and the opinion of such third licensed healthcare professional
shall be dispositive.

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

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

1.14         “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 manager;

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

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

(d)                                 the
Executive is excluded from participation in any employee benefit or short-term
incentive plan or program offered to other similarly situated executives of the
Company or his benefits under such plans or programs 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 directors’ and officers’ liability insurance
coverage for the Executive when such insurance is available; or

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

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

1.15         “Long-Term Stay-On
Agreement” shall mean that Long-Term Stay-On Performance Incentive
Agreement dated June 1, 2004, between the Company and the Executive.

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

1.17         “Pro Rata Bonus”
shall mean an amount equal to one hundred percent (100%) 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.

1.18         “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 Subsections
6.3, 7.2 or 7.3, the Restricted Area shall (a) after the first twelve (12)
months of the Restriction Period, exclude the Las Vegas Strip (which is defined
as that area bounded by Koval Lane and straight extensions thereof on the East,
Charleston Boulevard on the North, I-15 on the West, and Sunset Road on the
South) and (b) after a Change in Control, exclude Downtown Las Vegas (which is
defined as that area bounded by Eastern Avenue and straight extensions thereof
on the East, I-515 (U.S. Highway 93/95) on the North, I-15 on the West, and
Charleston Boulevard on the South).

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

1.20         “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.

1.21         “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.

1.22         “Term of Employment”
shall mean the period specified in Subsection 2.2.

1.23         “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.

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

3.             COMPENSATION.

3.1           Base Salary.  During the Term of Employment, the Executive
shall be entitled to receive a base salary (the “Base Salary”) payable no less
frequently than in equal bi-weekly installments at an annualized rate of no
less than $500,000.  The Base Salary
shall be reviewed annually for increase (but not decrease) in the discretion of
the Corporate Governance and Compensation Committee of the Board (the “Compensation
Committee”).  In conducting any such
annual review, the Compensation 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.

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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 by the Compensation Committee based on the
Executive’s performance.  Any annual
bonus that may be awarded to the Executive shall be paid at the same time as
annual bonuses are paid to other senior officers of the Company, 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           Stay-On Incentives.  The Executive shall be eligible to receive a
long-term stay-on performance incentive payment pursuant to the terms of the
Long-Term Stay-On Agreement.

3.4           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

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(d)                                 supplemental
term 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 four weeks per year;

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

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

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

6.             TERMINATION
OF EMPLOYMENT.

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

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

(b)                                 any
annual bonus awarded but not yet paid;

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

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

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(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.  In the
event of a termination for Cause, the Executive shall be entitled, in lieu of
any other compensation and benefits whatsoever, to:

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

(b)                                 any
annual bonus awarded but not yet paid;

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

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

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

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

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

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

(a)                                  an
amount equal to three times one hundred sixty percent (160%) of the Executive’s
Base Salary at the rate in effect at the time of his termination, one-third of
which shall be paid in a lump sum upon satisfaction of the 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 and a Pro Rata Bonus for the fiscal year
in which such termination of employment occurs;

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

(d)                                 exercise,
within one hundred eighty (180) days, all 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 thirty-six
(36) 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.  Immediately upon a Change in Control, in
addition to any other compensation or benefits payable pursuant to this
Agreement or otherwise, the Executive shall be entitled to immediate vesting of
all restricted stock, stock options, phantom stock units, stock appreciation
rights and similar stock-based or performance-based interests.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

7.4           Termination for Other
Reasons After a Change in Control.  If the Executive’s employment is terminated
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

 12

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 he fails
to comply with all of the terms and conditions of this Agreement, including,
without limitation, Sections 11 and 12.

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

9.             SPECIAL
REIMBURSEMENT.  

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

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

(a)                                  the
Total Payments shall be treated as “parachute payments” within the meaning of
Section 280G(b)(2) of the Code, and all “excess parachute payments” within the
meaning of Section 280G(b)(1) of the Code shall be treated as subject to
the Excise Tax, unless in the opinion of tax counsel selected by the Company
and reasonably acceptable to the Executive (which opinion shall be provided to
the Executive) such Total Payments (in whole or in part) (i) do not constitute
parachute payments, including 

 13
 

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

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

 14
 

(a)                                  The
Executive must promptly give the Company written notice of any actual or
threatened Indemnifiable Action and, upon providing such notice, the Executive
shall be presumed to be entitled to indemnification under this Agreement and
the Company shall have the burden of proof to overcome that presumption in
reaching any contrary determination; provided, however, that the
Executive’s failure to give such notice shall not affect the Company’s
obligations hereunder;

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

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

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

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

10.4         Non-Exclusivity of Rights.  The right to indemnification and the payment
of expenses incurred in defending an Indemnifiable Action in advance of its
final disposition conferred in this Section 10 shall not be
exclusive of any other right which the Executive may 

 15
 

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.

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

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

11.           COVENANT NOT ENGAGE IN
CERTAIN ACTS.

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

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

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

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

(c)                                  hire
or retain any employee of the Company or any Affiliate to provide services for
any other Person or induce, solicit, attempt to solicit, 

 16
 

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

12.           CONFIDENTIAL INFORMATION
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.

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, 

 17
 

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 Company’s right to seek injunctive relief as provided in Section
15.  Arbitration shall be final and
binding upon the Parties and shall be the exclusive remedy for all Arbitrable
Claims.  THE PARTIES
HEREBY WAIVE ANY RIGHTS THEY MAY HAVE TO TRIAL BY JUDGE OR JURY IN REGARD TO
ARBITRABLE CLAIMS, EXCEPT AS PROVIDED BY SECTION 13.4.

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

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

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

13.5         Acknowledgements.  The Executive acknowledges that he:

 18
 

(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.

  
	
   

  	
   

  	
  10973 W.
  Summerlin Centre Drive

  
	
   

  	
   

  	
  Las Vegas,
  Nevada 89135

  
	
   

  	
   

  	
  Attention:
  Richard J. Haskins

  
	
   

  	
   

  	
   

  
	
   

  	
  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:

  	
  Thomas M. Friel

  

 

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

 19
 

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 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.

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 

 20
 

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.

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/ Richard J. Haskins 

  
	
   

  	
   

  	
  Name:

  	
   

  	
  Richard J. Haskins 

  
	
   

  	
   

  	
  Title:

  	
   

  	
  Executive Vice President,

  
	
   

  	
   

  	
   

  	
   

  	
  General Counsel & Secretary

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Thomas M. Friel

  	
   

  
	
   

  	
   

  	
  THOMAS M. FRIEL

  	
   

  
						

 21

EXHIBIT
“A”

GENERAL
RELEASE AND COVENANT NOT TO SUE

This
GENERAL RELEASE AND COVENANT NOT TO SUE
(this “Release”) is executed and delivered by THOMAS M.
FRIEL (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 March 30, 2007 (the “Employment Agreement”), and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Executive hereby agrees as follows:

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

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THOMAS
  M. FRIEL

  	
   

  

 

 

	
  STATE OF

  	
  )

  	
   

  	
   

  	
   

  
	
   

  	
  )

  	
  ss:

  	
   

  	
   

  
	
  COUNTY OF

  	
  )

  	
   

  	
   

  	
   

  

 

On this      
day of                 ,
     , before me, a Notary Public of the State of                ,
personally appeared Thomas M. Friel, 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]Exhibit 10.4

June 1, 2004

Mr.
Thomas M. Friel

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

Dear
Tom:

This letter agreement
(this “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 1, 2012.

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 1, 2006 (the “First Award Date”), you will be paid $125,000 of the
LTSO Payment, minus the deductions required by law, provided that you have
remained continuously employed by the Company from June 1, 2004 through May 31,
2006.  Except as otherwise provided in
your Employment Agreement (as defined below), in the event that your employment
or service 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 1, 2008 (the “Second Award Date”), you will be paid an additional
$125,000 of the LTSO Payment, minus the deductions required by law, provided
that you have remained continuously employed by the Company from June 1, 2004
through May 31, 2008. Except as otherwise provided in your Employment
Agreement, in the event that your employment or service 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.

(c)                                  On
June 1, 2010 (the “Third Award Date”), you will be paid an additional
$125,000 of the LTSO Payment, minus the deductions required by law, provided
that you have remained continuously employed by the Company 

from June 1, 2004 through May 31, 2010. 
Except as otherwise provided in your Employment Agreement, 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 Second Award Date but before the Third Award Date, you will
forfeit any and all eligibility for remaining payments pursuant to this Agreement.

(d)                                 On
June 1, 2012 (the “Fourth Award Date”), you will be paid the remaining
$125,000 of the LTSO Payment, minus the deductions required by law, provided
that you have remained continuously employed by the Company from June 1, 2004
through May 31, 2012.  Except as
otherwise provided in your Employment Agreement, 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 Third Award Date but before the Fourth 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 of a revised employment agreement with the Company, which shall be
dated as of June 1, 2004 (the “Employment Agreement”).  If at any time prior to the Fourth Award
Date, you breach any term of the Employment Agreement, you will forfeit any and
all rights to any and all payments under this Agreement as of the date of such
breach.

4.                                       Right to Continued Employment or Service.  Nothing in this Agreement shall confer on you
any right to continue in the employ of or service to the Company or, except as
may otherwise be limited by a written agreement between the Company and you, in
any way affect the Company’s right to terminate your employment or service
without prior notice at any time for any or no reason.

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 you breach this obligation,
you will forfeit any and all rights to any and all payments under this
Agreement.

6.                                       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 no rights or obligations of you
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.

 2
 

7.                                       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.

	
  

  	
   

  	
  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/ Thomas M. Friel

  	
   

  	
   

  	
   

  
	
  Thomas
  M. Friel

  

 

 3

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