SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
CHECK THE APPROPRIATE BOX:
/ / Preliminary Proxy Statement / /
Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-
11(c) or Rule 14a-12
AMERISTAR CASINOS, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement
if other than the Registrant)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
/X/No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price of other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11
(Set forth the amount on which the filing fee is calculated and
state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing:
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>AMERISTAR CASINOS, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 6, 1997
To the Stockholders of
Ameristar Casinos, Inc.
The Annual Meeting of Stockholders of Ameristar Casinos, Inc. will be
held at 3:00 p.m. (local time) on Friday, June 6, 1997, in the Iowa Room at
Ameristar Casino Hotel Council Bluffs, located at 2200 River Road, Council
Bluffs, Iowa 51501 for the following purposes:
1. To elect two Class B Directors, each to serve for a three-year
term;
2. To approve amendments to the Company's Management Stock Option
Incentive Plan (the "Management Option Plan") to increase the
number of shares of Common Stock available for issuance upon the
exercise of stock options under the Management Option Plan from
1.0 million to 1.6 million and to expand the eligibility
provisions of the Management Option Plan to include non-employee
directors of the Company; and
3. To transact any other business which may properly come before the
meeting and any adjournments or postponements thereof.
A proxy statement containing information for stockholders is annexed
hereto and a copy of the Annual Report of the Company for the fiscal year
ended December 31, 1996 is enclosed herewith.
The Board of Directors has fixed the close of business on May 9, 1997,
as the record date for the determination of stockholders entitled to notice
of and to vote at the meeting.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON, PLEASE DATE
AND SIGN THE ACCOMPANYING PROXY CARD AND RETURN IT PROMPTLY IN THE ENVELOPE
ENCLOSED FOR THAT PURPOSE.
By order of the Board of Directors
Craig H. Neilsen
President and
Chief Executive Officer
Las Vegas, Nevada
May 9, 1997
<PAGE>AMERISTAR CASINOS, INC.
3773 Howard Hughes Parkway
Suite 490 South
Las Vegas, Nevada 89109
(702) 567-7000
PROXY STATEMENT
GENERAL INFORMATION
This proxy statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Ameristar Casinos, Inc. ("ACI" or
the "Company"), a Nevada corporation, for use only at its Annual Meeting of
Stockholders to be held on Friday, June 6, 1997, and any adjournments or
postponements thereof (the "Annual Meeting").
Shares may not be voted unless the signed proxy card is returned or
other specific arrangements are made to have shares represented at the
meeting. Any stockholder of record giving a proxy may revoke it at any
time before it is voted by filing with the Secretary of ACI a notice in
writing revoking it, by duly executing a proxy bearing a later date, or by
attending the Annual Meeting and expressing a desire to revoke the proxy
and vote the shares in person. Stockholders whose shares are held in
street name should consult with their brokers or other nominees concerning
procedures for revocation. Subject to such revocation, all shares
represented by a properly executed proxy card will be voted as directed by
the stockholder on the proxy card. IF NO CHOICE IS SPECIFIED, PROXIES WILL
BE VOTED "FOR" THE PERSONS NOMINATED BY THE BOARD OF DIRECTORS AND THE
AMENDMENTS TO THE MANAGEMENT OPTION PLAN.
In addition to soliciting proxies by mail, Company officers, Directors
and other regular employees, without additional compensation, may solicit
proxies personally or by other appropriate means. The total cost of
solicitation of proxies will be borne by ACI. Although there are no formal
agreements to do so, it is anticipated that ACI will reimburse banks,
brokerage houses and other custodians, nominees and fiduciaries for their
reasonable expenses in forwarding any proxy soliciting materials to their
principals.
Only stockholders of record at the close of business on Friday, May 9,
1997 are entitled to receive notice of and to vote at the Annual Meeting.
On April 30, 1997, ACI had outstanding 20,360,000 shares of Common Stock,
which constituted all of the outstanding voting securities of ACI. Each
share outstanding on the record date is entitled to one vote on each
matter. A majority of the shares of Common Stock outstanding on the record
date will constitute a quorum. Abstentions and broker non-votes are
counted for purposes of determining the presence or absence of a quorum for
the transaction of business but will not be counted for purposes of
determining whether a proposal has been approved, and thus will have the
effect of a "No" vote.
Directors are elected by a plurality of votes cast. Stockholders may
not cumulate their votes for any one or more nominees for election. The
approval of the amendments to the Management Option Plan are subject to the
requirements of The Nasdaq Stock Market, Inc. for the designation of the
Common Stock as a National Market Security and will require the vote of a
majority of the votes cast on such proposal. In order to maintain the
ability to grant incentive stock options under the Management Option Plan,
the approval of the amendments to the Management Option Plan is further
subject to the requirements of the Internal Revenue Code of 1986, as
amended, and will require the vote of a majority of the votes cast at the
Annual Meeting at which a quorum representing a majority of the outstanding
<PAGE>Common Stock is, either in person or by proxy, present and voting on
the proposal to approve the amendments to the Management Option Plan.
Generally, the affirmative vote of a majority of the shares present at the
Annual Meeting would be required for any other items which might be
submitted to the stockholders for consideration at the Annual Meeting.
Craig H. Neilsen, the Chairman of the Board, President and Chief
Executive Officer of the Company, beneficially owns 17,700,000 shares of
the Company's Common Stock, which represents 86.9% of the voting power of
the Company as of April 30, 1997. Mr. Neilsen intends to vote all such
shares in favor of the persons nominated by the Board of Directors and the
amendments to the Management Option Plan.
It is anticipated that this proxy statement and accompanying proxy
card will first be mailed to stockholders on or about May 12, 1997.
<PAGE>PROPOSAL NO. 1
ELECTION OF DIRECTORS
INFORMATION CONCERNING THE NOMINEES
The Company's Articles of Incorporation provide that the Board of
Directors shall be classified, with respect to the time for which the
directors severally hold office, into three classes, as nearly equal in
number as possible as the total number of directors constituting the entire
Board permits. The Board of Directors is now composed of five members, and
each of the two Class B Directors whose term is expiring in 1997 is being
nominated for reelection by the Company as described below. Biographical
information concerning the nominees and the other directors of the Company
is set forth under the caption "Management -- Directors and Executive
Officers." See "Security Ownership of Certain Beneficial Owners and
Management" for information regarding such person's holdings of Common
Stock.
The Board of Directors has nominated the incumbent Class B directors
to be elected for a term expiring at the 2000 Annual Meeting of
Stockholders, and until, in each case, such person's successor has been
duly elected and qualified or until his earlier death, resignation or
removal. The incumbent Class B Directors nominated are:
PAUL I. CORDDRY
THOMAS M. STEINBAUER
The Board of Directors has no reason to believe that any of its
nominees will be unable or unwilling to serve if elected. However, should
any nominee named herein become unable or unwilling to accept nomination or
election, the persons named as proxies will vote instead for such other
person as the Board of Directors may recommend.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ELECTION OF
THE ABOVE-NAMED NOMINEES AS DIRECTORS.
<PAGE>DIRECTORS AND EXECUTIVE OFFICERS
The following sets forth certain information as of April 15, 1997 with
regard to each of the directors and executive officers of the Company. The
terms of office of the Class A, B and C Directors expire in 1999, 1997 and
1998, respectively.
<TABLE>
<S> <C> <C>
NAME AGE POSITION
Craig H. Neilsen 55 Chairman of the Board, President and
Chief Executive Officer and Class C
Director
John R. Spina 47 Executive Vice President of Operations
and Class A Director
Thomas M. 46 Senior Vice President of Finance,
Steinbauer Treasurer and Class B Director
Brian E. Katz 43 Senior Vice President, General Counsel
and Secretary
Paul I. 60 Class B Director
Corddry(1)(2)
Larry A. 48 Class A Director
Hodges(1)(2)
</TABLE>
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
Mr. Neilsen has been Chairman of the Board of Directors, President and
Chief Executive Officer of the Company since its inception in August 1993.
Since May 1984, Mr. Neilsen has been the President and Chairman of the
Board of Directors of Cactus Petes, Inc. ("CPI"). Mr. Neilsen has also
been the President and sole director of Ameristar Casino Vicksburg, Inc.
("ACVI"), Ameristar Casino Council Bluffs, Inc. ("ACCBI") and Ameristar
Casino Las Vegas, Inc. ("ACLVI") since their respective dates of inception.
CPI, ACVI, ACCBI and ACLVI are wholly owned subsidiaries of the Company.
Mr. Neilsen has been actively involved in the development since 1993 of the
Company's Ameristar Vicksburg, Ameristar Council Bluffs and The Reserve
projects and the major expansions since 1985 of the Company's Cactus Petes
and Horseshu Casino-Hotels. Mr. Neilsen also owns a controlling interest
in several other closely held entities, most of which are engaged in real
estate development and management operations unrelated to the business of
the Company. Since 1987, Mr. Neilsen has devoted substantially all of his
business time to the affairs of the Company and its subsidiaries.
Mr. Spina has been Executive Vice President of Operations of the
Company since April 1995 and a director of the Company since November 1995.
He has been a Vice President of each of CPI, ACVI and ACCBI since May 1995.
From July 1994 until March 1995, Mr. Spina was President of Condado Plaza
and Vice President of Williams Hospitality, the owner and operator,
respectively, of the Condado Plaza Hotel Casino in San Juan, Puerto Rico.
Prior thereto, Mr. Spina worked in the Atlantic City, New Jersey hotel-
casino industry, serving first as Executive Vice President and Chief
Operating Officer of Resorts International Casino Hotel, Inc. from December
1988 to November 1993 and more recently as Senior Vice President of Greate
Bay Hotel and Casino, owner and operator of the Sand's Hotel and Casino,
from March 1994 to July 1994.
<PAGE>Mr. Steinbauer has been Senior Vice President of Finance of the
Company since May 1995 and Treasurer and a director of the Company since
its inception. He served as Vice President of Finance and Administration
and Secretary of the Company from its inception until May 1995. He has
served as the Secretary and the Treasurer of each of CPI and ACVI since
November 1992 and September 1992, respectively. Mr. Steinbauer has served
as Vice President, Secretary and Treasurer of each of ACCBI and ACLVI since
July 1994 and May 1996, respectively. Mr. Steinbauer has more than 20
years of experience in the gaming industry in Nevada and elsewhere. From
April 1989 to January 1991, Mr. Steinbauer was Vice President of Finance
for Las Vegas Sands, Inc., the owner of the Sands Hotel & Casino in Las
Vegas. From August 1988 to April 1989, he worked for McClaskey Enterprises
as the General Manager of the Red Lion Inn & Casino, handling the day-to-
day operations of seven different hotel and casino properties in northern
Nevada. Mr. Steinbauer was Property Controller of Bally's Reno from 1987
to 1988. Prior to that time, Mr. Steinbauer was employed for 11 years by
the Hilton Corporation and rose from an auditor to be the Casino Controller
of the Flamingo Hilton in Las Vegas and later the Property Controller of
the Reno Hilton.
Mr. Katz has been General Counsel of the Company since May 1994 and
Senior Vice President and Secretary of the Company since May 1995. He was
a Vice President of the Company from May 1994 until May 1995. From May
1979 to May 1994, Mr. Katz was an attorney with the law firm of Ray,
Quinney & Nebeker in Salt Lake City, Utah, which firm has provided and
continues to provide legal services to the Company.
Mr. Corddry became a Director of the Company in March 1994.
Mr. Corddry served for 28 years with H. J. Heinz Company ("Heinz"),
retiring from his position as Senior Vice President-Europe in August 1992.
Prior to that position, Mr. Corddry served as Senior Vice President in
charge of several Heinz domestic affiliates, President of Ore-Ida Foods,
Inc., a wholly owned subsidiary of Heinz, and General Manager of Product
Marketing. Mr. Corddry was also a member of the Board of Directors of
Heinz from September 1986 until his retirement. Prior to joining Heinz, he
held various brand management positions with Proctor & Gamble Co.
Mr. Corddry has served as a director of Albertson's, Inc., a major operator
of grocery stores, since 1987. He is also a member of the Board of
Trustees of the American University in Cairo and Albertson's College of
Idaho. Mr. Corddry has previously served on the boards of numerous food
industry-related associations and educational, cultural and medical
facilities, foundations and associations among other organizations.
Mr. Hodges became a Director of the Company in March 1994. Mr. Hodges
has more than 29 years of experience in the retail food business. In April
1994, he became President and Chief Executive Officer of Mrs. Fields Inc.,
after serving as President of Food Barn Stores, Inc. from July 1991 to
March 1994. He has been a director of Mrs. Fields Inc. since April 1993.
From February 1990 to October 1991, Mr. Hodges served as president of his
own company, Branshau Inc., which engaged in the business of providing
management consulting services to food makers and retailers. Earlier,
Mr. Hodges was with American Stores Company for 25 years, where he rose to
the position of President of two substantial subsidiary corporations.
Mr. Hodges' first management position was as Vice President of Marketing
for Alpha Beta Co., a major operator of grocery stores in the West.
Officers serve at the discretion of the Board of Directors.
<PAGE>BOARD OF DIRECTORS AND COMMITTEES
Directors are elected to serve staggered three-year terms and until
their successors are duly elected and qualified. Each Director who is not
otherwise employed by the Company receives an annual Director's fee of
$25,000 plus $1,000 for each Board meeting (and each Board committee
meeting held other than in conjunction with a Board meeting) attended in
person. Outside directors also participate in the Company's Non-Employee
Director Stock Option Plan (the "Non-Employee Director Plan"). However, if
the proposed amendments to the Management Option Plan are approved by the
stockholders at the Annual Meeting, the Non-Employee Director Plan will
terminate and outside directors will thereafter be eligible to participate
in the Management Option Plan. The Company also reimburses each Director
for reasonable out-of-pocket expenses incurred in his capacity as a member
of the Board of Directors or committees thereof. No payments are made for
participation in telephone meetings of the Board of Directors or its
committees or actions taken in writing. The Board of Directors held five
meetings during 1996.
The members of the Audit Committee of the Board of Directors are
Messrs. Corddry and Hodges. The Audit Committee held four meetings during
1996. The functions of the Audit Committee are primarily to recommend the
selection of the Company's independent public accountants, discuss with
them the scope of the audit, review audited financial statements, consider
matters pertaining to the Company's accounting policies and internal
controls and provide a means for direct communication between the
independent public accountants and the Board of Directors.
The members of the Compensation Committee of the Board of Directors
are Messrs. Corddry and Hodges. The Compensation Committee held two
meetings during 1996. The functions of the Compensation Committee are to
review and recommend salary and bonus levels of executive officers, to
review periodically, and make recommendations with respect to, the
compensation structure of the Company, and to administer the Company's
stock option plan.
The Company has no nominating committee or committee performing
similar functions.
Each Director attended at least 75% of the total number of the
meetings of the Board of Directors and each committee thereof on which such
Director served held during the year ended December 31, 1996.
PAGE
<PAGE>SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of April 15,
1997 with respect to persons known by the Company to be beneficial owners
of more than five percent of the Common Stock of the Company, as well as
beneficial ownership by the Directors of the Company, the executive
officers named in the Summary Compensation Table below, and all executive
officers and directors as a group. The persons named in the table have
sole voting and investment power with respect to all shares beneficially
owned, unless otherwise indicated.
<TABLE>
<S> <C> <C>
COMMON STOCK PERCENT OF
BENEFICIALLY OUTSTANDING
NAME OF BENEFICIAL OWNER OWNED COMMON STOCK(1)
Craig H. Neilsen 17,700,000(2) 86.9%
John R. Spina 27,000(3) -
Thomas M. Steinbauer 50,500(3)(4) -
Brian E. Katz 36,000(3) -
Paul I. Corddry 15,000(3) -
Larry A. Hodges 7,500(3) -
All executive officers and
directors as a group (6 persons) 17,836,000 87.1%
as a group (6 persons)
</TABLE>
(1) Other than Mr. Neilsen, each beneficial owner listed owns less than 1%
of the outstanding Common Stock.
(2) Includes shares held by Mr. Neilsen as sole trustee of the
Testamentary Trust created under the Last Will and Testament of Ray
Neilsen, dated October 9, 1963. Gwendolyn Anderson, Mr. Neilsen's
mother, is the only beneficiary of this trust other than Mr. Neilsen.
Mr. Neilsen's mailing address is c/o Ameristar Casinos, Inc., 3773
Howard Hughes Parkway, Suite 490 South, Las Vegas, Nevada 89109.
(3) Includes the following number of shares which may be acquired within
60 days by the following persons upon exercise of options held by such
persons: Mr. Spina - 27,000 shares; Mr. Steinbauer - 50,000 shares;
Mr. Katz - 35,000 shares; Mr. Corddry - 4,000 shares; and Mr. Hodges -
4,000 shares.
(4) Includes 300 shares held jointly by Mr. Steinbauer with his wife and
with respect to which Mr. and Mrs. Steinbauer have shared voting and
investment power.
<PAGE>PROPOSAL NO. 2
AMENDMENTS TO MANAGEMENT OPTION PLAN
INTRODUCTION
Subject to stockholder approval, the Board of Directors has adopted
amendments to the Company's Management Stock Option Incentive Plan (the
"Management Option Plan") to increase from 1.0 million to 1.6 million the
number of shares of Common Stock that may be issued or delivered upon the
exercise of stock options that may be granted under the Management Option
Plan and to expand the eligibility provisions of the Management Option Plan
to include the Company's non-employee directors. As of April 15, 1997, no
shares of Common Stock had been issued upon the exercise of stock options
under the Management Option Plan and stock options exercisable for 560,000
shares of Common Stock under the Management Option Plan were outstanding,
leaving an aggregate of 440,000 shares of Common Stock under the
1.0 million share limit available for issuance or delivery upon the
exercise of stock options that may be granted in the future, assuming that
all of the currently outstanding stock options are exercised in full.
Since the Management Option Plan was adopted in 1993, the Company has
expanded with the openings of Ameristar Vicksburg and Ameristar Council
Bluffs, and the construction and opening of The Reserve will result in
additional growth of the Company. The number of employees of the Company
has increased from 1,021 as of November 3, 1993 to 3,189 as of March 15,
1997. Additional employees will be added as warranted by increases in
operations of the Company.
In addition to the increase in the overall workforce of the Company,
the growth of the Company has resulted in, and is expected to continue to
result in, a need to expand the senior and middle management of the
Company. A significant portion of the compensation of employees at these
levels generally, and in the gaming industry in particular, typically is
comprised of stock-based compensation, which has the effect of providing an
incentive to such employees to increase the profitability and income of the
Company, thereby aligning their interests with those of the stockholders of
the Company.
In order to allow the Company to attract and retain qualified
personnel at all levels, the Board of Directors believes it is advisable to
increase the number of shares of Common Stock that may be issued or
delivered upon the exercise of stock options under the Management Option
Plan from 1.0 million to 1.6 million. Such number of shares would
constitute approximately 7.9 percent of the number of shares outstanding at
April 30, 1997. Accordingly, on September 4, 1996, the Board of Directors
adopted resolutions for the amendment and restatement of the Management
Option Plan providing for an increase in the number of shares of Common
Stock subject to the Management Option Plan to 1.6 million.
The amendments adopted by the Board of Directors also expand the
eligibility provisions of the Management Option Plan to include non-
employee directors of the Company, subject to the approval of the
stockholders. Previously, the non-employee directors have been ineligible
to participate in the Management Option Plan in order to satisfy the
requirements of Rule 16b-3 ("Rule 16b-3") of the SEC to exempt certain
stock option grants to executive officers and directors of the Company from
short swing profit disgorgement liability under Section 16(b) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). Non-
employee directors have instead participated in the Company's 1993 Non-
Employee Director Stock Option Plan (the "Non-Employee Director Plan"),
which provides for grants of <PAGE>stock options on a formula basis
intended to qualify the Management Option Plan and the Non-Employee
Director Plan for exemption under Rule 16b-3. This formula provided for
the annual grant of 10-year options to each non-employee director
exercisable for 1,000 shares of Common Stock at a per share exercise price
equal to the fair market value of the Common Stock on the date of grant and
a vesting date of one year following the grant date. On May 31, 1996, the
SEC adopted an amended version of Rule 16b-3, which became effective with
respect to the Company on September 4, 1996. Rule 16b-3, as amended,
permits participation in a discretionary-grant stock option plan (such as
the Management Option Plan) by the non-employee directors responsible for
administering the plan. Accordingly, the Board of Directors has adopted a
resolution terminating the Non-Employee Director Plan effective upon the
date of approval by the stockholders of the Company of the amendment to the
Management Option Plan increasing the number of shares that may be issued
under the Management Option Plan and expanding the eligibility provisions
of the Management Option Plan to include the non-employee directors. The
termination of the Non-Employee Director Plan will have no effect on stock
options currently outstanding under the Non-Employee Director Plan.
The other amendments to the Management Option Plan adopted by the
Board of Directors make certain other changes to conform the terms of the
Management Option Plan to the conditions of Rule 16b-3, as recently
amended, clarify and expand the means by which a stock option may be
exercised, and make certain other changes in light of changes in law,
regulation or interpretation of legal requirements in recent years. These
amendments were effective upon adoption by the Board of Directors and are
not being submitted to the stockholders for approval.
The amendment and restatement of the Management Option Plan became
effective on September 4, 1996; provided, however, that the adoption of the
amendments to the Management Option Plan to increase the number of shares
that may be issued or delivered upon the exercise of stock options under
the Management Option Plan from 1.0 million to 1.6 million and to expand
the eligibility provisions to include non-employee directors are subject to
the approval of the stockholders of the Company by the vote of a majority
of the outstanding shares of Common Stock not later than 12 months after
the date of adoption of the amendment and restatement of the Management
Option Plan by the Board of Directors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS TO THE STOCKHOLDERS OF
THE COMPANY THE APPROVAL OF THE ADOPTION OF THE AMENDMENTS TO THE
MANAGEMENT OPTION PLAN.
SUMMARY OF PRINCIPAL PROVISIONS OF THE MANAGEMENT OPTION PLAN
The following summary of the Management Option Plan, as amended and
restated, is qualified in its entirety by reference to the full text of the
Management Option Plan, which is attached as Appendix A to this Proxy
Statement.
Purpose. The purpose of the Management Option Plan is to further the
interests of the Company by encouraging and enabling selected officers,
directors, employees, consultants, advisers, independent contractors and
agents, upon whose judgment, initiative and effort the Company is largely
dependent for the successful conduct of its business, to acquire and retain
a proprietary interest in the Company by ownership of its stock through the
exercise of stock options intended to be granted under the Management
Option Plan.
<PAGE>Types of Options. The Management Option Plan provides for
awards in the form of stock options, which may be either "incentive stock
options" within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), or non-qualified stock options.
Shares. The total number of shares of Common Stock available for
distribution under the Management Option Plan is 1.6 million. Shares
awarded under the Management Option Plan may be authorized and unissued
shares or treasury shares. If shares subject to an option under the
Management Option Plan cease to be subject to such option, such shares will
again be available for future distribution under the Management Option
Plan.
Administration. The Management Option Plan is administered by the
Board of Directors of the Company (the "Board") or, in the discretion of
the Board, a committee of at least two directors of the Company appointed
by the Board, all of which members are both "non-employee directors" (as
such term is defined in Rule 16b-3) and "outside directors" within the
meaning of Section 162(m) of the Internal Revenue Code and Section 1.162-27
of the Treasury Regulations or any successor provision(s) thereto
("Section 162(m)"). Such committee, if any, as shall be designated to
administer the Management Option Plan or the Board is hereinafter referred
to as the "Committee." Notwithstanding any provision of the Management
Option Plan to the contrary, if such a committee has been designated to
administer the Management Option Plan, all actions with respect to the
administration of the Management Option Plan in respect of the members of
such committee shall be taken by the Board. Currently, the Management
Option Plan is administered by the Compensation Committee of the Board.
The Committee is authorized to, among other things, set the terms of
options to participants and waive compliance with the terms of such
options. The provisions attendant to the grant of an option under the
Management Option Plan may vary from participant to participant. The
Committee has the authority to interpret the Management Option Plan and
adopt administrative regulations. The Committee may from time to time
delegate to one or more officers of the Company any or all of its
authorities under the Management Option Plan, except with respect to awards
granted to persons subject to Section 16 of the Exchange Act. The
Committee must specify the maximum number of shares that the officer or
officers to whom such authority is delegated may award, and the Committee
may in its discretion specify any other limitations or restrictions on the
authority delegated to such officer or officers. The Committee has made
such a delegation of authority to Craig H. Neilsen, the Chairman of the
Board, President and Chief Executive Officer and a principal stockholder of
the Company.
Participation. The Committee may grant options to any person who is
or has agreed to become an officer, director, employee, consultant,
adviser, independent contractor or agent of Ameristar Casinos, Inc. or any
of its subsidiaries. The participants in the Management Option Plan are
selected from among those eligible in the sole discretion of the Committee.
Terms of Stock Options. Incentive stock options ("ISOs") and non-
qualified stock options may be granted for such number of shares of Common
Stock as the Committee determines, provided that no participant may be
granted stock options under the Management Option Plan for more than an
aggregate of 200,000 shares of Common Stock. A stock option will be
exercisable at such times, over such term and subject to such terms and
conditions as the Committee determines. The exercise price of stock
options is determined by the Committee. ISOs are also subject to
restrictions as to exercise period and exercise price as required by the
Code.
<PAGE>Payment of the exercise price may be made in such manner as the
Committee may provide, including cash, delivery of shares of Common Stock
already owned or subject to outstanding options under the Management Option
Plan.
Unless otherwise determined by the Committee at any time with respect
to any particular non-qualified stock option, all stock options granted
under the Management Option Plan expire 90 days after the date of the
optionee's termination of employment or other relationship with the Company
for any reason other than death or permanent disability and one year after
the optionee's termination of employment or other relationship by reason of
death or permanent disability (but not, in either case, later than the
scheduled expiration date). The termination of employment or other
relationship of an optionee does not accelerate or otherwise affect the
number of shares with respect to which a stock option may be exercised,
which shall be limited to that number of shares which could have been
purchased pursuant to the option had the option been exercised by the
optionee on the date of such termination of employment or other
relationship. In the case of death, options may be exercised by the person
or persons to whom the rights under the options pass by will or by the laws
of descent or distribution.
No option will be exercisable if such exercise would create a right of
recovery for "short swing" profits under Section 16(b) of the Exchange Act,
unless such restriction is expressly waived by the holder of the option.
A stock option agreement with respect to a non-qualified option may
permit an optionee to transfer the stock option to his or her children,
grandchildren or spouse ("Immediate Family"), to one or more trusts for the
benefit of such Immediate Family members, or to one or more partnerships in
which such Immediate Family members are the only partners if (i) the
agreement setting forth the stock option expressly provides that the option
may be transferred only with the express written consent of the Committee,
and (ii) the optionee does not receive any consideration in any form
whatsoever for such transfer. Any stock option so transferred will
continue to be subject to the same terms and conditions as were applicable
to the option immediately prior to its transfer. Except as described
above, stock options are not transferable by the optionee otherwise than by
will or by the laws of descent and distribution.
Amendment and Termination. No options may be granted under the
Management Option Plan more than 10 years after the date of approval of the
adoption of the Management Option Plan by the stockholders of the Company.
The Board may discontinue the Management Option Plan at any earlier time
and may amend it from time to time, except that no amendment or
discontinuation may adversely affect any outstanding award without the
holder's written consent. Amendments may be made without stockholder
approval except as required to satisfy any applicable mandatory legal or
regulatory requirements, or as required for the Management Option Plan to
satisfy the requirements of Section 162(m), Section 422 of the Code or any
other non-mandatory legal or regulatory requirements if the Board of
Directors deems it desirable for the Management Option Plan to satisfy any
such requirements.
Adjustment. If the number of outstanding shares of Common Stock is
increased or decreased, or if such shares are exchanged for a different
number or kind of shares through reorganization, merger, recapitalization,
reclassification, stock dividend, stock split, combination of shares or
other similar transaction, the aggregate number of shares available for
distribution under the Management Option Plan, the number of shares subject
to outstanding options, the per share exercise price of outstanding options
<PAGE>and the aggregate number of shares with respect to which options may
be granted to a single participant will be appropriately adjusted by the
Committee.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of certain federal income tax aspects of
awards made under the Management Option Plan based upon the laws in effect
on April 15, 1997.
Incentive Stock Options. Generally, no taxable income is recognized
by the participant upon the grant of an ISO or upon the exercise of an ISO
during the period of the participant's employment with the Company or one
of its subsidiaries or within three months (12 months, in the event of
permanent and total disability, or the term of the option, in the event of
death) after termination. However, the exercise of an ISO may result in an
alternative minimum tax liability to the participant. If the participant
continues to hold the shares acquired upon the exercise of an ISO for at
least two years from the date of grant and one year from the transfer of
the shares to the participant, then generally: (a) upon the sale of the
shares, any amount realized in excess of the option price will be taxed as
long-term capital gain; and (b) no deduction will be allowed to the
employer corporation for federal income tax purposes.
If Common Stock acquired upon the exercise of an ISO is disposed of
prior to the expiration of the one-year and two-year holding periods
described above (a "disqualifying disposition"), then generally: (a) the
participant will recognize ordinary income in an amount equal to the
excess, if any, of the fair market value of the shares on the date of
exercise (or, if less, the amount realized on disposition of the shares)
over the option exercise price; and (b) the employer corporation will be
entitled to deduct any such recognized amount. Any further gain recognized
by the participant on such disposition generally will be taxed as short-
term or long-term capital gain, depending on whether the shares were held
by the participant for more than one year, but such additional amounts will
not be deductible by the employer corporation.
According to proposed Treasury Regulations, in general, no gain or
loss will be recognized by a participant who uses shares of Common Stock
rather than cash to exercise an ISO. A number of new shares of Common
Stock acquired equal to the number of shares surrendered will have a basis
and capital gain holding period equal to those of the shares surrendered
(although such shares will be subject to new holding periods for
disqualifying disposition purposes beginning on the acquisition date). To
the extent new shares of Common Stock acquired pursuant to the exercise of
the ISO exceed the number of shares surrendered, such additional shares
will have a zero basis and will have a holding period beginning on the date
the ISO is exercised. The use of Common Stock acquired through exercise of
an ISO to exercise an ISO will constitute a disqualifying disposition with
respect to such Common Stock if the applicable holding period requirement
has not been satisfied.
Non-Qualified Stock Options. Except as noted below with respect to
officers and directors subject to Section 16 of the Exchange Act
("Insiders"), with respect to non-qualified stock options: (a) no income
is recognized by the participant at the time the option is granted;
(b) generally upon exercise of the option, the participant recognizes
ordinary income in an amount equal to the difference between the option
exercise price and the fair market value of the shares on the date of
exercise and the employer corporation will be entitled to a tax deduction
in the same amount, to the extent that such income is considered reasonable
compensation; and (c) at disposition, any appreciation after the date of
exercise generally is treated either as short-term or long-term capital
gain, depending on whether the <PAGE>shares were held by the participant
for more than one year, and such appreciation is not deductible by the
employer corporation.
No gain or loss will be recognized by a participant with respect to
shares of Common Stock surrendered to exercise a non-qualified stock
option. A number of new shares acquired equal to the number of shares
surrendered will have a tax basis and capital gain holding period equal to
those of the shares surrendered. The participant will recognize ordinary
income in an amount equal to the fair market value of the additional shares
acquired at the time of exercise (except as noted below with respect to
Insiders). Such additional shares will be deemed to have been acquired on
the date of such recognition of income and will have a tax basis equal to
their fair market value on such date.
Special Rules Applicable to Insiders. If an Insider exercises a non-
qualified stock option within six months of its grant, the income
recognition date is generally the date six months after the date of grant,
unless the Insider makes an election under Section 83(b) of the Code to
recognize income as of the date of exercise. The Insider recognizes
ordinary income equal to the excess of the fair market value of the shares
on the income recognition date over the option exercise price, and the
holding period for treating any subsequent gain as long-term capital gain
begins on the income recognition date.
Withholding Taxes. A participant in the Management Option Plan may be
required to pay the employer corporation an amount necessary to satisfy the
applicable federal and state law requirements with respect to the
withholding of taxes on wages, or to make some other arrangements to comply
with such requirements. The employer has the right to withhold from salary
or otherwise to cause a participant (or the executor or administrator of
the participant's estate or the participant's distributee or transferee) to
make payment of any federal, state, local or other taxes required to be
withheld with respect to any award under the Management Option Plan. The
Management Option Plan authorizes the Committee to permit participants to
use the shares of Common Stock already owned or subject to outstanding
options under the Management Option Plan to satisfy withholding
obligations.
Company Deductions. As a general rule, the Company or one of its
subsidiaries will be entitled to a deduction for federal income tax
purposes at the same time and in the same amount that a participant in the
Management Option Plan recognizes ordinary income from awards under the
Management Option Plan, to the extent that such income is considered
reasonable compensation and currently deductible (and not capitalized)
under the Code. However, Section 162(m) limits to $1 million the annual
tax deduction that the Company and its subsidiaries can take with respect
to the compensation of each of certain executive officers unless the
compensation qualifies as "performance based" or certain other exemptions
apply.
BENEFITS AND GRANTS UNDER THE MANAGEMENT OPTION PLAN
Since the original adoption of the Management Option Plan in November
1993 through April 15, 1997, the Company has granted non-qualified options
exercisable for a total of 560,000 shares of Common Stock to employees at
exercise prices aggregating $3,478,780 (not including options on 192,500
shares granted to former employees that did not vest or expired
unexercised). The market value of the shares of Common Stock underlying
such options as of April 15, 1997 totaled $2,730,000. All of the
outstanding options vest ratably over a five-year period on the anniversary
of either the date of grant or the optionee's employment commencement date
and are exercisable from the date of vesting to the date that is 10 years
from either the date of grant or the optionee's employment commencement
date, subject to earlier termination in certain circumstances.
<PAGE>The following table sets forth the number of options granted
under the Management Option Plan and the Non-Employee Director Plan since
their adoption in November 1993 to the persons and groups identified
therein.
<TABLE>
OPTION GRANTS
<S> <C> <C>
OPTIONS OPTIONS
GRANTED GRANTED
NAME AND POSITION UNDER UNDER NON-
MANAGEMENT EMPLOYEE
OPTION DIRECTOR
PLAN(1) PLAN(1)
Craig H. Neilsen, Chairman of
the Board, President and
Chief Executive Officer 0 0
John R. Spina, Executive Vice
President of
Operations and Director 100,000 0
Thomas M. Steinbauer, Senior
Vice President of Finance,
Treasurer and Director 100,000 0
Brian E. Katz, Senior Vice
President, General
Counsel and Secretary 75,000 0
Paul I. Corddry, Director 0 4,000
Larry A. Hodges, Director 0 4,000
All current executive officers
as a group (4 persons) 275,000 0
All current directors who are
not executive officers, as a
group (2 persons) 0 8,000
All employees, other than
executive officers,
officers, as a group 285,000 0
</TABLE>
(1) No options have been granted to any associate of any executive officer
or director of the Company, except as set forth in the above table.
<PAGE>EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION COMMITTEE AND BOARD OF DIRECTORS ON EXECUTIVE
COMPENSATION
The Compensation Committee of Ameristar Casinos, Inc. consists of
Larry A. Hodges and Paul I. Corddry. Neither is an employee or officer of
the Company or of any of its subsidiaries. The Compensation Committee
administers the Management Stock Option Incentive Plan, pursuant to which
employees of the Company (including its executive officers) receive stock
option grants. It also reviews salaries and other compensation of the
executive officers of the Company. None of the actions or recommendations
of the Compensation Committee were modified or rejected in 1996 by the
Board of Directors.
General Compensation Philosophy
The Compensation Committee seeks to compensate the Company's executive
officers in a fashion that will attract, retain, motivate and appropriately
reward those individuals who are responsible for the Company's
profitability and growth. The compensation of executive officers has
historically been determined primarily on subjective factors and
competitive requirements. The Compensation Committee has been working on
a bonus plan that will use objective criteria, but it has not yet devised
an acceptable plan.
In 1996 all compensation decisions were based on strictly subjective
determinations. Compensation for Company executive officers in 1996
consisted primarily of salary and a discretionary bonus. Executive
officers also participated in benefit plans available to employees
generally, including a medical plan, a 401(k) plan, and group life
insurance.
In making its determinations as to the amount of cash compensation,
the Committee considered, among other things, (i) the Company's financial
results during 1996, (ii) the market performance of the Company's stock,
(iii) the compensation paid to the executive officers in prior years,
(iv) the recommendation of Craig H. Neilsen, the Company's chief executive
officer, (v) the extraordinary services rendered by the executive officers
during the year, (vi) the amount of compensation paid by the Company's
competitors to their executive officers and (vii) the increase in the cost
of living associated with the relocation of the Company's offices to Las
Vegas, Nevada. No specific weight was assigned to any particular factor;
however, the Committee believed that competitive pressures required an
increase in salaries, and this factor was more heavily weighted. In
addition, the Committee did not place significant emphasis on the stock
price because of the wide fluctuations in the price during 1996, and
instead placed greater emphasis on the increase in profitability of the
Company before preopening costs. The Committee did not retain the services
of an independent compensation consultant to review the Company's executive
compensation policies and levels or to ascertain those of comparable
companies.
No stock options were awarded by the Committee in 1996 to any of the
executive officers. The executive officers, other than Mr. Neilsen, were
most recently awarded stock options in December 1995, and the Committee
believed that the outstanding stock options provided an adequate incentive
in 1996 to align the interests of management with those of the stockholders
of the Company.
<PAGE>Section 162(m) of the Internal Revenue Code
Section 162(m) of the Internal Revenue Code disallows a deduction for
federal income tax purposes of most compensation exceeding $1,000,000 in
any year paid to the Company's chief executive officer and the four other
most highly compensated executive officers of a publicly-traded
corporation. The Company was not impacted by Section 162(m) in 1996. In
future years, the Compensation Committee intends to take into account the
effect of Section 162(m) if the compensation payable to any executive
officer approaches $1,000,000. However, the fact that compensation above
$1,000,000 may not be deductible for federal income tax purposes will not
necessarily preclude the award of such compensation if the Compensation
Committee believes it is otherwise justified.
Compensation of Chief Executive Officer
The Company's chief executive officer is in a unique position in that
he owns or controls approximately 87% of the outstanding stock of the
Company. He has not been awarded any options to acquire stock under the
Company's stock option plan, and the Compensation Committee is not inclined
to award him any. The Compensation Committee believes that the interests
of the chief executive officer are already aligned with those of the
stockholders. In the opinion of the Committee the award of stock options
to the chief executive officer will not provide a material incentive to
him, particularly since the maximum number of options that can be awarded
under the stock option plan is 200,000. The Compensation Committee
believes that the chief executive officer must be compensated primarily by
cash and by deferred compensation plans. The Company currently does not
have any deferred compensation plans, although the Compensation Committee
is investigating the options available to it.
In 1996 the Company's chief executive officer received a salary of
$375,000 and a cash bonus of $375,000. These are the same salary and bonus
that the chief executive officer has received from the Company or a
subsidiary during each full fiscal year since fiscal 1990.
The Compensation Committee used strictly subjective factors in
deciding the amount. The Compensation Committee considered a number of
factors including (i) the advancement of the Company and its subsidiaries
since the chief executive officer assumed leadership in 1983; (ii) the
achievements of the Company in 1996, including acquiring The Reserve Hotel
and Casino project; (iii) the fact the chief executive officer is also the
majority stockholder of the Company and thereby is significantly motivated
to create long term increases in stockholder value; (iv) the fact the chief
executive officer has not received a raise in his salary or in his cash
bonus since 1990; (v) the profitability of the Company in 1996; (vi) the
performance of the Company's stock in 1996; and (vii) the fact the chief
executive officer requested that his salary and bonus not be increased. No
particular weight was given to any factor, although the request of the
chief executive officer was a key component in the decision and the
Committee balanced certain of the above factors in the same manner as
discussed above with respect to the other executive officers of the
Company. There is no quantifiable relationship between the Company's
performance and the compensation paid to the chief executive officer.
Compensation Committee
Larry A. Hodges
Paul I. Corddry
<PAGE>SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION OF NAMED EXECUTIVE
OFFICERS
The following table sets forth information concerning the annual and
long-term compensation earned by the Named Executive Officers for services
rendered in all capacities to the Company for the fiscal years ended
December 31, 1996, 1995 and 1994. The "Named Executive Officers" include
(i) each person who served as Chief Executive Officer during 1996 (one
person), (ii) each person who (a) served as an executive officer at
December 31, 1996, (b) was among the four most highly paid executive
officers of the Company, not including the Chief Executive Officer, during
1996 and (c) earned total annual salary and bonus compensation in 1996 in
excess of $100,000 (three persons), and (iii) up to two persons who would
be included under clause (ii) above had they served as an executive officer
at December 31, 1996 (no persons).
<TABLE>
SUMMARY COMPENSATION TABLE
<S> <C> <C> <C> <C> <C> <C>
LONG-TERM
ANNUAL COMPENSATION(1) COMPENSA-
TION(4)
OTHER SHARES
ANNUAL UNDERLYING ALL OTHER
NAME AND FISCAL SALARY BONUS COMPEN- OPTIONS/ COMPEN-
CAPACITY YEAR ($)(2) ($) SATION SARS SATION
IN WHICH SERVED ($)(3) (#) ($)(5)
Craig H. 1996 $375,000 $375,000 - 0 $2,072
Neilsen, 1995 $375,000 $375,000 - 0 $2,986
Chairman of the 1994 $375,000 $375,000 - 0 $5,206
Board, Chief
Executive
Officer and
President
John R. Spina, 1996 $271,155 $115,000 - 0 $2,040
Executive Vice 1995 $153,846 $ 95,000 - 100,000 $ 0
President of
Operations
Thomas M. 1996 $199,040 $ 75,000 - 0 $2,040
Steinbauer, 1995 $149,761 $ 65,000 - 100,000 $2,986
Senior Vice 1994 $137,500 $ 50,000 - 0 $4,547
President of
Finance and
Treasurer
Brian E. Katz, 1996 $196,444 $ 75,000 - 0 $2,040
Senior Vice 1995 $140,674 $ 75,000 - 75,000 $ 0
President, 1994 $ 72,116 $ 30,000 - 50,000 $ 0
General Counsel
and Secretary
</TABLE>
(1) Amounts shown include cash compensation earned for the periods
reported whether paid or accrued in such periods.
(2) As of April 15, 1997, the current annual salary levels for the Named
Executive Officers were: Mr. Neilsen ($375,000); Mr. Spina
($300,000); Mr. Steinbauer ($200,000); and Mr. Katz ($225,000).
(3) During 1996, 1995 and 1994, the Named Executive Officers received
personal benefits, the aggregate amounts of which for each Named
Executive Officer did not exceed the lesser of $50,000 or 10% of the
total of the annual salary and bonus reported for such Named Executive
Officer in such years.
(4) In the cases of Messrs. Steinbauer and Katz, the number of shares
underlying options/SARs granted in 1995 reflects the repricing of
their outstanding options in December 1995 (75,000 shares with respect
to Mr. Steinbauer and 50,000 shares with respect to Mr. Katz). The
Named Executive Officers did not receive any restricted stock awards
or long-term incentive plan payouts in 1996, 1995 or 1994.
(5) The 1996 amounts represent matching contributions under the Company's
401(k) plan. The amounts for prior years represent contributions made
by the Company under its profit sharing plan prior to the termination
of the plan.
<PAGE>OPTION GRANTS
No stock options or stock appreciation rights were granted by the
Company to the Named Executive Officers in 1996.
OPTION EXERCISES AND HOLDINGS
The following table sets forth with respect to the Named Executive
Officers information concerning the exercise of stock options during 1996
and unexercised options held as of the end of the year. The Company has
never granted stock appreciation rights.
<TABLE>
AGGREGATED OPTION/SAR EXERCISES
AND 1996 YEAR-END OPTION/SAR VALUES
<S> <C> <C> <C> <C>.
NUMBER
OF UNEXERCISED VALUE OF
SHARES VALUE OPTIONS/SARS AT UNEXERCISED
ACQUIRED REAL- FISCAL YEAR IN-THE-MONEY
ON IZED END(#) OPTIONS/SARS AT
EXERCISE ($) FISCAL YEAR
NAME (#) END($)(1)
<S> <C> <C> <C> <C> <C> <C>
------- -------- ------- --------
UNEXER- EXERCIS- UNEXER- EXERCIS-
CISABLE ABLE CISABLE ABLE
Craig H. 0 $0 0 0 -- --
Neilsen
John R. Spina 0 $0 80,000 20,000 $0 $0
Thomas M. 0 $0 50,000 50,000 $0 $0
Steinbauer
Brian E. Katz 0 $0 50,000 25,000 $0 $0
</TABLE>
(1) The values of unexercised in-the-money options have been determined
based on the closing price of the Company's Common Stock as reported
in the Nasdaq-National Market System on December 31, 1996.
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with Messrs.
Steinbauer and Spina. Each of the employment agreements has a term of
three years, commencing November 15, 1993 in the case of Mr. Steinbauer and
April 4, 1995 in the case of Mr. Spina, which are subject to automatic
renewal for a two-year period at the end of each term unless terminated by
either party with at least three months' prior written notice. Each
agreement includes a covenant not to compete for a term of one year after
termination of the officer's employment. This covenant applies only to
competing activities within a 90-mile radius of the operations of the
Company. The agreements provide that in the event an officer's employment
is terminated by the Company without "cause" (as defined in the
agreements), or by the officer as a result of a reduction in the officer's
duties or compensation, such officer would be entitled to a severance
payment in an amount equal to six months' base salary.
The Company has not entered into employment or similar agreements with
Messrs. Neilsen or Katz.
The Company has entered into an indemnification agreement with each of
its directors and executive officers. These agreements require the
Company, among other things, to indemnify such <PAGE>persons against
certain liabilities that may arise by reason of their status or service as
directors or officers (other than liabilities arising from actions
involving intentional misconduct, fraud or a knowing violation of law), to
advance their expenses incurred as a result of a proceeding as to which
they may be indemnified and to cover such persons under any directors' and
officers' liability insurance policy maintained by the Company. These
indemnification agreements are separate and independent of indemnification
rights under the Company's Bylaws and are irrevocable.
<PAGE>PERFORMANCE GRAPH
The following graph presents a comparison of the performance of the
Company's Common Stock with that of the Standard & Poor's 500 Stock Index
and Salomon Brothers Inc Small Cap Gaming Company Index.
[THE PERFORMANCE GRAPH HAS BEEN OMITTED FROM THIS ELECTRONIC FILING
PURSUANT TO RULE 304 OF REGULATION S-T. THE TABLE BELOW PRESENTS THE DATA
DEPICTED IN THE PERFORMANCE GRAPH.]
<TABLE>
<S> <C> <C> <C> <C> <C>
Value of $100.00 Investment
11/9/93 12/31/93 12/30/94 12/29/95 12/31/96
Ameristar Common $100.00 $105.68 $ 40.91 $ 59.09 $ 48.86
Stock
S&P 500 Index 100.00 101.33 99.77 133.80 160.92
SBI Small Cap Gaming 100.00 97.18 71.48 79.90 64.67
Co. Index
</TABLE>
(1) The graph assumes $100 invested in the Company's Common Stock, the
Standard & Poor's 500 Stock Index and the Salomon Brothers Inc Small
Cap Gaming Company Index on November 9, 1993, the first day of trading
of the Common Stock. The comparison assumes that all dividends are
reinvested.
(2) The Salomon Brothers Inc Small Cap Gaming Company Index is a straight
average (i.e., not weighted with respect to any measure of company
size or other factor) of the stock prices of 13 gaming companies.
There has not been any change in any index in the preparation of the
above graph.
<PAGE>CERTAIN TRANSACTIONS
During 1996, the Company leased certain office space in Twin Falls,
Idaho, from Lynwood Shopping Center, a partnership in which Craig H.
Neilsen has a controlling equity interest. The Company paid or accrued
aggregate rent in 1996 for the office space of approximately $68,811,
including $5,267 for amounts accrued in 1995. An additional $44,767 in
rents was paid or accrued to Lynwood Shopping Center by CPI in 1996
(including $2,833 for amounts accrued in 1995) for CPI's readerboard sign
(which is owned by Lynwood Shopping Center) and space provided for CPI's
dealer schoolroom.
The Twin Falls office space lease with Lynwood Shopping Center was
terminated on December 31, 1996 in connection with the relocation of the
Company's executive offices to Las Vegas. A portion of this office space
has been leased beginning January 1, 1997, by Lynwood Shopping Center to
Neilsen & Company (a partnership in which Mr. Neilsen owns a controlling
equity interest), which in turn has subleased to ACI and CPI the right to
use certain offices in this space and the common areas. ACI's sublease
rights terminated on March 31, 1997. CPI continues to occupy these
premises. The sublease terms between the Company and Neilsen & Company
have not yet been determined. In addition, the Company intends in 1997 to
sell certain furniture, fixtures and equipment located at the Twin Falls
office to Neilsen & Company on terms to be determined.
In 1995, CPI agreed to purchase from Neilsen & Company a used forklift
that was employed in the construction of Cactus Petes Resort Casino hotel
tower from 1989 to 1992, and which subsequently remained with CPI for use
in its operations. The $25,000 purchase price paid in 1996 was believed to
reflect the market value of the equipment based on estimates obtained from
independent companies engaged in the purchase and sale of such equipment.
In 1997, CPI plans to purchase from Neilsen & Company certain additional
maintenance equipment that has been used by CPI since 1993. Terms for this
purchase have not yet been determined.
The Company leases from Neilsen & Company two condominiums located in
Sun Valley, Idaho. The properties are leased by the Company at an
aggregate monthly rental rate of $3,500 plus maintenance supply and utility
costs. The properties are made available by the Company at no charge to
management personnel and certain business associates. The Company believes
that the condominiums are a valuable asset in strengthening management
morale and maintaining goodwill with important business contacts.
Management believes that the rental rate paid by the Company is within the
range of rates generally charged for such properties in Sun Valley.
A portion of the services of a Company employee were provided to
Neilsen & Company in 1996. The Company billed Neilsen & Company
approximately $27,163 for these services, representing approximately half
of the salary and additional payroll burden for this employee. Of the
amount billed, approximately $13,104 remained due at December 31, 1996.
These arrangements are expected to continue in 1997 until the completion of
certain projects being performed by this employee for the Company.
Mr. Neilsen is the president, director and sole stockholder of
Intermountain Express, Inc. ("Intermountain"), a transportation concern
that provides CPI with package delivery services between Jackpot and Twin
Falls, Idaho. Intermountain contracts with CPI for the use of CPI's
drivers and a van owned by CPI. In 1996, CPI paid or accrued a total of
$38,080 to Intermountain for package delivery <PAGE>services, and CPI
received approximately $8,837 from Intermountain for contracted driver
services provided in 1995. Subsequent to December 31, 1996, CPI invoiced
Intermountain for $28,523 for contracted driver services and miscellaneous
fuel and van maintenance expenses provided or paid by CPI in 1996.
Intermountain has requested supporting documentation from CPI to
substantiate approximately $9,817 of the invoiced amount. Intermountain
owes CPI an additional $11,400 in van rental payments accrued at the rate
of $100 per week in 1993, 1994 and early 1995. Van rental payments have
not been accrued for the remainder of 1995 and 1996 pending the completion
of discussions concerning the possible sale of the van by CPI to
Intermountain and the settlement of the outstanding van rental balance.
Management believes that the relationships between CPI and Intermountain
are beneficial to the Company and, subject to the contemplated
modifications concerning the van owned by CPI, these relationships are
expected to continue for the indefinite future.
The Company has adopted a policy requiring transactions with
affiliates to be on terms no less favorable to the Company than could be
obtained from unaffiliated parties. Each of the above transactions has
been approved by the Board of Directors. In the opinion of management, the
terms of the above transactions were at least as fair to the Company as
could have been obtained from unaffiliated parties.
FORM 10-K
ACI will furnish without charge to each stockholder, upon written
request addressed to ACI c/o Barbara Miller, 3773 Howard Hughes Parkway,
Suite 490 South, Las Vegas, Nevada 89109, a copy of its Annual Report on
Form 10-K for the year ended December 31, 1996 (excluding the exhibits
thereto), as filed with the Securities and Exchange Commission. The
Company will provide a copy of the exhibits to its Annual Report on Form 10-
K for the year ended December 31, 1996 upon the written request of any
beneficial owner of the Company's securities as of the record date for the
Annual Meeting and reimbursement of the Company's reasonable expenses.
Such request should be addressed to ACI c/o Brian E. Katz, Esq. at the
above address.
FUTURE STOCKHOLDER PROPOSALS
Any stockholder proposal intended to be presented at the 1998 Annual
Meeting of Stockholders must be submitted sufficiently far in advance so
that it is received by ACI not later than December 31, 1997.
OTHER MATTERS
The Company's independent public accountants for the fiscal year ended
December 31, 1996 were Arthur Andersen LLP, which firm is expected to be
appointed to serve in such capacity for the current year. A representative
of Arthur Andersen LLP is expected to be present at the meeting with the
opportunity to make a statement if he or she so desires and to respond to
appropriate questions.
Neither the Company nor any of the persons named as proxies knows of
matters other than those stated above to be voted on at the Annual Meeting.
However, if any other matters are properly presented at the meeting, the
persons named as proxies are empowered to vote in accordance with their
discretion on such matters.
<PAGE>The Annual Report of ACI for the fiscal year ended December 31,
1996 accompanies this proxy statement, but it is not to be deemed a part of
the proxy soliciting material.
PLEASE COMPLETE, SIGN AND RETURN
THE ENCLOSED PROXY PROMPTLY
AMERISTAR CASINOS, INC.
By order of the Board of Directors
Craig H. Neilsen
President and
Chief Executive Officer
Las Vegas, Nevada
April 30, 1997
<PAGE>APPENDIX A
AMERISTAR CASINOS, INC.
MANAGEMENT STOCK OPTION INCENTIVE PLAN
AS AMENDED AND RESTATED THROUGH SEPTEMBER 4, 1996
1. PURPOSE
The purpose of the Ameristar Casinos, Inc. Management Stock Option
Incentive Plan is to further the interests of Ameristar Casinos, Inc., a
Nevada corporation (the "Company"), and its subsidiaries by encouraging and
enabling selected officers, directors, employees, consultants, advisers,
independent contractors and agents, upon whose judgment, initiative and
effort the Company is largely dependent for the successful conduct of its
business, to acquire and retain a proprietary interest in the Company by
ownership of its stock through the exercise of stock options intended to be
granted hereunder. Options granted hereunder are either options intended
to qualify as "incentive stock options" within the meaning of Section 422
of the Code or non-qualified stock options.
2. DEFINITIONS
Whenever used herein the following terms shall have the following
meanings, respectively:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as
amended, and the regulations promulgated thereunder.
(c) "Committee" shall mean the Stock Option or Compensation
Committee appointed by the Board to administer the Plan, or if no
committee has been appointed reference to the "Committee" shall be
deemed to refer to the Board.
(d) "Common Stock" shall mean the Company's Common Stock, $0.01
per value.
(e) "Company" shall mean Ameristar Casinos, Inc., a Nevada
corporation.
(f) "Employee" shall mean, in connection with Incentive Options,
only employees of the Company or any Subsidiary or Parent Corporation
of the Company.
(g) "Fair Market Value Per Share" of the Common Stock on any
date shall mean, if the Common Stock is publicly traded, the mean
between the highest and lowest quoted selling prices of the Common
Stock on such date or, if not available, the mean between the bona
fide bid and asked prices of the Common Stock on such date. In any
situation not covered above, the Fair Market Value Per Share shall be
determined by the Committee in accordance with one of the valuation
methods described in Section 20.2031-2 of the Federal Estate Tax
Regulations (or any successor provision thereto).
<PAGE>(h) "Incentive Option" shall mean an Option granted under
the Plan which is designated as and qualified as an incentive stock
option within the meaning of Section 422 of the Code.
(i) "Non-Employee Director" shall have the meaning set forth in
Rule 16b-3 promulgated by the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended, or any
successor rule.
(j) "Non-Qualified Option" shall mean an Option granted under
the Plan which does not qualify as, or is not designated as, an
incentive stock option within the meaning of Section 422 of the Code.
(k) "Option" shall mean an Incentive Option or a Non-Qualified
Option.
(l) "Optionee" shall mean any person who has been granted an
Option under the Plan.
(m) "Outside Director" shall have the meaning set forth in
Section 162(m).
(n) "Parent Corporation" shall have the meaning set forth in
Section 424(e) of the Code.
(o) "Permanent Disability" shall mean termination of a
Relationship with the Company or any Subsidiary or Parent Corporation
of the Company with the consent of the Company or such Subsidiary by
reason of permanent and total disability within the meaning of
Section 22(e)(3) of the Code.
(p) "Plan" shall mean the Ameristar Casinos, Inc. Management
Stock Option Incentive Plan, as amended and restated hereby.
(q) "Relationship" shall mean that the Optionee is or has agreed
to become an officer, director, employee, consultant, adviser,
independent contractor or agent of the Company or any Subsidiary of
the Company.
(r) "Section 162(m)" means Section 162(m) of the Code and
Section 1.162-27 of the Treasury Regulations or any successor
provision(s) thereto.
(s) "Subsidiary" shall have the meaning set forth in
Section 424(f) of the Code.
3. ADMINISTRATION
(a) The Plan shall be administered either (i) by the Board, or
(ii) in the discretion of the Board, by a Committee of at least two
directors of the Company appointed by the Board, all of which members
are both Non-Employee Directors and Outside Directors, except that the
Plan shall be administered by the Board to the extent provided in the
last sentence of this Section. Notwithstanding the provisions of the
immediately preceding sentence, the requirement for Non-Employee
Directors in such sentence shall only apply to the grant of Options to
Persons subject to Section 16(a) of the Securities Exchange Act of
1934, as amended, and the requirement for <PAGE>Outside Directors in
such sentence shall only apply to the grant of Options to persons who
are "covered employees" within the meaning of Section 162(m). The
Board may from time to time appoint members of the Committee in
substitution for or in addition to members previously appointed and
may fill vacancies. Notwithstanding any other provision of the Plan
to the contrary, if a committee of directors has been designated by
the Board to administer the Plan, all actions with respect to the
administration of the Plan in respect of the members of such committee
shall be taken by the Board.
(b) Any action of the Committee with respect to the
administration of the Plan shall be taken by majority vote or by
written consent of a majority of its members.
(c) Subject to the provisions of the Plan, the Committee shall
have the authority to construe and interpret the Plan, to define the
terms used therein, to determine the time or times an Option may be
exercised and the number of shares for which an Option may be
exercised at any one time, to prescribe, amend and rescind rules and
regulations relating to the Plan, to approve and determine the
duration of leaves of absence which may be granted to participants
without constituting a termination of their employment for purposes of
the Plan, and to make all other determinations necessary or advisable
for the administration of the Plan. All determinations and
interpretations made by the Committee shall be conclusive and binding
on all Optionees and on their guardians, legal representatives and
beneficiaries.
(d) The Company shall indemnify and hold harmless the members of
the Board and the Committee from and against any and all liabilities,
costs and expenses incurred by such persons as a result of any act, or
omission to act, in connection with the performance of such persons'
duties, responsibilities and obligations under the Plan, other than
such liabilities, costs and expenses as may result from the
negligence, bad faith, willful misconduct or criminal acts of such
persons.
(e) The Company will provide financial information to the
Optionees on the same basis as the Company provides such information
to its stockholders.
(f) The Committee may from time to time delegate to one or more
officers of the Company any or all of its authorities granted
hereunder except with respect to awards granted to persons subject to
Section 16 of the Securities Exchange Act of 1934, as amended. The
Committee shall specify the maximum number of shares that the officer
or officers to whom such authority is delegated may award, and the
Committee may in its discretion specify any other limitations or
restrictions on the authority delegated to such officer or officers.
4. NUMBER OF SHARES SUBJECT TO PLAN
The aggregate number of shares of Common Stock subject to Options
which may be granted under the Plan shall not exceed 1,600,000. The shares
of Common Stock to be issued or delivered upon the exercise of Options may
be authorized but unissued shares, shares issued and reacquired by the
Company or shares purchased by the Company on the open market. If any
Option granted hereunder shall expire or terminate for any reason without
having been exercised in full, the unpurchased shares subject thereto shall
again be available for purposes of the Plan.
<PAGE>5. ELIGIBILITY AND PARTICIPATION
(a) Non-Qualified Options may be granted to any person who has a
Relationship with the Company or any of its Subsidiaries. Incentive
Options may be granted to any Employee. The Committee shall determine
the persons to whom Options shall be granted, the time or times at
which such Options shall be granted and the number of shares to be
subject to each Option. An Optionee may, if he is otherwise eligible,
be granted an additional Option or Options if the Committee shall so
determine. An Employee may be granted Incentive Options or Non-
Qualified Options or both under the Plan; provided, however, that the
grant of Incentive Options and Non-Qualified Options to an Employee
shall be the grant of separate Options and each Incentive Option and
each Non-Qualified Option shall be specifically designated as such.
(b) In no event shall the aggregate fair market value
(determined as of the time the Option is granted) of the shares with
respect to which Incentive Options (granted under the Plan or any
other plans of the Company or any Subsidiary or Parent Corporation of
the Company) are exercisable for the first time by an Optionee in any
calendar year exceed $100,000.
(c) In no event shall the aggregate number of shares of Common
Stock with respect to which Options may be granted to a single
Optionee during the term of the Plan exceed 200,000 shares.
6. PURCHASE PRICE
The purchase price of each share covered by each Option shall be
determined by the Committee; provided, however, that in the case of an
Incentive Option such price shall not be less than 100% of the Fair Market
Value Per Share of the Common Stock on the date the Incentive Option is
granted; and provided further that if at the time an Incentive Option is
granted the Optionee owns or would be considered to own by reason of
Section 424(d) of the Code more than 10% of the total combined voting power
of all classes of stock of the Company, the purchase price of the shares
covered by such Incentive Option shall not be less than 110% of the Fair
Market Value Per Share of the Common Stock on the date the Incentive Option
is granted.
7. DURATION OF OPTIONS
The expiration date of an Option and all rights thereunder shall be
determined by the Committee; provided, however, that the expiration date of
an Incentive Option must be within 10 years from the date on which the
Incentive Option is granted, unless at the time the Incentive Option is
granted the Optionee owns or would be considered to own by reason of
Section 424(d) of the Code more than 10% of the total combined voting power
of all classes of stock of the Company or any Subsidiary or Parent
Corporation of the Company, in which case the expiration date of such
Incentive Option must be within five years from the date of grant. In the
event the Committee does not specify the expiration date of an Option, the
expiration date shall be 10 years from the date on which the Option was
granted; provided, however, that if at the time an Incentive Option is
granted the Optionee owns or would be considered to own by reason of
Section 424(d) of the Code more than 10% of the total combined voting power
of all classes of stock of the Company or any Subsidiary or Parent
Corporation of the Company, such Incentive Option shall <PAGE>expire five
years from the date of grant. Options shall be subject to earlier
termination as provided herein.
8. EXERCISE OF OPTIONS
(a) An Option shall vest and become exercisable from time to
time in installments or otherwise in accordance with such schedule and
upon such other terms and conditions as the Committee shall in its
discretion determine at the time the Option is granted. An Optionee
may purchase less than the total number of shares for which the Option
is exercisable, provided that a partial exercise of an Option may not
be for less than 100 shares, unless the exercise is during the final
year of the Option, and shall not include any fractional shares. As a
condition to the exercise, in whole or in part, of any Option, the
Committee may in its sole discretion require the Optionee to pay, in
addition to the purchase price of the shares covered by the Option, an
amount equal to any federal, state, local or other taxes that the
Committee has determined are required to be paid in connection with
the exercise of such Option in order to enable the Company to claim a
deduction, to satisfy tax withholding requirements or otherwise.
Furthermore, if any Optionee disposes of any shares of stock acquired
by exercise of an Incentive Option prior to the expiration of either
of the holding periods specified in Section 422(a)(1) of the Code, the
Optionee shall pay to the Company, or the Company shall have the right
to withhold from any payments to be made to the Optionee, an amount
equal to any federal, state, local or other taxes that the Committee
has determined are required to be paid in connection with the exercise
of such Option in order to enable the Company to claim a deduction or
otherwise. To the extent permitted by the Committee, and subject to
such terms and conditions as the Committee may provide, an Optionee
may elect to have any withholding tax obligation, or any additional
tax obligation with respect to any awards hereunder, satisfied by (i)
having the Company withhold shares of Common Stock otherwise
deliverable to such person with respect to the Option being exercised
or (ii) delivering to the Company shares of unrestricted Common Stock,
which shares shall be valued as provided in Section 9(b).
(b) No Option will be exercisable (and any attempted exercise
will be deemed null and void) if such exercise would create a right of
recovery for "short-swing profits" under Section 16(b) of the
Securities Exchange Act of 1934, as amended. This Section 8(b) is
intended to protect persons subject to Section 16(b) against
inadvertent violations of Section 16(b) and shall not apply with
respect to any particular exercise of an Option if expressly waived in
writing by the Optionee at the time of such exercise.
9. METHOD OF EXERCISE
(a) To the extent that an Option has become exercisable, the
Option may be exercised from time to time by giving written notice to
the Company stating the number of shares with respect to which the
Option is being exercised, accompanied by payment of the purchase
price for the number of shares being purchased and, if applicable, any
federal, state, local or other taxes required to be paid in accordance
with the provisions of Section 8(a) hereof. Payment of the purchase
price shall be made in such manner as the Committee may provide in the
award of the Option, which may include cash (including cash
equivalents), delivery of shares of Common Stock already owned by the
Optionee or subject to Options under the Plan, any other manner
permitted <PAGE>by law as determined by the Committee (including
"cashless exercises"), or any combination of the foregoing.
(b) If any payment is made with shares of Common Stock already
owned, the Optionee, or other person entitled to exercise the Option,
shall deliver to the Company certificates representing the number of
shares of Common Stock in payment for the shares being purchased, duly
endorsed for transfer to the Company. If requested by the Committee,
prior to the acceptance of such certificates in payment for such
shares, the Optionee, or any other person entitled to exercise the
Option, shall supply the Committee with a representation and warranty
in writing that he has good and marketable title to the shares
represented by the certificate(s), free and clear of all liens and
encumbrances. The value of any shares of Common Stock tendered in
payment for any shares being purchased shall be their Fair Market
Value Per Share on the date of the exercise, and the value of any
shares of Common Stock subject to Options under the Plan that are
cancelled in payment for any shares being purchased shall be their
Fair Market Value Per Share on the date of the exercise reduced by the
exercise price per share provided for in such Option.
(c) Notwithstanding the foregoing, the Company shall have the
right to postpone the time of delivery of the shares for such period
as may be required for it to comply, with reasonable diligence, with
any applicable listing requirements of any national securities
exchange or any federal, state or local law. If an Optionee, or other
person entitled to exercise an Option, fails to accept delivery of or
fails to pay for all or any portion of the shares requested in the
notice of exercise, upon tender of delivery thereof, the Committee
shall have the right to terminate the Optionee's Option with respect
to such shares.
10. NON-TRANSFERABILITY AND LIMITED TRANSFERABILITY OF OPTIONS;
DISPOSITION OF OPTIONS OR COMMON STOCK BY OPTIONEES SUBJECT TO
SECTION 16
(a) An Option agreement may permit an Optionee to transfer a Non-
Qualified Option to his or her children, grandchildren or spouse
("Immediate Family"), to one or more trusts for the benefit of such
Immediate Family members, or to one or more partnerships in which such
Immediate Family members are the only partners if (i) the agreement
setting forth such Non-Qualified Option expressly provides that such
Non-Qualified Option may be transferred only with the express written
consent of the Committee, and (ii) the Optionee does not receive any
consideration in any form whatsoever for such transfer. Any Non-
Qualified Option so transferred shall continue to be subject to the
same terms and conditions as were applicable to such Non-Qualified
Option immediately prior to the transfer thereof. Any Option not
(x) granted pursuant to any agreement expressly allowing the transfer
of such Option as provided above or (y) amended expressly to permit
its transfer shall not be transferable by the Optionee otherwise than
by will or by the laws of descent and distribution, and such Option
shall be exercisable during the Optionee's lifetime only by the
Optionee.
(b) If for any reason any Option granted to a person subject to
Section 16 of the Securities Exchange Act of 1934, as amended, is not
approved in the manner provided for in clause (d)(1) or (d)(2) of Rule
16b-3, neither the Option (except upon its exercise) nor the Common
Stock underlying the Option may be disposed of by the Optionee until
six months have <PAGE>elapsed following the date of grant of the
Option, unless the Committee otherwise specifically permits such
disposition.
11. CONTINUANCE OF RELATIONSHIP
Nothing contained in the Plan or in any Option granted under the Plan
shall confer upon any Optionee any rights with respect to the continuation
of his or her employment by or other Relationship with the Company or any
Subsidiary or Parent Corporation of the Company or interfere in any way
with the right of the Company or any Subsidiary or Parent Corporation of
the Company at any time to terminate such employment or other Relationship
or to increase or decrease the compensation of the Optionee from the rate
in existence at the time of the grant of an Option.
12. TERMINATION OF RELATIONSHIP OTHER THAN BY DEATH OR
PERMANENT DISABILITY
Except as the Committee may determine otherwise at any time with
respect to any particular Non-Qualified Option granted hereunder:
(a) In an Optionee ceases to have a Relationship for any reason
other than the Optionee's death or Permanent Disability, any Options
granted to him shall terminate 90 days from the date on which such
Relationship terminates unless such Optionee has resumed or initiated
a Relationship and has a Relationship on such date. During such 90-
day period, the Optionee may exercise any Option granted to him but
only to the extent such Option was exercisable on the date of
termination of the Optionee's Relationship and provided that such
Option has not expired or otherwise terminated as provided herein. A
leave of absence approved in writing by the Committee shall not be
deemed a termination of Relationship for purposes of this Section 12,
but no Option may be exercised during any such leave of absence,
except during the first 90 days thereof.
(b) For purposes hereof, termination of an Optionee's
Relationship for reasons other than death or Permanent Disability
shall be deemed to take place upon the earliest to occur of the
following: (i) the date of the Optionee's retirement from employment
under the normal retirement policies of the Company or any Subsidiary
of the Company; (ii) the date of the Optionee's retirement from
employment with the approval of the Committee because of disability
other than Permanent Disability; (iii) the date the Optionee receives
notice or advice that his or her employment or other Relationship is
terminated; (iv) the date the Optionee ceases to render the services
which he was employed, engaged or retained to render to the Company or
any Subsidiary (absences for temporary illness, emergencies and
vacations or leaves of absence approved in writing by the Committee
excepted); or (v) in the case of a director of the Company, the date
on which such person ceases to be a director of the Company unless
such person has an other Relationship at such time. The fact that the
Optionee may receive payment from the Company or any Subsidiary of the
Company after termination for vacation pay, for services rendered
prior to termination, for salary in lieu of notice or for other
benefits shall not affect the termination date.
<PAGE>13. DEATH OR PERMANENT DISABILITY OF OPTIONEE
Except as the Committee may expressly determine otherwise at any time
with respect to any particular Non-Qualified Option granted hereunder, if
an Optionee shall die at a time when such person is in a Relationship or if
the Optionee shall cease to have a Relationship by reason of Permanent
Disability, any Options granted to the Optionee shall terminate one year
after the date of the Optionee's death or termination of Relationship due
to Permanent Disability unless by its terms it shall expire before such
date or otherwise terminate as provided herein, and shall only be
exercisable to the extent that it would have been exercisable on the date
of the Optionee's death or termination of the Optionee's Relationship due
to Permanent Disability. In the case of death, the Option may be exercised
by the person or persons to whom the Optionee's rights under the Option
shall pass by will or by the laws of descent and distribution.
14. STOCK PURCHASE NOT FOR DISTRIBUTION
Each Optionee shall, by accepting the grant of an Option under the
Plan, represent and agree, for the Optionee and the Optionee's transferees
by will or the laws of descent and distribution, that all shares of stock
purchased upon exercise of the Option will be received and held without a
view to distribution except as may be permitted by the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder.
After each notice of exercise of any portion of an Option, if requested by
the Committee, the person entitled to exercise the Option shall agree in
writing that the shares of stock are being acquired in good faith without a
view to distribution.
15. PRIVILEGES OF STOCK OWNERSHIP
No person entitled to exercise any Option granted under the Plan shall
have any of the rights or privileges of a stockholder of the Company with
respect to any shares of Common Stock issuable upon exercise of such Option
until such person has become the holder of record of such shares. No
adjustment shall be made for dividends or distributions of rights in
respect of such shares if the record date is prior to the date on which
such person becomes the holder of record, except as provided in Section 16
hereof.
16. ADJUSTMENTS
(a) If the number of outstanding shares of Common Stock is
increased or decreased, or if such shares are exchanged for a
different number or kind of shares or securities of the Company,
through reorganization, merger, recapitalization, reclassification,
stock dividend, stock split, combination of shares or other similar
transaction, the aggregate number of shares of Common Stock subject to
the Plan as provided in Section 4 hereof, the shares of Common Stock
subject to issued and outstanding Options under the Plan and the
aggregate number of shares of Common Stock with respect to which
Options may be granted to a single Optionee as provided in
Section 5(c) hereof shall be appropriately and proportionately
adjusted by the Committee. Any such adjustment in the outstanding
Options shall be made without change in the aggregate purchase price
applicable to the unexercised portion of the Option but with an
appropriate adjustment in the price for each share or other unit of
any security covered by the Option. No <PAGE>adjustment shall be made
on account of any transaction or event not specifically set forth in
this Section 16(a), including, without limitation, the issuance of
Common Stock for consideration.
(b) Notwithstanding the provisions of Section 16(a), upon the
dissolution or liquidation of the Company or upon any reorganization,
merger or consolidation with one or more corporations as a result of
which the Company is not the surviving corporation, or upon a sale of
all or substantially all of the assets of the Company to another
corporation or entity, the Committee may take such action, if any, as
it in its discretion may deem appropriate to accelerate the time
within which and the extent to which Options may be exercised, to
terminate Options at or prior to the date of any such event or to
provide for the assumption of Options by surviving, consolidated,
successor or transferee corporations.
(c) Adjustments under this Section 16 shall be made by the
Committee, whose determination as to which adjustments shall be made,
and the extent thereof, shall be final, binding and conclusive. No
fractional shares of stock shall be issued under the Plan or in
connection with any such adjustment.
17. AMENDMENT AND TERMINATION OF PLAN
(a) The Board may from time to time, with respect to any shares
at the time not subject to Options, suspend or terminate the Plan or
amend or revise the terms of the Plan. Amendments may be made without
stockholder approval except (i) if and to the extent necessary to
satisfy any applicable mandatory legal or regulatory requirements
(including the requirements of any stock exchange or over-the-counter
market on which the Common Stock or any other securities of the
Company is listed or qualified for trading and any requirements
imposed under any state securities laws or regulations as a condition
to the registration of securities distributable under the Plan or
otherwise), or (ii) as required for the Plan to satisfy the
requirements of Section 162(m), Section 422 of the Code or any other
non-mandatory legal or regulatory requirements if the Board of
Directors deems it desirable for the Plan to satisfy any such
requirements.
(b) No amendment, suspension or termination of the Plan shall,
without the consent of the Optionee, alter or impair in a manner
adverse to the Optionee any rights or obligations under any Option
theretofore granted to such Optionee.
(c) The terms and conditions of any Option granted to an
Optionee may be modified or amended only by a written agreement
executed by the Optionee and the Company; provided, however, that if
any amendment or modification of an Incentive Option would constitute
a "modification, extension or renewal" within the meaning of
Section 424(h) of the Code, such amendment shall be null and void
unless the amendment contains an acknowledgment by the parties
substantially in the following form: "The parties hereto recognize
and agree that this amendment constitutes a modification, renewal or
extension within the meaning of Section 424(h) of the Code, of the
option granted on _______________."
<PAGE>18. EFFECTIVE DATE OF AMENDED AND RESTATED PLAN
The Plan, as amended and restated hereby, shall become effective upon
the later of (i) its approval by the Board and (ii) the date upon which the
Company becomes subject to the version of Rule 16b-3 adopted by the
Securities and Exchange Commission in Release No. 34-37260 promulgated
under the Securities Exchange Act of 1934, as amended; provided, however,
that the adoption of the amendments to the Plan effected hereby to increase
the number of shares that may be issued upon the exercise of Options under
the Plan from 1,000,000 to 1,600,000 and to expand the eligibility
provisions to include non-employee directors shall be subject to the
approval of the stockholders of the Company by a majority of the
outstanding shares of Common Stock; and provided further that prior to such
approval by the stockholders of the Company, Options may be granted
pursuant to such amended provisions of the Plan subject to obtaining the
approval of the adoption of such amendments by the Company's stockholders
not later than 12 months after the date of adoption of the Plan by the
Board.
19. TERM OF PLAN
No Option shall be granted pursuant to the Plan after 10 years from
the earlier of the date of adoption of the Plan by the Board or the date of
approval by the Company's stockholders of the adoption of the Plan.
The date of adoption of the Plan by the Board was September 4, 1996.
The date of approval by the stockholders of the adoption of the Plan was
June __, 1997.
<PAGE>REVOCABLE PROXY
AMERISTAR CASINOS, INC.
ANNUAL MEETING OF STOCKHOLDERS -- JUNE 6, 1997
The undersigned stockholder(s) of Ameristar Casinos, Inc. (the
"Company") hereby nominates, constitutes and appoints Craig H. Neilsen and
Thomas M. Steinbauer, and each of them, the attorney, agent and proxy of
the undersigned, with full power of substitution, to vote all stock of
Ameristar Casinos, Inc. which the undersigned is entitled to vote at the
Annual Meeting of Stockholders of the Company to be held at Ameristar
Casino Hotel Council Bluffs located at 2200 River Road, Council Bluffs,
Iowa 51501, at 3:00 p.m. (local time) on Friday, June 6, 1997, and any and
all adjournments or postponements thereof, with respect to the matters
described in the accompanying Proxy Statement, and in their discretion, on
such other matters which properly come before the meeting, as fully and
with the same force and effect as the undersigned might or could do if
personally present thereat, as follows:
1. ELECTION OF AUTHORITY GIVEN WITHHOLD AUTHORITY
DIRECTORS to vote for the to vote for the
nominees listed below nominees.
(except as indicated
to the contrary
below).
(INSTRUCTIONS: To withhold authority to vote for any nominee, strike a
line through such
nominee's name below.)
CLASS B DIRECTORS: PAUL I. CORDDRY THOMAS M. STEINBAUER
2. PROPOSAL TO APPROVE AMENDMENTS TO THE COMPANY'S MANAGEMENT OPTION PLAN
TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK ISSUABLE PURSUANT TO
THE PLAN TO 1.6 MILLION AND TO EXPAND THE ELIGIBILITY PROVISIONS OF
THE PLAN TO INCLUDE NON-EMPLOYEE DIRECTORS
FOR AGAINST ABSTAIN
3. To transact such other business as may properly come before the
Meeting and any adjournment or adjournments or postponements thereof.
Management currently knows of no other business to be presented by or
on behalf of the Company or its Board of Directors at the Meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND MAY BE
REVOKED PRIOR TO ITS EXERCISE. PLEASE SIGN AND DATE ON THE REVERSE
SIDE OF THIS PROXY.
<PAGE>THE BOARD OF DIRECTORS RECOMMENDS A VOTE OF "AUTHORITY GIVEN"
FOR THE ELECTION OF DIRECTORS AND "FOR" THE PROPOSAL TO APPROVE THE
AMENDMENTS TO THE MANAGEMENT OPTION PLAN. THE PROXY CONFERS AUTHORITY TO
AND SHALL BE VOTED "AUTHORITY GIVEN" FOR THE ELECTION OF DIRECTORS AND
"FOR" THE PROPOSAL TO APPROVE THE AMENDMENTS TO THE MANAGEMENT OPTION PLAN
UNLESS OTHER INSTRUCTIONS ARE INDICATED, IN WHICH CASE THE PROXY SHALL BE
VOTED IN ACCORDANCE WITH SUCH INSTRUCTIONS.
IF ANY OTHER BUSINESS IS PRESENTED AT THE MEETING, THIS PROXY SHALL BE
VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS.
Dated: , 1997
(Please print name)
(Signature of Stockholder)
(Please print name)
(Signature of Stockholder)
Please date this Proxy and sign
your name as it appears on your
stock certificates. (Executors,
administrators, trustees, etc.,
should give their full titles. All
joint owners should sign).
I do do not expect to attend the
Meeting.
Number of Persons:
