-34-
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 11, 1999
To the Stockholders of
Ameristar Casinos, Inc.
The Annual Meeting of Stockholders of Ameristar Casinos, Inc. will be
held at 2:00 p.m. (local time) on Friday, June 11, 1999, in the Explorers
Room at The Reserve Hotel & Casino, located at 777 W. Lake Mead Drive (at
Interstate 515), Henderson, Nevada 89015 for the following purposes:
1. To elect one Class A Director to serve for a three-year term;
2. To approve a new 1999 Stock Incentive Plan; 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, 1998 is enclosed herewith.
The Board of Directors has fixed the close of business on May 3, 1999,
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
/s/Craig H. Neilsen
Craig H. Neilsen
President and
Chief Executive Officer
Las Vegas, Nevada
May 14, 1999
<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 11, 1999, 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 PERSON NOMINATED BY THE BOARD OF DIRECTORS AND THE
APPROVAL OF THE 1999 STOCK INCENTIVE 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 Monday, May 3,
1999 are entitled to receive notice of and to vote at the Annual Meeting.
On April 30, 1999, 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.
Directors are elected by a plurality of votes cast. Stockholders may
not cumulate their votes for any one or more nominees for election. Under
Nevada law, the affirmative vote of a majority of the votes cast on any
proposal at the Annual Meeting generally will constitute the approval of
the stockholders. Such approval will also satisfy the requirements of The
Nasdaq Stock Market, Inc. for the continued designation of the Common Stock
as a National Market Security and the requirements of the Internal Revenue
Code of 1986, as amended, applicable to the grant of incentive stock
options. The approval by the stockholders of the 1999 Stock Incentive Plan
is not required under Nevada law.
<PAGE> 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 in the election of Directors or the vote
to approve the 1999 Stock Incentive Plan or any other proposal. Thus,
abstentions and broker "non-votes" will have no effect on the election of
Directors or the vote on the proposal to approve the 1999 Stock Incentive
Plan or any other proposals voted on at the meeting. A broker "non-vote"
occurs when a nominee holding shares for a beneficial owner does not vote
on a particular proposal or matter, and so notifies the Company, because
the nominee does not have discretionary voting power with respect to that
proposal or matter and has not received voting instructions from the
beneficial owner.
Craig H. Neilsen, the Chairman of the Board, President and Chief
Executive Officer of the Company, 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, 1999. Mr. Neilsen intends to vote all such shares in favor of
the person nominated by the Board of Directors and the approval of the 1999
Stock Incentive Plan.
It is anticipated that this proxy statement and accompanying proxy
card will first be mailed to stockholders on or about May 14, 1999.
PROPOSAL NO. 1
ELECTION OF DIRECTOR
INFORMATION CONCERNING THE NOMINEE
- ----------------------------------
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 authorized number of Directors is currently set at six,
and there is one vacancy on the Board of Directors. Of the five sitting
Directors, one is a Class A Director whose term is expiring in 1999 and is
being nominated for reelection by the Company as described below.
Biographical information concerning the nominee and the other Directors of
the Company is set forth under the caption "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 not nominated a second person for
election as a Class A Director, and as a result one vacancy will remain on
the Board of Directors.
The Board of Directors has nominated the incumbent Class A Director to
be elected for a term expiring at the 2002 Annual Meeting of Stockholders,
and until such person's successor has been duly elected and qualified or
until his earlier death, resignation or removal. The incumbent Class A
Director nominated is:
LARRY A. HODGES
The Board of Directors has no reason to believe that its nominee will
be unable or unwilling to serve if elected. However, should the nominee
named herein become unable or unwilling to accept
<PAGE>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 NOMINEE AS DIRECTOR.
DIRECTORS AND EXECUTIVE OFFICERS
________________________________
The following sets forth certain information as of April 30, 1999 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, 2000 and
2001, respectively.
<TABLE>
<S> <C> <C>
NAME AGE POSITION
____ ___ ________
Craig H. Neilsen 57 Chairman of the Board, President and
Chief Executive Officer and Class C
Director
Thomas M. 48 Senior Vice President of Finance,
Steinbauer Treasurer,
Secretary and Class B Director
Paul I. Corddry* 62 Class B Director
Larry A. Hodges* 50 Class A Director
Warren E. 73 Class C Director
McCain*
________________________________
* Member of the Audit and Compensation Committees.
</TABLE>
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"), Ameristar Casino
Las Vegas, Inc. ("ACLVI"), A.C. Food Services, Inc. ("ACFSI") and AC Hotel
Corp. ("ACHC") since their respective dates of inception. CPI, ACVI,
ACCBI, ACLVI, ACFSI and ACHC 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. 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 was appointed as the Secretary of the Company in June
1998. 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, and is a Vice President of
<PAGE>both companies. Mr. Steinbauer has served as Vice President,
Secretary and Treasurer of each of ACCBI, ACLVI, ACFSI and ACHC since their
respective dates of inception. 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. 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. Since
1987, Mr. Corddry has served as a director of Albertson's, Inc., a major
operator of grocery stores. 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 30 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. Mr.
Hodges is also a director of Coinstar, Inc., an operator of automated, self-
service coin counting and processing machines.
Mr. McCain became a Director of the Company in December 1997. Mr.
McCain served as Chairman of the Executive Committee of Albertson's, Inc.,
a major operator of grocery stores, from February 1991 until his retirement
in February 1996. Previously, he served as Chairman and Chief Executive
Officer of Albertson's, Inc. for more than 15 years. Mr. McCain served as
a director of Albertson's, Inc. from 1973 to 1998 and of Pope & Talbot,
Inc., a wood and paper products manufacturer, from 1989 to 1998.
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 ($30,000 commencing in 1999) 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 participated in the
Company's Non-Employee Director Stock Option Plan until its termination in
June 1997, at which time the outside Directors became eligible to
participate in the Company's Management Stock Option Incentive Plan.
Outside Directors will be eligible to participate in the 1999 Stock
Incentive Plan if it is approved by the stockholders. 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 four meetings during 1998.
The members of the Audit Committee of the Board of Directors are
Messrs. Corddry, Hodges and McCain. The Audit Committee held four meetings
during 1998. 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, Hodges and McCain. The Compensation Committee held
one meeting during 1998. 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-based incentive compensation plans.
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, 1998.
The Company's Gaming Compliance Program requires one of the members of
the Company's Gaming Compliance Committee to be an outside Director of the
Company. Mr. Hodges has been appointed by the Board of Directors as the
chairman of the Gaming Compliance Committee. For these additional services
as a Director, Mr. Hodges receives compensation of $1,000 per meeting,
whether attended in person or by telephone. Mr. Steinbauer is also a
member of the Company's Gaming Compliance Committee, but he does not
receive any separate compensation for these services.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
______________________________________________________________
The following table sets forth certain information as of April 30,
1999 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%
Thomas M. Steinbauer 90,500(3)(4) -
Paul I. Corddry 25,000(3) -
Larry A. Hodges 17,500(3) -
Warren E. McCain 10,000(3) -
All executive officers and
Directors 17,843,000 87.1%
as a group (5 persons)
</TABLE>
______________________________
(1)Other than Mr. Neilsen, each beneficial owner listed owns less than 1%
of the outstanding Common Stock.
(2)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. Steinbauer - 90,000 shares; Mr. Corddry - 14,000 shares;
Mr. Hodges - 14,000 shares; and Mr. McCain - 5,000 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
APPROVAL OF 1999 STOCK INCENTIVE PLAN
The Board of Directors has unanimously approved, subject to
stockholder approval at the meeting, the Ameristar Casinos, Inc. 1999 Stock
Incentive Plan (the "Plan"). The purposes of the Plan are to (i) enable
the Company and Related Companies (as defined below) to attract, motivate
and retain top-quality directors, officers, employees, consultants,
advisers and independent contractors, (ii) provide substantial incentives
for such persons to act in the best interests of the stockholders of the
Company and (iii) reward extraordinary effort by such persons on behalf of
the Company or a Related Company. The 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, or restricted stock.
The Company currently has a Management Stock Option Incentive Plan, as
amended and restated through September 4, 1996 (the "Prior Plan"). As of
April 20, 1999, there were options outstanding under the Prior Plan
exercisable for 1,185,825 shares of Common Stock with per share exercise
prices ranging from $2.64 to $3.38 and with expiration dates ranging from
November 4, 2003 to April 19, 2009. The Prior Plan authorizes the issuance
of up to 1,600,000 shares of Common Stock in connection with awards under
the Prior Plan. As of April 20, 1999, no shares of Common Stock had been
issued upon the exercise of stock options granted under the Prior Plan.
The Board of Directors believes that the Prior Plan has aided the Company
in attracting, motivating and retaining quality employees and management
personnel. If the Plan is approved by the stockholders, the Board of
Directors will terminate the Prior Plan; provided, however, that any
outstanding stock options under the Prior Plan will remain outstanding and
exercisable.
The Board of Directors believes it is important to establish a new
stock incentive plan to increase the number of shares that may be issued or
distributed in connection with incentive compensation awards to qualifying
participants and to provide additional flexibility to the Company in
connection with the structuring of compensation packages through the
ability to award shares of restricted stock.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE
APPROVAL OF THE PLAN.
PRINCIPAL PROVISIONS OF THE PLAN
________________________________
The following summary of the Plan is qualified in its entirety by
reference to the full text of the Plan, which is attached as Appendix A to
this Proxy Statement.
Shares. The total number of shares of Common Stock available for
distribution under the Plan is 2,600,000; provided, however, that no award
of a stock option or restricted stock may be made under the Plan at any
time if, after giving effect to such award, (i) the total number of shares
of Common Stock issued upon the exercise of options under the Plan and the
Prior Plan plus (ii) the total number of shares of Common Stock issuable
upon exercise of all outstanding options of the Company under the Plan and
the Prior Plan plus (iii) the total number of shares of Common Stock
underlying awards of restricted stock under the Plan (whether or not the
applicable restrictions have lapsed) would exceed 2,600,000 shares. As of
April 20, 1999, the total number of shares of Common Stock with respect to
which awards under the Plan could be made was 1,414,175.
<PAGE> Shares awarded under the Plan may be authorized and unissued
shares or treasury shares. If shares subject to an option under the Plan
cease to be subject to such option, or shares under the Plan are forfeited,
such shares will again be available for future distribution under the Plan,
unless the forfeiting participant received any benefits of ownership such
as dividends from the forfeited award.
Administration. The Plan will be administered by the Compensation
Committee of the Board of Directors of the Company (the "Board") or such
other committee of directors as the Board shall designate, which committee
shall consist solely of not less than two "non-employee directors" (as such
term is defined in Rule 16b-3 under the Securities Exchange Act of 1934
(the "Exchange Act") or any successor rule ("Rule 16b-3")) who shall serve
at the pleasure of the Board, each of whom shall also be an "outside
director" within the meaning of Section 162(m) of the Code and
Section 1.162-27 of the Treasury Regulations or any successor provision(s)
thereto ("Section 162(m)"); provided, however, that if there are not two
persons on the Board who meet the foregoing qualifications, any such
committee may be comprised of two or more directors of the Company, none of
which is an officer (other than a non-employee Chairman of the Board of the
Company) or employee of the Company or a Related Company. If no such
committee has been appointed by the Board, the Plan will be administered by
the Board. Such committee as shall be designated to administer the Plan or
the Board is hereinafter referred to as the "Committee." Notwithstanding
any provision of the Plan to the contrary, if such a committee has been
designated 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.
Initially, the Plan will be administered by the Compensation
Committee, which is currently comprised of the Company's three independent
directors, each of whom is believed to be a non-employee director as
defined for purposes of Rule 16b-3 and an outside director as defined for
purposes of Section 162(m).
The Committee is authorized to, among other things, set the terms of
awards to participants and waive compliance with the terms of such awards.
The provisions attendant to the grant of an award under the Plan may vary
from participant to participant. The Committee has the authority to
interpret the 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 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.
Participation. The Committee may make awards to directors, officers,
employees, consultants, advisers and independent contractors of the Company
or a Related Company. A "Related Company" is any corporation, partnership,
joint venture or other entity in which the Company owns, directly or
indirectly, at least a 20% beneficial ownership interest. The participants
in the Plan are selected from among those eligible in the sole discretion
of the Committee.
<PAGE> Awards to Participants.
1. 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 in any calendar year on more than 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.
The exercise price of an ISO may not be less than the per share
fair market value of the Common Stock on the date of grant, or 110% of
such fair market value if the recipient 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 parent or subsidiary of the Company (a "10% Stockholder"). In
addition, an ISO may not be exercisable more than 10 years after the
date such ISO is awarded (5 years after the date of award if the
recipient is a 10% Stockholder). An ISO also may not be transferable
other than by will or by the laws of descent and distribution. The
aggregate fair market value (determined as of the time a stock option
is granted) of Common Stock with respect to which ISOs granted after
December 31, 1986 are exercisable for the first time by a participant
in any calendar year (under the Plan and any other plans of the
Company or any subsidiary or parent corporation) may not exceed
$100,000.
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 award under the Plan. The Committee
may provide that all or part of the shares received upon exercise of
an option using restricted stock will be restricted stock.
Upon an optionee's termination of employment or other qualifying
relationship, the option will be exercisable to the extent determined
by the Committee; provided, however, that unless employment or such
other qualifying relationship is terminated for cause (as may be
defined by the Committee in connection with the grant of any stock
option), the stock option will remain exercisable (to the extent that
it was otherwise exercisable on the date of termination) for at least
six months from the date of termination if termination was caused by
death or disability or at least 90 days from the date of termination
if termination was caused by other than death or disability. The
Committee may provide that an option that is outstanding on the date
of an optionee's death will remain outstanding for an additional
period after the date of such death, notwithstanding that such option
would expire earlier under its terms.
A stock option agreement for 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 or limited liability companies in which such Immediate
Family members are the only partners or members 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 other than the receipt
<PAGE>of an interest in the trust, partnership or limited liability
company to which the non-qualified option is transferred. 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.
2. Restricted Stock.
In making an award of restricted stock, the Committee will
determine the periods, if any, during which the stock is subject to
forfeiture, and the purchase price, if any, for the stock. The
vesting of restricted stock may be unconditional or may be conditioned
upon the completion of a specified period of service with the Company
or a Related Company, the attainment of specific performance goals or
such other criteria as the Committee may determine.
During the restricted period, the award holder may not sell,
transfer, pledge or assign the restricted stock, except as may be
permitted by the Committee. The certificate evidencing the restricted
stock will be registered in the award holder's name, although the
Committee may direct that it remain in the possession of the Company
until the restrictions have lapsed. Except as may otherwise be
provided by the Committee, upon the termination of the award holder's
service with the Company or a Related Company for any reason during
the period before all restricted stock has vested, or in the event the
conditions to vesting are not satisfied, all restricted stock that has
not vested will be subject to forfeiture and the Committee may provide
that any purchase price paid by the award holder, or an amount equal
to the restricted stock's fair market value on the date of forfeiture,
if lower, will be paid to the award holder. During the restricted
period, the award holder will have the right to vote the restricted
stock and to receive any cash dividends, if so provided by the
Committee. Stock dividends will be treated as additional shares of
restricted stock and will be subject to the same terms and conditions
as the initial grant, unless otherwise provided by the Committee.
Acceleration of Vesting in Certain Circumstances. Upon the
dissolution or liquidation of the Company or upon any reorganization,
merger or consolidation with one or more corporations or other entities as
a result of which the Company is not the surviving entity, 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: (i) to accelerate the time within
which and the extent to which stock options may be exercised, to terminate
stock options at or prior to the date of any such event or to provide for
the assumption of stock options by surviving, consolidated, successor or
transferee corporations or entities; or (ii) to waive any restrictions
applicable to any outstanding restricted stock awards under the Plan,
following which such shares shall be deemed fully vested, or to provide
that any securities or other consideration issuable to the participant in
respect of such restricted stock by the surviving, consolidated, successor
or transferee corporations or entities shall remain subject to the
restrictions applicable to such restricted stock award.
Amendment and Termination. No awards may be granted under the Plan
more than 10 years after the date of approval of the Plan by the
stockholders of the Company. The Board may discontinue the Plan at any
earlier time and may amend it from time to time, except that no amendment
or
<PAGE>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 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.
Adjustment. In the event of any merger, reorganization,
consolidation, sale of substantially all assets, recapitalization, stock
dividend, stock split, spin-off, split-up, split-off, distribution of
assets or other change in corporate structure affecting the Common Stock, a
substitution or adjustment, as may be determined to be appropriate by the
Committee in its sole discretion, will be made in the aggregate number of
shares reserved for issuance under the Plan, the maximum number of shares
with respect to which stock options may be granted to any participant
during any calendar year, the number of shares subject to outstanding
awards and the amounts to be paid by award holders or the Company, as the
case may be, with respect to outstanding awards. No such adjustment may
increase the aggregate value of any outstanding award.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
_______________________________________
The following is a summary of certain federal income tax aspects of
awards made under the Plan based upon the laws in effect on April 1, 1999.
1. 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 in the year of disposition: (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.
<PAGE> 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.
2. 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 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.
3. Restricted Stock.
A participant receiving restricted stock generally will recognize
income in the amount of the fair market value of the restricted stock
at the time the stock is no longer either non-transferable or subject
to a substantial risk of forfeiture, whichever comes first, less the
consideration, if any, paid for the stock. However, a participant may
elect, under Section 83(b) of the Code, to recognize ordinary income
on the date of grant in an amount equal to the excess of the fair
market value of the shares on such date (determined without regard to
the restrictions other than restrictions which by their terms will
never lapse) over their purchase price. The holding period to
determine whether the participant has long-term or short-term capital
gain on a subsequent disposition of the shares generally begins when
income was recognized, and the tax
<PAGE>basis for such shares generally will be the amount of income
that was recognized (i.e., the fair market value of such shares on
such date).
4. 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.
5. Dividends.
Dividends paid on restricted stock prior to the date on which the
forfeiture restrictions lapse generally will be treated as
compensation that is taxable as ordinary income to the participant and
will be deductible by the employer corporation. If, however, the
participant makes a Section 83(b) election with respect to the
restricted stock, the dividends will be taxable as ordinary dividend
income to the participant and will not be deductible by the employer
corporation.
6. Withholding Taxes.
A participant in the 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
Plan. The Plan authorizes the Committee to permit participants to use
the shares issuable under the Plan to satisfy withholding obligations.
7. 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 Plan recognizes
ordinary income from awards under the 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. The Company may or may not be subject to the
Section 162(m) limitation on the amount of the deduction upon the
exercise of a non-qualified stock option, depending on the terms of
the award. A non-qualified stock option granted under the Plan (and
an ISO, to the extent there is a
<PAGE>disqualifying disposition) will only qualify as "performance
based" compensation under Section 162 (m) if the exercise price is not
less than the fair market value of the Common Stock on the date of
grant. Any stock options granted with an exercise price that is less
than the fair market value of the Common Stock on the date of grant
will be subject to the Section 162 (m) limitation. Restricted stock
awards under the Plan will not qualify as "performance based"
compensation under the Regulations; therefore, the Company will be
subject to the Section 162(m) limitation for an award of restricted
stock.
BENEFITS UNDER THE PLAN
_______________________
No awards have been granted under the Plan, and no awards will be
granted unless the Plan is approved by the stockholders. As of April 20,
1999, there were approximately 4,250 employees and Directors of the Company
and Related Companies eligible to participate in the Plan. The benefits
that will be received by or allocated to various participants in the Plan
is not currently determinable. On April 20, 1999, the closing per share
price of the Common Stock was approximately $2.875.
<PAGE> EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION COMMITTEE AND BOARD OF DIRECTORS ON EXECUTIVE
___________________________________________________________________________
COMPENSATION
____________
In 1998, the Compensation Committee of Ameristar Casinos, Inc.
consisted of Larry A. Hodges, Paul I. Corddry and Warren E. McCain. None
of the members is an employee or officer of the Company. 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. The Compensation Committee also will
administer the 1999 Stock Incentive Plan, if it is approved by the
stockholders, pursuant to which employees of the Company (including its
executive officers) may receive stock option and restricted stock grants.
The Compensation Committee also reviews salaries and other compensation of
the executive officers of the Company. None of the actions or
recommendations of the Compensation Committee in 1998 were modified or
rejected by the Board of Directors.
General Compensation Philosophy
_______________________________
The Compensation Committee tries to compensate the Company's 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.
In 1998, all compensation decisions were based on strictly subjective
determinations. Compensation for the Company's executive officers in 1998
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 1998, (ii) the market performance of the Company's stock,
(iii) the compensation paid to the executive officers in prior years, (iv)
the recommendation of the Company's chief executive officer, (v) the
extraordinary services rendered by the executive officers during the year
and (vi) the amount of compensation paid by the Company's competitors to
their executive officers. No specific weight was assigned to any
particular factor, except the Committee did not place significant emphasis
on the stock price. The Committee concluded that the market for small cap
gaming stocks generally, combined with the thin float of the Company's
stock, made it unfair to weigh the stock price as a significant measure of
performance.
In 1998 the Compensation Committee, and the Chief Executive Officer
acting on delegated authority, awarded stock options to 68 employees of the
Company or its subsidiaries to purchase an aggregate of 833,610 shares of
the Company's Common Stock. The per share exercise price for stock option
awards covering 783,110 shares was $2.64, and the per share exercise prices
for stock option awards covering the remaining 50,500 shares ranged from
$2.78 to $5.13, with an average per share exercise price of $3.52. Of
these options, options covering 32,000 shares at a per share exercise price
of $2.64 were awarded to Thomas M. Steinbauer, an executive officer of the
Company. The Committee believes it is both appropriate and important that
the long-term economic interests of its executive officers should be
aligned with those of the Company's stockholders.
<PAGE> The Committee is continuing to examine options for a long-term
deferred compensation plan.
Repricing of Options
____________________
On December 14, 1998, the Compensation Committee voted to reprice
stock options exercisable for 298,500 shares, representing all previously
awarded outstanding options under the Management Stock Option Incentive
Plan. The amended per share exercise price is $2.64, the per share fair
market value on the date of repricing. Prior to repricing, these stock
options had exercise prices of between $2.78 and $6.13 per share. The
repricing did not affect any stock options granted to the members of the
Compensation Committee.
The Compensation Committee decided to reprice the options because it
believed the high strike prices offered insufficient incentive to the
holders. As with executive officers, the Committee wants the long-term
economic interests of its employees aligned with those of the Company's
stockholders. The Committee believed the relatively high strike prices
caused the employees to conclude the options were valueless. The Committee
was also concerned such an attitude would put pressure to increase the cash
compensation payable to the employees.
The Committee believed that it was appropriate to reprice the
outstanding options notwithstanding the Company's weaker financial
performance in 1998, due to the initial operating results of The Reserve
Hotel & Casino, which the Committee believed significantly contributed to
the decline in the Company's stock price during the year. The Company's
other properties continued to perform well in 1998, and the Committee
believed that it is important for the Company to provide an adequate
incentive to its employees to maintain and improve the performance of these
properties and the Company as a whole. Second, the Company's management
and employees have aggressively responded to the weakness in the initial
operating performance of the Reserve, and the Committee believed it is
necessary and appropriate to provide an incentive to employees for the
success of these continuing efforts.
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 1998. 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 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 plans, 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
<PAGE>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. 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 as noted above the
Compensation Committee is investigating such plans.
In 1998, 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 since the 1990 fiscal year.
The Compensation Committee used strictly subjective factors in
deciding the bonus 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 1998, including the strong
performance of the Company's casino properties in Council Bluffs, Iowa,
Vicksburg, Mississippi and Jackpot, Nevada, and the dedication of the
Company's chief executive officer in addressing the initial operating
performance of The Reserve; (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 1998;
(vi) the performance of the Company's stock in 1998; 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. The Committee
balanced certain of the 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
Warren E. McCain
<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, 1998, 1997 and 1996. The "Named Executive Officers" include
(i) each person who served as Chief Executive Officer during 1998 (one
person), (ii) each person who (a) served as an executive officer at
December 31, 1998, (b) was among the four most highly paid executive
officers of the Company, not including the Chief Executive Officer, during
1998 and (c) earned total annual salary and bonus compensation in 1998 in
excess of $100,000 (one person), and (iii) up to two persons who would be
included under clause (ii) above had they served as an executive officer at
December 31, 1998 (one person).
<TABLE>
SUMMARY COMPENSATION TABLE
__________________________
LONG-TERM
ANNUAL COMPENSATION(1) COMPENSATION(4)
_______________________________ _________________
<S> <C> <C> <C> <C> <C> <C>
OTHER SHARES
ANNUAL UNDERLYING ALL OTHER
NAME AND FISCAL SALARY BONUS COMPEN- OPTIONS/ COMPEN-
CAPACITY YEAR ($)(2) ($) SATION SARS SATION
IN WHICH SERVED ($)(3) (#) ($)(5)
_______________ _______ ________ ________ __________ _____________ _________
Craig H. 1998 $375,000 $375,000 - 0 $3,751
Neilsen, 1997 $375,000 $375,000 - 0 $1,976
Chairman of the 1996 $375,000 $375,000 - 0 $2,072
Board, Chief
Executive
Officer and
President
John R. Spina, 1998 $212,826 $0 - 0 $2,726
Executive Vice 1997 $309,014 $100 - 0 $1,976
President of 1996 $271,155 $115,000 - 100,000 $2,040
Operations(6)
Thomas M. 1998 $240,000 $75,000 - 132,000 $4,808
Steinbauer, 1997 $225,000 $85,000 - 0 $1,976
Senior Vice 1996 $199,040 $75,000 - 0 $2,040
President of
Finance and
Treasurer
</TABLE>
_____________________
(1)Amounts shown include cash compensation earned for the periods reported
whether paid or accrued in such periods.
(2)As of April 30, 1999, the current annual salary levels for the Named
Executive Officers were: Mr. Neilsen ($375,000); and Mr. Steinbauer
($252,500).
(3)During 1998, 1997 and 1996, the Named Executive Officers received
personal benefits, the aggregate amounts of which for each Named
Executive Officer did not exceed the lesser of $50,000 or 10% of the
total of the annual salary and bonus reported for such Named Executive
Officer in such years.
(4)In the case of Mr. Steinbauer, the number of shares underlying
options/SARs granted in 1998 reflects the December 1998 repricing of
outstanding options exercisable for 100,000 shares and the December
1998 grant of options exercisable for 32,000 shares. The Named
Executive Officers did not receive any restricted stock awards or long-
term incentive plan payouts in 1998, 1997 or 1996.
(5)These amounts represent matching contributions under the Company's
401(k) plan.
(6)Mr. Spina resigned as an officer of the Company effective July 28,
1998.
<PAGE>
OPTION GRANTS
_____________
The following table sets forth information with respect to grants of
stock options to the Named Executive Officers during fiscal 1998. No stock
appreciation rights were granted by the Company in fiscal 1998.
<TABLE>
OPTIONS/SAR GRANTS IN FISCAL 1998
<S> <C> <C> <C> <C> <C>
% OF
NUMBER TOTAL
OF OPTIONS
SECURI /SARS
TIES GRANTED POTENTIAL
UNDER- TO REALIZABLE VALUE AT
LYING EMPLOY- ASSUMED ANNUAL
OPTIONS/ EES IN EXERCISE RATES OF STOCK
SARS FISCAL PRICE EXPIRA APPRECIATION FOR
GRANTED YEAR ($/SHARE) TION OPTION TERM
______________________
NAME (#) DATE 0% 5% 10%
______________ _________ ______ __________ __________ _____ _______ ________
Thomas M. 32,000(1) 2.8% $2.64 12/14/2009 $0 $53,120 $125,440
Steinbauer
Thomas M. 25,000(2) 2.2% $2.64 12/21/2005 $0 $24,500 $59,750
Steinbauer
Thomas M. 75,000(2) 6.6% $2.64 11/4/2003 $0 $18,750 $75,750
Steinbauer
</TABLE>
(1)These options were granted under the Company's Management Stock Option
Incentive Plan. The grants were made on December 14, 1998. These
options vest at a rate of 20% per year on each anniversary of the date
of grant. The per share exercise price is equal to the per share fair
market value of the Common Stock on the date of grant.
(2)These grants reflect the amendment of previously outstanding options
under the Company's Management Stock Option Incentive Plan to reduce
the per share exercise price to the fair market value of the Common
Stock on December 14, 1998, the date of amendment. The previous per
share exercise price was $6.125. No other terms of the options were
amended. These options vest at a rate of 20% per year on each
anniversary of the date of original grant. The potential realizable
value of these options is based on the amended option price and the
remaining term of the options after the amendment date.
<PAGE>
OPTION EXERCISES AND HOLDINGS
_____________________________
The following table sets forth with respect to the Named Executive
Officers information concerning the exercise of stock options during 1998
and unexercised options held as of the end of the year. The Company has
never granted stock appreciation rights.
<TABLE>
AGGREGATED OPTION/SAR EXERCISES
AND 1998 YEAR-END OPTION/SAR VALUES
___________________________________
<S> <C> <C> <C> <C>
VALUE OF
NUMBER UNEXERCISED
OF UNEXERCISED IN-THE-MONEY
VALUE OPTIONS/SARS AT OPTIONS/SARS AT
SHARES REALI FISCAL YEAR FISCAL YEAR
ACQUIRED ZED END(#) END($)(1)
_______________________ ______________________
NAME ON ($) UNEXERCIS EXERCIS UNEXERCI EXERCIS
EXERCISE ABLE ABLE ABLE ABLE
(#)
___________ ___________ ______ ____________ __________ ___________ __________
Craig H. 0 $0 0 0 -- --
Neilsen
John R. Spina 0 $0 0 0 -- --
Thomas M. 0 $0 42,000 90,000 $0 $0
Steinbauer
</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, 1998 ($2.25).
EMPLOYMENT AGREEMENTS
The Company and Mr. Steinbauer entered into a three-year employment
agreement commencing November 15, 1993, which is 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. The
employment 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 agreement provides that in the event the officer's
employment is terminated by the Company without "cause" (as defined in the
agreement), 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
Mr. Neilsen.
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 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 the Dow Jones Entertainment and Leisure-Casinos Index as of the last
trading day of each year from 1993 through 1998.
[GRAPH DELETED IN EDGAR FILING; DATA POINTS USED IN PRINTED GRAPH ARE
PRESENTED BELOW]
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Value of $100.00 Investment
__________________________________________________________
12/31/93 12/30/94 12/29/95 12/31/96 12/31/97 12/31/98
________ ________ ________ ________ ________ ________
Ameristar Common $100.00 $ 38.71 $ 46.24 $ 55.91 $ 41.94 $ 19.35
Stock
S&P 500 Index 100.00 98.46 132.05 158.80 208.05 263.53
Dow Jones
Entertainment and 100.00 76.78 101.83 111.07 97.71 66.69
Leisure-Casinos
Index
</TABLE>
____________________
(1) The graph assumes $100 invested in the Company's Common Stock, the
Standard & Poor's 500 Stock Index, the SBI Index and the Dow Jones
Entertainment and Leisure-Casinos Index on December 31, 1993. The
comparison assumes that all dividends are reinvested.
(2) The Dow Jones Entertainment and Leisure-Casinos Index is a stock price
index of six gaming companies weighted on a market capitalization
basis.
<PAGE>
REPRICING OF OPTIONS/SARS
_________________________
The following table sets forth information with respect to each
repricing of outstanding stock options held by any executive officer of the
Company (including those who are not Named Executive Officers) that has
occurred since November 9, 1993, the date on which the Company became a
reporting company pursuant to Section 13(a) of the Securities Exchange Act
of 1934, as amended. The report of the Compensation Committee set forth
above includes an explanation of the repricing of the options in 1998 and
the basis for such repricing.
<TABLE>
TEN-YEAR OPTION/SAR REPRICINGS
<S> <C> <C> <C> <C> <C> <C>
NUMBER
OF LENGTH
SECURITI OF
ES ORIGINAL
UNDERLYI MARKET OPTION
NG PRICE OF EXERCISE TERM
NAME DATE OPTIONS/ STOCK AT PRICE AT REMAINING
SARS TIME OF TIME OF AT
REPRICED REPRICING REPRICING EXER- DATE OF
OR OR OR CISE REPRICING
AMENDED AMENDMENT AMENDMENT PRICE OR
(#) ($) ($) ($) AMENDMENT
_____________ ________ ___________ __________ ___________ _______ ___________
Thomas M. 12/21/95 75,000 $6.125 $11.00 $6.125 7.85 Years
Steinbauer
Brian E. Katz 12/21/95 50,000 $6.125 $13.75 $6.125 8.40 Years
Thomas M. 12/14/98 75,000 $2.64 $6.125 $2.64 4.90 Years
Steinbauer
Thomas M. 12/14/98 25,000 $2.64 $6.125 $2.64 6.00 Years
Steinbauer
</TABLE>
<PAGE>
CERTAIN TRANSACTIONS
Until March 31, 1997, the Company leased certain office space in Twin
Falls, Idaho, from Lynwood Shopping Center, a limited liability company in
which Craig H. Neilsen has a controlling equity interest. In 1998, the
Company paid previously accrued rent of $15,573 related to this tenancy.
CPI paid an additional $20,614 in rent to Lynwood Shopping Center in 1998
for CPI's readerboard sign (which was owned by Lynwood Shopping Center) and
space provided for CPI's dealer school. The readerboard sign lease expired
in July 1998, at which time CPI exercised an option to purchase the sign
for $22,989.
Commencing April 1, 1997, Neilsen & Company (a partnership in which
Mr. Neilsen owns a controlling equity interest) leased from Lynwood
Shopping Center certain of the office space previously leased by the
Company. CPI concurrently subleased from Neilsen & Company the right to
use certain offices in this space and the common areas through December 31,
2001. Accrued rent and expenses under this sublease totaled $14,634 in
1997, which were paid in February 1998. In 1998, rent and expenses of
$17,892 were accrued and paid, and a similar amount is expected to be paid
in 1999. These offices, and the readerboard sign and dealer school
described above, support CPI's casino-hotel operations in Jackpot, Nevada,
at the Idaho border due south of Twin Falls.
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. These leases expired on December 31, 1998, and are
continuing on a month-to-month basis. Neilsen & Company has proposed
renewing these leases at an aggregate monthly rental rate of $3,675 plus
maintenance, supply and utility costs, but the Company has not yet
responded to this proposal. Any rental increase is expected to be
retroactive to January 1, 1999. 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 rates
paid and proposed to be 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 until July 1, 1997, at which time this employee
terminated service with the Company and became an employee of Neilsen &
Company. The total estimated amount due to the Company for these services
at December 31, 1998 was approximately $25,104 ($13,104 for a portion of
the 1996 services and $12,000 for 1997 services), representing
approximately half of the salary and additional payroll burden for this
employee. Payment of the outstanding balance has been deferred pending an
analysis of amounts due to Neilsen & Company from the Company for various
services performed by Neilsen & Company and amounts due to the Company from
Neilsen & Company for certain telephone expenses paid by the Company on
behalf of Neilsen & Company. Among others, the services provided by
Neilsen & Company to the Company included assistance with the relocation of
the Company's offices to Las Vegas, Nevada, litigation and arbitration
support services, licensing application assistance and accounts payable
assistance. Minimal services have been provided by Neilsen & Company to
the Company since 1997.
<PAGE> 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 by Intermountain. In 1998, CPI paid $54,198 to Intermountain for
package delivery services in 1997 and 1998. An additional $3,755 was
accrued for services provided in 1998 and was outstanding at December 31,
1998. CPI charged Intermountain $31,415 in 1998 for contracted driver
services and miscellaneous fuel and van maintenance expenses paid for or
provided by CPI in 1997 and 1998, of which $8,910 remained outstanding at
December 31, 1998. Management believes that these relationships between
CPI and Intermountain are beneficial to the Company, and 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 completed transactions
described above 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, 1998 (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, 1998 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 Barbara Miller at the above
address.
FUTURE STOCKHOLDER PROPOSALS
Any stockholder proposal intended to be presented at the 2000 Annual
Meeting of Stockholders must be submitted sufficiently far in advance so
that it is received by ACI not later than January 14, 2000. In the event
that any stockholder proposal is presented at the 2000 Annual Meeting of
Stockholders other than in accordance with the procedures set forth in
Rule 14a-8 of the Securities and Exchange Commission, proxies solicited by
the Board of Directors for such meeting will confer upon the proxy holders
discretionary authority to vote on any matter so presented of which the
Company does not have notice prior to March 31, 2000.
OTHER MATTERS
The Company's independent public accountants for the fiscal year ended
December 31, 1998 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.
<PAGE> 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.
The Annual Report of ACI for the fiscal year ended December 31, 1998
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
/s/Craig H. Neilsen
Craig H. Neilsen
President and
Chief Executive Officer
Las Vegas, Nevada
May 14, 1999
<PAGE>
AMERISTAR CASINOS, INC.
1999 STOCK INCENTIVE PLAN
SECTION 1. Purposes.
The purposes of the Ameristar Casinos, Inc. 1999 Stock Incentive Plan
(the "Plan") are to (i) enable Ameristar Casinos, Inc. (the "Company") and
Related Companies (as defined below) to attract, motivate and retain top-
quality directors, officers, employees, consultants, advisers and
independent contractors (including without limitation dealers, distributors
and other business entities or persons providing services on behalf of the
Company or a Related Company), (ii) provide substantial incentives for such
directors, officers, employees, consultants, advisers and independent
contractors of the Company or a Related Company ("Participants") to act in
the best interests of the stockholders of the Company and (iii) reward
extraordinary effort by Participants on behalf of the Company or a Related
Company. For purposes of the Plan, a "Related Company" means any
corporation, partnership, joint venture or other entity in which the
Company owns, directly or indirectly, at least a twenty percent (20%)
beneficial ownership interest.
SECTION 2. Types of Awards. Awards under the Plan may be in the form
of (i) Stock Options or (ii) Restricted Stock.
SECTION 3. Administration.
3.1 Except as otherwise provided herein, the Plan shall be
administered by the Compensation Committee of the Board of Directors of the
Company (the "Board") or such other committee of directors as the Board
shall designate, which committee in either such case shall consist solely
of not less than two "non-employee directors" (as such term is defined in
Rule 16b-3 under the Securities Exchange Act of 1934 (the "Exchange Act")
or any successor rule ("Rule 16b-3")) who shall serve at the pleasure of
the Board, each of whom shall also be an "outside director" 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)"); provided, however, that if there are not two persons on
the Board who meet the foregoing qualifications, any such committee may be
comprised of two or more directors of the Company, none of which is an
officer (other than a non-employee Chairman of the Board of the Company) or
an employee of the Company or a Related Company. If no such committee has
been appointed by the Board, the Plan shall be administered by the Board,
and the Plan shall be administered by the Board to the extent provided in
the last sentence of this Section. Such committee as shall be designated
to administer the Plan, if any, or the Board is referred to herein as the
"Committee." Notwithstanding any other provision of the Plan to the
contrary, if such a committee has been designated 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.
3.2 The Committee shall have the following authority with respect to
awards under the Plan to Participants: to grant awards to eligible
Participants under the Plan; to adopt, alter and repeal such administrative
rules, guidelines and practices governing the Plan as it shall deem
advisable; to interpret the terms and provisions of the Plan and any award
granted under the Plan; and to otherwise supervise
<PAGE>the administration of the Plan. In particular, and without limiting
its authority and powers, the Committee shall have the authority:
(a) to determine whether and to what extent any award or
combination of awards will be granted hereunder;
(b) to select the Participants to whom awards will be
granted;
(c) to determine the number of shares of the common stock
of the Company, $0.01 par value (the "Stock"), to be covered by
each award granted hereunder, provided that no Participant will
be granted Stock Options on or with respect to more than 200,000
shares of Stock in any calendar year;
(d) to determine the terms and conditions of any award
granted hereunder, including, but not limited to, any vesting or
other restrictions based on performance and such other factors as
the Committee may determine, and to determine whether the terms
and conditions of the award are satisfied;
(e) to determine the treatment of awards upon a
Participant's retirement, disability, death, termination for
cause or other termination of employment or other qualifying
relationship with the Company or a Related Company;
(f) to determine that amounts equal to the amount of any
dividends declared with respect to the number of shares covered
by an award (i) will be paid to the Participant currently or (ii)
will be deferred and deemed to be reinvested or (iii) will
otherwise be credited to the Participant, or that the Participant
has no rights with respect to such dividends;
(g) to determine whether, to what extent, and under what
circumstances Stock and other amounts payable with respect to an
award will be deferred either automatically or at the election of
a Participant, including providing for and determining the amount
(if any) of deemed earnings on any deferred amount during any
deferral period;
(h) to provide that the shares of Stock received as a
result of an award shall be subject to a right of first refusal,
pursuant to which the Participant shall be required to offer to
the Company any shares that the Participant wishes to sell,
subject to such terms and conditions as the Committee may
specify;
(i) to amend the terms of any award, prospectively or
retroactively; provided, however, that no amendment shall impair
the rights of the award holder without his or her consent; and
(j) to substitute new Stock Options for previously granted
Stock Options, or for options granted under other plans, in each
case including previously granted options having higher option
prices.
<PAGE>
3.3 All determinations made by the Committee pursuant to the
provisions of the Plan shall be final and binding on all persons, including
the Company and all Participants.
3.4 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 Exchange Act. 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.
SECTION 4. Stock Subject to Plan.
4.1 The total number of shares of Stock reserved and available for
distribution under the Plan shall be 2,600,000 (subject to adjustment as
provided in Section 4.3); provided, however, that no award of a Stock
Option or Restricted Stock may be made at any time if, after giving effect
to such award, (i) the total number of shares of Stock issued upon the
exercise of options under the Plan and the Company's Management Stock
Option Incentive Plan, as amended and restated through September 4, 1996
(the "Prior Plan") plus (ii) the total number of shares of Stock issuable
upon exercise of all outstanding options of the Company under the Plan and
the Prior Plan plus (iii) the total number of shares of Stock underlying
awards of Restricted Stock under the Plan (whether or not the applicable
restrictions have lapsed) would exceed 2,600,000 shares (subject to
adjustment as provided in Section 4.3). Shares of Stock issuable in
connection with any award under the Plan may consist of authorized but
unissued shares or treasury shares.
4.2 To the extent a Stock Option terminates without having been
exercised, or shares awarded are forfeited, the shares subject to such
award shall again be available for distribution in connection with future
awards under the Plan, subject to the limitations set forth in Section 4.1,
unless the forfeiting Participant received any benefits of ownership such
as dividends from the forfeited award.
4.3 In the event of any merger, reorganization, consolidation, sale
of substantially all assets, recapitalization, Stock dividend, Stock split,
spin-off, split-up, split-off, distribution of assets or other change in
corporate structure affecting the Stock, a substitution or adjustment, as
may be determined to be appropriate by the Committee in its sole
discretion, shall be made in the aggregate number of shares reserved for
issuance under the Plan, the number of shares subject to outstanding awards
and the amounts to be paid by award holders or the Company, as the case may
be, with respect to outstanding awards; provided, however, that no such
adjustment shall increase the aggregate value of any outstanding award. In
the event any change described in this Section 4.3 occurs and an adjustment
is made in the outstanding Stock Options, a similar adjustment shall be
made in the maximum number of shares covered by Stock Options that may be
granted to any employee pursuant to Section 3.2(c).
SECTION 5. Eligibility.
Participants under the Plan shall be selected from time to time by the
Committee, in its sole discretion, from among those eligible.
<PAGE>
SECTION 6. Stock Options.
6.1 The Stock Options awarded to officers and employees under the
Plan may be of two types: (i) Incentive Stock Options within the meaning
of Section 422 of the Internal Revenue Code or any successor provision
thereto ("Section 422"); and (ii) Non-Qualified Stock Options. If any
Stock Option does not qualify as an Incentive Stock Option, or the
Committee at the time of grant determines that any Stock Option shall be a
Non-Qualified Stock Option, it shall constitute a Non-Qualified Stock
Option. Stock Options awarded to any Participant who is not an officer or
employee of the Company or a Related Company shall be Non-Qualified Stock
Options.
6.2 Subject to the following provisions, Stock Options awarded to
Participants under the Plan shall be in such form and shall have such terms
and conditions as the Committee may determine:
(a) Option Price. The option price per share of Stock
purchasable under a Stock Option shall be determined by the
Committee.
(b) Option Term. The term of each Stock Option shall be
fixed by the Committee, but in no event longer than one hundred
twenty (120) months after the date of grant of such Stock Option.
(c) Exercisability. Stock Options shall be exercisable at
such time or times and subject to such terms and conditions as
shall be determined by the Committee. If the Committee provides
that any Stock Option is exercisable only in installments, the
Committee may waive such installment exercise provisions at any
time in whole or in part.
(d) Method of Exercise. Stock Options may be exercised in
whole or in part at any time during the option period by giving
written notice of exercise to the Company specifying the number
of shares to be purchased, accompanied by payment of the purchase
price. Payment of the purchase price shall be made in such
manner as the Committee may provide in the award, which may
include cash (including cash equivalents), delivery of shares of
Stock acceptable to the Committee already owned by the optionee
or subject to awards hereunder, any other manner permitted by law
as determined by the Committee, or any combination of the
foregoing. The Committee may provide that all or part of the
shares received upon the exercise of a Stock Option which are
paid for using Restricted Stock shall be restricted in accordance
with the original terms of the award in question.
(e) No Stockholder Rights. An optionee shall have no
rights to dividends or other rights of a stockholder with respect
to shares subject to a Stock Option until the optionee has given
written notice of exercise and has paid for such shares.
(f) Surrender Rights. The Committee may provide that Stock
Options may be surrendered for cash upon any terms and conditions
set by the Committee.
<PAGE>
(g) Non-Transferability; Limited Transferability. A Stock
Option Agreement 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 or
limited liability companies in which such Immediate Family
members are the only partners or members if (i) the agreement
setting forth such Stock Option expressly provides that such
Stock 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 other
than the receipt of an interest in the trust, partnership or
limited liability company to which the non-qualified option is
transferred. Any Stock Option so transferred shall continue to
be subject to the same terms and conditions as were applicable to
such Stock Option immediately prior to the transfer thereof. Any
Stock Option not (x) granted pursuant to any agreement expressly
allowing the transfer of such Stock Option 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 Stock Option shall be exercisable during
the optionee's lifetime only by the optionee.
(h) Termination of Relationship. If an optionee's
employment or other qualifying relationship with the Company or a
Related Company terminates by reason of death, disability,
retirement, voluntary or involuntary termination or otherwise,
the Stock Option shall be exercisable to the extent determined by
the Committee; provided, however, that unless employment or such
other qualifying relationship is terminated for cause (as may be
defined by the Committee in connection with the grant of any
Stock Option), the Stock Option shall remain exercisable (to the
extent that it was otherwise exercisable on the date of
termination) for (A) at least six (6) months from the date of
termination if termination was caused by death or disability or
(B) at least ninety (90) days from the date of termination if
termination was caused by other than death or disability. The
Committee may provide that, notwithstanding the option term fixed
pursuant to Section 6.2(b), a Stock Option which is outstanding
on the date of an optionee's death shall remain outstanding for
an additional period after the date of such death.
(i) Option Grants to Participants Subject to Section 16.
If for any reason any Stock Option granted to a Participant
subject to Section 16 of the Exchange Act is not approved in the
manner provided for in clause (d)(1) or (d)(2) of Rule 16b-3,
neither the Stock Option (except upon its exercise) nor the Stock
underlying the Stock Option may be disposed of by the Participant
until six months have elapsed following the date of grant of the
Stock Option, unless the Committee otherwise specifically permits
such disposition.
6.3 Notwithstanding the provisions of Section 6.2, no Incentive Stock
Option shall (i) have an option price which is less than one hundred
percent (100%) of the Fair Market Value (as defined below) of the Stock on
the date of the award of the Stock Option (or less than one hundred ten
<PAGE>percent (110%) of the Fair Market Value of the Stock on the date of
award of the Stock Option if the Participant owns, or would be considered
to own by reason of Section 424(d) of the Internal Revenue Code or any
successor provision thereto, more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or any parent
or subsidiary of the Company at the time of the grant of the Stock Option),
(ii) be exercisable more than ten (10) years after the date such Incentive
Stock Option is awarded (five (5) years after the date of award if the
Participant owns, or would be considered to own by reason of Section 424(d)
of the Internal Revenue Code or any successor provision thereto, more than
ten percent (10%) of the total combined voting power of all classes of
stock of the Company or any parent or subsidiary of the Company at the time
of the grant of the Stock Option), (iii) be awarded more than ten (10)
years after the effective date of the Plan (or the latest restatement of
the Plan) or (iv) be transferable other than by will or by the laws of
descent and distribution. In addition, the aggregate Fair Market Value
(determined as of the time a Stock Option is granted) of Stock with respect
to which Incentive Stock Options granted after December 31, 1986 are
exercisable for the first time by a Participant in any calendar year (under
the Plan and any other plans of the Company or any subsidiary or parent
corporation) shall not exceed $100,000. For purposes of the Plan, "Fair
Market Value" in relation to a share of the Stock means, if the 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 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).
SECTION 7. Restricted Stock.
Subject to the following provisions, all awards of Restricted Stock to
Participants shall be in such form and shall have such terms and conditions
as the Committee may determine:
(a) The Restricted Stock award shall specify the number of
shares of Restricted Stock to be awarded, the price, if any, to
be paid by the recipient of the Restricted Stock and the date or
dates on which, or the conditions upon the satisfaction of which,
the Restricted Stock will vest. The vesting of Restricted Stock
may be conditioned upon the completion of a specified period of
service with the Company or a Related Company, upon the
attainment of specified performance goals or upon such other
criteria as the Committee may determine.
(b) Stock certificates representing the Restricted Stock
awarded to an employee shall be registered in the Participant's
name, but the Committee may direct that such certificates be held
by the Company on behalf of the Participant. Except as may be
permitted by the Committee, no share of Restricted Stock may be
sold, transferred, assigned, pledged or otherwise encumbered by
the Participant until such share has vested in accordance with
the terms of the Restricted Stock award. At the time Restricted
Stock vests, a certificate for such vested shares shall be
delivered to the Participant (or his or her designated
beneficiary in the event of death), free of all restrictions.
<PAGE>
(c) The Committee may provide that the Participant shall
have the right to vote or receive dividends, or both, on
Restricted Stock. The Committee may provide that Stock received
as a dividend on, or in connection with a stock split of,
Restricted Stock shall be subject to the same restrictions as the
Restricted Stock.
(d) Except as may be provided by the Committee, in the
event of a Participant's termination of employment or other
qualifying relationship with the Company or a Related Company
before all of his or her Restricted Stock has vested, or in the
event any conditions to the vesting of Restricted Stock have not
been satisfied prior to any deadline for the satisfaction of such
conditions set forth in the award, the shares of Restricted Stock
which have not vested shall be forfeited, and the Committee may
provide that the lower of (i) any purchase price paid by the
Participant and (ii) the Restricted Stock's aggregate Fair Market
Value on the date of forfeiture shall be paid in cash to the
Participant.
(e) The Committee may waive, in whole or in part, any or
all of the conditions to receipt of, or restrictions with respect
to, any or all of the Participant's Restricted Stock.
(f) If for any reason any Restricted Stock awarded to a
Participant subject to Section 16 of the Exchange Act is not
approved in the manner provided for in clause (d)(1) or (d)(2) of
Rule 16b-3, the Restricted Stock may not be disposed of by the
Participant until six months have elapsed following the date of
award of the Restricted Stock, unless the Committee otherwise
specifically permits such disposition.
SECTION 8. Election to Defer Awards.
The Committee may permit a Participant to elect to defer receipt of an
award for a specified period or until a specified event, upon such terms as
are determined by the Committee.
SECTION 9. Tax Withholding.
9.1 Each Participant shall, no later than the date as of which the
value of an award first becomes includible in such person's gross income
for applicable tax purposes, pay to the Company, or make arrangements
satisfactory to the Committee (which may include delivery of shares of
Stock already owned by the optionee or subject to awards hereunder)
regarding payment of, any federal, state, local or other taxes of any kind
required by law to be withheld with respect to the award. The obligations
of the Company under the Plan shall be conditional on such payment or
arrangements, and the Company (and, where applicable, any Related Company),
shall, to the extent permitted by law, have the right to deduct any such
taxes from any payment of any kind otherwise due to the Participant.
9.2 To the extent permitted by the Committee, and subject to such
terms and conditions as the Committee may provide, a Participant may elect
to have the withholding tax obligation, or any additional tax obligation
with respect to any awards hereunder, satisfied by (i) having the Company
<PAGE>withhold shares of Stock otherwise deliverable to such person with
respect to the award or (ii) delivering to the Company shares of
unrestricted Stock.
SECTION 10. Amendments and Termination.
No awards may be granted under the Plan more than ten (10) years after
the date of approval of the Plan by the stockholders of the Company. The
Board may discontinue the Plan at any earlier time and may amend it from
time to time. No amendment or discontinuation of the Plan shall adversely
affect any award previously granted without the award holder's written
consent. 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 Stock 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 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.
SECTION 11. Acceleration of Vesting in Certain Circumstances.
Notwithstanding any other provision of the Plan, upon the dissolution
or liquidation of the Company or upon any reorganization, merger or
consolidation with one or more corporations or other entities as a result
of which the Company is not the surviving entity, 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: (i) 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 or
entities; or (ii) to waive any restrictions applicable to any outstanding
Restricted Stock awards under the Plan, following which such shares shall
be deemed fully vested, or to provide that any securities or other
consideration issuable to the Participant in respect of such Restricted
Stock by the surviving, consolidated, successor or transferee corporations
or entities shall remain subject to the restrictions applicable to such
Restricted Stock award.
SECTION 12. General Provisions.
12.1 If the granting of any award under the Plan or the issuance,
purchase or delivery of Stock thereunder shall require, in the
determination of the Committee from time to time and at any time, (i) the
listing, registration or qualification of the Stock subject or related
thereto upon any securities exchange or over-the-counter market or under
any federal or state law or (ii) the consent or approval of any government
regulatory body, then any such award shall not be granted or exercised, in
whole or in part, unless such listing, registration, qualification, consent
or approval shall have been effected or obtained on conditions, if any, as
shall be acceptable to the Committee. In addition, in connection with the
granting or exercising of any award under the Plan, the Committee may
require the recipient to agree not to dispose of any Stock issuable in
connection with such award, except upon the satisfaction of specified
conditions, if the Committee determines such agreement is necessary or
desirable in connection with any requirement or interpretation of any
federal or state securities law, rule or regulation.
<PAGE>
12.2 Nothing set forth in this Plan shall prevent the Board from
adopting other or additional compensation arrangements. Neither the
adoption of the Plan nor any award hereunder shall confer upon any employee
of the Company, or of a Related Company, any right to continued employment,
and no award under the Plan shall confer upon any director any right to
continued service as a director.
12.3 Determinations by the Committee under the Plan relating to the
form, amount, and terms and conditions of awards need not be uniform, and
may be made selectively among persons who receive or are eligible to
receive awards under the Plan, whether or not such persons are similarly
situated.
12.4 No member of the Board or the Committee, nor any officer or
employee of the Company acting on behalf of the Board or the Committee,
shall be personally liable for any action, determination or interpretation
taken or made with respect to the Plan, and all members of the Board or the
Committee and all officers or employees of the Company acting on their
behalf shall, to the extent permitted by law, be fully indemnified and
protected by the Company in respect of any such action, determination or
interpretation.
SECTION 13. Effective Date of Plan.
The Plan shall be effective upon the approval of the Plan by (i) the
Board of Directors of the Company and (ii) the stockholders of the Company
acting by a majority of the votes cast at a duly held meeting of
stockholders at which a quorum representing at least a majority of the
outstanding shares is, either in person or by proxy, present and voting on
the Plan.
The Plan was duly approved by the Board of Directors of the Company on
April 26, 1999 and by stockholders of the Company on June 11, 1999.
<PAGE>
REVOCABLE PROXY
AMERISTAR CASINOS, INC.
ANNUAL MEETING OF STOCKHOLDERS - JUNE 11, 1999
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 The Reserve
Hotel & Casino located at 777 W. Lake Mead Drive, Henderson, Nevada 89015,
at 2:00 p.m. (local time) on Friday, June 11, 1999, 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 DIRECTOR [ ]AUTHORITY GIVEN [ ]WITHHOLD AUTHORITY
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 A DIRECTOR: LARRY A. HODGES
2. PROPOSAL TO APPROVE THE 1999 STOCK INCENTIVE PLAN
[ ]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 DIRECTOR AND "FOR" THE PROPOSAL TO APPROVE THE 1999
STOCK INCENTIVE PLAN. THE PROXY CONFERS AUTHORITY TO AND SHALL BE VOTED
"AUTHORITY GIVEN" FOR THE ELECTION OF DIRECTOR AND "FOR" THE 1999 STOCK
INCENTIVE 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: , 1999
(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:
