EXHIBIT 10.2
AMERISTAR CASINOS, INC.
2006 ANNUAL BONUS PROGRAM
FOR CORPORATE SENIOR MANAGEMENT
Adopted by the Compensation Committee
of the Board of Directors
March 30, 2006
          This 2006 Annual Bonus Program for Corporate Senior Management (this
“Program”) is being adopted by the Compensation Committee (the “Compensation
Committee”) of the Board of Directors of Ameristar Casinos, Inc. (the “Company”)
to provide a more direct alignment between the annual bonus compensation payable
to the Company’s Corporate Senior Management personnel (as defined below) and
the Company’s performance. The Company’s EBITDA (as defined below) is being used
to measure Company performance because it is a widely-used measure of
performance in the gaming industry and is used internally by management to
measure the Company’s operating performance.
          For purposes of this Program, each member of Corporate Senior
Management shall receive an annual cash bonus (the “Earned Bonus”) for 2006
determined exclusively by reference to the Company’s EBITDA, such person’s
weighted-average base salary (the “Base Salary”) and such person’s Performance
Grade for the year ending December 31, 2006. Notwithstanding the foregoing, the
Earned Bonus shall be subject to such downward or upward discretionary
adjustments, if any, as shall be made by the Compensation Committee acting in
its discretion in response to material changes in the condition or performance
of the Company or its business, or based on any other factors deemed relevant by
the Compensation Committee. Nothing contained in this Program shall preclude the
Compensation Committee, acting in its discretion, from awarding any member of
Corporate Senior Management any additional cash bonus or other compensation.
          For purposes of this Program, “EBITDA” means the Company’s
consolidated earnings before interest, taxes, depreciation, amortization and
non-recurring items, as reported in the Company’s public earnings release for
the year ending December 31, 2006; provided, however, that for purposes of this
Program, EBITDA shall be determined: (i) without deduction for any annual cash
bonus paid or payable for 2006 to the Company’s Chairman of the Board and Chief
Executive Officer; (ii) by assuming that any property or other business unit of
the Company that is sold or otherwise disposed of during 2006 continued to
perform as it had been performing prior to its disposition (with such
performance being measured by extrapolating its year-over-year performance
through the date of disposition for the remainder of the year); and (iii) by
excluding the performance of any property or other business unit acquired during
2006. For purposes of this Program, “Corporate Senior Management” means each of
the individuals, if any, who hold the following positions with the Company as of
December 31, 2006:

 

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(i) President/Chief Operating Officer (excluding Craig H. Neilsen);
(ii) Executive Vice President; (iii) Senior Vice President; (iv) Chief
Information Officer; (v) Chief Marketing Officer; or (vi) Chief Accounting
Officer/Controller. For purposes of this Program, “Performance Grade” means that
percentage corresponding to each letter grade used in the calculation of annual
merit bonuses paid to team members, where A = 100%; A- = 92%; B+ = 85%; B = 80%;
B- = 75%; C+ = 40%; and C = 28%.
          For purposes of this Program, (i) the “EBITDA Target” for each member
of Corporate Senior Management shall be $257,500,000 and (ii) the “Target Bonus”
for each member of Corporate Senior Management shall be the following percentage
of his or her Base Salary: (a) for the President/Chief Operating Officer (which
position is currently vacant), 100%; (b) for an Executive Vice President
(currently, Gordon R. Kanofsky), 85%; (c) for a Senior Vice President
(currently, Thomas M. Steinbauer, Angela R. Frost, Peter C. Walsh, Alan Rose and
Richard deFlon), 75%; (d) for the Chief Information Officer (currently, Ursula
Conway), 65%; (e) for the Chief Marketing Officer (currently, Paul Eagleton),
65%; and (f) for the Chief Accounting Officer/Controller (currently, Thomas L.
Malone), 65%.
          Each member of Corporate Senior Management shall be awarded an Earned
Bonus for 2006 equal to (i) such individual’s Target Bonus, multiplied by
(ii) the Applicable Bonus Percentage, multiplied by (iii) such individual’s
Performance Grade. The “Applicable Bonus Percentage” means: (i) if EBITDA is
less than or equal to 90.0% of the EBITDA Target (i.e., $231,750,000), 0%;
(ii) if EBITDA is equal to or greater than 110.0% of the EBITDA Target (i.e.,
$283,250,000), 200.0%; and (iii) if EBITDA is greater than 90.0% of the EBITDA
Target but less than 110.0% of the EBITDA Target (i.e., between $231,750,000 and
$283,250,000), the percentage equivalent, rounded to the nearest one-hundredth
of one percentage point (0.01%), of (a) the dollar amount by which EBITDA
exceeds $231,750,000, divided by (b) $25,750,000.
          Solely by way of example, a Senior Vice President whose Base Salary is
$350,000 would have a Target Bonus of 75% of Base Salary, or $262,500. If actual
EBITDA is $250,000,000 and his Performance Grade is A-, his Earned Bonus would
be 70.87% (the Applicable Bonus Percentage) of Target Bonus, multiplied by 0.92
(the percentage corresponding to his Performance Grade), or $171,151. The
Applicable Bonus Percentage is calculated as: $250,000,000 minus $231,750,000
equals $18,250,000, divided by $25,750,000 equals 70.87%. If actual EBITDA is
$270,000,000, his Earned Bonus would be 148.54% of Target Bonus, multiplied by
0.92, or $358,724. The Applicable Bonus Percentage is calculated as:
$270,000,000 minus $231,750,000 equals $38,250,000, divided by $25,750,000
equals 148.54%.
          Earned Bonuses shall be paid as soon as practicable following the
determination thereof. Each member of Corporate Senior Management shall have the
right to defer all or part of any bonus awarded under this Program by election
made pursuant to and in accordance with the Company’s Deferred Compensation
Plan.
          This Program may be amended or terminated at any time by the
Compensation Committee, acting in its discretion. Nothing contained in this
Program shall confer upon any person any contractual or other right to receive
any cash bonus or other compensation or to remain in the employ of the Company.

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