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THE FOLLOWING ITEMS ARE OMITTED FROM THIS FORM 10-K IN ACCORDANCE WITH RULE
12B-25 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED: ITEM 6, SELECTED
FINANCIAL DATA; ITEM 7, MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS; ITEM 8, FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA; ITEM 14(A)(2), FINANCIAL STATEMENT SCHEDULES.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
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(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NO. 1-6697
MIRAGE RESORTS, INCORPORATED
(Exact name of Registrant as specified in its charter)
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<TABLE>
<S> <C>
NEVADA 88-0058016
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
3400 LAS VEGAS BOULEVARD SOUTH 89109
LAS VEGAS, NEVADA (Zip Code)
(Address of principal executive offices)
</TABLE>
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (702) 791-7111
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SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
<TABLE>
<CAPTION>
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
- ------------------------------------------------ -----------------------------
<S> <C>
Common Stock ($.008 par value per share) New York Stock Exchange
Pacific Stock Exchange
</TABLE>
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
NONE
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days: YES X NO _
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K: X
The aggregate market value of the Registrant's Common Stock held by
non-affiliates (all persons other than executive officers or directors) of the
Registrant on March 1, 1994 (based on the closing price per share on the New
York Stock Exchange on that date) was $2,006,526,525.
The Registrant's Common Stock outstanding at March 1, 1994 was 90,782,611
shares.
Portions of the Registrant's definitive Proxy Statement for its May 26, 1994
Annual Meeting of Stockholders (which has not been filed as of the date of this
filing) are incorporated by reference into Part III.
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PART I
ITEM 1. BUSINESS
GENERAL
Mirage Resorts, Incorporated (the "Registrant" or the "Company") is a Nevada
corporation incorporated in 1949. The Registrant, through wholly owned
subsidiaries, owns and operates (i) The Mirage, a hotel-casino and destination
resort on the Las Vegas Strip, (ii) Treasure Island at The Mirage ("Treasure
Island"), a hotel-casino resort adjacent to The Mirage, (iii) the Golden Nugget,
a hotel-casino in downtown Las Vegas and (iv) the Golden Nugget-Laughlin, a
hotel-casino in Laughlin, Nevada. In January 1993, the Registrant, through a
wholly owned subsidiary, purchased the assets of the former Dunes Hotel, Casino
and Country Club (the "Dunes") on the Las Vegas Strip and is developing
long-term plans for the site, which include construction of extensive new hotel,
casino and resort facilities.
THE MIRAGE
The Registrant's wholly owned subsidiary, THE MIRAGE CASINO-HOTEL ("MCH"),
owns and operates The Mirage, which opened on November 22, 1989.
The Mirage is a luxurious, tropically themed destination resort containing
approximately 2.7 million square feet in a 29-story Y-shaped hotel tower and an
expansive low-rise complex. The Mirage features a 95,500-square foot casino,
3,030 hotel rooms (including 265 suites), 14 villa suites, approximately 82,000
square feet of meeting, convention and banquet space, a parking garage with
space for approximately 2,200 vehicles, a valet parking garage with space for
approximately 1,830 vehicles shared with Treasure Island, surface parking for
approximately 1,650 vehicles, a 1,500-seat showroom featuring top-name
entertainment (showcasing the world-famous illusionists Siegfried & Roy), five
international restaurants, a California-style pizza restaurant, a coffee shop, a
buffet, four bars (two of which feature live entertainment), two snack/ liquor
bars, an ice cream parlor, a health spa and beauty salon, a swimming pool and
cabana area, a white tiger display and extensive retail facilities. The exterior
of the resort is landscaped with palm trees, abundant foliage and more than four
acres of lagoons and other water features, centered around a 40-foot simulated
volcano and waterfall. Each evening, the volcano erupts at 15-minute intervals,
spectacularly illuminating the front of the resort. Inside the front entrance is
an atrium with a tropical garden and additional water features capped by a
150-foot (in diameter) glass dome. The atrium has an advanced environmental
control system and creative lighting and other special effects designed to
replicate the sights, sounds and fragrances of the South Seas. Located at the
rear of the hotel, adjacent to the swimming pool area, is a dolphin habitat with
adjoining food, beverage and retail facilities.
As of March 1, 1994, The Mirage's casino offered 119 table games (including
blackjack, craps, roulette, baccarat, pai gow, pai gow poker, Caribbean stud
poker, red dog and big six), keno, poker, a race and sports book and
approximately 2,250 slot machines and other coin-operated devices.
During the years ended December 31, 1993 and 1992, The Mirage's average
occupancy rates for standard rooms were approximately 98% and 96%, respectively.
These percentages include occupancy on a complimentary basis.
TREASURE ISLAND
The Registrant, through Treasure Island Corp. ("TI Corp."), a wholly owned
subsidiary of MCH, owns and operates Treasure Island, a pirate-themed
hotel-casino resort located on the same 116-acre site as The Mirage with
approximately 550 feet of frontage on the Las Vegas Strip. Construction of
Treasure Island commenced in March 1992, and the facility opened on October 26,
1993.
Treasure Island features a 75,000-square foot casino, 2,900 hotel rooms
(including 212 suites), a steak and seafood restaurant, a contemporary
Continental restaurant, an Italian specialties grill, a coffee shop, a buffet,
three snack bars, an ice cream parlor, four bars (three of which feature live
entertainment), a 1,500-seat showroom featuring an all-new production,
"Mystere," developed by the creators of the world-renowned Cirque du Soleil, and
an 18,000-square foot amusement arcade. Treasure Island also offers extensive
retail facilities, approximately 18,000 square feet of meeting and banquet
space, two wedding
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chapels, a swimming pool with a 230-foot mountain water slide, a parking garage
with space for approximately 2,400 vehicles and the valet parking garage shared
with The Mirage. The facade of Treasure Island, fronting on the Las Vegas Strip,
is an elaborate pirate village in which full-scale replicas of a pirate ship and
a British frigate periodically engage in a pyrotechnic and special effects sea
battle, culminating with the sinking of the frigate. Management believes that
the pirate-themed features of Treasure Island and its proximity to The Mirage
make it a "must see" attraction for Las Vegas visitors and local residents.
As of March 1, 1994, Treasure Island's casino offered 79 table games
(including blackjack, craps, roulette, baccarat, pai gow, pai gow poker,
Caribbean stud poker and big six), keno, poker, a race and sports book and
approximately 2,260 slot machines and other coin-operated devices.
From its opening through December 31, 1993, Treasure Island's average
occupancy rate for standard rooms was approximately 97%. This percentage
includes occupancy on a complimentary basis.
GOLDEN NUGGET
The Registrant's wholly owned subsidiary, GNLV, CORP. ("GNLV"), owns and
operates the Golden Nugget, a hotel-casino which, together with parking
facilities, occupies approximately 2 1/2 square blocks in downtown Las Vegas.
The Golden Nugget features a 38,000-square foot casino, 1,907 hotel rooms
(including 102 suites), two international restaurants, a California-style pizza
restaurant, a coffee shop, a buffet, a snack bar, three bars, an entertainment
lounge, a ballroom/showroom, approximately 23,000 square feet of meeting and
banquet space, two gift and retail shops, two hotel lobbies with guest
registration facilities, a swimming pool and lounge area, a health spa, a beauty
salon and two parking garages with space for approximately 1,050 vehicles.
As of March 1, 1994, the Golden Nugget's casino offered 69 table games
(including blackjack, craps, roulette, baccarat, pai gow, pai gow poker,
Caribbean stud poker, red dog and big six), keno, a race and sports book and
approximately 1,300 slot machines and other coin-operated devices.
During the years ended December 31, 1993 and 1992, the Golden Nugget's
average occupancy rates for standard rooms were approximately 97% and 94%,
respectively. These percentages include occupancy on a complimentary basis.
GOLDEN NUGGET-LAUGHLIN
The Registrant's wholly owned subsidiary, GNL, CORP. ("GNL"), owns and
operates the Golden Nugget-Laughlin, a hotel-casino in Laughlin, Nevada. The
hotel-casino is located on approximately 13 acres with approximately 600 feet of
Colorado River frontage near the center of Laughlin's existing hotel-casino
facilities. The Golden Nugget-Laughlin includes a two-story low-rise featuring a
32,000-square foot casino, three restaurants, three bars, an entertainment
lounge, a snack bar and a gift and retail shop. The hotel is a four-story
structure located adjacent to the low-rise containing 296 standard rooms and
four suites. Other facilities at the Golden Nugget-Laughlin include a swimming
pool, a parking garage with space for approximately 1,585 vehicles adjacent to
the low-rise and approximately four and one-half acres of surface parking for
recreational vehicles. The hotel and a 50% expansion of the casino were
completed in December 1992. GNL also owns and operates a 78-room motel in
Bullhead City, Arizona, across the Colorado River from Laughlin.
As of March 1, 1994, the Golden Nugget-Laughlin's casino offered 20 table
games (including blackjack, craps, roulette, pai gow poker and Caribbean stud
poker), approximately 1,300 slot machines and other coin-operated devices, keno
and a race and sports book.
IGUAZU FALLS, ARGENTINA CASINO VENTURE
The Registrant, through a wholly owned subsidiary, owns a 50% equity
interest in Mirage Universal de Misiones S.A., an Argentine corporation
("MUMSA"). In February 1994, MUMSA was awarded a 15-year concession by the
Province of Misiones, Argentina to develop, own and operate a casino near Iguazu
Falls, Argentina. The Registrant's total investment in the venture of $4 million
was contributed in January 1994. The casino is initially expected to offer
approximately 15 table games, 120 slot machines and food and beverage service.
It is anticipated that the casino will be opened to the public in mid-1994 and
will be managed principally by one of the other stockholders of MUMSA.
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FUTURE EXPANSION
In January 1993, the Registrant, through a wholly owned subsidiary,
completed the purchase for $70 million of the land, buildings and certain other
assets comprising the Dunes. The Dunes site consists of approximately 164 acres
situated on the Las Vegas Strip between Flamingo Road and Tropicana Avenue.
Pursuant to the terms of the purchase agreement, the seller terminated all
operations of the Dunes prior to the closing of the purchase. The Registrant
reopened the Dunes golf course to the public in February 1993 as "The Mirage
Golf Club" and intends to operate it at least until the commencement of major
construction at the site.
The Registrant is developing long-term plans for the Dunes property, which
include construction of extensive new hotel, casino and resort facilities. The
scope and timing of such a project are still uncertain, but management does not
currently anticipate breaking ground on any major construction prior to late
1994 or completing such construction prior to late 1996. In October 1993, the
Registrant imploded the north hotel tower of the Dunes as part of the opening
ceremonies for Treasure Island. The implosion received worldwide news coverage
and was featured in a one-hour fictional television special produced by the
Registrant which aired on network television in January 1994. Assuming
development of the Dunes property as presently contemplated, the cost of such
development is expected to be in excess of, and may significantly exceed, $500
million. There can be no assurance that the Registrant will determine to proceed
with such a project, that financing will be available on terms satisfactory to
the Registrant or that the project, if constructed, will be profitable. In
addition, there can be no assurance that the Registrant will obtain the
requisite approvals, permits, allocations and licenses, including gaming
licenses, or that such approvals, permits, allocations or licenses can be
obtained on a timely basis.
The Registrant regularly evaluates and pursues potential expansion and
acquisition opportunities in both the domestic and international markets. Such
opportunities may include the ownership, management and operation of gaming and
other entertainment facilities in states other than Nevada or outside of the
United States, either alone or with joint venture partners. The Registrant has
presented a large number of formal and informal proposals to develop, own and
operate gaming facilities in new and potential gaming jurisdictions, several of
which proposals are currently outstanding. Development and operation of any
gaming facility in a new jurisdiction is subject to numerous contingencies,
several of which are outside of the Registrant's control and may include the
enactment of appropriate gaming legislation, the issuance of requisite permits,
licenses and approvals and the satisfaction of other conditions. In addition,
some of the expansions being proposed require a substantial capital investment
by the Registrant and may require significant financing. There can be no
assurance that such financing can be obtained on terms acceptable to the
Registrant, that the Registrant will elect or be able to consummate any such
acquisition or expansion opportunity outside of Nevada or that the operations of
any such venture will be profitable.
MARKETING
Operations at the Registrant's hotel-casinos are conducted 24 hours a day,
every day of the year. The Registrant does not consider its Las Vegas business
to be highly seasonal. The Registrant considers its Laughlin business to be
seasonal, with the greatest level of activity occurring during the spring and
fall months and the lowest during December, January and the summer months.
The Registrant's revenues and operating income depend primarily upon the
level of gaming activity at its casinos, although the Registrant also seeks to
maximize revenues from food and beverage, lodging, entertainment and retail
operations. Therefore, the primary goal of the Registrant's marketing efforts is
to attract gaming customers to its casinos.
The principal segments of the Nevada gaming market are tour and travel,
leisure travel, high-level wagerers and conventions (including small meetings
and corporate incentive programs). The Registrant believes that The Mirage's
hotel occupancy and gaming revenues can be maximized through a balanced
marketing approach addressing each market segment. The Registrant's marketing
strategy for Treasure Island and the Golden Nugget is aimed at attracting
middle-to upper-middle-income wagerers primarily from the tour and travel and
leisure travel segments. The Registrant believes that the success of its hotel-
casinos is also affected by the level of walk-in customers and, accordingly, has
designed these facilities to maximize their attraction to these patrons.
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The tour and travel segment consists of gaming customers who take advantage
of travel "packages" produced by wholesale operators. The Registrant has
relationships with wholesalers selected on the basis of market penetration,
reputation and commitment. Tour and travel trade emphasizes mid-week occupancy,
as compared with the regionally based leisure travel segment, which is primarily
weekend-oriented. The Registrant has developed specialized marketing programs
for the tour and travel market. The Registrant has also developed important
relationships with, and programs for, certain of the major air carriers which
have their own wholesale tour and travel operations.
The leisure travel segment is largely composed of individuals traveling to
Las Vegas from the regional market, primarily Southern California and the
Southwest, by automobile and, to a lesser extent, by airplane. This segment
represents a significant portion of the customers for the Registrant's
facilities. As with the tour and travel business, The Mirage aims to attract the
upper-middle and higher-income strata of this segment, while the focus of
Treasure Island and the Golden Nugget is on the middle-to upper-middle-income
strata of the leisure travel segment. To this end, the Registrant has utilized
substantial media advertising (particularly radio and television commercials and
billboards) emphasizing the amenities, the atmosphere of excitement and the
relative value offered by the facilities. The Registrant also participates in
joint advertising and marketing programs with selected air carriers and benefits
from personal referrals and its high public profile.
The Registrant markets to the high-level-wagerer segment primarily through
direct sales, using its 19 marketing offices located in a number of major
domestic and foreign cities. Special entertainment and other events and
programs, including golf privileges at Shadow Creek as discussed below and the
presentation of major professional boxing matches, together with the provision
of complimentary rooms, food and beverage and air transportation and the
extension of gaming credit, are offered to attract high-level wagerers. The
Registrant employs several marketing executives who have extensive customer
relationships in certain areas of Asia, Latin America and Canada, as well as
casino hosts from many of the countries to which international marketing efforts
are directed.
Convention business, like the tour and travel segment, is mid-week oriented,
and is a major target for The Mirage, with its 82,000 square feet of meeting,
convention and banquet space. The Mirage seeks those conventions whose
participants have the best gaming profile. Treasure Island's and a portion of
The Mirage's convention business is derived from small corporate meetings (those
requiring less than 500 rooms per night) and corporate incentive programs
(travel packages produced by independent "incentive houses" for corporations
desiring to motivate their employees and reward them for superior performance).
Since the Golden Nugget's facilities are inadequate to accommodate conventions
requiring more than 200 rooms per night, its focus on this segment has been
limited to smaller groups and "spill-over" business from larger conventions
headquartered at other facilities, including The Mirage.
As discussed under "Future Expansion," the Registrant recently opened The
Mirage Golf Club at the Dunes site. The Registrant makes reduced green fees and
preferential tee times at The Mirage Golf Club available to guests of its
hotels. Management believes that The Mirage Golf Club has been beneficial to the
Registrant's marketing efforts.
Walk-in customers are those who patronize a facility's casino but are not
guests of its hotel. The Mirage and Treasure Island, which are strategically
located on the Las Vegas Strip, have been designed to attract walk-in casino
business.
The Golden Nugget-Laughlin appeals primarily to patrons from the
middle-income strata of the gaming populace. Many of the Golden
Nugget-Laughlin's customers, particularly those who arrive on bus tours, are
older and retired individuals who are attracted by lodging, food and beverage
and entertainment prices that are generally lower than those offered by the
major Las Vegas hotel-casinos. Many are also attracted by lower minimum wagering
limits and higher slot machine paybacks than those prevalent in Las Vegas, and
by their perception that Laughlin offers a more "relaxed" gaming and
recreational atmosphere. The predominant portion of the Golden Nugget-Laughlin's
casino revenues is derived from slot machine play. During 1993, slot revenues
accounted for approximately 87% of its total casino revenues. Convention and
high-level-wagerer patrons do not comprise a significant segment of the Laughlin
gaming market.
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The Registrant, through a wholly owned subsidiary of MCH, owns approximately
315 acres of real property located approximately 10 miles north of The Mirage
and Treasure Island and five miles north of the Golden Nugget. The Registrant
has developed a world-class 18-hole golf course and related facilities known as
"Shadow Creek" on approximately 80% of such property. In connection with its
marketing activities, the Registrant makes the course and related facilities
available for use, by invitation only, by high-level-wagerer patrons.
CREDIT
Credit play represents a significant portion of the table games volume at
The Mirage. The Registrant's other facilities do not emphasize credit play to
the same extent as The Mirage, although credit is made available.
The Registrant maintains strict controls over the issuance of credit and
aggressively pursues collection of its customer receivables. Such collection
efforts parallel those procedures commonly followed by most large corporations,
including the mailing of statements and delinquency notices, personal and other
contacts, the use of an outside collection agency, civil litigation and criminal
prosecution, if warranted. Nevada gaming debts evidenced by credit instruments
are enforceable under the laws of Nevada. All other states are required to
enforce a judgment on a gaming debt entered in Nevada pursuant to the Full Faith
and Credit Clause of the Unites States Constitution and, although foreign
countries are not so bound, the United States assets of foreign debtors may be
reached to satisfy a judgment entered in the United States.
SUPERVISION OF GAMING ACTIVITIES
In connection with the supervision of gaming activities at its casinos, the
Registrant maintains stringent controls on the recording of all receipts and
disbursements. These audit and cash controls include the following: locked cash
boxes; personnel independent of casino operations to perform the daily cash and
coin counts; floor observation of the gaming area; observation of gaming and
certain other areas through the use of closed-circuit television; computer
tabulation of receipts and disbursements for each of the slot machines and table
games; and timely analysis of discrepancies or deviations from normal
performance.
INSURANCE AND FIRE SAFETY MEASURES
The Registrant maintains extensive property damage, business interruption
and general liability insurance. Safety and protection have been, and continue
to be, of maximum concern in the construction and expansion of the Registrant's
facilities. The Mirage, Treasure Island, the high-rise towers of the Golden
Nugget and the Golden Nugget-Laughlin were constructed pursuant to modern
stringent fire codes, and generally exceed such codes. The Mirage, Treasure
Island and the Golden Nugget is each rated by insurance companies as a "highly
protected risk."
COMPETITION
The Mirage, Treasure Island and the Golden Nugget each compete with a number
of other hotel-casinos in Las Vegas. Currently, there are approximately 27 major
hotel-casinos located on or near the Las Vegas Strip, nine major hotel-casinos
located in the downtown area and several major facilities located elsewhere in
the Las Vegas area. During 1993 (principally during the fourth quarter), Las
Vegas hotel and motel room capacity increased by approximately 10,300 rooms, to
a total of approximately 83,700 rooms. This increase includes the effect of the
opening of Treasure Island and two other major Strip hotel-casinos in the fourth
quarter.
Management believes that the primary competition for The Mirage comes from
other large hotel-casinos located on or near the Strip that offer amenities and
marketing programs that appeal to the upper-middle and higher-income strata of
the gaming populace. The Mirage competes on the basis of the elegance and
excitement offered by the facility, the desirability of its location, the
quality and relative value of its hotel rooms and restaurants, its top-name
entertainment, customer service, its balanced marketing strategy and special
marketing and promotional programs.
Management believes that Treasure Island primarily competes with the other
large hotel-casinos located on or near the Strip that offer amenities and
marketing programs that appeal to the middle-to-
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upper-middle-income strata of the gaming populace. Treasure Island competes on
the basis of the entertainment and excitement offered by the facility, the
desirability of its location (including its proximity to The Mirage), the
affordability of its hotel rooms, the variety, quality and attractive pricing of
its food and beverage outlets, its unique showroom and innovative amusement
area, customer service and its marketing and promotional programs.
In management's opinion, the Golden Nugget primarily competes with the large
hotel-casinos located on or near the Strip, particularly those offering
amenities and marketing programs that appeal primarily to the middle-and
upper-middle-income strata of the gaming populace. The Golden Nugget competes
for gaming customers primarily on the basis of the elegance, intimacy and
excitement offered by the facility, the quality and relative value of its hotel
rooms and restaurants, customer service and its marketing and promotional
programs. In order to compete more effectively with the Strip hotel-casinos, a
coalition of several major downtown Las Vegas hotel-casino owners (including
GNLV), in conjunction with the City of Las Vegas, is developing The Fremont
Street Experience, a major tourist attraction in the downtown area. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included in Item 7 of Part II of this Form 10-K.
The Golden Nugget-Laughlin competes with eight nearby hotel-casinos. During
1993, the number of available hotel rooms in Laughlin increased by approximately
1,100 rooms, to a total of approximately 10,300 rooms.
The Registrant's facilities also compete for gaming customers to a lesser
extent with hotel-casino operations located in other areas of Nevada, Atlantic
City, New Jersey and other parts of the world. They also compete with
state-sponsored lotteries, off-track wagering, card parlors, riverboat and
Indian gaming ventures and other forms of legalized gaming in the United States,
as well as with gaming on cruise ships. Certain states have recently legalized,
and several other states are currently considering legalizing, casino gaming.
Management does not believe that such legalization of casino gaming in those
jurisdictions will have a material adverse impact on the Registrant's
operations. However, management believes that the legalization of large-scale
land-based casino gaming in or near certain major metropolitan areas,
particularly in California, could have a material adverse effect on the Las
Vegas market. The competitive impact of Treasure Island on the Registrant's
other hotel-casinos cannot yet be fully determined, but Treasure Island may
attract customers who would otherwise patronize these facilities.
EMPLOYEES AND LABOR RELATIONS
As of March 1, 1994, the Registrant and its subsidiaries had approximately
14,600 full-time and 2,400 part-time employees. At that date, the Registrant had
collective bargaining contracts with unions covering approximately 7,700 of its
Las Vegas employees, which expire in May 1994. The Registrant is in the process
of negotiating with respect to the renewal of such contracts. Although unions
have been active in Las Vegas, management considers its employee relations to be
excellent.
REGULATION AND LICENSING
The ownership and operation of casino gaming facilities in Nevada are
subject to (i) the Nevada Gaming Control Act and the regulations promulgated
thereunder (collectively, the "Nevada Act") and (ii) various local ordinances
and regulations. The Registrant's gaming operations are subject to the licensing
and regulatory control of the Nevada Gaming Commission (the "Nevada
Commission"), the Nevada State Gaming Control Board (the "Nevada Board"), the
City of Las Vegas and the Clark County Liquor and Gaming Licensing Board (the
"Clark County Board"). The Nevada Commission, the Nevada Board, the City of Las
Vegas and the Clark County Board are collectively referred to as the "Nevada
Gaming Authorities." To the best knowledge of management, the Registrant and its
subsidiaries are presently in material compliance with all applicable laws,
regulations and supervisory procedures described herein.
The laws, regulations and supervisory procedures of the Nevada Gaming
Authorities are based upon declarations of public policy which are concerned
with, among other things: (i) the prevention of unsavory or unsuitable persons
from having a direct or indirect involvement with gaming at any time or in any
capacity; (ii) the establishment and maintenance of responsible accounting
practices and procedures; (iii) the maintenance of effective controls over the
financial practices of licensees, including the establishment of minimum
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procedures for internal fiscal affairs and the safeguarding of assets and
revenues, providing reliable record keeping and requiring the filing of periodic
reports with the Nevada Gaming Authorities; (iv) the prevention of cheating and
fraudulent practices; and (v) providing a source of state and local revenues
through taxation and licensing fees. Change in such laws, regulations and
procedures could have an adverse effect on the Registrant's gaming operations.
The Registrant's direct and indirect subsidiaries that conduct gaming
operations are required to be licensed by the Nevada Gaming Authorities. The
gaming licenses require the periodic payment of fees and taxes and are not
transferable. MCH is registered as an intermediary company and has been found
suitable to own the stock of TI Corp. MCH has also been licensed to conduct
nonrestricted gaming operations at The Mirage. TI Corp. has been licensed to
conduct nonrestricted gaming operations at Treasure Island. GNLV has been
registered as an intermediary company and has been found suitable to own the
stock of Golden Nugget Manufacturing Corp. ("GNMC"), its inactive subsidiary
which is licensed as a manufacturer and distributor of gaming devices. GNLV has
also been licensed to conduct nonrestricted gaming operations at the Golden
Nugget. GNL has been licensed to conduct nonrestricted gaming operations at the
Golden Nugget-Laughlin. MR Realty, MRI's subsidiary which owns the Dunes site,
has been licensed to conduct restricted gaming operations at The Mirage Golf
Club. The Registrant is registered by the Nevada Commission as a publicly traded
corporation (a "Registered Corporation") and has been found suitable to own the
stock of MCH, GNLV and GNL, each of which, together with TI Corp., MR Realty and
GNMC, is a corporate licensee (individually, a "Gaming Subsidiary" and
collectively, the "Gaming Subsidiaries") under the Nevada Act.
As a Registered Corporation, the Registrant is required periodically to
submit detailed financial and operating reports to the Nevada Commission and
furnish any other information which the Nevada Commission may require. No person
may become a stockholder of, or receive any percentage of profits from, the
Gaming Subsidiaries without first obtaining licenses and approvals from the
Nevada Gaming Authorities. The Registrant and the Gaming Subsidiaries have
obtained from the Nevada Gaming Authorities the various registrations,
approvals, permits and licenses required in order to engage in gaming activities
in Nevada. The Nevada Gaming Authorities may investigate any individual who has
a material relationship to, or material involvement with, the Registrant or the
Gaming Subsidiaries in order to determine whether such individual is suitable or
should be licensed as a business associate of a gaming licensee. Officers,
directors and certain key employees of the Gaming Subsidiaries must file
applications with the Nevada Gaming Authorities and may be required to be
licensed or found suitable by the Nevada Gaming Authorities. Officers, directors
and key employees of the Registrant who are actively and directly involved in
gaming activities of the Gaming Subsidiaries may be required to be licensed or
found suitable by the Nevada Gaming Authorities. The Nevada Gaming Authorities
may deny an application for licensing for any cause which they deem reasonable.
A finding of suitability is comparable to licensing, and both require submission
of detailed personal and financial information followed by a thorough
investigation. The applicant for licensing or a finding of suitability must pay
all the costs of the investigation. Changes in licensed positions must be
reported to the Nevada Gaming Authorities, and in addition to their authority to
deny an application for a finding of suitability or licensure, the Nevada Gaming
Authorities have jurisdiction to disapprove a change in a corporate position.
If the Nevada Gaming Authorities were to find an officer, director or key
employee unsuitable for licensing or unsuitable to continue having a
relationship with the Registrant or the Gaming Subsidiaries, the companies
involved would have to sever all relationships with such person. In addition,
the Nevada Commission may require the Registrant or the Gaming Subsidiaries to
terminate the employment of any person who refuses to file appropriate
applications. Determinations of suitability or of questions pertaining to
licensing are not subject to judicial review in Nevada.
The Registrant, MCH, GNLV, GNL and TI Corp. are required to submit detailed
financial and operating reports to the Nevada Commission. Substantially all
material loans, leases, sales of securities and similar financing transactions
entered into by MCH, GNLV, GNL or TI Corp. must be reported to or approved by
the Nevada Commission.
7
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If it were determined that the Nevada Act was violated by a Gaming
Subsidiary, the licenses it holds could be limited, conditioned, suspended or
revoked, subject to compliance with certain statutory and regulatory procedures.
In addition, the Registrant, the Gaming Subsidiaries and the persons involved
could be subject to substantial fines for each separate violation of the Nevada
Act at the discretion of the Nevada Commission. Further, a supervisor could be
appointed by the Nevada Commission to operate The Mirage, Treasure Island, the
Golden Nugget and the Golden Nugget-Laughlin and, under certain circumstances,
earnings generated during the supervisor's appointment (except for the
reasonable rental value of the casino) could be forfeited to the State of
Nevada. Limitation, conditioning or suspension of the gaming license of a Gaming
Subsidiary or the appointment of a supervisor could (and revocation of any
gaming license would) materially adversely affect the Registrant's gaming
operations.
Any beneficial holder of the Registrant's voting securities, regardless of
the number of shares owned, may be required to file an application, be
investigated and have his suitability as a beneficial holder of the Registrant's
voting securities determined if the Nevada Commission has reason to believe that
such ownership would be inconsistent with the declared policies of the State of
Nevada. The applicant must pay all costs of investigation incurred by the Nevada
Gaming Authorities in conducting any such investigation.
The Nevada Act requires any person who acquires more than 5% of a Registered
Corporation's voting securities to report the acquisition to the Nevada
Commission. The Nevada Act requires that beneficial owners of more than 10% of a
Registered Corporation's voting securities apply to the Nevada Commission for a
finding of suitability within 30 days after the Chairman of the Nevada Board
mails a written notice requiring such filing. Under certain circumstances, an
"institutional investor," as defined in the Nevada Act, which acquires more than
10%, but not more than 15%, of a Registered Corporation's voting securities may
apply to the Nevada Commission for a waiver of such finding of suitability
requirement if such institutional investor holds the voting securities for
investment purposes only. An institutional investor shall not be deemed to hold
voting securities for investment purposes unless the voting securities were
acquired and are held in the ordinary course of business as an institutional
investor and not for the purpose of causing, directly or indirectly, the
election of a majority of the members of the board of directors of the
Registered Corporation, any change in the corporate charter, bylaws, management,
policies or operations of the Registered Corporation or any of its gaming
affiliates or any other action which the Nevada Commission finds to be
inconsistent with holding the Registered Corporation's voting securities for
investment purposes only. Activities which are not deemed to be inconsistent
with holding voting securities for investment purposes only include: (i) voting
on all matters voted on by stockholders; (ii) making financial and other
inquiries of management of the type normally made by securities analysts for
informational purposes and not to cause a change in its management, policies or
operations; and (iii) such other activities as the Nevada Commission may
determine to be consistent with such investment intent. The City of Las Vegas
requires 10% stockholders to be licensed. If the beneficial holder of voting
securities who must be found suitable is a corporation, partnership or trust, it
must submit detailed business and financial information, including a list of
beneficial owners. The applicant is required to pay all costs of investigation.
Any person who fails or refuses to apply for a finding of suitability or a
license within 30 days after being ordered to do so by the Nevada Commission or
the Chairman of the Nevada Board may be found unsuitable. The same restrictions
apply to a record owner if the record owner, after request, fails to identify
the beneficial owner. Any stockholder found unsuitable who holds, directly or
indirectly, any beneficial ownership of the common stock beyond such period of
time as may be prescribed by the Nevada Commission may be guilty of a criminal
offense. The Registrant is subject to disciplinary action if, after it receives
notice that a person is unsuitable to be a stockholder or to have any other
relationship with the Registrant or the Gaming Subsidiaries, the Registrant (i)
pays such person any dividend or interest upon voting securities of the
Registrant, (ii) allows such person to exercise, directly or indirectly, any
voting right conferred through securities held by that person, (iii) pays
remuneration in any form to such person for services rendered or otherwise or
(iv) fails to pursue all lawful efforts to require such person to relinquish his
voting securities including, if necessary, the immediate purchase of the voting
securities for cash at fair market value. Additionally, the Clark County Board
has taken the position that it has the authority to approve all persons owning
or controlling the stock of any corporation controlling a gaming licensee.
8
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The Nevada Commission may, in its discretion, require the holder of any debt
security of a Registered Corporation to file applications, be investigated and
be found suitable to own the debt security. If the Nevada Commission determines
that a person is unsuitable to own such security, then pursuant to the Nevada
Act, the Registered Corporation can be sanctioned, including the loss of its
approvals, if without the prior approval of the Nevada Commission, it: (i) pays
to the unsuitable person any dividend, interest or any distribution whatsoever;
(ii) recognizes any voting right by such unsuitable person in connection with
such securities; (iii) pays the unsuitable person remuneration in any form; or
(iv) makes any payment to the unsuitable person by way of principal, redemption,
conversion, exchange, liquidation or similar transaction.
The Registrant is required to maintain a current stock ledger in Nevada
which may be examined by the Nevada Gaming Authorities at any time. If any
securities are held in trust by an agent or nominee, the record holder may be
required to disclose the identity of the beneficial owner to the Nevada Gaming
Authorities. A failure to make such disclosure may be grounds for finding the
record holder unsuitable. The Registrant is also required to render maximum
assistance in determining the identity of the beneficial owner. The Nevada
Commission has the power to require the Registrant's stock certificates to bear
a legend indicating that the securities are subject to the Nevada Act. To date,
the Nevada Commission has not imposed such a requirement on the Registrant.
The Registrant may not make a public offering of its securities without the
prior approval of the Nevada Commission if the securities or proceeds therefrom
are intended to be used to construct, acquire or finance gaming facilities in
Nevada or to retire or extend obligations incurred for such purposes. On May 27,
1993, the Nevada Commission granted the Registrant prior approval to make public
offerings for a period of one year, subject to certain conditions (the "Shelf
Approval"). However, the Shelf Approval may be rescinded for good cause without
prior notice upon the issuance of an interlocutory stop order by the Chairman of
the Nevada Board. The Shelf Approval also applies to any affiliated company
wholly owned by the Registrant (an "Affiliate") which is a publicly traded
corporation or would thereby become a publicly traded corporation pursuant to a
public offering. The Shelf Approval also includes approval for the Gaming
Subsidiaries to guarantee any security issued by, or to hypothecate their assets
to secure the payment or performance of any obligations issued by, the
Registrant or an Affiliate in a public offering under the Shelf Approval. The
Shelf Approval does not constitute a finding, recommendation or approval by the
Nevada Commission or the Nevada Board as to the accuracy or adequacy of the
prospectus or the investment merits of the securities offered. Any
representation to the contrary is unlawful. The Registrant has filed an
application for a renewal of the Shelf Approval, which it anticipates will be
considered by the Nevada Board and the Nevada Commission in May 1994.
Changes in control of the Registrant through merger, consolidation, stock or
asset acquisitions, management or consulting agreements or any act or conduct by
a person whereby he obtains control may not occur without the prior approval of
the Nevada Commission. Entities seeking to acquire control of a Registered
Corporation must satisfy the Nevada Board and Nevada Commission with respect to
a variety of stringent standards prior to assuming control of such Registered
Corporation. The Nevada Commission may also require controlling stockholders,
officers, directors and other persons having a material relationship or
involvement with the entity proposing to acquire control to be investigated and
licensed as part of the approval process relating to the transaction.
The Nevada Legislature has declared that some corporate acquisitions opposed
by management, repurchases of voting securities and corporate defensive tactics
affecting Nevada corporate gaming licensees, and Registered Corporations that
are affiliated with those operations, may be injurious to stable and productive
corporate gaming. The Nevada Commission has established a regulatory scheme to
ameliorate the potentially adverse effects of these business practices upon
Nevada's gaming industry and to further Nevada's policy to: (i) assure the
financial stability of corporate gaming licensees and their affiliates; (ii)
preserve the beneficial aspects of conducting business in the corporate form;
and (iii) promote a neutral environment for the orderly governance of corporate
affairs. Approvals are, in certain circumstances, required from the Nevada
Commission before the Registered Corporation can make exceptional repurchases of
voting securities above the current market price thereof and before a corporate
acquisition opposed by management can be consummated. The Nevada Act also
requires prior approval of a plan of
9
<PAGE>
recapitalization proposed by the Registered Corporation's board of directors in
response to a tender offer made directly to the Registered Corporation's
stockholders for the purpose of acquiring control of the Registered Corporation.
License fees and taxes, computed in various ways depending on the type of
gaming or activity involved, are payable to the State of Nevada and to Clark
County and the City of Las Vegas, in which the Gaming Subsidiaries' respective
operations are conducted. Depending upon the particular fee or tax involved,
these fees and taxes are payable either monthly, quarterly or annually and are
based upon either: (i) a percentage of the gross revenues received; (ii) the
number of gaming devices operated; or (iii) the number of table games operated.
A casino entertainment tax is also paid by casino operations where entertainment
is furnished in connection with the selling of food or refreshments. Nevada
licensees that hold a manufacturer's or distributor's license, such as GNMC,
also pay certain fees to the State of Nevada.
Any person who is licensed, required to be licensed, registered, required to
be registered or is under common control with such persons (collectively,
"Licensees"), and who proposes to become involved in a gaming venture outside of
Nevada, is required to deposit with the Nevada Board, and thereafter maintain, a
revolving fund in the amount of $10,000 to pay the expenses of investigation by
the Nevada Board of its participation in such foreign gaming. The revolving fund
is subject to increase or decrease at the discretion of the Nevada Commission.
Thereafter, Licensees are required to comply with certain reporting requirements
imposed by the Nevada Act. Licensees are also subject to disciplinary action by
the Nevada Commission if they knowingly violate any laws of the foreign
jurisdiction pertaining to the foreign gaming operation, fail to conduct the
foreign gaming operation in accordance with the standards of honesty and
integrity required of Nevada gaming operations, engage in activities that are
harmful to the State of Nevada or its ability to collect gaming taxes and fees
or employ a person in the foreign operation who has been denied a license or
finding of suitability in Nevada on the ground of personal unsuitability.
The sale of alcoholic beverages at The Mirage, Treasure Island, the Golden
Nugget-Laughlin and The Mirage Golf Club, and the sale of alcoholic beverages at
the Golden Nugget, are subject to licensing, control and regulation by the Clark
County Board and the City of Las Vegas, respectively. All licenses are revocable
and are not transferable. The agencies involved have full power to limit,
condition, suspend or revoke any such license, and any such disciplinary action
could (and revocation would) have a material adverse effect on the operations of
the Gaming Subsidiaries.
ITEM 2. PROPERTIES
The Mirage and Treasure Island share an approximately 116-acre site owned by
the Registrant on the Las Vegas Strip. At March 15, 1994, both The Mirage and
Treasure Island were subject to aggregate encumbrances approximating $396.0
million, including amounts based upon the accreted value of zero coupon first
mortgage notes.
The Golden Nugget, including parking facilities, occupies approximately
seven and one-half acres in downtown Las Vegas. The improvements and
approximately 90% of the underlying land are owned by the Registrant, with the
remaining land being held under three separate ground leases that expire (after
giving effect to renewal options) on dates ranging from 2025 to 2046.
The Golden Nugget-Laughlin, including adjacent parking facilities, and GNL's
motel in Bullhead City, Arizona, occupy an aggregate of approximately 15 1/2
acres. All of the property is owned by the Registrant. The Golden
Nugget-Laughlin is subject to a blanket encumbrance collateralizing the
Registrant's bank credit facility, $20.0 million of which was drawn at March 15,
1994.
The Dunes site comprises approximately 164 acres of improved property owned
by the Registrant on the Las Vegas Strip. The Mirage Golf Club occupies
approximately 125 acres of such property.
The Registrant owns approximately 315 acres of land in North Las Vegas.
Shadow Creek occupies approximately 80% of such property. Shadow Creek is
subject to the blanket encumbrance collateralizing the Registrant's bank credit
facility.
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The Registrant also owns or leases various improved and unimproved property,
and options to purchase or lease property, in Las Vegas, Atlantic City, New
Jersey and other locations in the United States and certain foreign countries.
ITEM 3. LEGAL PROCEEDINGS
The Registrant (including its subsidiaries) is a defendant in various
lawsuits, most of which relate to routine matters incidental to its business.
Management does not believe that the outcome of such pending litigation, in the
aggregate, will have a material adverse effect on the Registrant.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during the
fourth quarter of 1993.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Registrant's common stock is traded on the New York and Pacific Stock
Exchanges under the symbol MIR. The following table sets forth, for the calendar
quarters indicated, the high and low sale prices of the common stock on the New
York Stock Exchange, as adjusted to reflect a five-for-two split of the
Registrant's common stock effective October 15, 1993.
<TABLE>
<CAPTION>
1993 1992
------------------ ------------------
HIGH LOW HIGH LOW
------- ------- ------- -------
<S> <C> <C> <C> <C>
First quarter........................... 17 3/8 13 1/8 14 7/8 10 1/4
Second quarter.......................... 19 13 1/4 14 1/2 8 3/4
Third quarter........................... 23 7/8 16 1/8 11 1/4 9 1/4
Fourth quarter.......................... 25 20 3/8 14 1/4 9 3/4
</TABLE>
The Registrant paid no dividends in 1993 or 1992. There were approximately
12,300 record holders of the Registrant's common stock as of March 15, 1994.
The Registrant's bank credit agreement contains a covenant restricting the
ability of the Registrant to pay cash dividends on its common stock or make
certain other restricted payments. At December 31, 1993, pursuant to such
covenant, the Registrant was permitted to pay dividends and make restricted
payments totaling approximately $280 million. In addition, certain subsidiaries
of the Registrant are parties to the credit agreement and to indentures which
contain covenants restricting the subsidiaries' ability to pay cash dividends on
their capital stock to the Registrant. Refer to Exhibits 4(a), 4(e), 4(g) and
10(dd) to this Form 10-K, and Note 5 of Notes to Consolidated Financial
Statements referred to in Item 14(a)(1) of this Form 10-K.
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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
There is incorporated by reference the information appearing under the
caption "Directors and Executive Officers" in the Registrant's definitive Proxy
Statement to be filed with the Securities and Exchange Commission.
ITEM 11. EXECUTIVE COMPENSATION
There is incorporated by reference the information appearing under the
caption "Executive Compensation" in the Registrant's definitive Proxy Statement
to be filed with the Securities and Exchange Commission.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
There is incorporated by reference the information appearing under the
caption "Stock Ownership of Major Stockholders and Management" in the
Registrant's definitive Proxy Statement to be filed with the Securities and
Exchange Commission.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There is incorporated by reference the information appearing under the
captions "Compensation Committee Interlocks and Insider Participation" and
"Certain Transactions" in the Registrant's definitive Proxy Statement to be
filed with the Securities and Exchange Commission.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
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(a)(3). EXHIBITS.
<TABLE>
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3(i)(a) Restated Articles of Incorporation of Registrant. Incorporated by reference
to Exhibit 3(i) to Registrant's Quarterly Report on Form 10-Q for the
fiscal quarter ended June 30, 1993.
3(i)(b) Amended and Restated Certificate of Division of Shares into Smaller
Denominations Pursuant to N.R.S. Section 78.207 of Registrant. Incorporated
by reference to Exhibit 2.2 to Amendment No. 3 to Registrant's Registration
Statement on Form 8-A dated October 19, 1993 (the "Form 8-A/A").
3(ii) Amended and Restated Bylaws of Registrant. Incorporated by reference to
Exhibit 2.3 to the Form 8-A/A.
4(a) Indenture, dated as of March 15, 1988, with respect to GNS FINANCE CORP.'s
("Finance") Zero Coupon First Mortgage Notes Due March 15, 1998, together
with exhibits (the "Zero Coupon Notes Indenture"). Incorporated by
reference to Exhibit 4(c) to the Registration Statement filed by Finance
and MCH on Form S-1 under the Securities Act of 1933 (No. 33-22369) (the
"MCH Form S-1").
4(b) First Supplemental Indenture, dated as of August 1, 1988, to the Zero
Coupon Notes Indenture. Incorporated by reference to Exhibit 4(f) to
Amendment No. 1 to the MCH Form S-1.
4(c) Second Supplemental Indenture, dated as of January 15, 1990, to the Zero
Coupon Notes Indenture. Incorporated by reference to Exhibit 4(q) to
Registrant's Annual Report on Form 10-K for the fiscal year ended December
31, 1989 (the "1989 Form 10-K").
4(d) Third Supplemental Indenture, dated as of October 15, 1990, to the Zero
Coupon Notes Indenture. Incorporated by reference to Exhibit 4(r) to
Amendment No. 1 to the Annual Report on Form 10-K of Finance for the fiscal
year ended December 31, 1990.
4(e) Indenture, dated as of March 15, 1992, with respect to Treasure Island
Finance Corp.'s 9 7/8% First Mortgage Notes Due October 1, 2000, together
with exhibits. Incorporated by reference to Exhibit 4(u) to the Annual
Report on Form 10-K of Finance for the fiscal year ended December 31, 1991
(the "Finance 1991 Form 10-K").
4(f) Fourth Supplemental Indenture, dated as of June 15, 1992, to the Zero
Coupon Notes Indenture. Incorporated by reference to Exhibit 19.4 to
Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended
June 30, 1992 (the "June 1992 Form 10-Q").
4(g) Indenture, dated as of March 31, 1993, with respect to Finance's 9 1/4%
Senior Subordinated Notes Due March 15, 2003, together with exhibits.
Incorporated by reference to Exhibit 4 to Registrant's Current Report on
Form 8-K dated March 31, 1993 (the "March 1993 Form 8-K").
10(a)* Forms of Incentive Stock Option Agreement and Non-Qualified Stock Option
Agreement. Incorporated by reference to Exhibit 10(b) to the 1989 Form
10-K.
10(b) Management Agreement, dated as of January 1, 1988, between Registrant and
MCH. Incorporated by reference to Exhibit 10(i) to the MCH Form S-1.
10(c) Tax Allocation Agreement, dated as of January 1, 1988, between Registrant
and MCH. Incorporated by reference to Exhibit 10(h) to the MCH Form S-1.
10(d) Tax Allocation Agreement, dated as of March 9, 1988, between Registrant and
Finance. Incorporated by reference to Exhibit 10(g) to the MCH Form S-1.
</TABLE>
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<TABLE>
<C> <S> <C>
10(e) Agreement of Purchase and Sale and Escrow Instructions, dated as of October
15, 1992, among Minami (Nevada), Incorporated, Minami Musen Denki Kabushiki
Kaisha, MR Realty and Registrant (without exhibits). Incorporated by
reference to Exhibit 2 to Registrant's Current Report on Form 8-K dated
January 26, 1993.
10(f)* 1983 Stock Option and Stock Appreciation Rights Plan, as amended.
Incorporated by reference to Exhibit 4.3 to the Registration Statement
filed by Registrant on Form S-8 under the Securities Act of 1933 (No.
33-16037) (the "Form S-8").
10(g)* 1984 Stock Option and Stock Appreciation Rights Plan, as amended.
Incorporated by reference to Exhibit 4.2 to the Form S-8.
10(h) Management Agreement, dated as of January 1, 1985, between Registrant and
GNLV. Incorporated by reference to Exhibit 10(g) to Amendment No. 2 to the
Registration Statement filed by GNLV FINANCE CORP. ("GNLV Finance") and
GNLV on Form S-1 under the Securities Act of 1933 (No. 33-5694) (the "GNLV
Form S-1").
10(i) Tax Allocation Agreement, dated as of January 1, 1985, between Registrant
and GNLV. Incorporated by reference to Exhibit 10(h) to the GNLV Form S-1.
10(j) Tax Allocation Agreement, dated as of May 13, 1986, between Registrant and
GNLV Finance. Incorporated by reference to Exhibit 10(f) to Amendment No. 2
to the GNLV Form S-1.
10(k)* 1986 Stock Option and Stock Appreciation Rights Plan, as amended.
Incorporated by reference to Exhibit 4.1 to the Form S-8.
10(l)* 1992 Stock Option and Stock Appreciation Rights Plan. Incorporated by
reference to Exhibit 10(n) to Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1991 (the "1991 Form 10-K").
10(m)* 1993 Stock Option and Stock Appreciation Rights Plan. Incorporated by
reference to Exhibit 10(m) to Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1992 (the "1992 Form 10-K").
10(n)* Executive Retirement Plan Agreement, dated as of December 1, 1986, between
Registrant and Kenneth R. Wynn. Incorporated by reference to Exhibit 10(hh)
to Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1986 (the "1986 Form 10-K").
10(o)* Executive Retirement Plan Agreement, dated as of December 1, 1986, between
Registrant and James E. Pettis. Incorporated by reference to Exhibit 10(mm)
to the 1986 Form 10-K.
10(p)* 1992 Non-Employee Director Stock Option Plan. Incorporated by reference to
Exhibit 10(t) to the 1991 Form 10-K.
10(q) Management Agreement, dated as of January 1, 1992, between Registrant and
TI Corp. Incorporated by reference to Exhibit 10(oo) to Amendment No. 2 to
the Registration Statement filed by Treasure Island Finance Corp., TI Corp.
and MCH on Form S-1 under the Securities Act of 1933 (No. 33-45415) (the
"TI Corp. Form S-1").
10(r) Deed of Trust, Assignment of Rents and Security Agreement, dated as of
March 23, 1988, from MCH in favor of First Interstate Bank of Nevada, N.A.
("FIBN"), as trustee. Incorporated by reference to Exhibit 10(xx) to
Registrant's Annual Report on Form 10-K for the fiscal year ended December
31, 1987.
10(s) Tax Allocation Agreement, dated as of January 1, 1992, between Registrant
and Treasure Island Finance Corp. Incorporated by reference to Exhibit
10(qq) to Amendment No. 2 to the TI Corp. Form S-1.
</TABLE>
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<TABLE>
<C> <S> <C>
10(t) Tax Allocation Agreement, dated as of January 1, 1992, between Registrant
and TI Corp. Incorporated by reference to Exhibit 10(pp) to Amendment No. 2
to the TI Corp. Form S-1.
10(u) Management Agreement, dated as of September 30, 1988, between Registrant
and GNL. Incorporated by reference to Exhibit 10(yy) to the 1989 Form 10-K.
10(v) Tax Allocation Agreement, dated as of September 30, 1988, between
Registrant and GNL. Incorporated by reference to Exhibit 10(zz) to the 1989
Form 10-K.
10(w) Ground Lease, dated as of March 1, 1992, between MCH and TI Corp.
Incorporated by reference to Exhibit 10(nn) to Amendment No. 2 to the TI
Corp. Form S-1.
10(x) Pledge Agreements, each dated as of March 25, 1992, between TI Corp. and
each of Security Pacific National Bank ("SPNB"), FIBN, First Trust National
Association ("FTNA"), United States Trust Company of New York ("USTC") and
Valley Bank of Nevada ("VBN"), as trustees. Incorporated by reference to
Exhibit 10(ee) to the Finance 1991 Form 10-K.
10(y) Completion Guaranty, dated as of March 25, 1992, from Registrant in favor
of VBN, as trustee. Incorporated by reference to Exhibit 10(kk) to
Amendment No. 2 to the TI Corp. Form S-1.
10(z) Amendment Agreement, dated as of October 4, 1990, between MCH, as trustor,
and FIBN, as beneficiary. Incorporated by reference to Exhibit 4.12 to
Registrant's Current Report on Form 8-K dated October 4, 1990.
10(aa) Easement, dated December 28, 1990, from MH, INC. ("MH") in favor of Stephen
A. Wynn. Incorporated by reference to Exhibit 10(ll) to Amendment No. 1 to
the Registration Statement filed by Finance and MCH on Form S-1 under the
Securities Act of 1933 (No. 33-38496).
10(bb) Deed of Trust, Assignment of Rents and Security Agreement, dated as of
March 25, 1992, from MCH in favor of VBN, as trustee. Incorporated by
reference to Exhibit 10(dd) to the Finance 1991 Form 10-K.
10(cc) Leasehold Deeds of Trust, Assignments of Rents and Security Agreements,
each dated as of March 25, 1992, from TI Corp. in favor of each of SPNB,
FIBN, FTNA, USTC and VBN, as trustees. Incorporated by reference to Exhibit
10(cc) to the Finance 1991 Form 10-K.
10(dd) Credit Agreement, dated as of October 23, 1992, among Registrant, MCH, the
financial institutions party thereto, as lenders, The Long-Term Credit Bank
of Japan, Ltd., Los Angeles Agency, as Lead Agent, and Societe Generale, as
Co-Agent, Collateral Agent and Funding Agent, together with schedules
(without exhibits). Incorporated by reference to Exhibit 19.1 to
Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 1992 (the "September 1992 Form 10-Q").
10(ee) Loan and Aircraft Chattel Mortgage Agreement (G-IV), dated as of October
22, 1992, between Golden Nugget Aviation Corp. ("GNAV") and The CIT
Group/Equipment Financing, Inc. ("CIT"), together with exhibits.
Incorporated by reference to Exhibit 19.2 to the September 1992 Form 10-Q.
10(ff) Loan and Aircraft Chattel Mortgage Agreement (G-II), dated as of October
22, 1992, between GNAV and CIT, together with exhibits. Incorporated by
reference to Exhibit 19.3 to the September 1992 Form 10-Q.
10(gg)* Employment Agreement, dated as of August 18, 1992, between Registrant and
Frank Visconti. Incorporated by reference to Exhibit 19.4 to the September
1992 Form 10-Q.
10(hh)* Employment Agreement, dated October 20, 1992, between Registrant and James
E. Pettis. Incorporated by reference to Exhibit 19.5 to the September 1992
Form 10-Q.
</TABLE>
15
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<TABLE>
<C> <S> <C>
10(ii) Escrow Instructions and Agreement for Sale of Real Estate, dated September
18, 1992, between MCH and TI Corp. and West Park, Inc., Tien Fu Hsu,
WestPark Company I and Lucky-Land Company Enterprises. Incorporated by
reference to Exhibit 19.6 to the September 1992 Form 10-Q.
10(jj) Promissory Note and Deed of Trust with Assignment of Rents, each dated
October 16, 1992, from Frank Visconti and Becky Visconti in favor of
Registrant. Incorporated by reference to Exhibit 19.7 to the September 1992
Form 10-Q.
10(kk)* Employment Agreement, dated December 16, 1992, between Registrant and
Stephen A. Wynn. Incorporated by reference to Exhibit 10(zz) to the 1992
Form 10-K.
10(ll) Promissory Note, dated April 24, 1992, from Stephen A. Wynn in favor of
Registrant. Incorporated by reference to Exhibit 19.1 to the June 1992 Form
10-Q.
10(mm) Agreement, dated as of May 4, 1992, between Atlandia Design and
Furnishings, Inc. and Marnell Corrao Associates, Inc. Incorporated by
reference to Exhibit 19.2 to the June 1992 Form 10-Q.
10(nn) Amendment Agreement, dated as of November 24, 1992, between MCH, as
trustor, and Bank of America National Trust & Savings Association, as
beneficiary. Incorporated by reference to Exhibit 10(ccc) to the 1992 Form
10-K.
10(oo) Amendment Agreement, dated as of November 24, 1992, between MCH, as
trustor, and FIBN, as beneficiary. Incorporated by reference to Exhibit
10(ddd) to the 1992 Form 10-K.
10(pp) Amendment Agreement, dated as of November 24, 1992, between MCH, as
trustor, and USTC, as beneficiary. Incorporated by reference to Exhibit
10(eee) to the 1992 Form 10-K.
10(qq) Amendment Agreement, dated as of November 24, 1992, between MCH, as
trustor, and FTNA, as beneficiary. Incorporated by reference to Exhibit
10(fff) to the 1992 Form 10-K.
10(rr) First Amendment to Ground Lease, dated as of March 1, 1993, between MCH and
TI Corp. Incorporated by reference to Exhibit 10(ggg) to the 1992 Form
10-K.
10(ss) Second Amendment to Deed of Trust, dated as of February 21, 1992, between
MCH, as trustor, and FIBN, as beneficiary. Incorporated by reference to
Exhibit 10(z) to the Finance 1991 Form 10-K.
10(tt) Lease, dated September 4, 1962, and Agreement, dated March 25, 1975,
between the Trustees of the Fraternal Order of Eagles and Registrant.
Incorporated by reference to Exhibit 10(c) to the GNLV Form S-1.
10(uu) Lease, dated July 1, 1973, and Amendment to Lease, dated February 27, 1979,
between First National Bank of Nevada, Trustee, and Registrant.
Incorporated by reference to Exhibit 10(d) to the GNLV Form S-1.
10(vv) Lease, dated April 30, 1976, between Elizabeth Zahn, Trustee, and
Registrant. Incorporated by reference to Exhibit 10(e) to the GNLV Form
S-1.
10(ww) Amendment No. 1 to Credit Agreement, dated as of March 23, 1993, among
Registrant, MCH and the financial institutions party thereto. Incorporated
by reference to Exhibit 10(kk) to the Registration Statement filed by
Finance and MCH on Form S-4 under the Securities Act of 1933 (No. 33-62514)
(the "Form S-4").
10(xx) Amendment No. 2 to Credit Agreement, dated as of March 30, 1993, among
Registrant, MCH and the financial institutions party thereto. Incorporated
by reference to Exhibit 10(ll) to the Form S-4.
</TABLE>
16
<PAGE>
<TABLE>
<C> <S> <C>
10(yy) Amendment No. 3 to Credit Agreement, dated as of April 16, 1993, among
Registrant, MCH and the financial institutions party thereto, together with
exhibit. Incorporated by reference to Exhibit 10(mm) to the Form S-4.
10(zz) Amendment No. 4 to Credit Agreement, dated as of August 20, 1993, among
Registrant, MCH and the financial institutions party thereto. Incorporated
by reference to Exhibit 10 to Registrant's Quarterly Report on Form 10-Q
for the fiscal quarter ended September 30, 1993.
10(aaa) Land Sales Contract, dated March 26, 1993, between MH and Stephen A. Wynn,
together with exhibits. Incorporated by reference to Exhibit 10(yy) to the
Form S-4.
10(bbb) Second Amendment to Ground Lease, dated as of October 26, 1993, between MCH
and TI Corp.
10(ccc)* First Amendment to Executive Retirement Plan Agreement, dated as of
December 1, 1993, between Registrant and Kenneth R. Wynn.
10(ddd) Purchase Agreement, dated March 23, 1993, among Finance, MCH, Donaldson,
Lufkin & Jenrette Securities Corporation ("DLJ") and Salomon Brothers Inc
("SBI"). Incorporated by reference to Exhibit 28.1 to the March 1993 Form
8-K.
10(eee) Registration Rights Agreement, dated as of March 31, 1993, among Finance,
MCH, DLJ and SBI. Incorporated by reference to Exhibit 28.2 to the March
1993 Form 8-K.
10(fff) Stockholders' Agreement, dated as of January 4, 1994, among MUMSA, Mirage
Argentina, Inc., Universal Casino Consultants (HK) Ltd. and Berjaya
Universal Casino Management (HK) Ltd.
21 List of subsidiaries of Registrant.
<FN>
- ------------------------
*Constitutes an executive compensation plan or agreement.
</TABLE>
(b). REPORTS ON FORM 8-K.
The Registrant filed no reports on Form 8-K during the three-month
period ended December 31, 1993.
17
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
MIRAGE RESORTS, INCORPORATED
By: STEPHEN A. WYNN
--------------------------------------
Stephen A. Wynn, PRESIDENT
Dated: March 30, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------------ -------------------------------------------- -----------------
<C> <S> <C>
STEPHEN A. WYNN Chairman of the Board, President and Chief
-------------------------------------- Executive Officer (Principal Executive March 30, 1994
Stephen A. Wynn Officer)
DANIEL R. LEE Senior Vice President -- Finance and
-------------------------------------- Development, Chief Financial Officer and March 30, 1994
Daniel R. Lee Treasurer (Principal Financial Officer)
HENRY M. APPLEGATE III
-------------------------------------- Senior Vice President and Controller March 30, 1994
Henry M. Applegate III (Principal Accounting Officer)
ELAINE P. WYNN
-------------------------------------- Director March 30, 1994
Elaine P. Wynn
GEORGE J. MASON
-------------------------------------- Director March 30, 1994
George J. Mason
MELVIN B. WOLZINGER
-------------------------------------- Director March 30, 1994
Melvin B. Wolzinger
RONALD M. POPEIL
-------------------------------------- Director March 30, 1994
Ronald M. Popeil
DANIEL B. WAYSON
-------------------------------------- Director March 30, 1994
Daniel B. Wayson
RICHARD D. BRONSON
-------------------------------------- Director March 30, 1994
Richard D. Bronson
</TABLE>
18
<PAGE>
SECOND AMENDMENT TO GROUND LEASE
This Second Amendment to Ground Lease (the "Amendment"), dated as of October 26,
1993, is made by and between THE MIRAGE CASINO-HOTEL, a Nevada corporation
("Lessor"), and TREASURE ISLAND CORP., a Nevada corporation ("Lessee").
1. AMENDMENT TO GROUND LEASE. Lessor and Lessee hereby amend the
definition of "Occupancy Date" in Section 1 of the Ground Lease, dated as of
March 1, 1992, as subsequently amended, between Lessor and Lessee (the "Ground
Lease"), by deleting the existing definition thereof in its entirety and
replacing it with the following:
""Occupancy Date" means October 26, 1993."
2. NO OTHER CHANGES. Except as modified by Paragraph 1 of this
Amendment, the Ground Lease shall continue unmodified and in full force and
effect.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the
date first above written.
LESSEE:
Treasure Island Corp.
By: /s/JOHN STRZEMP
-----------------------------
Name: John Strzemp
Title:Chief Financial Officer
LESSOR:
THE MIRAGE CASINO-HOTEL
By: /s/DOUGLAS G. POOL
-----------------------------
Name: Douglas G. Pool
Title: Chief Financial Officer
EXHIBIT 10(bbb)
<PAGE>
FIRST AMENDMENT TO
EXECUTIVE RETIREMENT PLAN AGREEMENT
This First Amendment to Executive Retirement Plan Agreement (this "First
Amendment") is made as of December 1, 1993 by and between Mirage Resorts,
Incorporated, formerly known as Golden Nugget, Inc., a Nevada corporation
("MRI"), and Kenneth R. Wynn ("Executive"), amending the Executive Retirement
Plan Agreement dated as of December 1, 1986 (the "Agreement") by and between MRI
and Executive.
WHEREAS, the Board of Directors has determined it to be in the best
interests of MRI to offer to Executive the opportunity to exchange his right to
Monthly Payments and the Benefit under the Agreement for 182,191 shares of MRI's
$.008 par value common stock on terms and subject to conditions described
herein; and
WHEREAS, Executive desires to accept such offer.
NOW, THEREFORE, in consideration of the mutual promises contained herein
and other valuable consideration, receipt of which is hereby acknowledged, the
parties hereby agree to amend the Agreement as follows:
1. In lieu of the Monthly Payments and Benefit provided for in the
Agreement, MRI shall issue to Executive, concurrently with the execution of this
First Amendment, 182,191 shares of MRI's $.008 par value common stock (the
"Shares").
2. Until the Vesting Date, none of the Shares shall be conveyed,
transferred, encumbered or otherwise disposed of by Executive (any such
disposition being herein called a "transfer"); provided, however, that nothing
herein contained shall prevent the transfer of the Shares prior to the Vesting
Date following: (i) the Executive's death or Permanent Disability; (ii) the
termination of Executive's employment with an Employer other than on account of
Executive's voluntary resignation or Executive's discharge by an Employer for
"cause" (as defined in Paragraph 4 below); or (iii) "a change of control" (as
defined in Paragraph 5 below) of MRI. Any attempted transfer of Shares in
violation of the Agreement and this First Amendment shall be void.
3. The Shares shall be subject to forfeiture by Executive in the event of
termination of Executive's employment with an Employer prior to the Vesting
Date; provided, however, that no forfeiture shall occur in the event of, and the
Shares shall immediately vest upon the occurrence of: (i) the Executive's
death or Permanent Disability; (ii) the termination of Executive's employment
with an Employer other than on account of Executive's voluntary resignation or
Executive's discharge by an Employer for "cause" (as defined in Paragraph 4
below); or (iii) a "change of control" (as defined in Paragraph 5 below) of MRI.
In the event that the Shares are forfeited pursuant to the preceding sentence,
Executive agrees to deliver the Shares immediately to MRI together with duly
executed stock powers and any other documents reasonably requested by MRI.
4. For purposes of the Agreement and this First Amendment, the term
"cause" shall mean: (i) conviction of a felony directly relating to Executive's
duties or his performance of services in connection with his employment by an
Employer and not resulting from actions or inactions taken or not taken by
Executive in the reasonable belief that such actions or inactions were for an
Employer's benefit; or (ii) Executive's consistent refusal to perform, or
willful misconduct in the performance of, his duties and obligations of
employment with an Employer, following reasonable written notification and
opportunity to correct the asserted refusal to perform or willful misconduct.
5. For purposes of the Agreement and this First Amendment, the term
"change of control" shall mean: (i) a change of control of a nature that would
be required to be reported in response to Item 6E of Schedule 14A, as in effect
on the date hereof, under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"); (ii) any person, including a "group" as such term is used in
Section 13(d)(3) of the Exchange Act, but excluding Stephen A. Wynn or any group
of which he is a member, becoming after the date hereof the beneficial owner,
directly or indirectly, of 33-1/3% or more of the combined voting power of MRI's
outstanding voting securities; (iii) individuals who, as of the date hereof,
constitute MRI's Board of Directors ceasing for any reason to constitute at
least a majority of such Board of Directors; or (iv) Stephen A. Wynn ceasing for
any reason to be the principal executive officer of MRI.
EXHIBIT 10(ccc)
<PAGE>
6. Executive acknowledges that the Shares have not been registered under
the Securities Act of 1933, as amended, and represents and agrees that the
Shares are being acquired for investment and that he has no present intention to
transfer, sell or otherwise dispose of any of such Shares, except as permitted
by the Agreement and this First Amendment and in compliance with applicable
federal and state securities laws.
7. Certificates representing the Shares shall bear the following legend:
The shares represented by this certificate have not been registered under
the Securities Act of 1933, as amended. Such shares may not be sold or
transferred in the absence of such registration or an exemption therefrom
under said Act. The shares represented by this certificate are also
subject to restrictions set forth in the Executive Retirement Plan
Agreement dated as of December 1, 1986 between the Corporation and Kenneth
R. Wynn, as amended by the First Amendment to Executive Retirement Plan
Agreement dated as of December 1, 1993 between the Corporation and Kenneth
R. Wynn, copies of which are on file in the office of the Corporation.
8. Capitalized terms used herein and not otherwise defined herein shall
have their respective meanings set forth in the Agreement.
9. Except as expressly modified herein, the provisions of the Agreement
shall remain in full force and effect. In the event of any conflict between the
provisions of the Agreement and this First Amendment, the provisions of this
First Amendment shall govern.
IN WITNESS WHEREOF, MRI has caused this First Amendment to be signed by its
duly authorized officer, and Executive has hereunder set his hand, as of the 1st
day of December, 1993.
MIRAGE RESORTS, INCORPORATED
By: /s/STEPHEN A. WYNN
------------------------------
STEPHEN A. WYNN, Chairman of
the Board, President and Chief
Executive Officer
/s/KENNETH R. WYNN
------------------------------
KENNETH R. WYNN
2
<PAGE>
---------------------------------------------------
STOCKHOLDERS' AGREEMENT
AMONG
MIRAGE UNIVERSAL DE MISIONES S.A.,
MIRAGE ARGENTINA, INC.
UNIVERSAL CASINO CONSULTANTS (HK) LTD.,
AND
BERJAYA UNIVERSAL CASINO MANAGEMENT (HK) LTD.
DATED AS OF
JANUARY 4, 1994
---------------------------------------------------
EXHIBIT 10(fff)
<PAGE>
STOCKHOLDERS' AGREEMENT
This STOCKHOLDERS' AGREEMENT (this "Agreement") is entered into this 4th
day of January, 1994, by and among MIRAGE UNIVERSAL DE MISIONES S.A., a
corporation organized and existing under the laws of the Republic of Argentina
(the "Corporation"), Mirage Argentina, Inc., a corporation organized and
existing under the laws of the State of Nevada ("MAI"), Universal Casino
Consultants (HK) Ltd., a corporation organized and existing under the laws of
Hong Kong ("UCC") and Berjaya Universal Casino Management (HK) Ltd., a
corporation organized and existing under the laws of Hong Kong ("Berjaya") (MAI,
UCC and Berjaya, together with any other persons who may hereafter own Shares
(as defined below), in accordance with the terms hereof, being referred to
individually as a "Stockholder" and collectively as the "Stockholders").
WITNESSETH
----------
WHEREAS, the Corporation participated in the Bid (as defined below), and
was awarded a permit by the Institute (as defined below) to build and operate a
new casino in the city of Puerto de Iguazu and adjacent areas (the "Casino");
and
WHEREAS, on or before the date hereof, MAI contributed or agreed to
contribute $4 million, UCC contributed or agreed to contribute $1.6 million and
Berjaya contributed or agreed to contribute $2.4 million to the capital of the
Corporation; and
WHEREAS, the Stockholders together own all of the presently issued and
outstanding shares of the Corporation (referred to hereafter as the "Shares" or
"Stock") as follows:
MAI 4,000,000 Shares
UCC 1,600,000 Shares
Berjaya 2,400,000 Shares; and
WHEREAS, the parties hereto wish to enter into this Agreement to regulate
their relationship with regard to the Corporation and to regulate the
relationship amongst themselves; and
WHEREAS, the parties hereto wish that, subject to the terms and conditions
hereof, all present and future Stockholders of Shares (or rights to acquire such
Shares) of the Corporation, be parties to this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, and for other good and valuable consideration, the sufficiency
of which is hereby acknowledged, the parties hereto, intending to be legally
bound, hereby agree as follows:
SECTION 1. DEFINITIONS
1.01 CERTAIN DEFINITIONS
(a) As used herein the following terms shall have the following
meanings:
"ACCEPTABLE BANK" means the principal New York investment
banking office of any of the following institutions: Prudential
Securities, Inc., Salomon Brothers Inc, Donaldson, Lufkin & Jenrette
Securities Corporation and Merrill Lynch, Pierce, Fenner & Smith Inc.
"ACCEPTANCE NOTICE" has the meaning set forth in Section 5.1
hereof.
"AFFILIATE" means, as to any Person (the "Designated Person"):
(i) any other Person who, directly or indirectly, controls, is controlled
by, or is under common control with (A) such Designated Person, or (B) any
Person controlling, directly or indirectly, such Designated Person ,
(ii) any officer or member of the board of directors of such Designated
Person or of any other Person described in clause (i) above, or (iii) any
other Person who, directly or indirectly, owns beneficially 10% or more of
the equity of such Designated Person.
2
<PAGE>
"AGREEMENT" has the meaning set forth in the first paragraph of
this Agreement.
"ARGENTINA" means the Republic of Argentina.
"BANKRUPTCY LAW" means Title 11, U.S. Code, or any similar law
of any applicable jurisdiction for the relief of debtors.
"BERJAYA" means Berjaya Universal Casino Management (HK) Ltd., a
corporation organized and existing under the laws of Hong Kong, together
with any successors and assigns.
"BID" means the public bid made by the Institute to build a
casino in the city of Puerto de Iguazu and adjacent areas.
"BID DATE" has the meaning set forth in Section 5.3(c) hereof.
"BOARD OF DIRECTORS" means the Board of Directors of the
Corporation.
"CASINO" has the meaning set forth in the first recital of this
Agreement.
"CONSTITUENT DOCUMENTS" of an entity means the Articles or
Certificate of Incorporation and the By-laws, or equivalent documents, of
such corporation.
"CORPORATION" has the meaning set forth in the first paragraph of
this Agreement.
"CORPORATION NOTICE" has the meaning specified in Section 5.1
hereof.
"DISQUALIFICATION NOTICE" has the meaning specified in Section
5.3(a) hereof.
"DISQUALIFIED STOCKHOLDER" has the meaning specified in Section
5.3(a) hereof.
"DOLLAR" and "$" means the lawful currency of the United States
of America.
"EFFECTIVE DATE" means the date of this Agreement.
"EXCESS AMOUNT" has the meaning set forth in Section 5.1 hereof.
"FAIR MARKET VALUE" has the meaning, and shall be calculated,
according to the specifications set forth in Section 5.3(f) hereof.
"INCLUDE" and "INCLUDING" shall be construed as if followed by
the phrase", without being limited to,".
"INSOLVENCY" means, as to the Corporation: (i) the Corporation
is unable generally to pay its debts as they become due, (ii) the
Corporation commences a voluntary case, consents to the entry of an order
for relief against it in an involuntary case, consents to the appointment of
a custodian of it or for all or substantially all of its property or makes a
general assignment for the benefit of its creditors, in each case pursuant
to or within the meaning of any Bankruptcy Law, or (iii) a court of
competent jurisdiction enters an order or decree under any Bankruptcy Law
that is for relief against the Corporation in an involuntary case, appoints
a custodian of the Corporation or substantially all of the property of the
Corporation or orders the liquidation of the Corporation, and the order or
decree remains unstayed and in effect for sixty (60) days.
"INSTITUTE" means the Instituto Provincial de Loteria y Casinos
of Misiones, Argentina.
"MAI" means Mirage Argentina, Inc. a corporation organized and
existing under the laws of the State of Nevada.
"MAI PURCHASE NOTICE" has the meaning set forth in Section 5.3(b)
hereof.
"MAI SALE NOTICE" has the meaning set forth in Section 5.3(b)
hereof.
"MISIONES" means the Province of Misiones in Argentina.
3
<PAGE>
"MRI" means Mirage Resorts, Incorporated, a corporation organized
and existing under the laws of the State of Nevada.
"PERSON" means any individual, corporation, company, voluntary
association, partnership, joint venture, trust or unincorporated
organization, business, entity or government (or any agency, instrumentality
or political subdivision thereof).
"PROPORTIONATE SHARE" has the meaning set forth in Section 5.1
hereof.
"PROPOSED SALE" has the meaning set forth in Section 5.1 hereof.
"RECOUPMENT" means the time at which MAI has received aggregate
distributions from the Corporation in respect of its Shares equal to MAI's
total investment in the Corporation plus interest thereon calculated at
MRI's weighted cost of debt capital, on a consolidated basis, during the
period from the Effective Date through Recoupment.
"SECURITIES ACT" means any statute or regulation in any
applicable jurisdiction which governs the sale of securities to the public
and the rules and regulations promulgated thereunder, all as the same shall
be in effect at any time or from time to time.
"SHARES" and "STOCK" has the meaning specified in the recital
hereto.
"SELLING STOCKHOLDER" has the meaning specified in Section 5.1
hereof.
"SIGNIFICANT LOSSES" means, as to the Corporation, either of the
following circumstances which exist at any time after the first eighteen
(18) months of operations of the Corporation: (i) Insolvency or (ii) the
Corporation has an accumulated deficit, as determined in accordance with
United States generally accepted accounting principles, consistently
applied, and has operated at a net loss, as determined in accordance with
United States generally accepted accounting principles, consistently
applied, during the preceding six-month period.
"STOCKHOLDER NOTICE" has the meaning set forth in Section 5.1
hereof.
"SUBJECT SHARES" has the meaning set forth in Section 5.1 hereof.
"SUBSIDIARY" of the Corporation means any corporation or other
entity of which more than fifty percent (50%) (by number of votes) of the
shares or other equity interests is owned by the Corporation and/or one or
more other Subsidiaries.
"TERMINATION DATE" means the date on which this Agreement shall
terminate, pursuant to Section 3 hereof.
"TRANSFER" means to issue, transfer, sell, assign, pledge,
hypothecate, give, create a security interest in or lien on, place in trust
(voting or otherwise), assign or in any other way encumber or dispose of,
directly or indirectly and whether or not by operation of law or for value,
any of the Shares or any interest therein.
"UCC" means Universal Casino Consultants (HK) Ltd., a corporation
organized and existing under the laws of Hong Kong, and any successors and
assigns.
1.02 GENERAL PRINCIPLES OF CONSTRUCTION
Unless otherwise specified herein, (a) "SECTION" shall refer to a section or
subsection of this Agreement, as the context shall require, (b) "herein,"
"hereunder," "hereby," "hereof" and words of similar import shall refer to this
Agreement and any schedules and exhibits hereto taken as a whole, and not just
to the specific section in which such term appears, and (c) terms defined in the
singular shall have the appropriate correlative meaning when used in the plural
and VICE VERSA.
4
<PAGE>
SECTION 2. REPRESENTATIONS, WARRANTIES AND COVENANTS
2.1 REPRESENTATIONS AND WARRANTIES
Each of MAI, UCC and Berjaya hereby represents and warrants that:
(a) it is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation;
(b) it has full power and authority to enter into this
Agreement and to carry out the transactions contemplated hereby;
(c) its board of directors has taken any actions which may be
required to authorize the execution and delivery of this Agreement, the
performance of its obligations hereunder and the consummation of the
transactions contemplated hereby;
(d) this Agreement has been duly executed and delivered by it
and is a valid and binding obligation of such corporation enforceable in
accordance with its terms;
(e) neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby violates or will
violate or conflicts or will conflict with any provisions of its Constituent
Documents or other governing instrument; or any agreement or instrument to which
it is a party or by which it is bound, or any judicial decree, order,
injunction, statute, rule or regulation applicable to it; and
(f) neither it, nor to the best of its knowledge, any of its
agents or Affiliates, have acted or permitted any action that could be construed
to be a violation of the requirements of the Foreign Corrupt Practices Act, as
amended (15 U.S.C. 78, ET SEQ.).
2.2 COVENANTS
(a) Each party to this Agreement will cooperate with the
appropriate governmental authorities in the State of Nevada in connection with
any investigation, license or permit from the State of Nevada.
(b) UCC shall grant MAI, and shall cause their agents and
Affiliates to grant MAI, any rights which they might have reserved to use the
name "Mirage" in Argentina and elsewhere, in each case for a total consideration
of $1. Neither UCC nor Berjaya nor any of their agents or Affiliates shall use
the name "Mirage" in any way in connection with the Casino or any other business
or activities.
SECTION 3. TERM OF AGREEMENT
(a) This Agreement shall commence on the date first above
written and shall continue in full force and effect until the occurrence of any
of the following events, at which time this Agreement shall automatically
terminate:
(i) upon the consent in writing of Stockholders owning not
less than eighty-one (81%) of the then issued and outstanding Shares;
(ii) upon the voluntary or involuntary dissolution of the
Corporation; or
(iii) upon the sale of all or substantially all of the assets of
the Corporation and the distribution of the proceeds thereof to the Stockholders
(to the extent otherwise permitted by this Agreement).
(b) In the event any Stockholder shall cease to be the owner
of any Shares, such Stockholder shall cease to be a party to this Agreement and,
subject to Section 3(c) hereof, this Agreement shall no longer be binding upon
or inure to the benefit of such Stockholder.
(c) Nothing contained in this Section 3 shall affect or impair
any rights or obligations arising prior to or at the time of the termination of
this Agreement pursuant to Section 3(a) hereof or the termination of its
application to any party resulting from the operation of Section 3(b) hereof.
5
<PAGE>
SECTION 4. VOTING AGREEMENT
4.1 COMPOSITION OF THE BOARD OF DIRECTORS
(a) Each Stockholder agrees that, effective on the date hereof
and during the term of this Agreement, the Board of Directors of the Corporation
shall consist of seven (7) directors, until a Recoupment occurs, from and after
which time the Board of Directors shall consist of six (6) directors. The
meetings of the Board of Directors may, at the request of any three of its
members, be held through a telephonic conference.
(b) The Stockholders shall vote or cause to vote all of their
Shares to the end that (i) Before a Recoupment, four (4) directors of the
Corporation shall be designated by MAI, one (1) designated by UCC and two (2)
designated by Berjaya, and (ii) after a Recoupment, three (3) directors of the
Corporation shall be designated by MAI, one (1) designated by UCC and two (2)
designated by Berjaya. In the event it shall be necessary to fill a vacancy on
the Board of Directors of the Corporation, the Stockholders shall vote their
Shares in favor of an individual designated by the party whose designated
position on the Board is to be filled.
(c) A quorum of four (4) directors, including at least two (2)
nominated by MAI and two (2) nominated by Berjaya or UCC, shall be required to
hold a meeting of the Board of Directors.
4.2 STOCKHOLDER VOTE
In addition to any affirmative vote required by law or by any other
provisions of this Agreement, from the Effective Date until the Termination
Date, the Stockholders agree, and shall cause the Constituent Documents of the
Corporation to provide at all times, that except during the existence of
Significant Losses, the approval or authorization of any of the following
actions shall require the affirmative vote of the holders of not less than
eighty-one percent (81%) of the then issued and outstanding Shares:
(a) the amendment, alteration, modification or repeal of the
Constituent Documents or any provision thereof;
(b) the merger or consolidation of the Corporation with or
into any Person, except a wholly owned Subsidiary of the Corporation;
(c) the sale, transfer, conveyance or other disposition, or
pledge, mortgage or grant of a security interest or other adverse right or
encumbrance, of or in all or substantially all of the assets of the
Corporation;
(d) the acquisition of any Person, or the acquisition of the
assets of any Person other than in the ordinary course of business;
(e) the recapitalization, reorganization or dissolution of the
Corporation;
(f) the removal of a director of the Corporation, whether with
or without cause (except in the case of the removal of a designated director by
the Stockholder or Stockholders that designated such designated director); or
(g) any change in the name of the Corporation.
Unless otherwise stated in this Agreement, any other matter requiring the
approval or authorization of stockholders under the laws of Argentina, the
Constituent Documents of the Corporation or this Agreement shall require for
approval or authorization the affirmative vote of the holders of not less than a
majority of the then issued and outstanding Shares.
During the existence of Significant Losses, UCC hereby grants to MAI a proxy
as to one Share owned by UCC (the "Proxy"). The parties hereto hereby
acknowledge and agree that the Proxy is coupled with an interest and is
irrevocable.
6
<PAGE>
4.3 DIRECTOR VOTE
In addition to any affirmative vote required by law or by any other
provisions of this Agreement, from the Effective Date until the Termination
Date, the Stockholders agree, and shall cause the Constituent Documents to at
all times provide, that except during the existence of Significant Losses, the
approval or authorization of any of the following shall require the affirmative
vote of not less than five (5) directors or, in the case of any matter referred
to in subclause (d) below, if such approval or authorization cannot be obtained,
the affirmative vote of all of the disinterested directors:
(a) the incurrence of any indebtedness for borrowed money or
the guaranty of the obligations of others in excess of 110% of approved
borrowing included in the annual budget for the Corporation and its Subsidiaries
(on a consolidated basis), as approved by the Board of Directors;
(b) the sale, transfer, conveyance or other disposition, or
pledge, mortgage, grant of a security interest or other right or encumbrance of
or in any material asset of the Corporation;
(c) the making of any expenditures or the incurrence of any
other financial obligations for purposes not provided for in a budget of the
Corporation approved by the Board of Directors or exceeding the amount provided
therein by more than ten percent (10%);
(d) except as provided in Section 8 hereof, the consummation
of any transaction or the incurrence or performance of any obligation in which
one or more directors of the Corporation or any of their Affiliates, directly or
indirectly, has a material pecuniary or other material interest;
(e) the voting or taking of any other action with respect to
any shares or other ownership interests held by the Corporation in any
Subsidiary, including without limitation, the election, removal or substitution
of directors of any such Subsidiary and the determination of the number of
members of the board of directors of any such Subsidiary;
(f) to the extent otherwise permitted by the laws of the
jurisdiction under which the Corporation is organized and existing, the
amendment, alteration, modification or repeal of the Constituent Documents or
any provision thereof;
(g) the declaration of any dividend or distribution to
Stockholders; or
(h) the selection of an Acceptable Bank to determine the Fair
Market Value of Shares.
Unless otherwise stated in this Agreement, any other matter requiring the
approval or authorization of the Board of Directors under the laws of Argentina,
the Constituent Documents of the Corporation or this Agreement shall require for
approval or authorization the affirmative vote of a majority of the directors
present at a meeting of the Board of Directors at which a quorum is present.
4.4 USE OF MIRAGE NAME
At no time shall any of the Stockholders permit the use of the name "Mirage"
in any way by the Corporation in connection with the Casino or any other
business or activities.
SECTION 5. THE SHARES
No Stockholder shall Transfer any Shares, except in accordance with the
terms and provisions of this Agreement. Any purported Transfer in violation of
this Agreement shall be null and void and of no force and effect and the
purported transferee of such Shares shall have no right to have the Corporation
register or otherwise acknowledge such Transfer or any other rights or
privileges in or with respect to the Corporation or the Shares purported to have
been so transferred.
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5.1 RIGHT OF FIRST OFFER
(a) (i) If a Stockholder desires to sell or otherwise
Transfer (a "Selling Stockholder") any of its Shares (the "Proposed Sale") in a
transaction to any third party, the Selling Stockholder shall first give a
notice (the "Stockholder Notice") of such desire to the Corporation. The
Stockholder Notice shall specify (x) the number of Shares proposed to be sold or
transferred (the "Subject Shares"), (y) the aggregate consideration to be paid
therefor and (z) other significant terms and conditions of the Proposed Sale.
The Corporation shall mail a copy of the Stockholder Notice to each other
Stockholder within five (5) days after receipt of the Stockholder Notice.
(ii) The Corporation shall have the right to purchase all
or part of the Subject Shares for the aggregate consideration to be paid
therefor and on the other terms and conditions of the Proposed Sale specified in
the Stockholder Notice by giving notice to the Selling Stockholder within thirty
(30) days after receipt by the Corporation of the Stockholder Notice specifying
the number of the Subject Shares to be so purchased by the Corporation.
(iii) If the Corporation elects to purchase none of, or
less than all, the Subject Shares, then the Corporation may give each
Stockholder other than the Selling Stockholder a notice (the "Corporation
Notice") within three (3) days after the expiration of the thirty (30)-day
period referred to in the preceding paragraph, which Corporation Notice shall
specify the number of Subject Shares available for purchase by such
Stockholders. If the Corporation so elects to give the Corporation Notice, then
each such Stockholder (provided that such Stockholder is then an owner of
Shares) shall have the right to purchase the available Subject Shares on a pro
rata basis in accordance with its Proportionate Share (as hereinafter defined)
for the aggregate consideration to be paid therefor and on the other terms and
conditions of the Proposed Sale specified in the Stockholder Notice by giving
notice (the "Acceptance Notice") to the Selling Stockholder within ten (10) days
after receipt of the Corporation Notice.
(iv) Any Stockholder which elects to purchase its
Proportionate Share may also indicate in his, her or its Acceptance Notice, if
he, she or it so elects, its desire to purchase a number of the Subject Shares
in excess of its Proportionate Share, stating the maximum dollar amount of such
excess (the "Excess Amount"). If one or more Stockholders declines to
participate in such purchase or elects to purchase less than such Stockholder's
Proportionate Share, then the pro rata participations or the balance of such
participations of such Stockholders shall automatically be deemed to be accepted
by any Stockholder which set forth an Excess Amount in its Acceptance Notice in
an amount not greater than such Excess Amount, such acceptance to be allocated
among such Stockholders in proportion to their respective Proportionate Shares
and, if the number of Subject Shares allocable to any accepting Stockholder
exceeds its Excess Amount, such excess shall be allocated among the remaining
Stockholders electing to purchase an Excess Amount in proportion to their
respective Proportionate Shares, and such procedure shall be employed until the
entire Excess Amount of each Stockholder electing to purchase an Excess Amount
has been satisfied or all Subject Shares have been allocated.
As used herein, the term "Proportionate Share" of a Stockholder shall mean
the percentage of Subject Shares offered by a Selling Stockholder which such
Stockholder is entitled to purchase pursuant to this Section 5.1. Such
percentage, as to each Stockholder, shall be determined by dividing the number
of Shares then owned by such Stockholder by the aggregate number of Shares then
owned by all Stockholders who are entitled to purchase Subject Shares pursuant
to this Section 5.1.
If the Corporation or the Stockholders fail to elect to purchase all the
Subject Shares within the time periods specified in the foregoing paragraphs,
then the Selling Stockholder (i) shall be under no obligation to sell any
Subject Shares to the Corporation or any Stockholder unless the Selling
Stockholder so elects and (ii) shall have the right to sell to the proposed
purchaser, within a period of ninety (90) days after receipt by the Corporation
of the Stockholder Notice, all or any of the Subject Shares at a price per share
not less than the consideration to be paid therefor as specified in the
Stockholder Notice, provided that at the time of such Transfer each such
transferee agrees in writing (in form and substance reasonably satisfactory to
the Corporation) to be bound by all of the provisions of this Agreement
applicable to Stockholders so long as it continues to own any of the Shares so
transferred. Any Shares not sold pursuant to the immediately preceding sentence
prior to the expiration of the ninety (90)-day period referred to therein shall
once again be subject to the rights of first offer set forth in this
Section 5.1.
8
<PAGE>
(b) Each of the Corporation and any offeree Stockholder may
cause its designee to purchase from the Selling Stockholder any Subject Shares
that it is entitled to purchase pursuant to Section 5.1(a) hereof at the same
purchase price and upon the same terms and conditions offered to them pursuant
to Section 5.1(a) hereof. In the case of any such designee, at the time of such
Transfer each such designee shall agree in writing (in form and substance
reasonably satisfactory to the Corporation) to be bound by all of the provisions
of this Agreement applicable to Stockholders so long as it continues to own any
of the Subject Shares so transferred to such designee.
5.2. EXCEPTIONS TO RIGHT OF FIRST OFFER
Notwithstanding anything to the contrary contained in Section 5 hereof:
(a) each Stockholder shall have the right at any time during
the term of this Agreement to (i) pledge its Shares to any financial institution
or any other Stockholder or (ii) Transfer any or all of its Shares to any
Affiliate or any other Stockholder, in either case without first offering them
to the Corporation and the Stockholders in accordance with Section 5.1 hereof,
provided that at the time of such Transfer each such transferee agrees in
writing (in form and substance reasonably satisfactory to the Corporation) to be
bound by all of the provisions of this Agreement applicable to Stockholders so
long as it continues to own any of the Shares so transferred; and
(b) each Stockholder shall have the right to sell Shares free
and clear of the terms, provisions and restrictions of this Agreement (i) in a
bona fide public offering of Shares approved by the Board of Directors pursuant
to any applicable Securities Act or (ii) subsequent to a bona fide public
offering of Shares approved by the Board of Directors pursuant to any applicable
Securities Act.
5.3 PURCHASE AND SALE RIGHTS
(a) UCC and Berjaya understand and acknowledge that MRI and
its subsidiaries that conduct gaming operations in the State of Nevada
(collectively, the "Nevada Gaming Subsidiaries") are subject to the jurisdiction
and regulation of the Nevada State Gaming Control Board, the Nevada Gaming
Commission and various local regulatory authorities (the "Nevada Gaming
Authorities"), and that MRI, the Nevada Gaming Subsidiaries or other
subsidiaries of MRI ("Foreign Subsidiaries") may become subject to the
jurisdiction and regulation of gaming authorities outside the State of Nevada
(each, a "Gaming Authority") in respect of other gaming projects. In the event
that MRI (i) is ordered, required or otherwise advised by the Nevada Gaming
Authorities or a Gaming Authority to terminate its relationship with UCC or
Berjaya, (ii) is advised by the Nevada Gaming Authorities or a Gaming Authority
that its relationship with UCC or Berjaya or any of their respective principals
jeopardizes its registrations, licenses, findings of suitability or approvals
(collectively, the "Licenses" and individually, a "License"), or any License of
the Gaming Subsidiaries or Foreign Subsidiaries, or any application for a
License by MRI, the Gaming Subsidiaries or Foreign Subsidiaries (an
"Application") or (iii) determines in its reasonable judgment that its
relationship with UCC or Berjaya or any of their respective principals does or
may jeopardize its Licenses, or the Licenses of the Gaming Subsidiaries or
Foreign Subsidiaries, or an Application, then MAI shall have the right, but not
the obligation, to deliver a written notice specifying the relevant event or
situation set forth in this sentence (the "Disqualification Notice") to UCC or
Berjaya, as the case may be (the "Disqualified Stockholder"), and to the Board
of Directors.
(b) Upon delivery of a Disqualification Notice to the Board of
Directors, the Stockholders shall use their best efforts to cause the Fair
Market Value per Share to be determined as soon as practicable pursuant to
Section 5.3(f) hereof. Within fifteen (15) days after the determination of the
Fair Market Value per Share, MAI shall have the right to either (i) offer to
purchase all, but not less than all, of the Shares held by the Disqualified
Stockholder for cash at the Fair Market Value per Share by delivery to the
Disqualified Stockholder of a written notice specifying such election (the "MAI
Purchase Notice"), or (ii) offer to sell all, but not less than all, of the
Shares held by MAI to the Disqualified Stockholder for cash at the Fair Market
Value per Share by delivery to the Disqualified Stockholder of a written notice
specifying such election (the "MAI Sale Notice").
9
<PAGE>
(c) Within fifteen (15) days of receipt of an MAI Purchase
Notice, the Disqualified Stockholder shall, by written notice delivered to MAI,
either (i) unconditionally undertake to sell all of its Shares to MAI for cash
at the Fair Market Value per Share at a closing to be held within thirty (30)
days of such date, or (ii) unconditionally undertake to submit to the Board of
Directors, on a specified date (the "Bid Date") within five (5) days of such
date, a sealed bid to purchase all of the Shares held by MAI at a per-Share
purchase price greater than the Fair Market Value per Share. In the event the
Disqualified Stockholder elects to submit a sealed bid and so notifies MAI, MAI
shall either (i) unconditionally undertake to sell for cash all of its Shares to
the Disqualified Stockholder at the per-Share price set forth in the sealed bid
submitted by the Disqualified Stockholder and opened by the Board of Directors
on the Bid Date (provided such per-Share price exceeds the Fair Market Value per
Share), such sale to be consummated at a closing to be held within thirty (30)
days after the Bid Date, or (ii) submit to the Board of Directors on the Bid
Date a sealed bid to purchase all of the Shares held by the Disqualified
Stockholder. In the event MAI elects to submit a sealed bid, the Board of
Directors shall open each sealed bid on the Bid Date and whichever Stockholder
shall have submitted the higher per-Share bid shall be obligated to purchase for
cash, and the other Stockholder shall be obligated to sell, all of the Shares
held by the other Stockholder at the bid price at a closing to be held within
thirty (30) days after the Bid Date.
(d) Within fifteen (15) days of receipt of an MAI Sale Notice,
the Disqualified Stockholder shall either (i) unconditionally undertake to
purchase for cash all of the Shares held by MAI at the Fair Market Value per
Share by delivery of notice thereof to MAI and as otherwise provided in Section
5.3(c) hereof, or (ii) decline to purchase the Shares held by MAI by delivery of
notice thereof to MAI. In the event the Disqualified Stockholder declines to
purchase the Shares held by MAI, MAI shall have the right, but not the
obligation, by delivery of written notice to the Disqualified Stockholder within
fifteen (15) days of MAI's receipt of the notice of declination from the
Disqualified Stockholder, to purchase all of the Shares held by the Disqualified
Stockholder for cash at the Fair Market Value per Share at a closing to be held
within thirty (30) days of such date.
(e) In the event that MAI does not elect to purchase all of
the Shares held by the Disqualified Stockholder as provided in the last sentence
of Section 5.3(d) hereof, MAI shall have the right, but not the obligation, at
any time thereafter to sell or otherwise transfer all or any portion of the
Shares held by MAI free of any provision of this Agreement limiting such
Transfer, provided that at the time of such Transfer each transferee agrees in
writing (in form and substance reasonably satisfactory to the Corporation) to be
bound by all of the provisions of this Agreement applicable to Stockholders so
long as it continues to own any of the Shares so transferred. In connection
therewith, the Corporation shall assist MAI in disposing of the Shares held by
it in a prompt and orderly manner and, at the request of MAI, the Corporation
shall make available (and authorize MAI to make available through the
Corporation) financial and other information concerning the Corporation and its
subsidiaries to any prospective transferee of such Shares. The Corporation may
require that each such prospective transferee keep confidential, pursuant to
customary confidentiality requirements, any information received by him, her or
it pursuant to this Section 5.3(e). In the event of any Transfer in accordance
with the provisions of this Section 5.3(e), written notice of the Transfer shall
be delivered by MAI to the Corporation within five (5) days of such Transfer.
(f) If it is necessary to determine the Fair Market Value of
Shares under this Agreement, such value shall be (i) the value agreed to by all
of the Stockholders, or (ii) if no such agreement is reached within ten (10)
days, the value determined in an appraisal by an Acceptable Bank selected by the
Board of Directors, such appraisal to employ, in respect of an appraisal of the
Fair Market Value of the Shares, customary conventions for the valuation of the
shares of a corporation similar to the Corporation, taking into account all
relevant factors, including the valuation of such Shares in the context of the
going concern value of the Corporation (if applicable). Any costs or expenses
incurred in connection with any determination of the Fair Market Value of Shares
shall be borne equally by the Stockholders.
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5.4 RESTRICTIONS ON TRANSFERABILITY; REGISTRATION
In addition to the foregoing provisions of this Agreement
restricting the ability of Stockholders to Transfer Shares, no Stockholder shall
Transfer any Shares to a third party unless (i) such Transfer complies with the
conditions specified in this Agreement which are intended to ensure compliance
with the provisions of the securities laws of the relevant jurisdictions, and
(ii) the transferee of such Shares executes and delivers to the Corporation a
copy of this Agreement.
SECTION 6. LEGEND
Each certificate representing Shares owned by the Stockholders or by any
persons subject to the provisions of this Agreement shall have stamped, printed
or typed thereon, in addition to any other legend required by law, the following
legend (both in Spanish and in English):
"THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY ARE SUBJECT TO, AND SHALL BE
TRANSFERABLE ONLY IN ACCORDANCE WITH, THE PROVISIONS OF A CERTAIN STOCKHOLDERS'
AGREEMENT, DATED AS OF JANUARY 4, 1994."
SECTION 7. ANTIDILUTION RIGHTS
(a) The Corporation shall not, at any time after the date
hereof, issue or sell additional securities, unless approved by the Board of
Directors and the holders of at least eighty-one percent (81%) of the
outstanding Shares.
(b) The restrictions contained in Section 7(a) hereof shall
not apply to issuances from time to time by the Corporation of its Shares, or of
securities convertible or exercisable into or exchangeable for Shares, to its
officers or employees pursuant to any existing or future stock option or other
compensation plan, agreement or arrangement.
(c) Any distributions or dividends to be made or paid to the
Stockholders shall be distributed or paid to the Stockholders on a pro rata
basis in accordance with each Stockholder's ownership of Shares on the record
date for any such distribution or dividend.
SECTION 8. RESTRICTIONS ON CORPORATION'S ACTIONS
(a) The Corporation shall not, directly or indirectly, enter
into any transaction or agreement with any employee, officer, director or
Stockholder or with any Affiliate of any of the persons or entities described
above unless the transaction or agreement is on terms and conditions no less
favorable to the Corporation than could be obtained at the time in an arm's-
length transaction with a third person that is not such a person.
(b) The Corporation shall not, without the unanimous consent
of the Stockholders, directly or indirectly, engage in any business other than
businesses contemplated in the Bid.
(c) The Corporation shall not enter into any agreement in
contravention of this Agreement.
(d) The Corporation agrees that it will not at any time permit
any Transfer to be made on its books or records of the certificates representing
the Shares of the Stockholders or any other person subject to the provisions of
this Agreement, and that it will refuse to recognize any claims of ownership of
any purported transferee of such Shares, unless such Transfer is made pursuant
to and in accordance with the terms and conditions of this Agreement.
SECTION 9. INDEPENDENT ACCOUNTANTS
Coopers & Lybrand shall serve as the Corporation's independent public
accountants, subject to replacement by the Board of Directors.
11
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SECTION 10. CAPITAL CONTRIBUTIONS
On or before the date hereof, (i) MAI contributed $1 million to the capital
of the Corporation and deposited an additional $3 million in an interest-
earning escrow account (the "Account") maintained by Bank of America Nevada, Las
Vegas, Nevada ("BofA"), for the benefit of MAI pursuant to an escrow agreement
among BofA and the Stockholders (the "Escrow Agreement"), (ii) UCC contributed
$400,000 to the capital of the Corporation and deposited an additional $1.2
million in the Account for the benefit of UCC pursuant to the Escrow Agreement
and (iii) Berjaya contributed $600,000 to the capital of the Corporation and
deposited an additional $1.8 million in the Account for the benefit of Berjaya
pursuant to the Escrow Agreement. Pursuant to the Escrow Agreement, BofA, as
agent for the Stockholders, shall, from time to time as and when requested by
the Board of Directors, disburse from the Account to the operating account of
the Corporation, as additional capital contributions by the respective
Stockholders to the Corporation in payment of the balance due for their Shares,
funds in the amounts requested by the Board of Directors, pro rata in accordance
with each Stockholder's interest in the Account. Pursuant to the Escrow
Agreement, MAI shall have the exclusive right, power and authority to authorize
and instruct BofA to disburse funds from the Account to the account of the
Corporation, and BofA shall be entitled to rely conclusively on written
instructions from MAI to such effect.
SECTION 11. MISCELLANEOUS
11.1 SPECIFIC PERFORMANCE
The Stockholders agree that it would be impossible to measure in money the
damage to the Corporation and the Stockholders in the event of a breach of any
of the terms and provisions hereof and the Stockholders agree that in the event
of any such breach the Corporation and the stockholders will not have an
adequate remedy at law and will be irreparably damaged if such provisions are
not specifically enforced. Therefore, the covenants set forth in Section 2
hereof and the restrictions on the transfer of Shares and the obligations to
purchase Shares set forth in Section 5 hereof shall be enforceable in a court of
equity by a decree of specific performance, and each of the parties hereto
hereby consents that injunctive relief may be applied for and granted in
connection therewith. Such remedies shall, however, be cumulative and not
exclusive and shall be in addition to any other remedies which any other party
may have under this Agreement or otherwise.
11.2 COMPLETE AGREEMENT
This Agreement constitutes the complete understanding among the parties with
respect to its subject matter and no alteration, waiver or modification of any
of its provisions shall be valid unless made in writing and signed by all the
Stockholders.
11.3 SECTION HEADINGS
The section headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
11.4 SUCCESSORS AND ASSIGNS
All of the terms of this Agreement shall inure to the benefit of and shall
be binding upon the successors and assigns of the Stockholders and upon the
successors and assigns of the Corporation, except as otherwise specifically
provided herein.
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11.5 NOTICES
(a) All notices, offers, acceptances and other communications
required or permitted hereunder shall be sufficiently given if (a) in writing
and personally delivered, (b) sent by telex or telecopy provided that "answer-
back" confirmation is received by the sender, or (c) upon receipt, if sent by
registered or certified mail, postage paid, return receipt requested, or major
commercial courier, in any case addressed:
If to the Corporation:
Mirage Universal de Misiones S.A.
Carlos Pellegrini 887
3rd Floor
1338 Buenos Aires, Argentina
Telephone:(54-1) 325-3500
Telecopy: (54-1) 334-6617
If to MAI:
Mirage Argentina, Inc.
c/o General Counsel
Mirage Resorts, Incorporated
3400 Las Vegas Boulevard South
Las Vegas, Nevada 89109
Telephone (1-702) 791-7111
Telecopy: (1-702) 791-5787
If to UCC:
Universal Casino Consultants (HK)
Ltd.
Prince's Building, 17th Floor
10 Chater Road
Central Hong Kong
Telephone: (071) 431-9407
Telecopy: (071) 431-9454
If to Berjaya:
Berjaya Universal Casino
Management (HK) Ltd.
Level 28 Shahzan Prudential Tower
30 Jalan Sultan Ismail
50250 Kuala Lumpur, Malaysia
Telephone:(603) 242-2622
Telecopy: (603) 248-4660
(b) Any party may change the address to which each such notice
or communication shall be sent by giving written notice to the other parties of
such new address in the manner provided herein for giving notice. Absent such
notification, the information contained above will remain valid for purposes of
any notice of communication under this Agreement.
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11.6 GOVERNING LAW
The parties hereto expressly acknowledge and agree that, in accordance with
the provisions of New York General Obligations Law Section 5-1401 governing
agreements relating to any obligation arising out of a transaction covering in
the aggregate not less than $250,000, this Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to the provisions, policies or principles thereof respecting conflict or
choice of laws.
11.7 JURISDICTION
(a) ANY SUIT, ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT AND ANY ACTION OR PROCEEDING TO EXECUTE OR OTHERWISE ENFORCE ANY
JUDGMENT OBTAINED IN CONNECTION HEREWITH MAY BE INSTITUTED IN THE SUPREME COURT
OF THE STATE OF NEW YORK, COUNTY OF NEW YORK, OR IN THE U.S. DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS
GENERALLY (BUT NON-EXCLUSIVELY) TO THE JURISDICTION OF EACH SUCH COURT OF ANY
SUIT, ACTION OR PROCEEDING. EACH OF THE PARTIES HERETO HEREBY FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS IN ANY SUIT, ACTION OR PROCEEDING
IN SAID COURTS BY THE MAILING THEREOF BY ANY OTHER PARTY BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH PARTY AT ITS ADDRESS FOR NOTICES
SPECIFIED PURSUANT TO SECTION 11.5.
(b) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO LAYING OF VENUE OF ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE ENFORCEMENT OF THIS
AGREEMENT BROUGHT IN THE SUPREME COURT OF THE STATE OF NEW YORK, COUNTY OF NEW
YORK, OR THE U.S. DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND
HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
11.8 AFTER-ACQUIRED SHARES
The terms and provisions of this Agreement shall apply to all of the Shares
now owned or which may be acquired hereafter in accordance with the provisions
of this Agreement.
11.9 AMENDMENTS
Any provision of this Agreement may be amended or waived only in writing
and shall require the written consent of the holders of eighty-one percent (81%)
of the Shares and shall be effective upon the execution and delivery of such
consent by such Persons.
11.10 COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original but all of which taken together shall constitute one
and the same agreement.
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11.11 FURTHER ASSURANCES
Each of the parties hereto agrees to take such actions and to vote the
Shares held by such party to give effect to the provisions of this Agreement.
Each of the parties hereto agrees to take such further actions and to execute
and deliver such additional agreements and documents as the other parties hereto
may reasonably request in order to carry out all obligations and covenants
arising hereunder. Without limiting the generality of the foregoing, each party
shall not permit any of its designees on the Board of Directors to take any
action or omit to take any action that frustrates or otherwise materially
interferes with the performance by any party of its obligations under this
Agreement or under the other agreements and documents relating to the subject
matter hereof, except to the extent that (a) any member of such Board of
Directors designated by another party hereto (which is not an Affiliate of the
first party) takes or omits to take such action or approve or condone the action
taken or omitted, or (b) such designee has concluded in good faith in his sole
judgment that such action or omission was necessary or desirable in order to
comply with his fiduciary duties or other applicable legal standards, whether or
not in fact legally required. Each of the parties hereto acknowledges that it
is the intention of each such party that the Constituent Documents of the
Corporation shall, to the extent permitted pursuant to the laws of the relevant
jurisdiction under which the Corporation is organized and existing, conform to
the provisions of Sections 2, 4 and 5 hereof and that such party shall comply
with the provisions set forth in Sections 2, 4 and 5, notwithstanding the
existence of any inconsistent provision set forth in any such Constituent
Document.
11.12 SEVERABILITY
If at any time subsequent to the date of this Agreement, any provision of
this Agreement shall be held by any court of competent jurisdiction to be
illegal, void or unenforceable, such provision shall be of no force or effect
but the illegality or unenforceability of such provision shall have no effect
upon or impair the enforceability of any other provision.
11.13 NO WAIVER
No failure on the part of any party hereunder to exercise, and no delay in
exercising, and no course of dealing with respect to, any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege.
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IN WITNESS WHEREOF, the parties have signed this Agreement as of the date
first set forth above.
MIRAGE UNIVERSAL DE MISIONES S.A.
By: /s/ISAAC S. ATTIAS
-------------------------------------------
Name: Isaac S. Attias
Title: President
STOCKHOLDERS:
BERJAYA UNIVERSAL CASINO MANAGEMENT
(HK) LTD.
By: /s/TAN SRI DATO VINCENT TAN CHEE YIOUN
-------------------------------------------
Name: Tan Sri Dato Vincent Tan Chee Yioun
Title: Director
MIRAGE ARGENTINA, INC.
By: /s/STEPHEN A. WYNN
------------------------------------------
Name: Stephen A. Wynn
Title: President
UNIVERSAL CASINO CONSULTANTS (HK) LTD.
By: /s/MAX M. KINGSLEY
------------------------------------------
Name: Max M. Kingsley
Title: Chairman
16
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<TABLE>
<CAPTION>
SUBSIDIARIES OF MIRAGE RESORTS, INCORPORATED
- ---------------------------------------------------------------------------------------------------
<S> <C>
GOLDEN NUGGET, INC. GN MARKETING CORP.
a New Jersey corporation a New York corporation
AC HOLDING CORP. GOLDEN NUGGET MARKETING CORP.
a Nevada corporation a Pennsylvania corporation
AC HOLDING CORP. II GOLDEN NUGGET MARKETING CORP.
a Nevada corporation a Texas corporation
ATLANDIA DESIGN AND FURNISHINGS, INC. GOLDEN NUGGET MARKETING CORP.- ILLINOIS
a New Jersey corporation a Nevada corporation
THE MIRAGE CASINO-HOTEL TYOH ADVERTISING, INC.
a Nevada corporation a Nevada corporation
dba The Mirage MH, INC.**
GNS FINANCE CORP. a Nevada corporation
a Nevada corporation dba Shadow Creek
CAL INVESTMENTS, INC. NEW CITY DEVELOPMENT, INC.
a Nevada corporation a Connecticut corporation
GNLV, CORP. SEE SAW SIGN CORP. ***
a Nevada corporation a Nevada corporation
dba Golden Nugget MIRAGE SPORTS
GNLV FINANCE CORP. a Nevada corporation
a Nevada corporation THE MIRAGE-GOLDEN NUGGET TAIWAN, LTD.
THE MIRAGE-GOLDEN NUGGET LATIN AMERICA, LTD. a Nevada corporation
a Nevada corporation GOLDEN NUGGET FINANCE CORP.
GNRM, CORP. a Nevada corporation
a Nevada corporation MIRAGE MIDWEST, INC.
GOLDEN NUGGET (ASIA) LTD. a Nevada corporation
a Nevada corporation TREASURE ISLAND FINANCE CORP.****
THE MIRAGE-GOLDEN NUGGET HONG KONG, LTD. a Nevada corporation
a Nevada corporation MIRAGE RIVERBOATS OF ILLINOIS, INC.
GOLDEN NUGGET AVIATION CORP. an Illinois corporation
a Nevada corporation MCH HOLDING CORP. **
GOLDEN NUGGET MANUFACTURING CORP.* a Nevada corporation
a Nevada corporation GNLV HOLDING CORP.*
GNL, CORP. a Nevada corporation
a Nevada corporation MR REALTY
dba Golden Nugget-Laughlin a Nevada corporation
MIRAGE HAWAII MARKETING CORP. dba The Mirage Golf Club
a Nevada corporation MIRAGE LAUNDRY SERVICES CORP.
MIRAGE INDONESIA MARKETING CORP., LTD. a Nevada corporation
a Nevada corporation MIRAGE CONNECTICUT, INC.
TREASURE ISLAND CORP.** a Connecticut corporation
a Nevada corporation MIRAGE ARGENTINA, INC.
dba Treasure Island at The Mirage a Nevada corporation
SHADOW CREEK TREASURE ISLAND PRODUCTIONS, INC.*****
a Nevada corporation a Nevada corporation
SNAK, CORP. GOLDEN NUGGET EXPERIENCE CORP.
a Nevada corporation a Nevada corporation
GOLDEN NUGGET MARKETING CORP. EGARIM, INC.
a Mississippi corporation an Alabama corporation
GOLDEN NUGGET MARKETING CORP. MIRAGE RIVERBOATS OF INDIANA, INC.
a Georgia corporation an Indiana corporation
MIRAGE NORTHWEST, INC. MIRAGE BUENOS AIRES, INC.
a Nevada corporation a Nevada corporation
GNLV MARKETING CORP. - CANADA GOLDEN NUGGET LAWRENCEBURG, INC.
a Nevada corporation an Indiana corporation
M.I.R. TRAVEL THREE RIVERS PLANNING CORP.
a Nevada corporation a Pennsylvania corporation
THE MIRAGE-GOLDEN NUGGET SINGAPORE, LTD.
a Nevada corporation
GOLDEN NUGGET MARKETING CORP.
a California corporation
GOLDEN NUGGET MARKETING CORP.
a Louisiana corporation
<FN>
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* 100% of the voting securities are owned by GNLV, CORP.
** 100% of the voting securities are owned by THE MIRAGE CASINO-HOTEL
*** 100% of the voting securities are owned by TYOH ADVERTISING, INC.
**** 100% of the voting securities are owned by GNS FINANCE CORP.
***** 100% of the voting securities are owned by Treasure Island Corp.
</TABLE>
EXHIBIT 21
