<PAGE>
FILED PURSUANT TO RULE 424(B)(5)
UNDER THE SECURITIES ACT OF 1933 AS AMENDED
COMMISSION FILE NO: 333-07621
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED JULY 12, 1996
$250,000,000
MIRAGE RESORTS, INCORPORATED
7.25% SENIOR NOTES DUE OCTOBER 15, 2006
--------------
Interest on the Notes is payable on April 15 and October 15 of each year,
commencing April 15, 1997. The Notes are redeemable, in whole or in part, at the
option of the Company at any time at a redemption price equal to the greater of
(i) 100% of the principal amount of such Notes or (ii) as determined by a
Quotation Agent (as defined herein), the sum of the present values of the
remaining scheduled payments of principal and interest thereon discounted to the
date of redemption on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Adjusted Treasury Rate (as defined herein), plus,
in each case, accrued interest thereon to the date of redemption.
The Notes offered hereby will be represented by one or more global Notes
registered in the name of the nominee of DTC (as defined herein). Beneficial
interests in the global Notes will be shown on, and transfers thereof will be
effected only through, records maintained by DTC and its participants. Except as
described herein, Notes in definitive form will not be issued. The Notes will be
issued only in registered form in denominations of $1,000 and integral multiples
thereof. See "Description of Notes."
-------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-------------------
NEITHER THE NEVADA GAMING COMMISSION, THE NEVADA STATE GAMING CONTROL BOARD,
THE MISSISSIPPI GAMING COMMISSION, THE NEW JERSEY CASINO CONTROL
COMMISSION NOR ANY OTHER GAMING REGULATORY AUTHORITY HAS PASSED UPON
THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS TO WHICH IT RELATES OR THE INVESTMENT MERITS OF
THE SECURITIES OFFERED HEREBY. ANY REPRESENTATION TO
THE CONTRARY IS UNLAWFUL.
-------------------
<TABLE>
<CAPTION>
INITIAL PUBLIC
OFFERING PRICE UNDERWRITING PROCEEDS TO
(1) DISCOUNT (2) COMPANY (1)(3)
----------------- ------------- ----------------
<S> <C> <C> <C>
Per Note..................................................... 99.869% 0.650% 99.219%
Total........................................................ $249,672,500 $1,625,000 $248,047,500
</TABLE>
- ---------
(1) Plus accrued interest, if any, from October 30, 1996.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
(3) Before deducting estimated expenses of $500,000 payable by the Company.
-------------------
The Notes offered hereby are offered severally by the Underwriters, as
specified herein, subject to receipt and acceptance by them and subject to their
right to reject any order in whole or in part. It is expected that the Notes
will be ready for delivery in book-entry form only through the facilities of DTC
in New York, New York, on or about October 30, 1996, against payment therefor in
immediately available funds.
GOLDMAN, SACHS & CO. CS FIRST BOSTON
BA SECURITIES, INC. BEAR, STEARNS & CO. INC. DONALDSON, LUFKIN &
JENRETTE SMITH BARNEY INC.
SECURITIES CORPORATION
------------------------
The date of this Prospectus Supplement is October 25, 1996.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
-------------------
THE COMPANY
Mirage Resorts, Incorporated (the "Company") owns and operates some of the
most successful casino-based entertainment resorts in the world. These resorts
include (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. The Company also owns a 50% interest in a joint venture which
owns and operates the Monte Carlo Resort & Casino ("Monte Carlo"), a
hotel-casino resort on the Las Vegas Strip which opened on June 21, 1996. The
Company is currently constructing Bellagio, an elegant hotel-casino and
destination resort on the Las Vegas Strip, and Beau Rivage, a luxurious
hotel-casino and beachfront resort in Biloxi, Mississippi. When these properties
are opened, the total number of hotel rooms at the Company's wholly owned
properties will increase by approximately 59% and total casino square footage at
such facilities will increase by approximately 92%.
The Company's philosophy is to build superior products in each of its
markets and to maintain these products in first-class condition. The Company
also believes that its progressive human resource policies have resulted in
superior customer service and low staff turnover. This philosophy has produced
high and stable levels of profitability at each of its major resorts.
Unless the context otherwise requires, references to the Company include the
Company and its wholly owned subsidiaries, through which its operations are
conducted.
THE MIRAGE
The Mirage is a luxurious, tropically themed destination resort containing
approximately 3.1 million square feet in a 29-story Y-shaped hotel tower and an
expansive low-rise complex. The Mirage features a 95,900-square foot casino,
3,044 hotel rooms (including 265 suites and 14 villa and lanai suites),
approximately 71,000 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 1,503-seat showroom
showcasing the world-famous illusionists Siegfried & Roy, five gourmet
restaurants, a California-style pizza restaurant, a coffee shop, a buffet, four
bars (two featuring live entertainment), two snack 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.
During 1995, all of the standard guest rooms and 61 of the suites were
extensively refurbished and enhanced. 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 54-foot simulated volcano and waterfall. Each
evening, the volcano erupts at regular 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 100-foot-high 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 housing seven Atlantic bottlenose dolphins.
As of October 1, 1996, The Mirage's casino offered 119 table games
(including blackjack, craps, roulette, baccarat, mini-baccarat, let it ride, pai
gow, pai gow poker, Caribbean stud poker and big six), keno, poker, a race and
sports book and approximately 2,245 slot machines or similar coin-operated
devices.
S-2
<PAGE>
TREASURE ISLAND
Treasure Island is a pirate-themed hotel-casino resort featuring an
82,000-square foot casino, 2,900 hotel rooms (including 212 suites), three
gourmet restaurants, an Italian specialties grill, a coffee shop, a buffet, two
snack bars, an ice cream parlor, five bars (two featuring live entertainment), a
1,525-seat showroom featuring "Mystere" (a production 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
16,000 square feet of meeting and banquet space, two wedding chapels, a swimming
pool, a parking garage with space for approximately 2,400 vehicles and the
previously mentioned valet parking garage shared with The Mirage. The front of
Treasure Island, facing 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.
As of October 1, 1996, Treasure Island's casino offered 82 table games
(including blackjack, craps, roulette, baccarat, mini-baccarat, let it ride, pai
gow, pai gow poker, Caribbean stud poker and big six), keno, poker, a race and
sports book and approximately 2,145 slot machines or similar coin-operated
devices.
GOLDEN NUGGET
The Golden Nugget, together with its parking facilities, occupies
approximately two and one-half square blocks in downtown Las Vegas,
approximately five miles from The Mirage and Treasure Island. The Golden Nugget
features a 38,000-square foot casino, 1,907 hotel rooms (including 102 suites),
two gourmet restaurants, a California-style pizza restaurant, a coffee shop, a
buffet, a snack bar, three bars, an entertainment lounge, a ballroom/showroom,
approximately 24,000 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 October 1, 1996, the Golden Nugget's casino offered 64 table games
(including blackjack, craps, roulette, baccarat, mini-baccarat, pai gow poker,
Caribbean stud poker and big six), keno, a race and sports book and
approximately 1,295 slot machines or similar coin-operated devices.
GOLDEN NUGGET-LAUGHLIN
The Golden Nugget-Laughlin, a hotel-casino in Laughlin, Nevada,
approximately 90 miles south of Las Vegas, is located on approximately 13 acres
with 600 feet of Colorado River frontage near the center of Laughlin's tourist
strip. The Golden Nugget-Laughlin features a 32,000-square foot casino, 300
hotel rooms (including four suites), three restaurants, three bars, an
entertainment lounge, a deli, an ice cream parlor and sweets shop and a gift and
retail shop. Other facilities at the Golden Nugget-Laughlin include a swimming
pool, a parking garage with space for approximately 1,585 vehicles and
approximately four and one-half acres of surface parking for recreational
vehicles. The Company also owns a 78-room motel in Bullhead City, Arizona,
across the Colorado River from the Golden Nugget-Laughlin.
As of October 1, 1996, the Golden Nugget-Laughlin's casino offered 24 table
games (including blackjack, craps, roulette, let it ride, pai gow poker and
Caribbean stud poker), keno, a race and sports book and approximately 1,185 slot
machines or similar coin-operated devices.
MONTE CARLO (50%-OWNED)
The Company is a 50% partner with Circus Circus Enterprises, Inc. ("Circus")
in a joint venture that owns and operates Monte Carlo. The resort is situated on
46 acres adjacent to the Bellagio site. Monte Carlo has a palatial style
reminiscent of the Belle Epoque, the French Victorian architecture of the late
19th century, and features a 90,000-square foot casino and 3,014 hotel rooms
(including 256 suites). Other amenities at Monte Carlo include a 550-seat bingo
parlor, three specialty restaurants, a buffet, a
S-3
<PAGE>
coffee shop, a food court, a microbrewery featuring live entertainment,
extensive retail space, approximately 15,000 square feet of meeting and banquet
space, a health spa, a beauty salon, a 1,200-seat theater featuring the
world-renowned magician Lance Burton, a large pool area, lighted tennis courts,
a multi-story parking garage with space for approximately 1,895 vehicles and
surface parking for approximately 2,330 vehicles. Monte Carlo will be connected
to Bellagio by a monorail.
CURRENT EXPANSION PROJECTS
BELLAGIO
The Company is constructing Bellagio on approximately 120 acres on the Las
Vegas Strip between Flamingo Road and Tropicana Avenue. Bellagio is designed to
be the Company's most ambitious and elegant destination resort and will include
a 34-story hotel tower with approximately 3,000 lavishly appointed guest rooms
(including 361 suites and villas) and a 152,000-square foot casino, overlooking
a lake inspired by Lake Como in Northern Italy. Several times each day the
lake's fountains will come alive in a choreographed ballet of water, music and
lights. Bellagio will feature a wide variety of casual and gourmet restaurants
in both indoor and outdoor settings, upscale retail boutiques and extensive
meeting, convention and banquet space. Cirque du Soleil will perform an all-new
production in a specially designed showroom. The resort will be lushly
landscaped with classical gardens and European fountains and pools. Bellagio is
currently expected to cost approximately $1.35 billion (including land and
capitalized interest) and is scheduled to open in the summer of 1998.
BEAU RIVAGE
In July 1996, the Company began construction of Beau Rivage, a luxurious
beachfront resort in Biloxi, Mississippi. Beau Rivage will be situated on a
21-acre site where Interstate 110 meets the Gulf Coast. The resort will feature
a 75,000-square foot casino, 1,804 hotel rooms (including 87 suites), a variety
of restaurants and retail outlets, a 1,200-seat showroom, approximately 32,000
square feet of meeting and banquet space, a health spa, a beauty salon, a
swimming pool and a multi-story parking garage. Beau Rivage is scheduled for
completion in the first quarter of 1998 at a total cost, including land and
capitalized interest, of approximately $500 million.
As with any major construction project, the Bellagio and Beau Rivage
projects involve many risks, including shortages of materials and labor, work
stoppages, labor disputes, weather interference, unforeseen engineering,
environmental or geological problems and unanticipated cost increases, any of
which could give rise to delays or cost overruns. Construction, equipment or
staffing problems or difficulties in obtaining any of the requisite licenses,
permits, allocations or authorizations from regulatory authorities could
increase the cost or delay the construction or opening of the facilities or
otherwise affect their design and features. It is possible that the existing
budget and construction plans for either project may be changed for competitive
or other reasons. Accordingly, there can be no assurance that either project
will be completed within the time periods or budgets which are currently
contemplated.
FUTURE EXPANSION
ATLANTIC CITY
The Company and the City of Atlantic City have entered into a redevelopment
agreement providing for the City to convey 150 acres located in the Marina area
of Atlantic City to the Company in exchange for the Company agreeing to develop
a casino-based destination resort on the site and undertaking certain other
obligations, including remediation of environmental contamination and the
relocation of City-owned facilities currently located on the site. Closing under
the redevelopment agreement requires the satisfaction of a number of conditions,
including the receipt by the Company of all requisite licenses, permits,
allocations and authorizations, resolution of real estate title issues and the
execution by the Company and the New Jersey Department of Transportation of a
definitive agreement with respect to the construction and financing of certain
major roadway improvements designed to improve access to the Marina area.
Accordingly, there can be no assurance as to whether or when the Company will
proceed with the project.
S-4
<PAGE>
As currently proposed, the project, if developed, would include the
Company's construction of a wholly owned luxury hotel-casino resort featuring
approximately 2,000 guest rooms, a 115,000-square foot casino, a variety of
restaurants, a large entertainment and retail concourse and other amenities.
Although such resort has not yet been designed, the Company estimates that it
will cost between $700 million and $1 billion and require 24 to 30 months to
complete. The Company does not expect to commence construction prior to late
1997. The Company, which intends to act as master developer of the entire site,
has entered into separate agreements with Boyd Gaming Corporation ("BGC") and
Circus pursuant to which the Company and BGC will, through a joint venture,
construct a hotel-casino resort containing a minimum of 1,000 guest rooms on a
portion of the site and Circus will acquire a portion of the site from the
Company and construct an additional 2,000-room hotel-casino resort, each in an
architectural format that conforms to an agreed-to master plan. Development of
the projects by the joint venture and Circus is also contingent upon the
satisfaction of the conditions to the Company's obligation to develop its wholly
owned resort.
OTHER
The Company 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. Development and
operation of any gaming facility in a new jurisdiction are subject to numerous
contingencies, several of which are outside of the Company's control and may
include the enactment of appropriate gaming legislation, the issuance of
requisite permits, licenses and approvals, the availability of appropriate
financing and the satisfaction of other conditions. There can be no assurance
that the Company will elect or be able to consummate any such acquisition or
expansion opportunity. In the past year, the Company has reduced its expansion
efforts in emerging gaming jurisdictions in order to concentrate on the design
and development of Bellagio and Beau Rivage and its potential project in
Atlantic City.
The following table sets forth certain data, as of October 1, 1996,
regarding the Company's major resorts and certain estimates regarding the
Company's two projects under construction.
<TABLE>
<CAPTION>
BELLAGIO (A) BEAU RIVAGE (A) THE MIRAGE TREASURE ISLAND GOLDEN NUGGET
--------------- ----------------- ------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Project cost....................... $1.35 billion $ 500 million $ 815 million(c) $ 470 million (d)
Opening date....................... Summer 1998 Spring 1998 Nov. 1989 Oct. 1993 Aug. 1946
Total building square footage...... 4,631,000 2,025,000 3,072,000 2,374,000 1,465,000
Casino
Square footage (including
corridors)..................... 152,000 75,000 95,900 82,000 38,000
Number of tables................. 138 79 119 82 64
Number of slots.................. 2,476 2,100 2,245 2,145 1,295
Hotel
Number of rooms (including suites
and villas).................... 3,000 1,804 3,044 2,900 1,907
Square footage of interior
meeting space.................. 94,100 31,700 71,000 16,000 24,000
Food
Number of outlets................ 14 11 11 9 6
Number of seats.................. 2,815 1,440 2,255 1,708 1,066
Retail
Square footage................... 85,700 12,800 24,815 11,929 4,350
Entertainment
Number of seats.................. 1,780 1,200 1,503 1,525 410
<CAPTION>
MONTE CARLO (B)
---------------
<S> <C>
Project cost....................... $ 350 million
Opening date....................... June 1996
Total building square footage...... 2,520,000
Casino
Square footage (including
corridors)..................... 90,000
Number of tables................. 95
Number of slots.................. 2,225
Hotel
Number of rooms (including suites
and villas).................... 3,014
Square footage of interior
meeting space.................. 15,000
Food
Number of outlets................ 7
Number of seats.................. 2,120
Retail
Square footage................... 11,300
Entertainment
Number of seats.................. 1,200
</TABLE>
- ------------------------------
(a) Estimates regarding Bellagio and Beau Rivage are subject to change.
(b) Monte Carlo is 50%-owned by the Company.
(c) Includes capital improvements subsequent to opening.
(d) Not meaningful for comparative purposes.
S-5
<PAGE>
GAMING REGULATION
The ownership and operation of casino gaming facilities are subject to
extensive state and local regulation. The States of Nevada, where the Company's
licensed gaming operations are currently conducted, and Mississippi, where the
Company and its subsidiary which is constructing and will operate Beau Rivage
are licensed, and other states, where the Company may conduct gaming operations
in the future (including New Jersey), as well as the applicable local
authorities in such states, require various licenses, findings of suitability,
registrations, permits and approvals (individually, a "Gaming License" and
collectively, "Gaming Licenses") to be held by the Company and its subsidiaries
and joint ventures that are engaged in gaming operations. The Nevada Gaming
Commission, as well as the Mississippi Gaming Commission and the New Jersey
Casino Control Commission (individually, a "Gaming Authority" and collectively,
the "Gaming Authorities"), may, among other things, limit, condition, suspend or
revoke a Gaming License or approval to own the stock or joint venture interest
of any of the Company's licensed Nevada or Mississippi operations or any
operations subsequently conducted in New Jersey, for any cause deemed reasonable
by such licensing authority. Substantial fines or forfeiture of assets for
violations of gaming laws or regulations may be levied against the Company, such
subsidiaries and joint ventures and the persons involved. The suspension or
revocation of any of the Company's Gaming Licenses or levy on the Company of
substantial fines or forfeiture of assets could have a material adverse effect
on the business of the Company.
To date, the Company has obtained all Gaming Licenses necessary for the
operation of its existing gaming activities. However, Gaming Licenses and
related approvals are deemed to be privileges under Nevada and Mississippi as
well as New Jersey law, and no assurance can be given that any new Gaming
License that may be required in the future will be granted or that existing
Gaming Licenses will not be revoked or suspended.
The Nevada Gaming Commission may, in its discretion, require the holder or
beneficial owner of any debt security issued by the Company to file
applications, be investigated and be found suitable to own such debt security if
the Nevada Gaming Commission has reason to believe that such holder's or
beneficial owner's acquisition of such debt security would be inconsistent with
the declared policy of the State of Nevada. If the Nevada Gaming Commission
determines that a person is unsuitable to own such debt security, then pursuant
to the Nevada Gaming Control Act, the Company can be sanctioned, including the
loss of its approvals, if without the prior approval of the Nevada Gaming
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 or similar transaction. The
Mississippi Gaming Commission has similar jurisdiction over the holders and
beneficial owners of debt securities issued by the Company and may also require
their investigation and approval, and the New Jersey Casino Control Commission
will have such jurisdiction and authority if the Company is subsequently
licensed to conduct gaming operations in that state.
Under Nevada and Mississippi law, the Company may not make a public offering
of its securities without prior approval of the applicable Gaming Authorities if
the securities or proceeds therefrom are intended to be used to construct,
acquire or finance gaming facilities in such jurisdictions, or to retire or
extend obligations incurred for such purposes or for similar transactions. On
May 23, 1996, the Nevada Gaming Commission granted the Company 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 State Gaming Control Board and must be renewed
annually. The Shelf Approval does not constitute a finding, recommendation or
approval by the Nevada Gaming Commission or the Nevada State Gaming Control
Board as to the accuracy or adequacy of this Prospectus Supplement or the
accompanying Prospectus or the investment merits of the securities offered. Any
representation to the contrary is unlawful. The public offering of the Notes
will be made pursuant to the Shelf Approval. The
S-6
<PAGE>
Company received a similar one-year waiver of approval requirements from the
Mississippi Gaming Commission on June 20, 1996.
Consistent with the foregoing, the Indenture governing the Notes will
provide that each holder and beneficial owner thereof, by accepting any of the
Notes, shall be deemed to have agreed that if the Gaming Authority of any
jurisdiction in which the Company or any of its subsidiaries conducts or
proposes to conduct gaming requires that a person who is a holder or beneficial
owner must be licensed, qualified or found suitable under applicable Gaming
Laws, such holder or beneficial owner shall apply for a license, qualification
or finding of suitability within the required time period. If such person fails
to apply or become licensed or qualified or is not found suitable (in each case,
a "failure of compliance"), the Company shall have the right, at its option, (i)
to require such person to dispose of its Notes or beneficial interest therein
within 30 days of receipt of notice of the Company's election or such earlier
date as may be requested or prescribed by such Gaming Authority or (ii) to
redeem such Notes at a redemption price equal to the lesser of (A) such person's
cost or (B) 100% of the principal amount thereof, plus, in either case, accrued
and unpaid interest to the earlier of the redemption date or the date of the
failure of compliance, which may be less than 30 days following the notice of
redemption if so requested or prescribed by the Gaming Authority. The Company
shall notify the Trustee under the Indenture of any such redemption as soon as
practicable. The Company shall not be responsible for any costs or expenses any
such holder or beneficial owner may incur in connection with its application for
a license, qualification or finding of suitability.
For additional information regarding the regulation of the Company's gaming
operations, see the discussion under the caption "Regulation and Licensing" in
Item 1 of the Company's Annual Report on Form 10-K for the year ended December
31, 1995, incorporated by reference in the accompanying Prospectus.
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale of the Notes,
estimated at $247.5 million, are expected to be used to repay borrowings under
the Company's revolving bank credit facility and for other general corporate
purposes, which may include the development and construction of Bellagio and
Beau Rivage as well as any new hotel, casino and resort facilities developed in
Atlantic City. As of September 30, 1996, the Company had outstanding
indebtedness under its revolving bank credit facility of $113.0 million, bearing
interest at a weighted average rate of approximately 5.76% per annum. The
amounts outstanding under the revolving bank credit facility are short-term with
various maturities.
Pending utilization of the net proceeds as set forth above, such proceeds
may be invested in government securities, short-term commercial paper or
repurchase agreements, certificates of deposit, corporate obligations or other
marketable securities.
S-7
<PAGE>
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Company at June 30, 1996, and as adjusted at such date to give effect to the
sale of the Notes offered hereby. See "Use of Proceeds."
<TABLE>
<CAPTION>
AT JUNE 30, 1996
----------------------------
ACTUAL AS ADJUSTED
------------- -------------
(IN THOUSANDS)
<S> <C> <C>
Long-Term Debt (excluding current maturities)
Collateralized
Zero Coupon First Mortgage Notes Due March 15, 1998 (a)......................... $ 110,537 $ 110,537
Notes with interest rates of 7% and 8.689%, maturing in 1999 and 2003........... 852 852
------------- -------------
Total collateralized.......................................................... 111,389 111,389
------------- -------------
Uncollateralized
9 1/4% Senior Subordinated Notes Due March 15, 2003............................. 100,000 100,000
Revolving bank credit facility, maturing in May 1999 (b)........................ -- --
7.25% Senior Notes Due October 15, 2006 (c)..................................... -- 249,673
Notes with interest rates of 9% and 12%, maturing in 2001 and 2007.............. 1,087 1,087
------------- -------------
Total uncollateralized........................................................ 101,087 350,760
------------- -------------
Total long-term debt........................................................ 212,476 462,149
------------- -------------
Stockholders' Equity
Common stock, par value $0.004: authorized 1,125,000,000 shares;
issued 235,147,650 shares; outstanding 184,626,564 shares (d)................... 940 940
Additional paid-in capital........................................................ 721,733 721,733
Retained earnings................................................................. 755,356 755,356
Treasury stock, at cost: 50,521,086 shares (d).................................... (148,947) (148,947)
------------- -------------
Total stockholders' equity.................................................. 1,329,082 1,329,082
------------- -------------
Total capitalization.................................................... $ 1,541,558 $ 1,791,231
------------- -------------
------------- -------------
</TABLE>
- ------------------------
(a) Net of unamortized original issue discount of approximately $22.5 million.
(b) The revolving bank credit facility permits outstanding borrowings by the
Company of up to $1.0 billion. Borrowings outstanding under such facility at
September 30, 1996 totaled $113.0 million. See "Use of Proceeds."
(c) Net of original issue discount of $327,500.
(d) Does not give effect to the repurchase of 2,993,400 shares of the Company's
common stock in July and August 1996 pursuant to its existing share
repurchase program.
S-8
<PAGE>
SELECTED FINANCIAL DATA
The selected consolidated financial information of the Company presented in
the table below for each of the five years ended December 31, and the balance
sheet data as of the end of each year has been derived from audited consolidated
financial statements included in the documents incorporated by reference in the
accompanying Prospectus. The selected consolidated financial information of the
Company presented in the table below as of and for the six months ended June 30,
1996 and 1995 is unaudited; however, in the opinion of management, all
adjustments, consisting only of normal recurring adjustments, necessary for a
fair presentation of the results for such periods have been included. The
results of operations for the six months ended June 30, 1996 may not be
indicative of results of operations to be expected for the full year. The table
should be read in conjunction with the consolidated Financial Statements and
notes thereto included in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1995 and the Condensed Consolidated Financial
Statements and notes thereto included in the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended June 30, 1996 incorporated by reference in the
accompanying Prospectus.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
---------------------------------------------------------- ----------------------
1991 1992 1993 (A) 1994 1995 1995 1996
---------- ---------- ---------- ---------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE AND RATIO DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING RESULTS
Gross revenues................... $ 901,639 $ 920,576 $1,053,413 $1,370,941 $1,453,716 $ 710,112 $ 751,851
Promotional allowances........... (78,782) (87,552) (100,111) (116,764) (122,972) (58,044) (64,991)
Net revenues..................... 822,857 833,024 953,302 1,254,177 1,330,744 652,068 686,860
Operating income................. 163,488 125,775 131,728 237,839 284,087 135,874 157,442
Income before extraordinary item
and cumulative effect of change
in accounting principle (b).... 44,538 36,945 48,069 124,739 169,948 80,279 105,186
Net income....................... 46,767 28,419 29,232 114,324 163,163 73,494 105,186
Income per share before
extraordinary item and
cumulative effect of change in
accounting principle (b)....... $ 0.40 $ 0.26 $ 0.29 $ 0.66 $ 0.88 $ 0.42 $ 0.54
Net income per share............. $ 0.42 $ 0.20 $ 0.18 $ 0.60 $ 0.85 $ 0.38 $ 0.54
OTHER DATA
Interest expense................. $ 113,712 $ 99,246 $ 63,465 $ 44,215 $ 23,183 $ 13,565 $ 3,292
Cash provided by operating
activities..................... 154,966 84,565 180,825 286,761 325,286 147,538 126,548
Capital expenditures............. 66,051 220,844 432,388 69,111 179,385 60,538 113,607
Ratio of earnings to fixed
charges (c).................... 1.6 1.4 1.5 4.5 8.2 7.4 9.8
BALANCE SHEET DATA AT PERIOD-END
Total assets..................... $1,327,015 $1,594,921 $1,705,258 $1,641,439 $1,791,713 $1,673,864 $1,841,319
Long-term debt................... 797,759 831,179 535,025 359,584 248,548 298,344 212,476
Stockholders' equity............. 300,593 553,611 910,864 1,030,922 1,209,343 1,109,081 1,329,082
Shares outstanding............... 109,857 149,199 181,213 181,991 183,341 182,289 184,627
</TABLE>
- ------------------------------
(a) Treasure Island opened on October 26, 1993.
(b) Before extraordinary gains and losses on early retirements of debt and a
one-time credit of $3,632 in 1992 for the cumulative effect of a change in
method of accounting for income taxes.
(c) For the purpose of computing the ratio of earnings to fixed charges,
"earnings" consist of income before fixed charges, income taxes,
extraordinary items and the cumulative effect of a change in accounting
principle, adjusted to exclude capitalized interest and equity in
undistributed earnings and losses of less-than-50%-owned ventures. "Fixed
charges" include interest, whether expensed or capitalized, amortization of
debt discount and issuance costs, the Company's proportionate share of the
interest cost of 50%-owned ventures and the estimated interest component of
rental expense.
S-9
<PAGE>
RECENT OPERATING RESULTS
The Company reported 1996 third quarter net income of $48.7 million, or
$0.25 per share, an 8% increase over the $45.2 million, or $0.23 per share,
reported in the third quarter of 1995. This was the Company's eleventh
consecutive quarter in which earnings per share exceeded the prior-year results.
Revenues, net of promotional allowances, totaled $338.6 million, an increase of
$3.4 million over the $335.2 million reported in the 1995 third quarter.
Operating income grew by 4% to $76.0 million, versus $73.1 million in the
prior-year quarter.
Monte Carlo's first full quarter of operations produced operating income of
$18.6 million on net revenues of $67.5 million. Net of the unconsolidated
subsidiary's interest expense, the facility contributed $7.2 million to the
Company's pretax income. Monte Carlo operated at over 98% occupancy in the
quarter, with an average standard room rate of nearly $70.
Net non-casino revenues at The Mirage rose 10% over the prior-year quarter.
Casino revenues excluding baccarat were approximately flat, but the level of
baccarat activity declined from the prior-year quarter. As a result, operating
income at The Mirage declined by 14% in the quarter. For the nine-month period,
the property's operating income increased 2% over the prior-year corresponding
period.
Net revenues at Treasure Island increased 4% over the prior-year quarter
despite the new competition from Monte Carlo and Stratosphere. Operating income
increased by 9% over the prior-year quarter. Treasure Island has achieved
increases in revenues and operating income in each of the seven quarters where
year-to-year comparisons are possible. For the nine-month period, Treasure
Island's operating income increased 10% over the 1995 nine-month period.
The Golden Nugget also had a strong quarter, achieving an 11% increase in
operating income on a 4% increase in net revenues, as compared to the prior-year
quarter. This continues the strong results that the property has shown since the
December 1995 opening of the Fremont Street Experience. For the nine-month
period, the Golden Nugget's operating income increased 38% over the prior-year
period.
The Company-wide table games win percentage was 19.2% in the third quarter,
versus 20.3% in the prior-year quarter. By comparison, for the full years 1994
and 1995, the Company-wide win percentage was 18.8% and 20.2%, respectively.
The Company's occupancy and average room rates reflect the continued
underlying strength of the Las Vegas market. Company-wide occupancy of standard
guest rooms increased to 99.2% for the third quarter, versus 98.8% for the
prior-year quarter. Meanwhile, the Company's average standard room rate
increased by 7%.
Corporate expense declined 14% from the prior-year quarter, as management's
focus has shifted from potential legalization efforts to actual projects under
construction.
Interest expense declined $4.3 million, or 80%, from the prior-year quarter
as the Company's construction-in-progress has increased, resulting in greater
capitalization of interest.
S-10
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
COMPARISON OF THE SIX MONTHS ENDED JUNE 30, 1995 AND 1996
RESULTS OF OPERATIONS
The following table sets forth certain financial information for the six
months ended June 30, 1995 and June 30, 1996 for each of the Company's
properties.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
-------------------- % INCREASE
1995 1996 (DECREASE)
--------- --------- ------------
(DOLLARS IN THOUSANDS, EXCEPT PER
SHARE AND ROOM RATE AMOUNTS)
<S> <C> <C> <C>
Gross revenues
The Mirage.................................................................. $ 382,105 $ 405,619 6.2 %
Treasure Island............................................................. 194,925 205,388 5.4 %
Golden Nugget............................................................... 100,113 114,309 14.2 %
Golden Nugget-Laughlin...................................................... 32,969 31,703 (3.8)%
--------- --------- ------------
710,112 757,019 6.6 %
Equity in loss of Monte Carlo............................................... -- (5,168) --
--------- --------- ------------
$ 710,112 $ 751,851 5.9 %
--------- --------- ------------
Net revenues
The Mirage.................................................................. $ 349,448 $ 368,682 5.5 %
Treasure Island............................................................. 181,421 190,161 4.8 %
Golden Nugget............................................................... 91,308 104,646 14.6 %
Golden Nugget-Laughlin...................................................... 29,891 28,539 (4.5 )%
--------- --------- ------------
652,068 692,028 6.1 %
Equity in loss of Monte Carlo............................................... -- (5,168) --
--------- --------- ------------
$ 652,068 $ 686,860 5.3 %
--------- --------- ------------
Operating profit
The Mirage.................................................................. $ 87,994 $ 98,254 11.7 %
Treasure Island............................................................. 43,970 48,394 10.1 %
Golden Nugget............................................................... 16,978 25,561 50.6 %
Golden Nugget-Laughlin...................................................... 4,847 4,179 (13.8 )%
--------- --------- ------------
153,789 176,388 14.7 %
Equity in loss of Monte Carlo................................................. -- (5,168) --
Corporate expense............................................................. (17,915) (13,778) (23.1 )%
--------- --------- ------------
$ 135,874 $ 157,442 15.9 %
--------- --------- ------------
Operating margin (OPERATING PROFIT/NET REVENUES)
The Mirage.................................................................. 25.2% 26.7% 1.5 pts
Treasure Island............................................................. 24.2% 25.4% 1.2 pts
Golden Nugget............................................................... 18.6% 24.4% 5.8 pts
Golden Nugget-Laughlin...................................................... 16.2% 14.6% (1.6 )pts
Company-wide (BEFORE MONTE CARLO AND CORPORATE EXPENSE)..................... 23.6% 25.5% 1.9 pts
--------- --------- ------------
Income before extraordinary item.............................................. $ 80,279 $ 105,186 31.0 %
Net income.................................................................... $ 73,494 $ 105,186 43.1 %
--------- --------- ------------
Income per share before extraordinary item.................................... $ 0.42 $ 0.54 28.6 %
Net income per share.......................................................... $ 0.38 $ 0.54 42.1 %
Other information (EXCLUDING MONTE CARLO)
Company-wide table games win percentage..................................... 20.2% 19.0% (1.2 )pts
Company-wide occupancy of standard guest rooms.............................. 98.6% 99.5% 0.9 pts
Average standard guest room rate (a)........................................ $ 79 $ 92 16.5 %
--------- --------- ------------
</TABLE>
- ------------------------------
(a) Excludes the Golden Nugget-Laughlin and rooms provided on a complimentary
basis.
S-11
<PAGE>
The first half of 1996 set new records for the Company. Revenues, operating
income and income before non-recurring items were all records for the first six
months of any year in the Company's history, surpassing previous records set in
the first six months of 1995. Operating profit before Monte Carlo and corporate
expense grew by $22.6 million, or 15%, and earnings per share of $0.54
represents a 29% increase over the $0.42 before extraordinary item in the 1995
six-month period.
Operating results at the Company's Las Vegas resorts were up strongly over
the 1995 period. The Mirage overcame a decline in the table games win percentage
to achieve increases of 6% in net revenues and 12% in operating income. The
Mirage's room enhancement program, which was completed in August 1995, yielded
strong returns throughout the first half of 1996. With 14% more available room
nights and a 16% increase in the average standard room rate, net room revenues
grew by $12.2 million, or 26%. Food and beverage, entertainment and retail
revenues also experienced solid increases. In total, net non-casino revenues
were up $20.1 million, or 15%, over the 1995 six-month period.
Slot revenues at The Mirage increased by 6% and table games activity grew by
5%. The improvement in table games activity, however, was offset by the lower
win percentage, resulting in a small decline in total casino revenues.
Treasure Island achieved a 5% increase in net revenues and a 10% increase in
operating income during the first half of 1996. These increases primarily
reflect an $8.1 million, or 8%, improvement in net non-casino revenues. Casino
revenues were relatively flat compared with the 1995 period. Net non-casino
revenues showed improvement in virtually every category. In particular, room
revenues grew by $5.1 million, or 13%, and entertainment revenues were up $1.3
million, or 7%. The growth in room revenues principally reflects an increase in
the average standard room rate. Increases in both occupancy and the average
ticket price for the Mystere show primarily account for the increase in
entertainment revenues.
The Fremont Street Experience, which opened in December 1995, had a
significant positive impact on the Golden Nugget's operating results throughout
the first half of 1996. Net revenues grew by 15% and operating income was up
51%. The growth in revenues reflects increases of $7.7 million, or 13%, in
casino revenues and $5.6 million, or 17%, in net non-casino revenues. Slot
revenues were up 12%. Table games benefited from an increase in activity and a
more favorable win percentage, resulting in a 15% increase in revenues.
Net room revenues at the Golden Nugget grew by $3.7 million, or 22%,
attributable to increases in both occupancy and the average room rate. Occupancy
of available standard guest rooms was 98.9%, versus 96.6% in the 1995 six-month
period. Food and beverage revenues increased $1.7 million, or 16%, accounting
for most of the remaining increase in net non-casino revenues.
Weak market conditions hampered operating results at the Golden
Nugget-Laughlin during the first half of 1996. A $1.1 million decrease in slot
revenues led to a 5% decline in total net revenues and a 14% reduction in
operating income.
Monte Carlo, the Company's joint venture hotel-casino with Circus, opened
June 21, 1996 on the Las Vegas Strip. For the 10-day period of operations in
June, this new mid-priced resort reported $9.0 million in total revenues and
$1.2 million in operating profit before the write-off of preopening costs. These
results were achieved despite what management believes is a lower than normal
table games win percentage and notwithstanding the inefficiencies inherent in
any new property's first few weeks of operation. Net of the write-off of all
$11.2 million in preopening costs, Monte Carlo had a $10.3 million net loss for
the period.
Because Monte Carlo is a 50% owned venture, its operating results are not
consolidated with the Company's. Instead, the Company's $5.2 million share of
Monte Carlo's net loss for the 10-day period is included in the Company's gross
revenues.
S-12
<PAGE>
OTHER FACTORS AFFECTING EARNINGS
Corporate expense declined by 23%, as management concentrated on developing
resorts in existing gaming jurisdictions rather than pursuing opportunities in
potential new jurisdictions.
Interest and other income during the 1996 and 1995 periods include gains of
$4.5 million and $2.5 million, respectively, from the sale of investment
securities. At June 30, 1996, there were no securities remaining in the
Company's investment portfolio.
Interest expense declined by $10.3 million, or 76%, due to a continued
reduction in debt levels coupled with an increase in capitalized interest, as
greater amounts are being invested in new projects.
In February 1996, the Company sold its 50% equity interest in a small casino
located near Iguazu Falls, Argentina. The casino opened in July 1994 with a
total investment by the Company of $4.0 million. Although the casino was quite
profitable, contributing $1.4 million (on a pretax basis) to the Company's 1995
annual operating results, management determined that the facility was not
capable of being expanded into a resort of meaningful size to the Company.
Consequently, the Company's interest was sold for $12.5 million in cash,
resulting in a pretax gain of $8.0 million.
In March 1995, the Company called for redemption the remaining $126.0
million principal amount of the 9 7/8% first mortgage notes associated with The
Mirage and Treasure Island. Although this early retirement was financially
advantageous to the Company, the call premium and the write-off of the related
unamortized debt issuance costs resulted in an extraordinary charge of $6.8
million ($0.04 per share) during the 1995 six-month period.
REGULATION AND TAXES
The Company is subject to extensive regulation by the Nevada gaming
authorities and will be subject to regulation, which may or may not be similar
to that in Nevada, by the appropriate authorities in Mississippi, New Jersey and
any other jurisdiction in which it may conduct gaming activities in the future.
Changes in applicable laws or regulations could have a significant impact on the
Company's operations. Recently, legislation was enacted which established a
federal commission to study the gaming industry.
The gaming industry represents a significant source of tax revenues,
particularly to the State of Nevada and its counties and municipalities. From
time to time, various state and federal legislators and officials have proposed
changes in tax law, or in the administration of such law, affecting the gaming
industry. Proposals in recent years that have not been enacted included a
federal gaming tax and increases in state or local gaming taxes. Other issues
under consideration by the Internal Revenue Service include limitations on the
federal income tax deductibility of furnishing complimentary promotional items
to customers, as well as various measures that would require withholding on
amounts won by customers or on discounts negotiated with foreign customers on
amounts owed to the Company.
Management believes that the Company's recorded tax balances are adequate.
However, it is not possible to determine with certainty the likelihood of
possible changes in tax law or in the administration of such law. Such changes,
if adopted, could have a material adverse effect on the Company's operating
results.
COMPARISON OF THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
RESULTS OF OPERATIONS
The Company achieved record operating results during 1995. Income before
extraordinary and non-recurring items of $169.9 million ($0.88 per share) was
36% greater than the previous record of $124.7 million ($0.66 per share)
achieved on the same basis in 1994. After deducting extraordinary charges on
early retirements of debt, the Company had net income of $163.2 million ($0.85
per share) in 1995, versus $114.3 million ($0.60 per share) in the prior year.
S-13
<PAGE>
The Company's net revenues during 1995 increased $76.6 million, or 6%,
reflecting substantial growth in both casino and non-casino revenues. The
Company's casinos achieved a 15% increase in table games revenues attributable
almost equally to a higher win percentage and a strong increase in the level of
activity, particularly baccarat play. The Company-wide table games win
percentage for the year was 20.2%, compared to 18.8% in 1994.
Slot revenues increased 1% over 1994. However, the Company's other casino
revenues declined due primarily to a lower sports book win percentage.
The Company's 1995 non-casino revenues net of promotional allowances
increased by $21.4 million, or 4%. A major contributor to this was a 23%
increase in entertainment revenues. This growth partially reflects a 16%
increase in the number of performances by Siegfried & Roy, whose performance
schedule was curtailed during 1994 due to knee surgery required by one of the
principal performers. Furthermore, the Mystere production achieved higher
occupancy and a higher average ticket price for the year. Both Siegfried & Roy
and Mystere played to average occupancy of nearly 100% during 1995. The increase
in ticket prices and showroom occupancy resulted in an improvement in gross
margins and profitability.
Company-wide net room revenues increased 5% for the year. This was
particularly notable as the number of available room nights declined 4%, due to
construction relating to the enhancement and refurbishment of many of the guest
rooms at The Mirage and the Golden Nugget. Net revenues per available room night
at the Company's four hotels increased 8% over 1994. Company-wide occupancy of
standard guest rooms remained steady, at approximately 98%. The increase in
average room rate helped the Company achieve an increase in the gross margin on
room revenues.
Treasure Island was the principal contributor to the substantial growth in
the Company's operating results in 1994. This exciting pirate-themed facility
opened on October 26, 1993, and contributed net revenues and operating income of
$343.0 million and $69.7 million, respectively, during its first full year of
operation. Treasure Island's 1994 net revenues consisted of casino revenues of
$152.5 million and non-casino revenues of $190.5 million.
During its 66 days of operations in 1993, Treasure Island contributed net
revenues of $59.0 million and operating income (before preopening and related
promotional expense) of $8.5 million. Net revenues included casino revenues of
$30.6 million and non-casino revenues of $28.4 million.
The combined net revenues and operating income of The Mirage and the
Company's two Golden Nugget properties increased 2% and 11%, respectively,
during 1994. Combined casino revenues of the three properties increased $19.4
million, or 3%, primarily resulting from a 5% improvement in table games
activity at The Mirage. Combined slot revenue of the three properties was up
$9.2 million, or 4%. Management attributes the improvement in part to the
mid-1994 completion of a program to install new upgraded slot machines at the
three facilities.
Net non-casino revenues, excluding Treasure Island, were relatively
unchanged in 1994. This result was achieved despite approximately 16% fewer
performances by Siegfried & Roy and the November 1993 conclusion of Cirque du
Soleil's engagement at The Mirage.
OTHER FACTORS AFFECTING EARNINGS
General and administrative expense in 1994 includes abandonment charges
totaling $12.4 million, principally reflecting an $11.0 million charge
associated with the room enhancement program at The Mirage. Various smaller
projects resulted in similar charges of $3.6 million in 1995 and $0.5 million in
1993. The Company's depreciation and amortization expense during 1995 declined
8%, principally due to certain equipment at The Mirage having five-year
depreciable lives becoming fully depreciated near the end of 1994.
Corporate expense was essentially flat in 1995, after having increased 19%
from 1993 to 1994. The 1994 increase was primarily due to additional costs
associated with the Company's evaluation and
S-14
<PAGE>
pursuit of opportunities in new gaming jurisdictions. Such activities diminished
during 1995, but were offset by general growth of the Company and various other
factors.
The Company's policy is to expense as incurred all costs (except for land
acquisition costs) associated with potential new ventures until the likelihood
of construction is relatively certain. At December 31, 1995, capitalized
preopening costs relating to the Bellagio and the Beau Rivage projects totaled
$1.7 million.
Preopening and related promotional expense in 1993 represents the write-off
of the costs associated with the development and opening of Treasure Island.
Reflecting management's continuing efforts to reduce the Company's overall
cost of capital, interest cost declined by $36.5 million, or 41%, from 1993 to
1994, and further declined by $19.2 million, or 37%, in 1995. Total debt at
December 31, 1995 was $249.1 million, versus $363.6 million and $566.6 million
at year-end 1994 and 1993, respectively. Interest capitalized declined from
$25.1 million in 1993 to $7.8 million in 1994 as a result of the October 1993
completion of Treasure Island. Continuing development of Bellagio was the
primary reason for the small increase in interest capitalized to $9.6 million
during 1995.
Non-operating items include the Company's former 50% joint venture interest
in the operations of Casino Iguazu. The facility, located near Iguazu Falls,
Argentina, opened in July 1994. The Company recognized income of $1.4 million
attributable to its share of the earnings of Casino Iguazu during 1995, versus a
$1.0 million loss in 1994. Such loss was principally attributable to the
Company's proportionate share of the facility's preopening costs.
During all three years, the Company retired some of its more expensive debt
prior to its scheduled maturities. Although these retirements were financially
advantageous to the Company, the call premiums and the write-off of the related
unamortized debt issuance costs results in extraordinary charges.
FINANCIAL POSITION AND CAPITAL RESOURCES
At September 30, 1996, the Company had net working capital of $54.3 million
and borrowings under the $1 billion revolving bank credit facility totaled
$113.0 million. Management believes that operating cash flow and remaining
amounts available under the revolving bank credit facility will provide the
Company with sufficient resources to meet its existing debt obligations and
capital expenditure requirements, including those relating to the development of
Bellagio and Beau Rivage (see "The Company--Current Expansion Projects"). Should
the Company proceed with the projects contemplated in Atlantic City (see "The
Company--Future Expansion") or undertake significant share repurchases,
additional financing would likely be required. It is anticipated that such
financing would be available through an increase in the borrowing capacity under
the revolving bank credit facility or the issuance of additional debt or equity
securities.
DESCRIPTION OF NOTES
The following information concerning the 7.25% Notes Due October 15, 2006
(the "Notes") offered hereby supplements and should be read in conjunction with
the statements in the accompanying Prospectus under the caption "Description of
Debt Securities." Capitalized terms not otherwise defined herein shall have the
meanings given to them in the accompanying Prospectus.
GENERAL
The Notes will be issued as Debt Securities under an Indenture to be dated
as of October 15, 1996 (the "Base Indenture"), and a Supplemental Indenture
thereto to be dated as of October 15, 1996 (the "Supplemental Indenture," and
together with the Base Indenture, the "Indenture"), each between the Company and
Firstar Bank of Minnesota, N.A. (the "Trustee"). Provisions of the Base
Indenture are more fully described in the accompanying Prospectus. The Notes
will be issued as unsecured obligations of the Company in an aggregate principal
amount of $250,000,000 and will mature on October 15, 2006. The Notes will bear
interest from October 30, 1996, payable semiannually in arrears on each April 15
and
S-15
<PAGE>
October 15, commencing April 15, 1997, at the rate set forth on the cover page
of this Prospectus Supplement, to the persons in whose names the Notes are
registered on the preceding April 1 and October 1, respectively. Payment of the
principal of, and interest on, the Notes will not be guaranteed by any
subsidiary of the Company. All of the Company's principal operations are
conducted through subsidiaries. Most of such subsidiaries are obligors under the
Company's revolving bank credit facility but will have no obligation with
respect to the Notes.
RESTRICTIVE COVENANTS
The Notes are entitled to the benefit of certain restrictive covenants
described in the accompanying Prospectus under the heading "Description of Debt
Securities--Covenants."
In addition, the Notes are subject to the covenants described below.
LIMITATION ON LIENS
The Indenture will provide that the Company will not, and will not permit
any subsidiary to, create, incur, issue, assume or guarantee any Indebtedness of
the Company or any subsidiary secured by a Lien upon any Principal Property, or
upon shares of capital stock or evidences of Indebtedness issued by any
subsidiary which owns or leases a Principal Property and which are owned by the
Company or any subsidiary (whether such Principal Property, shares or evidences
of Indebtedness are now owned or are hereafter acquired by the Company), without
making effective provision to secure all of the Notes then outstanding by such
Lien, equally and ratably with (or prior to) any and all other Indebtedness
thereby secured, so long as such Indebtedness shall be so secured.
The foregoing restrictions shall not apply, however, to: (a) Liens existing
on the date of original issuance of the Notes; (b) Liens affecting property of a
corporation or other entity existing at the time it becomes a subsidiary of the
Company or at the time it is merged into or consolidated with the Company or a
subsidiary of the Company; (c) Liens on property existing at the time of
acquisition thereof or incurred to secure payment of all or a part of the
purchase price thereof or to secure Indebtedness incurred prior to, at the time
of, or within 24 months after the acquisition for the purpose of financing all
or part of the purchase price thereof; (d) Liens on any property to secure all
or part of the cost of improvements or construction thereon or Indebtedness
incurred to provide funds for such purpose in a principal amount not exceeding
the cost of such improvements or construction; (e) Liens which secure
Indebtedness owing by a subsidiary of the Company to the Company or to another
subsidiary of the Company; (f) purchase money security Liens on personal
property; (g) Liens to secure Indebtedness of joint ventures in which the
Company or a subsidiary has an interest, to the extent such Liens are solely on
property or assets of, or equity interests in, such joint ventures; (h) Liens in
favor of the United States of America or any State thereof, or any department,
agency or instrumentality or political subdivision thereof, to secure partial,
progress, advance or other payments; and (i) any extension, renewal, replacement
or refunding of any Lien referred to in the foregoing clauses (a) through (h),
PROVIDED, however, that the aggregate principal amount of Indebtedness secured
thereby and not otherwise authorized by the foregoing clauses shall not exceed
the aggregate principal amount of Indebtedness, plus any premium or fee payable
in connection with any such extension, renewal, replacement or refunding, so
secured at the time of such extension, renewal, replacement or refunding.
Notwithstanding the foregoing, the Company and its subsidiaries may create,
incur, issue, assume or guarantee Indebtedness secured by Liens without equally
and ratably securing the Notes then outstanding, PROVIDED, that at the time of
such creation, incurrence, issuance, assumption or guarantee, after giving
effect thereto and to the retirement of any Indebtedness which is concurrently
being retired, the aggregate amount of all outstanding Indebtedness secured by
Liens so incurred (other than those Liens permitted by the preceding paragraph),
together with all outstanding Attributable Value of all sale and leaseback
transactions permitted by the last paragraph under "Limitation on Sale and
Leaseback Transactions," does not exceed 15% of the Consolidated Net Tangible
Assets of the Company.
S-16
<PAGE>
LIMITATION ON SALE AND LEASEBACK TRANSACTIONS
Sale and leaseback transactions by the Company or any subsidiary involving
any Principal Property are prohibited unless the Company or such subsidiary
shall apply, or cause to be applied, to the retirement of its secured debt
within 120 days after the effective date of the sale and leaseback transaction,
an amount not less than the greater of (i) the net proceeds of the sale of the
Principal Property leased pursuant to such arrangement or (ii) the fair market
value of the Principal Property so leased. This restriction will not apply to a
sale and leaseback transaction involving the taking back of a lease for a period
of less than three years.
Notwithstanding the restrictions described above, the Company or any
subsidiary may enter into a sale and leaseback transaction, PROVIDED, that at
the time of such transaction, after giving effect thereto, the Attributable
Value thereof, together with all Indebtedness secured by Liens permitted
pursuant to the Indenture as described above under "Limitation on Liens" (other
than those Liens permitted by the second paragraph under "Limitation on Liens"
above, and other than the Attributable Value of the sale and leaseback
transactions permitted by the preceding paragraph) does not exceed 15% of
Consolidated Net Tangible Assets of the Company.
OPTIONAL REDEMPTION
The Notes will be redeemable, in whole or in part, at the option of the
Company at any time at a redemption price equal to the greater of (i) 100% of
the principal amount of such Notes or (ii) as determined by a Quotation Agent,
the sum of the present values of the remaining scheduled payments of principal
and interest thereon discounted to the redemption date on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Adjusted
Treasury Rate, plus, in each case, accrued interest thereon to the date of
redemption.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of the Notes to be redeemed.
Unless the Company defaults in payment of the redemption price, interest
will cease to accrue on the Notes or portions thereof called for redemption on
and after the redemption date.
The Notes will not be entitled to the benefit of a sinking fund.
SUCCESSOR CORPORATION AND ASSIGNMENT
The Indenture will provide that the Company may not consolidate or merge
with or into, or sell, lease, convey or otherwise dispose of all or
substantially all of its assets to, another person unless (i) the successor, if
other than the Company, is a corporation organized under the laws of the United
States or any state thereof or the District of Columbia, (ii) the successor, if
other than the Company, assumes all obligations of the Company under the Notes
and the Indenture, (iii) immediately after such transaction no Default or Event
of Default exists under the Indenture and (iv) if, as a result of the
transaction, property of the Company would become subject to a Lien that would
not be permitted under the limitation on Liens described above under
"Restrictive Covenants," the Company takes such steps as shall be necessary to
secure the Notes equally and ratably with (or prior to) the Indebtedness secured
by such Lien. Upon the occurrence of such a consolidation, merger or transfer in
which there is a successor other than the Company, all such obligations of the
Company will terminate.
EVENTS OF DEFAULT AND NOTICE THEREOF
The term "Event of Default," when used in the Indenture with respect to the
Notes, will mean any one of the following: (i) failure of the Company to pay
(whether or not prohibited by applicable subordination provisions, if any),
interest for 30 days on, or the principal when due of, any Notes; (ii) failure
of the Company to comply with any of its other agreements or other covenants
contained in the Notes or in such Indenture and applicable to the Notes, and
continuance of such default for 30 days after notice (or in the case of certain
defaults, without notice); (iii) failure to pay when due (after applicable grace
periods
S-17
<PAGE>
as provided in any applicable instrument governing such Indebtedness) the
principal of, or acceleration of, any Indebtedness for money borrowed by the
Company having an aggregate principal amount outstanding equal to at least $25
million, if such Indebtedness is not discharged, or such acceleration is not
annulled, within 30 days after written notice as provided in the Indenture; (iv)
entry of final judgments against the Company or any subsidiary or subsidiaries
of the Company which remain undischarged for a period of 60 days, provided that
the aggregate of all such judgments exceeds $25,000,000 and the judgments remain
undischarged for 60 days after notice; (v) certain events of bankruptcy,
insolvency or reorganization; and (vi) a revocation, suspension or involuntary
loss of any Gaming License by the Company or a subsidiary of the Company (after
the same shall have been obtained) which results in the cessation of operation
of the business at a Principal Property for a period of more than 90 consecutive
days.
CERTAIN DEFINITIONS
"Adjusted Treasury Rate" means, with respect to any redemption date, the
rate per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date, plus 0.15%.
"Attributable Value" in respect of any sale and leaseback transaction means,
as of the time of determination, the total obligation (discounted to present
value at the rate of interest specified by the terms of the Notes compounded
semiannually) of the lessee for rental payments (other than amounts required to
be paid on account of property taxes as well as maintenance, repairs, insurance,
water rates and other items which do not constitute payments for property
rights) during the remaining portion of the base term of the lease included in
such sale and leaseback transaction.
"Comparable Treasury Issue" means the United States Treasury security
selected by a Quotation Agent as having a maturity comparable to the remaining
term of the Notes to be redeemed that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
of such Notes.
"Comparable Treasury Price" means, with respect to any redemption date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
Business Day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such Business Day, (A) the average
of the Reference Treasury Dealer Quotations for such redemption date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations or
(B) if the Trustee obtains fewer than three such Reference Treasury Dealer
Quotations, the average of all such Quotations.
"Consolidated Net Tangible Assets" of the Company means the aggregate amount
of assets (less applicable reserves and other properly deductible items) after
deducting therefrom (a) all current liabilities (excluding any Indebtedness for
money borrowed having a maturity of less than 12 months from the date of the
most recent consolidated balance sheet of the Company but which by its terms is
renewable or extendable beyond 12 months from such date at the option of the
borrower) and (b) all goodwill, trade names, patents, unamortized debt discount
and expense and any other like intangibles, all as set forth on the most recent
consolidated balance sheet of the Company and computed in accordance with
generally accepted accounting principles.
"Lien" means, with respect to any property or assets, any mortgage or deed
of trust, pledge, hypothecation, assignment, security interest, lien,
encumbrance or other security arrangement of any kind or nature whatsoever on or
with respect to such property or assets (including any conditional sale or other
title retention agreement having substantially the same economic effect as any
of the foregoing).
"Principal Property" means any real property of the Company or any of its
subsidiaries, and any equipment located at or comprising a part of any such real
property, having a net book value, as of the
S-18
<PAGE>
date of determination, in excess of the greater of $25 million and 5% of
Consolidated Net Tangible Assets of the Company.
"Quotation Agent" means one of the Reference Treasury Dealers appointed by
the Trustee after consultation with the Company.
"Reference Treasury Dealer" means each of Goldman, Sachs & Co. and CS First
Boston Corporation and their respective successors; PROVIDED, HOWEVER, that if
any of the foregoing shall cease to be a primary U.S. Government securities
dealer in New York City (a "Primary Treasury Dealer"), the Company shall
substitute therefor another Primary Treasury Dealer; and any other Primary
Treasury Dealer selected by the Trustee after consultation with the Company.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any redemption date, the average, as determined by the
Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the
third Business Day preceding such redemption date.
BOOK-ENTRY SYSTEM
The Notes will be represented by Global Securities that will be deposited
with, or on behalf of, DTC and registered in the name of a nominee of DTC.
DTC has advised the Company and the Underwriters as follows: DTC is a
limited-purpose trust company organized under the New York Banking Law, a
"banking organization" within the meaning of the New York Banking Law, a member
of the Federal Reserve System, a "clearing corporation" within the meaning of
the New York Uniform Commercial Code and a "clearing agency" registered pursuant
to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC was
created to hold securities of its participating organizations ("participants")
and to facilitate the clearance and settlement of securities transactions, such
as transfers and pledges, among its participants in such securities through
electronic computerized book-entry changes in accounts of the participants,
thereby eliminating the need for physical movement of securities certificates.
Participants include securities brokers and dealers (including the
Underwriters), banks, trust companies, clearing corporations and certain other
organizations, some of whom (and/or their representatives) own DTC. Access to
DTC's book-entry system is also available to others, such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly. Persons who are
not participants may beneficially own securities held by DTC only through
participants.
Unless and until they are exchanged in whole or in part for certificated
Notes in definitive form, the Global Securities may not be transferred except as
a whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or another
nominee of DTC.
The Notes represented by the Global Securities will not be exchangeable for
certificated Notes, PROVIDED that if DTC is at any time unwilling, unable or
ineligible to continue as depositary and a successor depositary is not appointed
by the Company within 90 days, the Company will issue individual Notes in
definitive form in exchange for the Global Securities. In addition, the Company
may at any time and in its sole discretion determine not to have Global
Securities and, in such event, will issue individual Notes in definitive form in
exchange for the Global Securities previously representing all such Notes. In
either instance, an owner of a beneficial interest in a Global Security will be
entitled to physical delivery of Notes in definitive form equal in principal
amount to such beneficial interest and to have such Notes registered in its
name. Individual Notes so issued in definitive form will be issued in
denominations of $1,000 and any larger amount that is an integral multiple of
$1,000 and will be issued in registered form only, without coupons.
Payments of principal of and interest on the Notes will be made by the
Company through the Trustee to DTC or its nominee, as the case may be, as the
registered owner of the Global Securities. Neither the Company nor the Trustee
will have any responsibility or liability for any aspect of the records relating
to
S-19
<PAGE>
or payments made on account of beneficial ownership interests of the Global
Securities or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests. The Company expects that DTC, upon receipt
of any payment of principal or interest in respect of the Global Securities,
will credit the accounts of the related participants with payment in amounts
proportionate to their respective holdings in principal amount of beneficial
interest in the Global Securities as shown on the records of DTC. The Company
also expects that payments by participants to owners of beneficial interests in
the Global Securities will be governed by standing customer instructions and
customary practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name," and will be the
responsibility of such participants.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
and the Pricing Agreement, the Company has agreed to sell to each of the
Underwriters named below, and each of such Underwriters, for whom Goldman, Sachs
& Co. and CS First Boston Corporation are acting as representatives (the
"Representatives"), has severally agreed to purchase, the principal amount of
the Notes set forth opposite its name below:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
UNDERWRITER OF NOTES
- ---------------------------------------------------------------------------- ----------------
<S> <C>
Goldman, Sachs & Co......................................................... $ 83,450,000
CS First Boston Corporation................................................. 83,425,000
BA Securities, Inc.......................................................... 15,000,000
Bear, Stearns & Co. Inc..................................................... 15,000,000
Donaldson, Lufkin & Jenrette Securities Corporation......................... 15,000,000
Smith Barney Inc............................................................ 8,125,000
ABN AMRO Securities (USA) Inc............................................... 5,000,000
BT Securities Corporation................................................... 5,000,000
CIBC Wood Gundy Securities Corp............................................. 5,000,000
Montgomery Securities....................................................... 5,000,000
Schroder Wertheim & Co. Incorporated........................................ 5,000,000
Societe Generale Securities Corporation..................................... 5,000,000
----------------
Total..................................................................... $ 250,000,000
----------------
----------------
</TABLE>
Under the terms and conditions of the Underwriting Agreement and the Pricing
Agreement, the Underwriters are committed to take and pay for all of the Notes,
if any are taken.
The Underwriters propose to offer the Notes in part directly to the public
at the initial public offering price set forth on the cover page of this
Prospectus Supplement and in part to certain securities dealers at such price
less a concession of 0.40% of the principal amount of the Notes. The
Underwriters may allow, and such dealers may reallow, a concession not to exceed
0.25% of the principal amount of the Notes to certain brokers and dealers. After
the Notes are released for sale to the public, the offering price and other
selling terms may from time to time be varied by the Representatives.
The Notes are a new issue of securities with no established trading market.
The Company has been advised by the Representatives that the Representatives
intend to make a market in the Notes but are not obligated to do so and may
discontinue market making at any time without notice. No assurance can be given
as to the liquidity of the trading market for the Notes.
The Company has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
In the ordinary course of their respective businesses, certain of the
Underwriters and their affiliates engage and may in the future engage in
investment banking and commercial banking activities with the
S-20
<PAGE>
Company and its subsidiaries. Each of ABN AMRO Securities (USA) Inc., BA
Securities, Inc., BT Securities Corporation, CIBC Wood Gundy Securities Corp.
and Societe Generale Securities Corporation is a lender or an affiliate of a
lender to the Company under the Company's revolving bank credit facility. The
Company intends to use a significant portion of the net proceeds from the sale
of the Notes to repay outstanding amounts due under the revolving bank credit
facility. See "Use of Proceeds." As a result, this offering of the Notes is
being made pursuant to the provisions of Rule 2710(c)(8) of the Conduct Rules of
The National Association of Securities Dealers, Inc.
LEGAL MATTERS
Certain legal matters in connection with this offering will be passed upon
for the Company by Wolf, Block, Schorr and Solis-Cohen, Philadelphia,
Pennsylvania, and for the Underwriters by Latham & Watkins, Los Angeles,
California. Certain legal matters with respect to Nevada law will be passed upon
by Peter C. Walsh, Assistant General Counsel of the Company.
STATEMENT ON FORWARD-LOOKING INFORMATION
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements. Certain information included in this
Prospectus Supplement and included or incorporated by reference in the
accompanying Prospectus contains statements that are forward-looking, such as
statements relating to plans for future expansion and other business development
activities as well as other capital spending, financing sources and the effects
of regulation (including gaming and tax regulation) and competition. Such
forward-looking information involves important risks and uncertainties that
could significantly affect anticipated results in the future and, accordingly,
such results may differ from those expressed in any forward-looking statements
made herein or therein. These risks and uncertainties include, but are not
limited to, those relating to development and construction activities,
dependence on existing management, leverage and debt service (including
sensitivity to fluctuations in interest rates), domestic or global economic
conditions, changes in federal or state tax laws or the administration of such
laws and changes in gaming laws or regulations (including the legalization of
gaming in certain jurisdictions).
S-21
<PAGE>
PROSPECTUS
$500,000,000
MIRAGE RESORTS, INCORPORATED
SECURITIES
--------------
Mirage Resorts, Incorporated, a Nevada corporation (the "Company"), may
offer from time to time (i) its debt securities (the "Debt Securities"), which
may be any of senior secured Debt Securities, senior unsecured Debt Securities,
senior subordinated Debt Securities or subordinated Debt Securities, in each
case consisting of bonds, debentures, notes and/or other evidences of
indebtedness, (ii) shares of its common stock, $.004 par value (the "Common
Stock"), (iii) shares of its preferred stock, $.10 par value (the "Preferred
Stock"), in one or more series, which may be issued in the form of depositary
shares (the "Depositary Shares"), evidenced by depositary receipts (the
"Depositary Receipts"), and (iv) warrants to purchase Debt Securities, or shares
of Common Stock or Preferred Stock (the "Warrants"), in each case, as shall be
designated by the Company at the time of the offering thereof. The Debt
Securities, the Common Stock, the Preferred Stock, the Depositary Shares and the
Warrants are collectively referred to in this Prospectus as the "Securities" and
will have an aggregate initial offering price of up to $500,000,000, or the
equivalent thereof in U.S. dollars if any Securities are denominated in a
currency other than U.S. dollars or in currency units. The Securities may be
offered separately or together (in any combination) and as separate series, in
any case in amounts, at prices and on terms to be determined at the time of
sale.
The form in which the Securities are to be issued, their specific title or
designation, authorized denominations, aggregate principal amount or aggregate
initial offering price, maturity, if any, rate or rates (which may be fixed or
variable) (or the manner of calculation thereof) and times of payment of
interest or dividends, if any, redemption, repayment, conversion, exchange and
sinking fund terms, if any, voting or other rights, if any, exercise price and
detachability, if any, additional covenants, if any, and other specific terms
will be set forth in a Prospectus Supplement (including any related terms sheet)
relating to such Securities (the "Prospectus Supplement"), together with the
terms of offering of such Securities. If so specified in the applicable
Prospectus Supplement, Debt Securities of a series may be issued in whole or in
part in the form of one or more temporary or permanent global securities. The
Prospectus Supplement will also contain information, as applicable, about
certain material United States federal income tax considerations relating to the
particular Securities offered thereby. The Prospectus Supplement will also
contain information, where applicable, as to any listing on a national
securities exchange of the Securities covered by such Prospectus Supplement.
The Common Stock is traded on the New York Stock Exchange and the Pacific
Stock Exchange under the symbol "MIR." On July 12, 1996, the last reported sale
price of the Common Stock, as reported on the New York Stock Exchange Composite
Tape, was $23.625 per share.
The Securities may be offered directly to one or more purchasers, through
agents designated from time to time by the Company or to or through underwriters
or dealers. If any agents or underwriters are involved in the sale of the
Securities, their names, and any applicable purchase price, fee, commission or
discount arrangement between or among them, will be set forth, or will be
calculable from the information set forth, in the applicable Prospectus
Supplement. See "Plan of Distribution." No Securities may be sold without
delivery of a Prospectus Supplement describing the method and terms of the
offering of such Securities.
-------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
-------------------
<PAGE>
NEITHER THE NEVADA GAMING COMMISSION, THE NEVADA STATE GAMING CONTROL BOARD,
THE NEW JERSEY CASINO CONTROL COMMISSION NOR ANY OTHER GAMING REGULATORY
AUTHORITY HAS PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS OR
THE INVESTMENT MERITS OF THE SECURITIES OFFERED HEREBY. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
-------------------
The date of this Prospectus is July 12, 1996.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
-------------------
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, and its regional offices located
at Seven World Trade Center, Suite 1300, New York, New York 10048 and Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of
such material may be obtained by mail from the Public Reference Section of the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, at prescribed rates. Reports, proxy statements and other information
regarding the Company may also be inspected at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005, and the Pacific Stock
Exchange, 301 Pine Street, San Francisco, California 94104.
The Company has filed with the Commission a Registration Statement on Form
S-3 (including all amendments thereto, the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
Securities offered hereby. As permitted by the rules and regulations of the
Commission, this Prospectus does not contain all of the information set forth in
the Registration Statement, including the exhibits and schedules thereto. For
further information with respect to the Company and the Securities offered
hereby, reference is made to the Registration Statement, including the exhibits
and schedules thereto. The Registration Statement, including the exhibits and
schedules thereto, may be inspected at the Commission's public reference
facilities in Washington, D.C. and copies of all or any part thereof may be
obtained from the Commission upon payment of the prescribed fees. Statements
contained in this Prospectus, in any Prospectus Supplement or in any document
incorporated by reference herein or therein as to the contents of any contract
or other document referred to herein or therein are not necessarily complete
and, in each instance, reference is made to the copy of such contract or other
document filed as an exhibit to, or incorporated by reference in, the
Registration Statement, each such statement being qualified in all respects by
such reference.
-------------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed by the Company (File No. 1-6697)
with the Commission under the Exchange Act are incorporated by reference in this
Prospectus as of their respective dates: (i) the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1995; (ii) the Company's Quarterly
Report on Form 10-Q for the quarter ended March 31, 1996; (iii) the Company's
Current Report on Form 8-K dated May 23, 1996; and (iv) the description of the
Common Stock contained in the Company's Registration Statement on Form 8-A filed
under Section 12 of the Exchange Act on July 23, 1980, as amended by Amendment
No. 4 thereto filed on June 19, 1996.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Securities made hereby shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
respective dates of filing of such documents, except as to any portion of any
future annual or quarterly report to the Company's stockholders or proxy
statement which is not deemed to be filed under those provisions. Any statement
contained in this Prospectus, or in a document, all or a portion of which is
incorporated by reference herein, shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any subsequently dated
2
<PAGE>
document, as the case may be, which also is or is deemed to be incorporated by
reference herein, modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as modified or superseded, to
constitute a part of this Prospectus.
The Company undertakes to provide, without charge, to each person to whom a
copy of this Prospectus has been delivered, upon the request of such person, a
copy of any or all of the documents referred to above which have been or may be
incorporated by reference in this Prospectus, other than exhibits to such
documents, unless such exhibits are also specifically incorporated by reference
herein. Written or oral requests for such copies should be directed to the
Company at 3400 Las Vegas Boulevard South, Las Vegas, Nevada 89109, Attention:
General Counsel; telephone number (702) 791-7111.
THE COMPANY
The Company, 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.
The Company, through a wholly owned subsidiary, also owns a 50% interest in a
joint venture which owns and operates Monte Carlo, a mid-priced hotel-casino
resort on the Las Vegas Strip which opened on June 21, 1996.
The Company, through a wholly owned subsidiary, is constructing "Bellagio,"
a major new 3,000-guest room luxury hotel, casino and resort facility on
approximately 120 acres adjacent to Monte Carlo, scheduled to open in the spring
of 1998.
The Company, through wholly owned subsidiaries, owns approximately 18 acres
of land in Biloxi, Mississippi on which it is constructing a casino-based
destination resort. The planned facility will be a luxurious resort featuring a
waterfront casino, more than 1,800 hotel rooms, a variety of restaurants and
other amenities. Construction is expected to be completed in early 1998 at a
total cost, including land and capitalized interest, of approximately $500
million.
The Company and the City of Atlantic City, New Jersey have entered into a
redevelopment agreement providing for the City to convey 150 acres owned by the
City, located in the Marina area of Atlantic City, to the Company in exchange
for the Company agreeing to develop a casino-based destination resort on the
site and undertaking certain other obligations, including remediation of
environmental contamination and the relocation of City-owned facilities
currently located on the site. Closing under the redevelopment agreement
requires the satisfaction of a number of conditions, including the receipt by
the Company of all requisite licenses, permits, allocations and authorizations,
resolution of real estate title issues, the Company determining that the costs
of environmental remediation are not unreasonable and the approval by the State
of New Jersey of funding for certain major roadway improvements affecting the
site. Accordingly, there can be no assurance as to whether or when the Company
will proceed with the project. As currently proposed, the project, if developed,
would include the Company's construction of a luxury hotel-casino featuring
approximately 2,000 guest rooms, a 115,000-square foot casino, a variety of
restaurants, a large entertainment and retail concourse and other amenities. The
Company, which will act as master developer of the entire site, has entered into
separate agreements with Boyd Gaming Corporation ("BGC") and Circus Circus
Enterprises, Inc. ("Circus"), pursuant to which the Company and BGC will,
through a joint venture, construct a hotel-casino resort containing a minimum of
1,000 guest rooms on a portion of the site and Circus will acquire a portion of
the site from the Company and construct an additional 2,000-room hotel-casino
resort in architectural formats that conform to an agreed-to master plan.
Development of the projects by the joint venture and Circus are also contingent
upon the satisfaction of the conditions to the Company's obligation to develop
its wholly owned resort.
The Company was incorporated in Nevada in 1949 as the successor to a
partnership that began business in 1946. Its executive offices are located at
3400 Las Vegas Boulevard South, Las Vegas, Nevada 89109; telephone (702)
791-7111.
3
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
Set forth in the table below are the ratios of earnings to fixed charges of
the Company for the three months ended March 31, 1996 and each of the years in
the five-year period ended December 31, 1995.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
THREE MONTHS ENDED --------------------------------------------------
MARCH 31, 1996 1995 1994 1993 1992
----------------------- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges (1)................ 12.1 8.2 4.5 1.5 1.4
<CAPTION>
1991
-----
<S> <C>
Ratio of earnings to fixed charges (1)................ 1.6
</TABLE>
- ------------------------
(1) For purposes of computing the ratios, "earnings" consist of income before
fixed charges, income taxes, extraordinary items and the cumulative effect
of a change in accounting principle, adjusted to exclude capitalized
interest and equity in undistributed earnings and losses of less-than-50%-
owned ventures, such as The Fremont Street Experience Limited Liability
Company. "Fixed charges" include interest, whether expensed or capitalized,
amortization of debt discount and issuance costs, the Company's
proportionate share of the interest cost of 50%-owned ventures, such as the
joint venture which owns Monte Carlo, and the estimated interest component
of rental expense.
USE OF PROCEEDS
The Company intends to use the net proceeds from the sale of the Securities
for general corporate purposes, which may include financing the development and
construction of new facilities (including Bellagio and the currently
contemplated projects in Biloxi, Mississippi and Atlantic City, New Jersey),
capital expenditures and working capital, to repay or repurchase outstanding
indebtedness of the Company or its subsidiaries or for such other purposes as
may be specified in an accompanying Prospectus Supplement.
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
offered by any Prospectus Supplement and the extent to which such general
provisions may apply to the Debt Securities will be described in a Prospectus
Supplement relating to such Debt Securities.
The Debt Securities may constitute either senior secured debt, senior
unsecured debt, senior subordinated debt or subordinated debt, or any
combination thereof, of the Company. One or more series of Debt Securities may
be issued under a single indenture amended in the case of each subsequent series
of Debt Securities by a supplemental indenture to include the additional terms
applicable to such series, or alternatively, any series of Debt Securities may
be issued under a separate indenture. Each indenture pursuant to which any Debt
Securities are issued (hereinafter referred to as an "Indenture," and
collectively with any other Indentures, as the "Indentures") will be entered
into between the Company, as obligor, and an institution to be named in the
applicable Prospectus Supplement, as trustee (the "Trustee").
The terms of any series of the Debt Securities include those stated in the
applicable Indenture and those made part of such Indenture by reference to the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). Holders of
each series of the Debt Securities are referred to the Indenture for such series
and the Trust Indenture Act for a statement of such terms. A copy of the form of
Indenture for the Debt Securities, which may be amended or modified for any
series of Debt Securities as described in an applicable Prospectus Supplement,
is filed as an exhibit to the Registration Statement. The following summaries of
certain provisions of the Debt Securities and the Indenture for such Debt
Securities do not purport to be complete and are subject to, and are qualified
in their entirety by reference to, all of the provisions of the Debt Securities
and such Indenture, including the definitions therein of certain terms
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which are not otherwise defined in this Prospectus, and the Prospectus
Supplement(s) and supplemental indenture(s) with respect thereto. Wherever
particular provisions or defined terms of an Indenture are referred to, such
provisions or defined terms are incorporated herein by reference.
GENERAL
An Indenture will not limit the aggregate principal amount of Debt
Securities which may be issued thereunder. Debt Securities may be issued
thereunder from time to time as a single series or in two or more separate
series up to the aggregate principal amount from time to time authorized by the
Company for each series. As of the date of this Prospectus, the Company has
authorized the issuance under the Indentures of Debt Securities, the aggregate
initial offering price of which (represented by the aggregate principal amount
of Debt Securities issued at their principal amount or the issue price of Debt
Securities issued at an original issue discount) does not exceed $500 million.
Each series of Debt Securities will be denominated in United States dollars
unless otherwise provided in the Prospectus Supplement relating thereto. The
Debt Securities will be issued in denominations of $1,000 and integral multiples
thereof unless otherwise provided in the Prospectus Supplement relating thereto.
The applicable Prospectus Supplement or Prospectus Supplements will
describe, among other things, the following terms of the Debt Securities, to the
extent applicable to such Debt Securities: (i) the title of the Debt Securities
and, if other than denominations of $1,000 and any integral multiple thereof,
the denominations in which any Debt Securities shall be issuable; (ii) any limit
on the aggregate principal amount of the Debt Securities and any provisions
relating to the seniority or subordination of all or any portion of the
indebtedness evidenced thereby to other indebtedness of the Company; (iii) the
price or prices (expressed as a percentage of the respective aggregate principal
amount thereof) at which the Debt Securities will be issued; (iv) the date or
dates on which the principal of the Debt Securities is payable or the method of
determination thereof; (v) the rate or rates (which may be fixed or variable) at
which the Debt Securities will bear interest (which rate may be zero in the case
of certain Debt Securities issued at an issue price representing a discount from
the principal amount payable at maturity), the date or dates from which such
interest, if any, will accrue and the circumstances, if any, in which the
Company may defer interest payments; (vi) the interest payment dates, if any, on
which any interest on the Debt Securities will be payable, the record date for
any interest payable on any Debt Securities and the person to whom interest
shall be payable if other than the person in whose name the Debt Security is
registered at the close of business on the record date for such interest; (vii)
the place or places where principal of, premium, if any, and interest on the
Debt Securities shall be payable; (viii) the terms applicable to any "original
issue discount" (as defined in the Internal Revenue Code of 1986, as amended,
and the regulations thereunder), including the rate or rates at which such
original issue discount shall accrue; (ix) the right or obligation, if any, of
the Company to redeem or purchase Debt Securities pursuant to any sinking fund
or analogous provisions or at the option of a holder thereof, or otherwise, the
conditions, if any, giving rise to such right or obligation and the period or
periods within which, and the price or prices at which and the terms and
conditions upon which, Debt Securities shall be redeemed or purchased, in whole
or in part, and any provisions for the marketing of such Debt Securities; (x) if
the amount of payments of principal of, premium, if any, and interest, if any,
on the Debt Securities is to be determined by reference to an index, formula or
other method, the manner in which such amounts are to be determined and the
calculation agent, if any, with respect thereto; (xi) if other than the
principal amount thereof, the portion of the principal amount of the Debt
Securities which will be payable upon declaration or acceleration of the stated
maturity thereof pursuant to an Event of Default; (xii) whether the Debt
Securities will be issued in certificated or book-entry form and, if applicable,
the identity of the depositary for the Debt Securities; (xiii) any listing of
the Debt Securities on a securities exchange; (xiv) any restrictive covenants
included for the benefit of Holders of such Debt Securities; (xv) any additional
events of default provided with respect to such Debt Securities; (xvi) the
terms, if any, on which such Debt Securities will be convertible into or
exchangeable for other debt or equity securities; (xvii) the collateral, if any,
securing payments with respect to such Debt Securities and any provisions
relating thereto; and (xviii) any other material terms of the Debt Securities.
Any such Prospectus Supplement will
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also describe any special provisions for the payment of additional amounts with
respect to the Debt Securities.
MANDATORY DISPOSITION PURSUANT TO GAMING LAWS
An Indenture will provide that each Holder, by accepting any of the Debt
Securities subject thereto, shall be deemed to have agreed that if any Gaming
Authority of any jurisdiction that holds regulatory, licensing or permit
authority over the gaming or gaming-related activities of the Company or any of
its subsidiaries or any joint venture or other entity in which the Company or
any of its subsidiaries owns an interest requires that a person who is a Holder
of Debt Securities or the beneficial owner of the Debt Securities of a Holder
must be licensed, qualified or found suitable under applicable Gaming Laws, such
Holder or beneficial owner, as the case may be, shall apply for a license,
qualification or a finding of suitability, as the case may be, within the
required time period. Such Indenture will further provide that if such person
fails to apply or become licensed or qualified or is found unsuitable (in each
case, a "failure of compliance"), the Company shall have the right, at its
option, (i) to require such person to dispose of its Debt Securities or
beneficial interest therein within 30 days of receipt of notice of the Company's
election or such earlier date as may be requested or prescribed by such Gaming
Authority or (ii) to redeem within such 30-day or earlier period requested or
prescribed by such Gaming Authority such Debt Securities at a redemption price
equal to the lesser of (a) such person's cost or (b) 100% of the principal
amount thereof, together, in either case, with accrued and unpaid interest to
the earlier of the redemption date or the date of the failure of compliance,
which may be less than 30 days following the notice of redemption if so
requested or prescribed by such Gaming Authority. The Company shall notify the
Trustee under such Indenture in writing of any such redemption as soon as
practicable. The Company shall not be responsible for any costs or expenses any
such Holder or owner may incur in connection with its application for a license,
qualification or finding of suitability.
REGISTERED GLOBAL SECURITIES
The registered Debt Securities of a series may be issued in the form of one
or more registered Global Securities that will be deposited with and registered
in the name of a depositary (each, a "Depositary") or its nominee identified in
the applicable Prospectus Supplement. In such case, one or more registered
Global Securities will be issued, each in a denomination equal to the portion of
the aggregate principal amount of outstanding registered Debt Securities of the
series to be represented by such registered Global Security. Unless and until it
is exchanged in whole or in part for Debt Securities in definitive registered
form, a registered Global Security may not be transferred except as a whole by
the Depositary for such registered Global Security to a nominee of such
Depositary, or by such a nominee to such Depositary or to another nominee of
such Depositary, or by such Depositary or any such nominee to a successor
Depositary or a nominee of such successor Depositary.
The specific terms of the depositary arrangement with respect to any portion
of a series of Debt Securities to be represented by a registered Global Security
will be described in the applicable Prospectus Supplement. The Company
anticipates that the following provisions will apply to all depositary
arrangements.
Ownership of beneficial interests in a registered Global Security will be
limited to persons that have accounts with the Depositary for such registered
Global Security (collectively, the "participants") or persons holding interests
through participants. Upon the issuance of a registered Global Security, the
Depositary for such registered Global Security will credit, on its book-entry
registration and transfer system, the participants' accounts with the respective
principal amounts of the Debt Securities represented by such registered Global
Security beneficially owned by such participants. The accounts to be credited
shall be designated by any dealers, underwriters or agents participating in the
distribution of such Debt Securities. Ownership of beneficial interests in such
registered Global Security will be shown on, and the transfer of such ownership
interests will be effected only through, records maintained by the Depositary
for such registered Global Security (with respect to interests of participants)
and on the records of participants (with respect to interests of persons holding
through participants). The laws of
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certain states may require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and such laws may
impair the ability to own, transfer or pledge beneficial interests in registered
Global Securities.
So long as the Depositary for a registered Global Security, or its nominee,
is the registered owner of such registered Global Security, such Depositary or
such nominee, as the case may be, will be considered the sole owner or holder of
the Debt Securities represented by such registered Global Security for all
purposes under the Indenture applicable thereto. Except as set forth below,
owners of beneficial interests in a registered Global Security will not be
entitled to have the Debt Securities represented by such registered Global
Security registered in their names, will not receive or be entitled to receive
physical delivery of such Debt Securities in definitive form and will not be
considered the owners or holders thereof under the Indenture applicable thereto.
Accordingly, each person owning a beneficial interest in a registered Global
Security must rely on the procedures of the Depositary for such registered
Global Security and, if such person is not a participant, on the procedures of
the participant through which such person owns its interests, to exercise any
rights of a holder under the Indenture applicable to such registered Global
Security. The Company understands that under existing industry practices, if the
Company requests any action of holders, or if an owner of a beneficial interest
in a registered Global Security desires to give or take any action which a
holder is entitled to give or take under the applicable Indenture, the
Depositary for such registered Global Security would authorize the participants
holding the relevant beneficial interests to give or take such action, and such
participants would authorize beneficial owners owning through such participants
to give or take such action or would otherwise act upon the instructions of
beneficial owners holding through them.
Principal, premium, if any, and interest payments on Debt Securities
represented by a registered Global Security registered in the name of a
Depositary, or its nominee, will be made to such Depositary or its nominee, as
the case may be, as the registered owner of such registered Global Security.
None of the Company, the Trustee under the applicable Indenture or any other
agent of the Company or agent of such Trustee will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in such registered Global Security or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
The Company expects that the Depositary for any Debt Securities represented
by a registered Global Security, upon receipt of any payment of principal,
premium or interest in respect of such registered Global Security, will
immediately credit participants' accounts with payments in amounts proportionate
to their respective beneficial interests in such registered Global Security as
shown on the records of such Depositary. The Company also expects that payments
by participants to owners of beneficial interests in such registered Global
Security held through such participants will be governed by standing customer
instructions and customary practices, as is now the case with the securities
held for the accounts of customers in bearer form or registered in "street
name," and will be the responsibility of such participants.
If the Depositary for any Debt Securities represented by a registered Global
Security is at any time unwilling or unable to continue as Depositary or ceases
to be a clearing agency registered under the Exchange Act, and a successor
Depositary registered as a clearing agency under the Exchange Act is not
appointed by the Company within 90 days, the Company will issue such Debt
Securities in definitive form in exchange for such registered Global Security.
In addition, the Company may at any time and in its sole discretion determine
not to have any of the Debt Securities of a series represented by one or more
registered Global Securities and, in such event, will issue Debt Securities of
such series in definitive form in exchange for each registered Global Security
representing such Debt Securities. Any Debt Securities issued in definitive form
in exchange for a registered Global Security will be registered in such name or
names as the Depositary shall instruct the Trustee. It is expected that such
instructions will be based upon directions received by the Depositary from
participants with respect to ownership of beneficial interests in such
registered Global Security.
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COVENANTS
PUT OPTION UPON CHANGE IN CONTROL
If there is a Change in Control (the time of a Change in Control being
referred to as the "Change in Control Date"), then the Company will (a)
commence, within five business days following the Change in Control Date, an
offer to repurchase (the "Repurchase Offer") all of the then outstanding Debt
Securities at a price (the "Repurchase Price") of 101% of the principal amount,
plus accrued interest to the Repurchase Date (as defined below) and (b) deposit
with the Paying Agent an amount equal to the aggregate Repurchase Price for all
Debt Securities then outstanding so as to be available for payment to holders of
Debt Securities who elect to require the Company to repurchase all or a portion
of their Debt Securities.
An Indenture will require the Repurchase Offer to remain open from the time
of mailing until 10 business days thereafter, unless a longer period is required
by law or stock exchange rule or unless a majority of the Continuing Directors
of the Company votes in favor of extending such period (the date on which the
Repurchase Offer closes being the "Repurchase Date"). Under the tender offer
rules currently in effect under the Exchange Act, the Repurchase Offer must
remain open for at least 20 business days. The Company intends to comply with
all applicable tender offer rules in connection with any Repurchase Offer.
OTHER COVENANTS
Any additional covenants of the Company with respect to any series of Debt
Securities will be set forth in the Prospectus Supplement relating thereto.
CERTAIN DEFINITIONS
"Capital Stock" of any person means any and all shares, interests,
participations or other equivalents (however designated) of corporate stock and
any and all forms of partnership interests or other equity interests in a
person, including but not limited to any type of preference stock which for
other purposes may not be treated as equity.
"Change in Control" means, as to any Indenture (i) the time the Company
first determines that any person or group, within the meaning of Section
14(d)(2) of the Exchange Act (other than any person who was at the date of such
Indenture an officer or director of the Company or a group consisting of persons
who were at the date of such Indenture officers or directors of the Company)
have acquired direct or indirect beneficial ownership (within the meaning of
Rule 13d-3 under the Exchange Act) of 35% or more of the outstanding voting
Capital Stock of the Company, unless a majority of the Continuing Directors
approves the acquisition not later than 10 business days after the Company makes
the determination, or (ii) the first day on which a majority of the members of
the Board of Directors of the Company are not Continuing Directors.
"Continuing Directors" means, as to any Indenture and as of any date of
determination, any member of the Board of Directors of the Company who (i) was a
member of that Board of Directors on the date of such Indenture, (ii) had been a
member of that Board of Directors for the two years immediately preceding such
date of determination or (iii) was nominated for election or elected to that
Board of Directors with the affirmative vote of the greater of (x) a majority of
Continuing Directors who were members of that Board at the time of such
nomination or election or (y) at least three Continuing Directors.
"Existing Properties" means The Mirage, Treasure Island, the Golden Nugget
and the Golden Nugget-Laughlin.
"Gaming Authority" means any Governmental Authority that holds regulatory,
licensing or permit authority over any gaming or gaming related casino
activities conducted or proposed to be conducted by the Company or any of its
subsidiaries or any joint venture or other entity in which the Company or
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any of its subsidiaries owns an interest, including without limitation the
Nevada Gaming Commission, the Nevada State Gaming Control Board and the Clark
County Liquor and Gaming Licensing Board.
"Gaming License" means, as to any Indenture, every license, franchise or
other authorization on the date of such Indenture or thereafter required to own,
lease, operate or otherwise conduct gaming or gaming related activities at any
property owned or operated by the Company or any of its subsidiaries or any
joint venture or other entity in which the Company or any of its subsidiaries
owns an interest.
"Indebtedness" of any person means any indebtedness, contingent or
otherwise, but exclusive of deferred taxes, in respect of borrowed money
(whether or not the recourse of the lender is to the whole of the assets of such
person or only a portion thereof), or evidenced by bonds, notes, debentures or
similar instruments or reimbursement obligations with respect to letters of
credit, or representing the balance deferred and unpaid of the purchase price of
any property or interest therein (including pursuant to capitalized leases),
except any such balance that constitutes a trade payable, if and to the extent
such indebtedness would appear as a liability upon a balance sheet of such
person prepared on a consolidated basis in accordance with generally accepted
accounting principles, and also includes, to the extent not otherwise included,
the guaranty of any Indebtedness (other than the guaranty of completion of
construction).
"Paying Agent" means, with respect to any series of Debt Securities, an
office or agency where Debt Securities of that series may be presented for
payment.
"Qualified Government Obligations" means, with respect to any Debt
Securities, direct obligations of, or obligations the principal of and interest
on which are fully guaranteed by, the government which issued the currency in
which such Debt Securities are denominated, and which are not subject to
prepayment, redemption or call.
"subsidiary" of any specified person means (i) a corporation, a majority of
whose Capital Stock with voting power under ordinary circumstances to elect
directors is at the time, directly or indirectly, owned by such person or by
such person and a subsidiary or subsidiaries of such person or by a subsidiary
or subsidiaries of such person or (ii) any other person (other than a
corporation) in which such person or such person and a subsidiary or
subsidiaries of such person or a subsidiary or subsidiaries of such person
directly or indirectly, at the date of determination thereof, has at least a
majority ownership interest.
"Trustee" means, as to any Indenture, the person named therein as such until
a successor replaces it in accordance with the applicable provisions of such
Indenture and thereafter means (i) during any period when a successor Trustee is
serving as Trustee with respect to all of the Debt Securities to which such
Indenture relates, such successor Trustee, and (ii) during any period when a
successor Trustee is serving as Trustee with respect to one or more (but not
all) series of Debt Securities to which such Indenture relates, as to each
series the successor serving as Trustee with respect thereto.
SUCCESSOR CORPORATION AND ASSIGNMENT
An Indenture will provide that the Company may not consolidate or merge with
or into, or sell, lease, convey or otherwise dispose of all or substantially all
of its assets to, another person unless (i) the successor, if other than the
Company, is a corporation organized under the laws of the United States or any
state thereof or the District of Columbia, (ii) the successor, if other than the
Company, assumes all obligations of the Company under the Debt Securities to
which such Indenture relates and such Indenture, and (iii) immediately after
such transaction no Default or Event of Default exists under such Indenture.
Upon the occurrence of such a consolidation, merger or transfer in which there
is a successor other than the Company, all such obligations of the Company will
terminate.
EVENTS OF DEFAULT AND NOTICE THEREOF
Unless otherwise indicated in the applicable Prospectus Supplement, the term
"Event of Default," when used in an Indenture with respect to any series of Debt
Securities, will mean any one of the
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following: (i) failure of the Company to pay (whether or not prohibited by
applicable subordination provisions, if any), interest for 30 days on, or the
principal when due of, any Debt Securities of such series; (ii) failure of the
Company to comply with any of its other agreements or other covenants contained
in such series of Debt Securities or in such Indenture and applicable to such
series of Debt Securities, and continuance of such default for 60 days after
notice (or in the case of certain defaults, without notice); (iii) the
occurrence of an event of default under any instrument evidencing Indebtedness
of the Company or of any subsidiary of the Company (or the payment of which is
guaranteed by the Company or any subsidiary of the Company), if (a) such event
of default results from the failure to pay principal of or interest upon
maturity on any such Indebtedness, (b) the principal amount of such
Indebtedness, together with the principal amount of any other such Indebtedness
in default for failure to pay principal or interest thereon upon maturity,
aggregates $50,000,000 or more and (c) the default continues for a period of 60
days after the receipt by the Company of notice of such event from the Trustee
under such Indenture or the holders of 25% in principal amount of such series of
Debt Securities then outstanding; (iv) entry of final judgments against the
Company or any subsidiary or subsidiaries of the Company which remain
undischarged for a period of 60 days, provided that the aggregate of all such
judgments exceeds $50,000,000 and the judgments remain undischarged for 60 days
after notice; (v) certain events of bankruptcy, insolvency or reorganization;
and (vi) a revocation, suspension or involuntary loss of any Gaming License by
the Company or a subsidiary of the Company (after the same shall have been
obtained) which results in the cessation of operation of the business at the
Existing Properties for a period of more than 90 consecutive days.
An Indenture will provide that the Trustee thereunder will, within 90 days
after the occurrence of a default with respect to the Debt Securities subject
thereto, give the holders of such Debt Securities notice of all uncured defaults
known to it (the term "default" to include the events specified above without
grace or notice), provided, that, except in the case of a default in the payment
of principal of or interest on such Debt Securities, such Trustee shall be
protected in withholding such notice if and so long as a committee of its trust
officers in good faith determines that the withholding of such notice is in the
interest of the holders of such Debt Securities.
In case an Event of Default (other than certain events of bankruptcy,
insolvency or reorganization) occurs and is continuing with respect to any
series of Debt Securities, the Trustee under the Indenture relating to such
series of Debt Securities or the holders of not less than 25% in principal
amount of such series of Debt Securities then outstanding, by notice in writing
to the Company (and to such Trustee if given by the holders of such series of
Debt Securities), may declare the unpaid principal of and all accrued and unpaid
interest on all such series of Debt Securities to be due and payable
immediately. Such declaration may be rescinded by holders of a majority in
principal amount of such series of Debt Securities then outstanding if, among
other conditions, all existing Events of Default with respect to such series of
Debt Securities (except non-payment of principal of or interest on such series
that has become due solely because of the acceleration) have been cured or
waived and if the rescission would not conflict with any judgment or decree.
Defaults with respect to any series of Debt Securities (except, unless
theretofore cured, a default in payment of principal of or interest on such
series of Debt Securities or default with respect to a provision which cannot be
modified under the terms of the applicable Indenture without the consent of each
holder of the Debt Securities affected) may be waived by the holders of a
majority in principal amount of such series of Debt Securities then outstanding
upon the conditions provided in such Indenture.
An Indenture will include a covenant that the Company will (so long as it
has not been relieved of the obligation by covenant defeasance or discharge of
such Indenture in accordance with the terms thereof) file annually with the
Trustee under such Indenture a statement regarding compliance by the Company
with the terms thereof and specifying any defaults thereunder of which the
signers may have knowledge.
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MODIFICATION OF THE INDENTURES
Under an Indenture, the rights and obligations of the Company and the rights
of the holders of the Debt Securities covered by such Indenture generally may be
modified by the Company and the Trustee under such Indenture with the consent of
the holders of not less than a majority in principal amount of the Debt
Securities then outstanding affected by such modification. Notwithstanding the
foregoing, without the consent of each affected holder of Debt Securities, an
amendment or waiver with respect to such Indenture may not (i) reduce the amount
of Debt Securities whose holders must consent to an amendment, supplement or
waiver; (ii) reduce the rate of or change the time for payment of interest on
any Debt Security in a manner adverse to the holders thereof; (iii) reduce the
principal of, or extend the stated maturity of any Debt Security or alter the
redemption provisions of any Debt Securities in a manner adverse to the holders
thereof; (iv) make any Debt Security payable in money other than that stated in
such Debt Security; (v) waive a default in the payment of the principal of, or
interest on, any Debt Security; or (vi) take any other action, if any, described
in a Prospectus Supplement as requiring the consent of each affected holder of
Debt Securities. Under certain circumstances, the Company and the Trustee may
amend or supplement an Indenture without notice to or the consent of any holder
of the Debt Securities covered by such Indenture.
SATISFACTION AND DISCHARGE OF INDENTURES
Unless otherwise indicated in the applicable Prospectus Supplement, the
Indenture with respect to any series of Debt Securities will be discharged upon
payment in full of such series of Debt Securities outstanding thereunder, or
upon the deposit with the Trustee, in trust, of money or Qualified Government
Obligations, or both, which, together with the predetermined and certain income
to accrue thereon, without consideration of any reinvestment thereof, will
provide money in an amount sufficient to pay and discharge the principal of and
each installment of interest on such series of Debt Securities on the maturity
or redemption date, as the case may be, in accordance with the terms of such
Indenture and such series of Debt Securities issued thereunder. The Company will
be entitled to make such a deposit if, among other things, the Company has
delivered to the Trustee an opinion of counsel to the effect that the holders of
such series of Debt Securities will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit and defeasance of the
applicable Indenture and will be subject to federal income tax in the same
manner as would have been the case if such deposit and defeasance had not
occurred.
COVENANT DEFEASANCE
Unless otherwise indicated in the applicable Prospectus Supplement, an
Indenture will provide that the Company may be released from its obligations
with respect to any series of Debt Securities to which such Indenture relates
other than the Company's obligations with respect to the payment of principal
of, premium, if any, and interest on such series of Debt Securities, and that
such release will not be deemed to be an Event of Default under such Indenture
with respect to any such series of Debt Securities ("covenant defeasance"), upon
the deposit with the Trustee (or other qualifying trustee), in trust, of money
or Qualified Government Obligations, or both, which through the payment of
interest and principal in accordance with their terms will provide money in an
amount sufficient to pay and discharge the principal of and each installment of
interest on such series of Debt Securities on the maturity of such payments in
accordance with the terms of the applicable Indenture and such series of Debt
Securities issued thereunder. The Company will be entitled to make such a
deposit if, among other things, the Company has delivered to the Trustee an
opinion of counsel to the effect that the holders of such series of Debt
Securities will not recognize income, gain or loss for federal income tax
purposes as a result of such covenant defeasance and will be subject to federal
income tax in the same manner as would have been the case if such covenant
defeasance had not occurred.
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CONCERNING THE TRUSTEE
The applicable Prospectus Supplement relating to each issuance of Debt
Securities will identify the Trustee under the Indenture relating to such Debt
Securities. If more than one series of Debt Securities is outstanding under an
Indenture, a Trustee may serve in such capacity with respect to the Debt
Securities of one or more of such series. If more than one series of Debt
Securities is outstanding under an Indenture, the holders of a majority in
aggregate principal amount of each such series at any time outstanding may
remove the Trustee with respect to such series (but not as to any other series)
by so notifying the Trustee and may appoint a successor Trustee with respect to
such series. Each reference in this Prospectus to the Trustee under an Indenture
refers, in the case of each series of Debt Securities outstanding under such
Indenture, to the Trustee for such series. Except as otherwise described in the
applicable Prospectus Supplement or provided for in an Indenture, payments of
principal of, premium, if any, and interest on, and all registration, transfer,
exchange, authentication and delivery (including authentication and delivery on
original issuance of the Debt Securities) of, Debt Securities issued under such
Indenture will be effected by the Trustee under the Indenture applicable to such
Debt Securities at such Trustee's corporate trust office, or at an office
designated by such Trustee in New York, New York.
An Indenture will contain certain limitations on the right of the Trustee
under such Indenture, should it become a creditor of the Company, to obtain
payment of claims in certain cases or to realize on certain property received in
respect of any such claim as security or otherwise. The Trustee under each
Indenture will be permitted to engage in other transactions; however, if a
Trustee acquires any conflicting interest, it must eliminate such conflict or
resign its position as Trustee.
The holders of a majority in principal amount of any series of Debt
Securities then outstanding under an Indenture will have the right to direct the
time, method and place of conducting any proceeding for exercising any remedy
available to the Trustee under such Indenture applicable to such series of Debt
Securities, provided that such direction would not conflict with any rule of law
or with such Indenture, would not be unduly prejudicial to the rights of another
holder of such Debt Securities and would not involve such Trustee in personal
liability. An Indenture will provide that in case an Event of Default under such
Indenture shall occur and be known to the Trustee under such Indenture (and not
be cured), such Trustee will be required to use the degree of care of a prudent
person in the conduct of such person's own affairs in the exercise of its power.
Subject to such provisions, a Trustee will be under no obligation to exercise
any of its rights or powers under such Indenture at the request of any of the
holders of the Debt Securities to which the Indenture relates unless such
holders shall have offered to such Trustee security and indemnity satisfactory
to it.
NO PERSONAL LIABILITY
An Indenture will provide that no past, present or future director, officer,
employee, stockholder or incorporator of the Company or any successor
corporation shall have any liability for any obligations of the Company under
the Debt Securities to which such Indenture relates or for any claim based on,
in respect of or by reason of such obligations or their creation, by reason of
such person's status as such director, officer, employee, stockholder or
incorporator.
DESCRIPTION OF PREFERRED STOCK
GENERAL
The Company may issue, from time to time, shares of one or more series of
Preferred Stock.
The following description of the terms of the Preferred Stock sets forth
certain general terms and provisions of the Preferred Stock to which any
Prospectus Supplement may relate. The particular terms of any series of
Preferred Stock offered by any Prospectus Supplement and the extent, if any, to
which such general provisions may apply to the series of Preferred Stock so
offered will be described in a Prospectus Supplement relating to such Preferred
Stock. The following summary of certain provisions of the Preferred Stock does
not purport to be complete and is subject to, and is qualified in its entirety
by
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express reference to, the provisions of the Company's Articles of Incorporation,
as amended (the "Articles of Incorporation"), and each Certificate of
Designation relating to a specific series of the Preferred Stock (each, a
"Certificate of Designation"), which will be in the form filed as an exhibit to,
or incorporated by reference in, the Registration Statement at or prior to the
time of issuance of such series of Preferred Stock.
Pursuant to the Articles of Incorporation, the Company has the authority to
issue 5,000,000 shares of Preferred Stock. The Board of Directors of the Company
is authorized to issue shares of Preferred Stock, in one or more series, and to
fix for each such series voting powers and such preferences and relative,
participating, optional or other special rights and such qualifications,
limitations or restrictions, as are permitted by the Nevada Revised Statutes.
The Board of Directors of the Company is authorized to determine for each
series of Preferred Stock, and the Prospectus Supplement shall set forth with
respect to such series, the following: (i) the designation of such series and
the number of shares that constitute such series; (ii) the dividend rate (or the
method of calculation thereof), if applicable, on the shares of such series and
the priority as to payment of dividends with respect to other classes or series
of capital stock of the Company; (iii) the dividend periods (or the method of
calculation thereof), if applicable; (iv) the voting rights, if any, of the
shares; (v) the liquidation preference and the priority as to payment of such
liquidation preference with respect to other classes or series of capital stock
of the Company and any other rights of the shares of such series upon any
liquidation or winding-up of the Company; (vi) whether or not and on what terms
the shares of such series will be subject to redemption or repurchase at the
option of the Company; (vii) whether and on what terms the shares of such series
will be convertible into or exchangeable for other debt or equity securities;
(viii) whether depositary shares representing shares of such series of Preferred
Stock will be offered and, if so, the fraction of a share of such series of
Preferred Stock represented by each depositary share (see "Description of
Depositary Shares" below); (ix) whether the shares of such series of Preferred
Stock will be listed on a securities exchange; and (x) the other rights and
privileges and any qualifications, limitations or restrictions of such rights or
privileges of such series.
DIVIDENDS
Holders of shares of Preferred Stock shall be entitled to receive, when and
as declared by the Board of Directors of the Company out of funds of the Company
legally available therefor, cash dividends payable on such dates and at such
rates, if any, per share set forth in the applicable Prospectus Supplement.
Unless otherwise set forth in the applicable Prospectus Supplement, each
series of Preferred Stock will rank junior as to dividends to any series of
Preferred Stock that may be issued in the future that is expressly senior as to
dividends to such earlier series of the Preferred Stock. If at any time the
Company has failed to pay accrued dividends on any such senior series at the
time dividends are payable on a junior series, the Company may not pay any
dividend on such junior series of Preferred Stock or redeem or otherwise
repurchase shares of such junior series of Preferred Stock until such
accumulated but unpaid dividends on the senior series have been paid or set
aside for payment in full by the Company.
Unless otherwise set forth in the applicable Prospectus Supplement, no
dividends (other than in Common Stock or other capital stock ranking junior to
the Preferred Stock of any series as to dividends and upon liquidation) shall be
declared or paid or set aside for payment, nor shall any other distribution be
declared or made upon the Common Stock, or any other capital stock of the
Company ranking junior to or on a parity with the Preferred Stock of such series
as to dividends, nor shall any Common Stock or any other capital stock of the
Company ranking junior to or on a parity with the Preferred Stock of such series
as to dividends be redeemed, purchased or otherwise acquired for any
consideration (or any monies be paid to or made available for a sinking fund for
the redemption of any shares of any such stock) by the Company (except by
conversion into or exchange for other capital stock of the Company ranking
junior to the Preferred Stock of such series as to dividends) unless (i) if such
series of Preferred Stock has a cumulative dividend, full cumulative dividends
on the Preferred Stock of such series have
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been or contemporaneously are declared and paid or declared and a sum sufficient
for the payment thereof set apart for all past dividend periods and the then
current dividend period or (ii) if such series of Preferred Stock does not have
a cumulative dividend, full dividends on the Preferred Stock of such series have
been or contemporaneously are declared and paid or declared and a sum sufficient
for the payment thereof set apart for payment for the then current dividend
period; provided, however, that any monies theretofore deposited in any sinking
fund with respect to any Preferred Stock of the Company in compliance with the
provisions of such sinking fund may thereafter be applied to the purchase or
redemption of such Preferred Stock in accordance with the terms of such sinking
fund, regardless of whether at the time of such application full cumulative
dividends upon shares of the Preferred Stock outstanding on the last dividend
payment date shall have been paid or declared and set apart for payment; and
provided, further, that any such junior or parity Preferred Stock of the Company
or Common Stock of the Company may be converted into or exchanged for stock of
the Company ranking junior to the series of Preferred Stock then senior to such
junior or parity Preferred Stock as to dividends.
The amount of dividends payable for the initial dividend period or any
period shorter than a full dividend period shall be computed on the basis of a
360-day year of twelve 30-day months. Accrued but unpaid dividends will not bear
interest.
CONVERTIBILITY
No series of Preferred Stock will be convertible into, or exchangeable for,
other securities or property except as set forth in the applicable Prospectus
Supplement.
REDEMPTION AND SINKING FUND
No series of Preferred Stock will be redeemable or receive the benefit of a
sinking fund except as set forth in the applicable Prospectus Supplement.
LIQUIDATION RIGHTS
Unless otherwise set forth in the applicable Prospectus Supplement, in the
event of any liquidation, dissolution or winding-up of the Company, the holders
of shares of each series of Preferred Stock are entitled to receive out of
assets of the Company available for distribution to stockholders, before any
distribution of assets is made to holders of: (i) any other shares of Preferred
Stock of the Company ranking junior to such series of Preferred Stock as to
rights upon liquidation, dissolution or winding-up; or (ii) shares of Common
Stock, liquidating distributions per share in the amount of the liquidation
preference specified in the applicable Prospectus Supplement for such series of
Preferred Stock plus any dividends accrued and accumulated but unpaid to the
date of final distribution, but, in either case, the holders of each series of
Preferred Stock will not be entitled to receive the liquidating distribution of,
plus such dividends on, such shares until the liquidation preference of any
shares of the Company's capital stock ranking senior to such series of the
Preferred Stock as to the rights upon liquidation, dissolution or winding-up
shall have been paid (or a sum set aside therefor sufficient to provide for
payment) in full. If upon any liquidation, dissolution or winding-up of the
Company, funds available for such purpose are insufficient to pay in full the
amounts payable with respect to any series of the Preferred Stock, and any other
Preferred Stock ranking as to any such distribution on a parity with such series
of the Preferred Stock, the holders of such series of the Preferred Stock of the
Company and such other parity Preferred Stock will share ratably in any such
distribution of assets in proportion to the full respective preferential amounts
to which they are entitled. Unless otherwise specified in a Prospectus
Supplement for a series of Preferred Stock, after payment of the full amount of
the liquidating distribution to which they are entitled, the holders of shares
of Preferred Stock will not be entitled to any further participation in any
distribution of assets by the Company. Neither a consolidation or merger of the
Company with another corporation nor a sale of securities shall be considered a
liquidation, dissolution or winding-up of the Company.
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VOTING RIGHTS
Holders of Preferred Stock will not have any voting rights except as set
forth in the applicable Prospectus Supplement or as otherwise from time to time
required by law.
MISCELLANEOUS
The holders of Preferred Stock will have no preemptive rights. The Preferred
Stock, upon issuance against full payment of the purchase price therefor, will
be fully paid and nonassessable. Shares of Preferred Stock redeemed or otherwise
reacquired by the Company shall resume the status of authorized and unissued
shares of Preferred Stock undesignated as to series, and shall be available for
subsequent issuance. There are no restrictions on repurchase or redemption of
the Preferred Stock on account of any arrearage on sinking fund installments
except as may be set forth in an applicable Prospectus Supplement. Payment of
dividends on any series of Preferred Stock may be restricted by loan agreements,
indentures or other agreements entered into by the Company. The accompanying
Prospectus Supplement will describe any material contractual restrictions on
dividend payments. Such Prospectus Supplement will also describe any material
United States federal income tax considerations applicable to the Preferred
Stock.
NO OTHER RIGHTS
The shares of a series of Preferred Stock will not have any preferences,
voting powers or relative, participating, optional or other special rights
except as set forth above or in the applicable Prospectus Supplement, the
Articles of Incorporation or the applicable Certificate of Designation, or as
otherwise required by law.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for each series of Preferred Stock will be
designated in the applicable Prospectus Supplement.
DESCRIPTION OF DEPOSITARY SHARES
GENERAL
The Company may, at its option, elect to offer fractional shares of the
Preferred Stock of a series, rather than full shares of the Preferred Stock of
such series. In the event such option is exercised, the Company will issue
Depositary Receipts for Depositary Shares, each of which will represent a
fraction (to be set forth in the Prospectus Supplement relating to a particular
series of Preferred Stock) of a share of a particular series of Preferred Stock
as described below.
The shares of any series of Preferred Stock represented by Depositary Shares
will be deposited under a Deposit Agreement (the "Deposit Agreement") among the
Company, a depositary to be named in the applicable Prospectus Supplement (the
"Preferred Stock Depositary") and the holders from time to time of depositary
receipts issued thereunder. Subject to the terms of the Deposit Agreement, each
holder of a Depositary Share will be entitled, in proportion to the applicable
fraction of a share of Preferred Stock represented by such Depositary Share, to
all the rights and preferences of the Preferred Stock represented thereby
(including dividend, voting, redemption, subscription and liquidation rights).
The Depositary Shares will be evidenced by Depositary Receipts issued
pursuant to the Deposit Agreement to those persons purchasing Depositary Shares.
The following description of the terms of the Depositary Shares sets forth
certain general terms and provisions of the Depositary Shares to which any
Prospectus Supplement may relate. The particular terms of the Depositary Shares
offered by any Prospectus Supplement and the extent, if any, to which such
general provisions may apply to the Depositary Shares so offered will be
described in a Prospectus Supplement relating to such Depositary Shares. The
forms of Deposit Agreement and Depositary
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Receipt will be filed with the Commission as exhibits to a document incorporated
by reference in the Registration Statement prior to the date of any Prospectus
Supplement relating to an offering of the Depositary Shares.
Immediately following the issuance of fractional shares of a series of
Preferred Stock by the Company, the Company will deposit such shares with the
Preferred Stock Depositary, which will then issue and deliver the Depositary
Receipts to the purchasers thereof. Depositary Receipts will only be issued
evidencing whole Depositary Shares. A Depositary Receipt may evidence any number
of whole Depositary Shares.
Pending the preparation of definitive engraved Depositary Receipts, the
Preferred Stock Depositary may, upon the written order of the Company, issue
temporary Depositary Receipts substantially identical to (and entitling the
holders thereof to all the rights pertaining to) the definitive Depositary
Receipts but not in definitive form. Definitive Depositary Receipts will be
prepared thereafter without unreasonable delay, and such temporary Depositary
Receipts will be exchangeable for definitive Depositary Receipts at the
Company's expense.
The following summary of certain provisions which will be included in the
Deposit Agreement with respect to the Depositary Shares does not purport to be
complete and is subject to, and is qualified in its entirety by express
reference to, all the provisions of the Deposit Agreement, including the
definitions therein of certain terms.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Preferred Stock Depositary will distribute all cash dividends or other
cash distributions received in respect of the Preferred Stock represented by the
Depositary Shares to the record holders of the Depositary Shares in proportion
to the number of such Depositary Shares owned by such holders.
In the event of a distribution other than in cash, the Preferred Stock
Depositary will distribute property received by it to the record holders of
Depositary Shares entitled thereto in proportion to the number of Depositary
Shares owned by such holders, unless the Preferred Stock Depositary determines
that such distribution cannot be made proportionately among such holders or that
it is not feasible to make such distributions, in which case the Preferred Stock
Depositary may, with the approval of the Company, adopt such method as it deems
equitable and practicable for the purpose of effecting such distribution,
including the sale (at public or private sale) of the securities or other
property thus received, or any part thereof, at such place or places and upon
such terms as it may deem proper.
The amount distributed in any of the foregoing cases will be reduced by any
amounts required to be withheld by the Company or the Preferred Stock Depositary
on account of taxes or other governmental charges.
REDEMPTION OF DEPOSITARY SHARES
If a series of the Preferred Stock underlying the Depositary Shares is
subject to redemption, the Depositary Shares will be redeemed from the proceeds
received by the Preferred Stock Depositary resulting from any redemption, in
whole or in part, of such series of the Preferred Stock held by the Preferred
Stock Depositary. The redemption price per Depositary Share will be the fraction
of the redemption price per share payable with respect to such series of the
Preferred Stock equal to the fraction of a share of such Preferred Stock
represented by a Depositary Share. If the Company redeems shares of a series of
Preferred Stock held by the Preferred Stock Depositary, the Preferred Stock
Depositary will redeem as of the same redemption date the number of Depositary
Shares representing the shares of Preferred Stock so redeemed. If less than all
the Depositary Shares are to be redeemed, the Depositary Shares to be redeemed
will be selected by lot or substantially equivalent method determined by the
Preferred Stock Depositary.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares will cease, except the
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right to receive the monies payable upon such redemption and any money or other
property to which the holders of such Depositary Shares were entitled upon such
redemption, upon surrender to the Preferred Stock Depositary of the Depositary
Receipts evidencing such Depositary Shares.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of any series of
the Preferred Stock are entitled to vote, the Preferred Stock Depositary will
mail the information contained in such notice of meeting to the record holders
of the Depositary Shares relating to such series of Preferred Stock. Each record
holder of such Depositary Shares on the record date (which will be the same date
as the record date for the related series of Preferred Stock) will be entitled
to instruct the Preferred Stock Depositary as to the exercise of the voting
rights pertaining to the number of shares of the series of Preferred Stock
represented by such holder's Depositary Shares. The Preferred Stock Depositary
will endeavor, insofar as practicable, to vote or cause to be voted the number
of shares of the Preferred Stock represented by such Depositary Shares in
accordance with such instructions, provided the Preferred Stock Depositary
receives such instructions sufficiently in advance of such meeting to enable it
to so vote or cause to be voted the shares of Preferred Stock, and the Company
will agree to take all reasonable action that may be deemed necessary by the
Preferred Stock Depositary in order to enable the Preferred Stock Depositary to
do so. The Preferred Stock Depositary will abstain from voting shares of the
Preferred Stock represented by Depositary Shares to the extent it does not
receive specific instructions from the holders of Depositary Shares representing
such Preferred Stock.
WITHDRAWAL OF STOCK
Upon a holder's surrender of Depositary Receipts at the corporate trust
office of the Preferred Stock Depositary and upon such holder's payment of the
taxes, charges and fees provided for in the Deposit Agreement and subject to the
terms thereof, the holder of the Depositary Shares evidenced thereby will be
entitled to delivery at such office, to or upon his or her order, of the number
of whole shares of the related series of Preferred Stock and any money or other
property, if any, represented by such Depositary Shares.
Holders of Depositary Shares will be entitled to receive whole shares of the
related series of Preferred Stock, but holders of such whole shares of Preferred
Stock will not thereafter be entitled to deposit such shares of Preferred Stock
with the Preferred Stock Depositary or to receive Depositary Shares therefor. If
the Depositary Receipts delivered by the holder evidence a number of Depositary
Shares in excess of the number of Depositary Shares representing the number of
whole shares of the related series of Preferred Stock to be withdrawn, the
Preferred Stock Depositary will deliver to such holder or upon such holder's
order at the same time a new Depositary Receipt evidencing such excess number of
Depositary Shares.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time and from time to time be
amended by agreement between the Company and the Preferred Stock Depositary.
However, any amendment that materially adversely alters the rights of the
holders of Depositary Shares will not be effective unless such amendment has
been approved by the holders of a majority of the Depositary Shares then
outstanding. Every holder of a Depositary Receipt at the time such amendment
becomes effective will be deemed, by continuing to hold such Depositary Receipt,
to be bound by the Deposit Agreement as so amended. Notwithstanding the
foregoing, in no event may any amendment impair the right of any holder of any
Depositary Shares, upon surrender of the Depositary Receipts evidencing such
Depositary Shares and subject to any conditions specified in the Deposit
Agreement, to receive shares of the related series of Preferred Stock and any
money or other property represented thereby, except in order to comply with
mandatory provisions of applicable law. The Deposit Agreement may be terminated
by the Company at any time upon not less than 60 days' prior written notice to
the Preferred Stock Depositary, in which case, on a date that is not later than
30
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days after the date of such notice, the Preferred Stock Depositary shall deliver
or make available for delivery to holders of Depositary Shares, upon surrender
of the Depositary Receipts evidencing such Depositary Shares, such number of
whole or fractional shares of the related series of Preferred Stock as are
represented by such Depositary Shares. The Deposit Agreement shall automatically
terminate after all outstanding Depositary Shares have been redeemed or there
has been a final distribution in respect of the related series of Preferred
Stock in connection with any liquidation, dissolution or winding-up of the
Company and such distribution has been distributed to the holders of Depositary
Shares.
CHARGES OF DEPOSITARY
The Company will pay all transfer and other taxes and the governmental
charges arising solely from the existence of the depositary arrangements. The
Company will pay the charges of the Preferred Stock Depositary, including
charges in connection with the initial deposit of any series of Preferred Stock
represented by Depositary Shares and the initial issuance of the Depositary
Shares and all withdrawals of shares of the related series of Preferred Stock,
except that holders of Depositary Shares will pay other transfer and other taxes
and governmental charges and such other charges as are expressly provided in the
Deposit Agreement to be for their accounts.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Preferred Stock Depositary may resign at any time by delivering to the
Company written notice of its election to do so, and the Company may at any time
remove the Depositary, any such resignation or removal to take effect upon the
appointment of a successor Preferred Stock Depositary, which successor Preferred
Stock Depositary must be appointed within 60 days after delivery of the notice
of resignation or removal and must be a bank or trust company having its
principal office in the United States and having a combined capital and surplus
of at least $50,000,000.
MISCELLANEOUS
The Preferred Stock Depositary will forward to the holders of Depositary
Shares all reports and communications from the Company that are delivered to the
Preferred Stock Depositary and which the Company is required to furnish to the
holders of the Preferred Stock.
The Preferred Stock Depositary's corporate trust office will be identified
in the applicable Prospectus Supplement. Unless otherwise set forth in the
applicable Prospectus Supplement, the Preferred Stock Depositary will act as
transfer agent and registrar for Depositary Receipts and if shares of a series
of Preferred Stock are redeemable, the Preferred Stock Depositary will act as
redemption agent for the corresponding Depositary Receipts.
DESCRIPTION OF WARRANTS
GENERAL
The Company may issue, together with other Securities or separately,
warrants for the purchase of (i) Debt Securities (the "Debt Warrants"), (ii)
Common Stock (the "Common Stock Warrants") or (iii) Preferred Stock (the
"Preferred Stock Warrants" and, collectively with the Debt Warrants and the
Common Stock Warrants, the "Warrants").
The Warrants will be issued under Warrant Agreements (as defined below) to
be entered into between the Company and a bank or trust company, as warrant
agent (the "Warrant Agent"), all to be set forth in the applicable Prospectus
Supplement relating to Warrants in respect of which this Prospectus is being
delivered. Copies of the form of agreement for each Warrant (each, a "Debt
Securities Warrant Agreement," a "Common Stock Warrant Agreement" or a
"Preferred Stock Warrant Agreement," as the case may be, or collectively, the
"Warrant Agreements"), including the forms of certificates representing the
Warrants (the "Debt Warrant Certificate(s)," the "Common Stock Warrant
Certificate(s)" or the "Preferred Stock Warrant Certificate(s)," as the case may
be, or collectively, the "Warrant Certificates"),
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reflecting the provisions to be included in such agreements that will be entered
into with respect to the particular offerings of each type of Warrant will be,
in each case, filed with the Commission as an exhibit to a document incorporated
by reference in the Registration Statement prior to the date of any Prospectus
Supplement relating to an offering of such Warrant.
The following description of the terms of the Warrants sets forth certain
general terms and provisions of the Warrants to which any Prospectus Supplement
may relate. The particular terms of the Warrants offered by any Prospectus
Supplement and the extent, if any, to which such general provisions may apply to
the Warrants so offered will be described in a Prospectus Supplement relating to
such Warrants. The following summary of certain provisions of the Warrants, the
Warrant Agreements and the Warrant Certificates does not purport to be complete
and is subject to, and is qualified in its entirety by express reference to, all
of the provisions of the Warrant Agreements and Warrant Certificates, including
the definitions therein of certain terms.
DEBT WARRANTS
GENERAL. Reference is made to the applicable Prospectus Supplement for the
terms of Debt Warrants in respect of which this Prospectus is being delivered,
the Debt Securities Warrant Agreement relating to such Debt Warrants and the
Debt Warrant Certificate(s) representing such Debt Warrants, including the
following: (i) the designation, aggregate principal amount and terms of the Debt
Securities purchasable upon exercise of such Debt Warrants and the procedures
and conditions relating to the exercise of such Debt Warrants; (ii) the
designation and terms of any related Debt Securities with which such Debt
Warrants are issued and the number of such Debt Warrants issued with each such
Debt Security; (iii) the date, if any, on and after which such Debt Warrants and
the related Debt Securities will be separately transferable; (iv) the principal
amount of Debt Securities purchasable upon exercise of each Debt Warrant and the
price at which such principal amount of Debt Securities may be purchased upon
such exercise; (v) the date on which the right to exercise such Debt Warrants
shall commence and the date on which such right shall expire; (vi) a discussion
of the material United States federal income tax considerations applicable to
the exercise of Debt Warrants; (vii) whether the Debt Warrants represented by
the Debt Warrant Certificates will be issued in registered or bearer form, and,
if registered, where they may be transferred and registered; (viii) call
provisions of such Debt Warrants, if any; and (ix) any other terms of the Debt
Warrants.
Debt Warrant Certificates will be exchangeable for new Debt Warrant
Certificates of different denominations and Debt Warrants may be exercised at
the corporate trust office of the Warrant Agent or any other office indicated in
the applicable Prospectus Supplement. Prior to the exercise of their Debt
Warrants, holders of Debt Warrants will not have any of the rights of holders of
the Debt Securities purchasable upon such exercise and will not be entitled to
payments of principal of (and premium, if any) or interest, if any, on the Debt
Securities purchasable upon such exercise.
EXERCISE OF DEBT WARRANTS. Each Debt Warrant will entitle the holder to
purchase for cash such principal amount of Debt Securities at such exercise
price as shall in each case be set forth in, or be determinable as set forth in,
the applicable Prospectus Supplement relating to the Debt Warrants offered
thereby. Debt Warrants may be exercised at any time up to the date and time on
such date set forth in the applicable Prospectus Supplement. Thereafter,
unexercised Debt Warrants will become void.
Debt Warrants may be exercised as set forth in the applicable Prospectus
Supplement relating to the Debt Warrants. Upon receipt of payment and the Debt
Warrant Certificate properly completed and duly executed at the corporate trust
office of the Warrant Agent or any other office indicated in the applicable
Prospectus Supplement, the Company will, as soon as practicable, forward the
Debt Securities purchasable upon such exercise. If less than all of the Debt
Warrants represented by such Debt Warrant Certificate are exercised, a new Debt
Warrant Certificate will be issued for the remaining amount of Debt Warrants.
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COMMON STOCK WARRANTS
GENERAL. Reference is made to the applicable Prospectus Supplement for the
terms of Common Stock Warrants in respect of which this Prospectus is being
delivered, the Common Stock Warrant Agreement relating to such Common Stock
Warrants and the Common Stock Warrant Certificates representing such Common
Stock Warrants, including the following: (i) the procedures and conditions
relating to the exercise of such Common Stock Warrants; (ii) the number of
shares of Common Stock, if any, issued with such Common Stock Warrants; (iii)
the date, if any, on and after which such Common Stock Warrants and any related
shares of Common Stock will be separately transferable; (iv) the offering price
of such Common Stock Warrants, if any; (v) the number of shares of Common Stock
purchasable upon exercise of such Common Stock Warrants and the price or prices
at which such shares may be purchased upon exercise; (vi) the date on which the
right to exercise such Common Stock Warrants shall commence and the date on
which such right shall expire; (vii) a discussion of the material United States
federal income tax considerations applicable to the exercise of Common Stock
Warrants; (viii) call provisions of such Common Stock Warrants, if any; and (ix)
any other terms of the Common Stock Warrants.
Common Stock Warrant Certificates will be exchangeable for new Common Stock
Warrant Certificates of different denominations and Common Stock Warrants may be
exercised at the corporate trust office of the Warrant Agent or any other office
indicated in the applicable Prospectus Supplement. Prior to the exercise of
their Common Stock Warrants, holders of Common Stock Warrants will not have any
of the rights of holders of Common Stock purchasable upon such exercise,
including, without limitation, the right to any dividend payments on the Common
Stock purchasable upon such exercise.
EXERCISE OF COMMON STOCK WARRANTS. Each Common Stock Warrant will entitle
the holder to purchase for cash such number of shares of Common Stock at such
exercise price as shall in each case be set forth in, or be determinable as set
forth in, the applicable Prospectus Supplement relating to the Common Stock
Warrants offered thereby. Common Stock Warrants may be exercised at any time up
to the date and time on such date set forth in the applicable Prospectus
Supplement. Thereafter, unexercised Common Stock Warrants will become void.
Common Stock Warrants may be exercised as set forth in the applicable
Prospectus Supplement relating to the Common Stock Warrants. Upon receipt of
payment and the Common Stock Warrant Certificate properly completed and duly
executed at the corporate trust office of the Warrant Agent or any other office
indicated in the applicable Prospectus Supplement, the Company will, as soon as
practicable, forward a certificate representing the number of shares of Common
Stock purchasable upon such exercise. If less than all of the Common Stock
Warrants represented by such Common Stock Warrant Certificate are exercised, a
new Common Stock Warrant Certificate will be issued for the remaining amount of
Common Stock Warrants.
PREFERRED STOCK WARRANTS
GENERAL. Reference is made to the applicable Prospectus Supplement for the
terms of Preferred Stock Warrants in respect of which this Prospectus is being
delivered, the Preferred Stock Warrant Agreement relating to such Preferred
Stock Warrants and the Preferred Stock Warrant Certificates representing such
Preferred Stock Warrants, including the following: (i) the designation and terms
of the shares of Preferred Stock purchasable upon exercise of such Preferred
Stock Warrants and the procedures and conditions relating to the exercise of
such Preferred Stock Warrants; (ii) the designation and terms of any related
shares of Preferred Stock with respect to which such Preferred Stock Warrants
are issued and the number of shares of such Preferred Stock, if any, issued with
Preferred Stock Warrants; (iii) the date, if any, on and after which such
Preferred Stock Warrants and any related shares of Preferred Stock will be
separately transferable; (iv) the offering price of such Preferred Stock
Warrants, if any; (v) the number of shares of Preferred Stock purchasable upon
exercise of such Preferred Stock Warrants and the initial price or prices at
which such shares may be purchased upon exercise; (vi) the date on which the
right to exercise such Preferred Stock Warrants shall commence and the date on
which such
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right shall expire; (vii) a discussion of the material United States federal
income tax considerations applicable to the exercise of Preferred Stock
Warrants; (viii) call provisions of such Preferred Stock Warrants, if any; and
(ix) any other terms of the Preferred Stock Warrants.
Preferred Stock Warrant Certificates will be exchangeable for new Preferred
Stock Warrant Certificates of different denominations and Preferred Stock
Warrants may be exercised at the corporate trust office of the Warrant Agent or
any other office indicated in the applicable Prospectus Supplement. Prior to the
exercise of their Preferred Stock Warrants, holders of Preferred Stock Warrants
will not have any of the rights of holders of Preferred Stock purchasable upon
such exercise, including, without limitation, any right to any dividend payments
on the Preferred Stock purchasable upon such exercise.
EXERCISE OF PREFERRED STOCK WARRANTS. Each Preferred Stock Warrant will
entitle the holder to purchase for cash such number of shares of Preferred Stock
at such exercise price as shall in each case be set forth in, or be determinable
as set forth in, the applicable Prospectus Supplement relating to the Preferred
Stock Warrants offered thereby. Preferred Stock Warrants may be exercised at any
time up to the date and time on such date set forth in the applicable Prospectus
Supplement. Thereafter, unexercised Preferred Stock Warrants will become void.
Preferred Stock Warrants may be exercised as set forth in the applicable
Prospectus Supplement relating to the Preferred Stock Warrants. Upon receipt of
payment and the Preferred Stock Warrant Certificate properly completed and duly
executed at the corporate trust office of the Warrant Agent or any other office
indicated in the applicable Prospectus Supplement, the Company will, as soon as
practicable, forward a certificate representing the number of shares of
Preferred Stock purchasable upon such exercise. If less than all of the
Preferred Stock Warrants represented by such Preferred Stock Warrant Certificate
are exercised, a new Preferred Stock Warrant Certificate will be issued for the
remaining amount of Preferred Stock Warrants.
PLAN OF DISTRIBUTION
The Company may offer and sell the Securities directly to purchasers or to
or through underwriters, dealers or agents. Any such underwriter, dealer or
agent involved in the offer and sale of the Securities in respect of which this
Prospectus is delivered will be named in the applicable Prospectus Supplement.
The applicable Prospectus Supplement with respect to such Securities will also
set forth the terms of the offering of such Securities, including the purchase
price of such Securities and the proceeds to the Company from such sale, any
underwriting discounts and other items constituting underwriters' compensation,
any initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers and any securities exchanges on which such
Securities may be listed.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, or from
time to time at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices. The applicable
Prospectus Supplement will describe the method of distribution of the
Securities.
If underwriters are used in an offering of Securities, the name of each
managing underwriter, if any, and any other underwriters and terms of the
transaction, including any underwriting discounts and other items constituting
compensation of the underwriters and dealers, if any, will be set forth in the
applicable Prospectus Supplement relating to such offering and the Securities
will be acquired by the underwriters for their own accounts and may be resold
from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. Any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers may be changed from time to
time. Underwriters, dealers and agents may be entitled, under agreements which
may be entered into with the Company, to indemnification against and
contribution toward certain civil liabilities, including liabilities under the
Securities Act, and to reimbursement by the Company of certain expenses.
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If a dealer is used in an offering of Securities, the Company will sell such
Securities to the dealer, as principal. The dealer may then resell such
Securities to the public at varying prices to be determined by such dealer at
the time of resale. The name of the dealer and the terms of the transaction will
be set forth in the applicable Prospectus Supplement relating thereto.
If an agent is used in an offering of Securities, the agent will be named,
and the terms of the agency will be set forth, in the applicable Prospectus
Supplement relating thereto. Unless otherwise indicated in such applicable
Prospectus Supplement, an agent will act on a best efforts basis for the period
of its appointment.
Dealers and agents named in an applicable Prospectus Supplement may be
deemed to be underwriters (within the meaning of the Securities Act) of the
Securities described therein and, under agreements which may be entered into
with the Company, may be entitled to indemnification by the Company against
certain civil liabilities under the Securities Act. Underwriters, dealers and
agents may be customers of, engage in transactions with or perform services for,
the Company in the ordinary course of business.
Offers to purchase Securities may be solicited, and sales thereof may be
made, by the Company directly to institutional investors or others, who may be
deemed to be underwriters within the meaning of the Securities Act with respect
to any resales thereof. The terms of any such offer will be set forth in the
applicable Prospectus Supplement relating thereto.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize underwriters or other agents of the Company to solicit offers by
certain institutional investors to purchase Securities from the Company pursuant
to contracts providing for payment and delivery at a future date. Institutional
investors with which such contracts may be made include commercial and savings
banks, insurance companies, pension funds, investment companies, educational and
charitable institutions and others, but in all cases such purchasers must be
approved by the Company. The obligations of any purchaser under any such
contract will not be subject to any conditions except that (i) the purchase of
the Securities shall not at the time of delivery be prohibited under the laws of
any jurisdiction to which such purchaser is subject and (ii) if the Securities
are also being sold to underwriters, the Company shall have sold to such
underwriters the Securities not subject to delayed delivery. Underwriters and
other agents will not have any responsibility in respect of the validity or
performance of such contracts.
In addition, the Securities may be offered and sold by the holders thereof
in one or more of the transactions described above, which transactions may be
effected at any time and from time to time. Upon any such sale of Securities,
the respective holders thereof and any broker, dealer or underwriter
participating therewith may be deemed to be underwriters within the meaning of
Section 2(11) of the Securities Act, and any commissions, discounts or
concessions upon such sale, or any profit on the resale of such shares, received
thereby in connection with such sale may be deemed to be underwriting
commissions or discounts under the Securities Act. The compensation, including
commissions, discounts, concessions and other profits, received by any broker,
dealer or underwriter in connection with the sale of any of such Securities may
be less than or in excess of customary commissions.
The anticipated date of delivery of Securities will be set forth in the
applicable Prospectus Supplement relating to each offering.
The Securities may or may not be listed on a national securities exchange or
a foreign securities exchange. No assurances can be given that there will be a
market for any of the Securities.
LEGAL MATTERS
Certain legal matters will be passed upon for the Company by Wolf, Block,
Schorr and Solis-Cohen, Philadelphia, Pennsylvania, and, as to certain matters
of Nevada law, by Peter C. Walsh, Assistant General Counsel of the Company. Mr.
Walsh holds options to purchase 134,000 shares of Common Stock.
22
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EXPERTS
The consolidated balance sheets of Mirage Resorts, Incorporated and
subsidiaries as of December 31, 1995 and 1994, and the related consolidated
statements of income, stockholders' equity and cash flows for the years then
ended, incorporated by reference herein, have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their report with respect
thereto, and are incorporated herein in reliance upon the authority of such firm
as experts in accounting and auditing.
The consolidated statements of income, stockholders' equity and cash flows
of Mirage Resorts, Incorporated and subsidiaries for the year ended December 31,
1993, incorporated by reference herein, have been incorporated herein in
reliance upon the report of Coopers & Lybrand, independent accountants, given
upon the authority of that firm as experts in accounting and auditing.
23
<PAGE>
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS
SUPPLEMENT OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY
SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT
AS OF ANY TIME SUBSEQUENT TO ITS DATE.
--------------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
The Company.................................... S-2
Gaming Regulation.............................. S-6
Use of Proceeds................................ S-7
Capitalization................................. S-8
Selected Financial Data........................ S-9
Recent Operating Results....................... S-10
Management's Discussion and Analysis of
Financial Condition and Results of
Operations.................................... S-11
Description of Notes........................... S-15
Underwriting................................... S-20
Legal Matters.................................. S-21
Statement on Forward-Looking Information....... S-21
</TABLE>
PROSPECTUS
<TABLE>
<S> <C>
Available Information.......................... 2
Incorporation of Certain Documents by
Reference..................................... 2
The Company.................................... 3
Ratio of Earnings to Fixed Charges............. 4
Use of Proceeds................................ 4
Description of Debt Securities................. 4
Description of Preferred Stock................. 12
Description of Depositary Shares............... 15
Description of Warrants........................ 18
Plan of Distribution........................... 21
Legal Matters.................................. 22
Experts........................................ 23
</TABLE>
$250,000,000
MIRAGE RESORTS, INCORPORATED
7.25% SENIOR NOTES
DUE OCTOBER 15, 2006
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PROSPECTUS SUPPLEMENT
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GOLDMAN, SACHS & CO.
CS FIRST BOSTON
REPRESENTATIVES OF THE UNDERWRITERS
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