<PAGE>
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED JULY 12, 1996
$300,000,000
MIRAGE RESORTS, INCORPORATED
$200,000,000 6 3/4% Notes Due August 1, 2007
$100,000,000 7 1/4% Debentures Due August 1, 2017
Interest Payable February 1 and August 1
--------
The 6 3/4% Notes are due August 1, 2007 (the "Notes") and the 7 1/4% Debentures
are due August 1, 2017 (the "Debentures" and, together with the Notes, the
"Securities"). Interest on the Securities is payable semiannually on each
February 1 and August 1, beginning February 1, 1998. The Securities are
redeemable, in whole or in part, at the option of Mirage Resorts,
Incorporated (the "Company") at any time at a redemption price equal to
the greater of (i) 100% of the principal amount of such Securities 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 and the Debentures each will be represented by one or more Global
Securities (as defined herein) registered in the name of the nominee of The
Depository Trust Company (the "Depositary"). Except as described herein,
Securities in definitive form will not be issued. See "Description of
Securities."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIESAND
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. 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>
Underwriting
Price to Discounts and Proceeds to
Public(1) Commissions Company(1)(2)
------------ ------------- -------------
<S> <C> <C> <C>
Per Note............................... 99.547% 0.65% 98.897%
Per Debenture.......................... 99.695% 0.875% 98.82%
Total.................................. $298,789,000 $2,175,000 $296,614,000
</TABLE>
(1) Plus accrued interest, if any, from August 5, 1997.
(2) Before deduction of expenses payable by the Company estimated at $450,000.
The Securities are offered by the Underwriters when, as and if issued by the
Company, delivered to and accepted by the Underwriters and subject to their
right to reject orders in whole or in part. It is expected that delivery of the
Securities in book-entry form will be made through the facilities of the
Depositary on or about August 5, 1997, against payment in immediately available
funds.
CREDIT SUISSE FIRST BOSTON
GOLDMAN, SACHS & CO.
BANCAMERICA SECURITIES, INC.
Prospectus Supplement dated July 31, 1997.
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE SECURITIES
OFFERED HEREBY, INCLUDING OVER-ALLOTMENT, STABILIZING TRANSACTIONS, SYNDICATE
SHORT COVERING TRANSACTIONS AND PENALTY BIDS. FOR A DESCRIPTION OF THESE
ACTIVITIES, SEE "UNDERWRITING."
THE COMPANY
Mirage Resorts, Incorporated (the "Company") owns and operates some of the
most successful, well-known 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 and destination 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 95%.
The Company is also planning to construct at least one major casino-based
resort in Atlantic City, New Jersey.
The Company's philosophy is to build innovative, high-quality destination
resorts in each of its markets and to maintain these properties 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 levels of profitability at each of its major
resorts and worldwide recognition. Recently, for the second consecutive year,
the Company was ranked in the top 10 in Fortune magazine's annual survey of
the most admired companies in America.
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 located on
approximately 120 acres shared with Treasure Island near the center of the Las
Vegas Strip. 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 with eight Atlantic bottlenose dolphins, and The
Secret Garden of Siegfried & Roy, an exhibit that allows guests to view the
beautiful exotic animals of Siegfried & Roy, the world-famous illusionists who
perform at The Mirage.
TREASURE ISLAND
Treasure Island is a pirate-themed hotel-casino resort. 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 regularly
engage in a pyrotechnic and special effects sea battle, culminating with the
sinking of the frigate. The showroom at Treasure Island features Mystere, a
unique choreographic mix of magic, special effects and feats of human prowess
produced and performed by the world-famous Cirque du Soleil.
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 has received the Mobil Travel Guide's Four Star Award and the AAA Four
Diamond Award for 13 and
S-2
<PAGE>
20 consecutive years, respectively. The Golden Nugget is the generally
acknowledged leader in the downtown Las Vegas market and has benefited from
the "Fremont Street Experience," a $70 million entertainment attraction that
opened adjacent to the Golden Nugget in December 1995.
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
offering 18 table games and approximately 1,190 slots, 300 hotel rooms
(including four suites), three restaurants, three bars, an entertainment
lounge, a deli, an ice cream parlor and sweets shop, a gift and retail shop
and a parking garage with space for approximately 1,585 vehicles.
MONTE CARLO (50%-OWNED)
The Company is a 50% partner with Circus Circus Enterprises, Inc. ("Circus")
in Victoria Partners, a joint venture that owns and operates Monte Carlo. The
resort is situated on 48 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. Monte Carlo has amenities such as a
microbrewery featuring live entertainment, a health spa, a beauty salon, a
1,200-seat theater featuring the world-renowned magician Lance Burton, a large
pool area and lighted tennis courts. Monte Carlo will be connected to Bellagio
by a monorail.
CURRENT EXPANSION PROJECTS
BELLAGIO
The Company is constructing Bellagio on approximately 118 acres on the Las
Vegas Strip between Flamingo Road and Tropicana Avenue. Bellagio is the
Company's most ambitious destination resort to date. This elegant European-
style resort will overlook 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 is producing an all-new production to be performed 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 $1.5 billion (including land, capitalized interest and
preopening costs) and is scheduled to open in the third quarter of 1998.
Additionally, as of June 30, 1997, the Company had acquired approximately $110
million of fine art for display and resale at Bellagio.
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. Beau Rivage is
scheduled for completion in the fourth quarter of 1998 at an estimated total
cost (including land, capitalized interest and preopening costs) of
approximately $550 million. The Company has also acquired approximately 508
acres of land in the Biloxi area and is contemplating the development of a
world-class 18-hole golf course.
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.
S-3
<PAGE>
The following table sets forth certain data, as of June 30, 1997, regarding
the Company's major resorts and certain estimates regarding the Company's two
projects under construction.
<TABLE>
<CAPTION>
BEAU THE TREASURE GOLDEN MONTE
BELLAGIO(A) RIVAGE(A) MIRAGE ISLAND NUGGET CARLO(B)
------------- ------------- ------------ ------------ --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Project cost............ $1.5 billion $550 million $835 million(c) $470 million (d) $350 million
Opening date............ 3rd Qtr. 1998 4th Qtr. 1998 Nov. 1989 Oct. 1993 Aug. 1946 June 1996
Total building square
footage................ 4,289,000 2,222,000 3,072,000 2,374,000 1,465,000 2,520,000
Casino
Square footage
(including corridors). 156,000 80,000 95,900 82,000 38,000 90,000
Number of gaming
tables................ 173 73 119 83 64 95
Number of slots........ 2,746 2,200 2,181 1,900(e) 1,305 2,200
Hotel
Number of guest rooms
(including suites and
villas)............... 3,005 1,780 3,044 2,891 1,907 3,002
Square footage of
interior meeting
space................. 94,600 30,000 100,000 16,000 24,000 15,000
Restaurants
Number of outlets...... 16 12 11 9 6 7
Number of seats........ 2,831 1,640 2,300 1,530 1,006 2,120
Retail
Square footage......... 81,000 25,500 22,035 14,200 4,350 11,300
Showroom
Number of seats........ 1,800 1,550 1,503 1,525 410 1,200
</TABLE>
- --------
(a) Estimates regarding Bellagio and Beau Rivage are subject to change. The
estimated Bellagio project cost does not include approximately $110
million of fine art purchased for display and resale at Bellagio.
(b) Monte Carlo is 50%-owned by the Company.
(c) Includes capital improvements subsequent to opening.
(d) Not meaningful for comparative purposes.
(e) Does not include approximately 250 machines temporarily out of service as
a result of construction underway on several improvements to the resort.
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. Closing under the agreement requires the satisfaction of a
number of conditions. One such condition is the construction of certain major
road improvements designed to improve access to the Marina area. The Company
has entered into a road development agreement with the New Jersey Department
of Transportation and the South Jersey Transportation Authority with respect
to the construction and joint funding of the road improvements, although
details of the funding have not been finalized. Selection of a contractor to
design and build the road improvements is being determined by public bidding.
On July 8, 1997, bids were submitted and the apparent low bid was within the
budget provided in the road development agreement. On May 2, 1997, the Company
filed applications for various permits necessary for development of a 2,000-
room hotel-casino that would occupy a portion of the 150-acre site.
The required permits for the hotel-casino and the road improvement project
have not yet been received. The Company also has not yet submitted its plans
for the hotel-casino to potential contractors. Furthermore, an existing
Atlantic City hotel-casino operator and others have filed various lawsuits
which seek to prevent construction of the road improvements and closing under
the redevelopment agreement, thereby preventing the Company from developing a
hotel-casino on the Marina site. As a result of the foregoing factors, there
can be no assurance as to the timing, cost or certainty of construction by the
Company in Atlantic City.
The Company has entered into an agreement with Boyd Gaming Corporation for
the development of a jointly owned hotel-casino resort containing a minimum of
1,000 guest rooms on the Marina site. The Company
S-4
<PAGE>
has also entered into a separate agreement with Circus pursuant to which
Circus would acquire a portion of the Marina site and construct its own 2,000-
room hotel-casino resort. Each of these additional resorts would be in an
architectural format that conforms to a master plan created by the Company.
Closing under each agreement is subject to various conditions and there can be
no assurance that such conditions will be satisfied.
OTHER
The Company regularly evaluates 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. Currently, the
Company intends to submit a response (which is due August 1, 1997) to a
request for proposals to develop a casino in Detroit, Michigan. 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.
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, such as the Securities, 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.
S-5
<PAGE>
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 22, 1997, the Nevada Gaming Commission granted the Company prior approval
to make public offerings for a period of two years, 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 biannually. 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 Securities will be made pursuant to the Shelf Approval.
The Company received a similar one-year waiver of approval requirements from
the Mississippi Gaming Commission on May 29, 1997.
Consistent with the foregoing, the Indenture governing the Securities will
provide that each holder and beneficial owner thereof, by accepting any of the
Securities, 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 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 such Securities 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 fiscal year ended
December 31, 1996, incorporated by reference in the accompanying Prospectus.
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale of the
Securities, estimated at $296.2 million, are expected to be used to repay
borrowings under the Company's revolving bank credit facility and commercial
paper program 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 June 30,
1997, the Company had outstanding indebtedness under its revolving bank credit
facility of $265.0 million, bearing interest at a weighted average rate of
approximately 6.1% per annum, and had outstanding indebtedness under its
commercial paper program of $83.9 million, bearing interest at a weighted
average rate of 5.9% per annum. The amounts outstanding under the revolving
bank credit facility and the commercial paper program are short-term with
various maturities. The indebtedness outstanding under the revolving bank
credit facility and the commercial paper program was incurred principally in
connection with the Company's projects described in this Prospectus Supplement
under the caption "The Company--Current Expansion Projects" and the
refinancing of previously incurred indebtedness.
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-6
<PAGE>
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Company at March 31, 1997, and as adjusted at such date to give effect to the
sale of the Securities offered hereby. This table does not give effect to the
expected use of proceeds of this offering to repay outstanding indebtedness.
See "Use of Proceeds."
<TABLE>
<CAPTION>
AT MARCH 31, 1997
----------------------
AS
ACTUAL ADJUSTED
---------- ----------
(IN THOUSANDS)
<S> <C> <C>
Long-term debt (excluding current maturities)
Collateralized
Zero Coupon First Mortgage Notes Due March 15,
1998(a)........................................... $ 119,908 $ 119,908
Notes with interest rates of 7% and 8.689%,
maturing in 1999 and 2003......................... 739 739
---------- ----------
Total collateralized............................. 120,647 120,647
---------- ----------
Uncollateralized
9 1/4% Senior Subordinated Notes Due March 15,
2003.............................................. 100,000 100,000
Revolving bank credit facility, maturing in March
2002(b)........................................... -- --
Commercial paper notes(b)(c)....................... 99,317 99,317
7 1/4% Notes Due October 15, 2006(d)............... 249,683 249,683
6 3/4% Notes Due August 1, 2007(e)................. -- 199,094
7 1/4% Debentures Due August 1, 2017(f)............ -- 99,695
Notes with interest rates of 9% and 12%, maturing
in 2001 and 2007.................................. 1,021 1,021
---------- ----------
Total uncollateralized........................... 450,021 748,810
---------- ----------
Total long-term debt........................... 570,668 869,457
---------- ----------
Stockholders' equity
Common stock, par value $0.004: authorized
1,125,000,000 shares; issued 235,147,650 shares;
outstanding 178,631,209 shares...................... 940 940
Additional paid-in capital........................... 727,607 727,607
Retained earnings.................................... 910,679 910,679
Treasury stock, at cost: 56,516,441 shares........... (290,769) (290,769)
---------- ----------
Total stockholders' equity....................... 1,348,457 1,348,457
---------- ----------
Total capitalization........................... $1,919,125 $2,217,914
========== ==========
</TABLE>
- --------
(a) Net of unamortized original issue discount of approximately $13.1 million.
The notes are classified as long-term debt because the Company intends to
refinance the obligations on a long-term basis and has availability under
its revolving bank credit facility that would permit it to do so.
(b) The revolving bank credit facility permits outstanding borrowings by the
Company under such facility and under the Company's commercial paper
program of up to an aggregate of $1.75 billion. Outstanding bank facility
and commercial paper borrowings at June 30, 1997 totaled $348.9 million.
See "Use of Proceeds."
(c) On July 24, 1997, the size of the Company's commercial paper program was
increased from $350.0 million to $500.0 million.
(d) Net of unamortized original issue discount of $317,000.
(e) Net of original issue discount of $906,000.
(f) Net of original issue discount of $305,000.
S-7
<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 such 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
three months ended March 31, 1996 and 1997 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 three months ended
March 31, 1997 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, 1996 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 March 31,
1997 incorporated by reference in the accompanying Prospectus.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
---------------------------------------------------------- ----------------------
1992 1993(A) 1994 1995 1996(B) 1996 1997(B)
---------- ---------- ---------- ---------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE AND RATIO DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING RESULTS
Gross revenues......... $ 920,576 $1,053,413 $1,370,941 $1,453,716 $1,496,357 $ 408,668 $ 394,399
Promotional allowances. (87,552) (100,111) (116,764) (122,972) (128,813) (34,460) (32,360)
Net revenues........... 833,024 953,302 1,254,177 1,330,744 1,367,544 374,208 362,039
Operating income....... 125,775 131,728 237,839 284,087 312,670 98,124 90,737
Income before
extraordinary item and
cumulative effect of
change in accounting
principle (c)......... 36,945 48,069 124,739 169,948 206,045 64,587 56,689
Net income............. 28,419 29,232 114,324 163,163 206,045 64,587 54,464
Income per share before
extraordinary item and
cumulative effect of
change in accounting
principle (c)......... $ 0.26 $ 0.29 $ 0.66 $ 0.88 $ 1.06 $ 0.33 $ 0.30
Net income per share... $ 0.20 $ 0.18 $ 0.60 $ 0.85 $ 1.06 $ 0.33 $ 0.29
PRO FORMA EARNINGS PER
SHARE (d)
Income per share before
extraordinary items
Undiluted.............. $ 0.28 $ 0.31 $ 0.69 $ 0.93 $ 1.13 $ 0.35 $ 0.32
Diluted................ $ 0.26 $ 0.29 $ 0.66 $ 0.88 $ 1.05 $ 0.33 $ 0.30
Net income per share
Undiluted.............. $ 0.22 $ 0.19 $ 0.63 $ 0.89 $ 1.13 $ 0.35 $ 0.31
Diluted................ $ 0.20 $ 0.18 $ 0.60 $ 0.85 $ 1.05 $ 0.33 $ 0.28
OTHER DATA
Interest expense....... $ 99,246 $ 63,465 $ 44,215 $ 23,183 $ 6,825 $ 2,696 $ 3,161
Cash provided by
operating activities.. 84,565 180,825 286,761 325,286 322,124 80,179 86,093
Capital expenditures... 220,844 432,388 69,111 179,385 356,397 55,810 179,050
Ratio of earnings to
fixed charges (e)..... 1.4 1.5 4.5 8.2 8.3 12.1 6.2
BALANCE SHEET DATA AT
PERIOD-END
Total assets........... $1,594,921 $1,705,258 $1,641,439 $1,791,713 $2,143,490 $1,816,044 $2,293,947
Long-term debt......... 831,179 535,025 359,584 248,548 468,140 209,544 570,668
Stockholders' equity... 553,611 910,864 1,030,922 1,209,343 1,290,883 1,284,022 1,348,457
Shares outstanding..... 149,199 181,213 181,991 183,341 178,336 184,140 178,631
</TABLE>
- -------
(a) Treasure Island opened on October 26, 1993.
(b) Includes the Company's 50% share of the net income or loss of Monte Carlo,
which opened on June 21, 1996. The 1996 amounts are after deducting a one-
time charge of $5.6 million reflecting the Company's proportionate share
of Monte Carlo's preopening costs.
(c) Before extraordinary 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.
(d) In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128--Earnings Per Share
("SFAS 128"). SFAS 128 is effective for periods ending after December 15,
1997 and replaces currently reported earnings per share with "basic," or
undiluted, earnings per share and "diluted" earnings per share. Undiluted
earnings per share is computed by dividing reported earnings by the
weighted-average number of common shares outstanding during the period.
Diluted earnings per share reflects the additional dilution for all
potentially dilutive securities such as stock options. Diluted earnings
per share is similar to earnings per share currently reported by the
Company, but includes the potential dilution for stock options that become
exercisable more than five years from the date of the financial
statements. The Company will adopt the provisions of SFAS 128 in its 1997
annual financial statements and all previously reported earnings per share
amounts will be restated. Information under this caption represents the
Company's pro forma earnings per share as determined in accordance with
SFAS 128.
(e) 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-8
<PAGE>
RECENT OPERATING RESULTS
The following table sets forth information concerning the Company's
operating results for the three and six months ended June 30, 1996 and 1997.
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------- ------------------
1996 1997 1996 1997
--------- --------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE
AMOUNTS)
<S> <C> <C> <C> <C>
OPERATING RESULTS
Gross revenues.................... $ 343,183 $ 373,757 $751,851 $768,156
Promotional allowances............ (30,531) (29,396) (64,991) (61,756)
Net revenues...................... 312,652 344,361 686,860 706,400
Operating income.................. 59,318 76,837 157,442 167,574
Income before extraordinary item.. 40,599 48,901 105,186 105,590
Net income........................ 40,599 48,901 105,186 103,365
Income per share before
extraordinary item............... $ 0.21 $ 0.26 $ 0.54 $ 0.55
Net income per share.............. $ 0.21 $ 0.26 $ 0.54 $ 0.54
PRO FORMA EARNINGS PER SHARE (see
footnote (d) to Selected Financial
Data on previous page)
Income per share before
extraordinary item
Undiluted....................... $ 0.22 $ 0.27 $ 0.57 $ 0.59
Diluted......................... $ 0.20 $ 0.25 $ 0.53 $ 0.55
Net income per share
Undiluted....................... $ 0.22 $ 0.27 $ 0.57 $ 0.58
Diluted......................... $ 0.20 $ 0.25 $ 0.53 $ 0.54
</TABLE>
The Company reported 1997 second quarter net income of $48.9 million, or
$0.26 per share, a 20% increase over the $40.6 million, or $0.21 per share,
reported in the second quarter of 1996. The Company has now achieved year-
over-year earnings increases in 13 of the past 14 quarters. Revenues, net of
promotional allowances, totaled $344.4 million, an increase of 10% over the
$312.7 million reported in the 1996 second quarter. Operating income grew by
30% to $76.8 million, versus $59.3 million in the prior-year period.
The Company-wide table games win percentage during the 1997 second quarter
was a relatively normal 20.1%, versus the unusually low 16.0% recorded in the
prior-year period. The 1996 second quarter benefited from a $4.5 million gain
on the sale of investment securities, but was impacted by a $5.6 million
charge reflecting the Company's share of Monte Carlo's preopening costs. There
were no such non-recurring items in the 1997 quarter.
The 1997 second quarter results were achieved against the backdrop of
increased competition in the Las Vegas market. According to the Las Vegas
Convention and Visitors Authority, during the period January through April
1997, the number of Las Vegas visitors rose by nearly 6% over the same 1996
period. Meanwhile, the number of available guest rooms in Las Vegas increased
by almost 13%. As a result, city-wide hotel room occupancy declined.
Management believes that this trend continued during May and June.
The Company, however, focuses on operating superior, "must see" properties
and has been less affected by the city-wide trend. In the 1997 second quarter,
Company-wide standard guest room occupancy remained very high (99.0%, versus
99.6% in the 1996 second quarter) and the average standard room rate at the
Company's Las Vegas hotels rose to $95, compared to $92 in the prior-year
period.
The earnings improvement during the 1997 second quarter was led by the
Company's flagship resort, The Mirage, which achieved a $24.6 million, or 15%,
increase in net revenues and an $11.7 million, or 33%, increase in operating
income. Casino revenues at The Mirage increased by 24%, as a result of higher
activity levels and an increase in the table games win percentage. The
Mirage's net non-casino revenues rose by 6%, reflecting stable hotel room
occupancy, higher average room rates and the continued success of Siegfried &
Roy.
S-9
<PAGE>
Amidst competitive market conditions and ongoing construction of a new hotel
lobby and other amenities, Treasure Island achieved net revenues of $91.0
million and operating income of $19.7 million, nearly equaling the strong
$93.2 million and $22.5 million reported in the 1996 second quarter. The
ongoing construction has temporarily reduced the number of slot machines
offered at Treasure Island. During the 1997 second quarter, there was an
average of approximately 6% fewer slot machines available for play compared
with the 1996 period, contributing to a 7% decline in casino revenues. Net
non-casino revenues were up slightly over the 1996 second quarter, primarily
resulting from an increase in the average ticket price for Mystere. Room
revenues also showed a small improvement, reflecting stable occupancy and a
higher average room rate. The new hotel lobby is scheduled to be open in
August, followed by a new Italian restaurant and other new features in the
third and fourth quarters.
The downtown Las Vegas market has been particularly impacted by the
additional competition on the Las Vegas Strip. Net revenues and operating
income at the Golden Nugget were each down by approximately $4.6 million
versus the 1996 second quarter. The Golden Nugget has also been impacted
during 1997 by the refurbishment of its 1,382-room south hotel tower, which
was completed in late April.
During the 1997 second quarter, Monte Carlo produced net revenues of
$63.6 million and operating income of $19.3 million. Monte Carlo's 1997 second
quarter operating income represents its highest quarterly operating income
since opening on June 21, 1996. After deducting net interest expense, this
50%-owned joint venture resort contributed $8.8 million to the Company's
pretax income during the 1997 quarter.
The Company's interest cost rose to $14.5 million in the quarter, reflecting
the ongoing construction of Bellagio and Beau Rivage, as well as borrowings
for share repurchases completed principally in the second half of 1996. The
Company capitalized $11.9 million of such interest cost during the quarter
relating to construction in progress.
S-10
<PAGE>
DESCRIPTION OF SECURITIES
The following information concerning the Securities 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 Securities will be issued as Debt Securities under an Indenture to be
dated as of August 1, 1997 (the "Base Indenture") between the Company and
First Security Bank, National Association (the "Trustee"), and a Supplemental
Indenture thereto to be dated as of August 1, 1997 (the "Supplemental
Indenture") between the Company and the Trustee (together with the Base
Indenture, the "Indenture"). Provisions of the Base Indenture are more fully
described in the accompanying Prospectus. The Notes and the Debentures will be
issued as unsecured obligations of the Company in aggregate principal amounts
of $200,000,000 and $100,000,000, respectively. The Notes will mature on
August 1, 2007 and the Debentures will mature on August 1, 2017. The
Securities will bear interest from August 5, 1997, payable semiannually in
arrears on each February 1 and August 1, commencing February 1, 1998, at the
rate of 6 3/4% per annum in the case of the Notes and 7 1/4% per annum in the
case of the Debentures, to the persons in whose names the Securities are
registered on the January 15 or July 15 preceding such February 1 or August 1.
Payment of the principal of, and interest on, the Securities will not be
guaranteed by any subsidiary of the Company. All of the Company's principal
operations are conducted through subsidiaries. The Securities will be issued
only in registered form in denominations of $1,000 and integral multiples
thereof.
RESTRICTIVE COVENANTS
The Securities 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 Securities 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
Securities 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 Securities; (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
S-11
<PAGE>
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 Securities 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" below, does not exceed 15% of
the Consolidated Net Tangible Assets of the Company.
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 the
Consolidated Net Tangible Assets of the Company.
OPTIONAL REDEMPTION
The Securities 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 Securities 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 Securities to be
redeemed.
Unless the Company defaults in payment of the redemption price, interest
will cease to accrue on the Securities or portions thereof called for
redemption on and after the redemption date.
The Securities 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
S-12
<PAGE>
under the Securities 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 Securities 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 or the Debentures, as the case may be, 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 Securities of such series; (ii) failure of the
Company to comply with any of its other agreements or other covenants
contained in the Securities or in such Indenture and applicable to the
Securities of such series, 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 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 million 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 0.20% with respect to the Notes
and 0.25% with respect to the Debentures.
"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 average interest rate of the Securities (weighted in proportion
to the aggregate principal amount of the Notes and Debentures originally
issued) 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, with respect to the Notes or the
Debentures, as the case may be, the United States Treasury security selected
by a Quotation Agent as having a maturity comparable to the remaining term of
such Securities 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 Securities.
"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 Company obtains fewer than three such Reference
Treasury Dealer Quotations, the average of all such Quotations.
S-13
<PAGE>
"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 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 Company and certified to the Trustee by the Company.
"Reference Treasury Dealer" means each of Credit Suisse First Boston
Corporation, Goldman, Sachs & Co. and BancAmerica Securities, Inc. 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 certify same to the Trustee; and any other Primary
Treasury Dealer selected by the Company and certified to the Trustee by the
Company.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any redemption date, the average, as determined by the
Company and certified to the Trustee by the Company, 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 Company by such
Reference Treasury Dealer at 5:00 p.m. on the third Business Day preceding
such redemption date.
BOOK-ENTRY SYSTEM
The Securities will be represented by Global Securities that will be
deposited with, or on behalf of, the Depositary and registered in the name of
a nominee of the Depositary.
The Depositary has advised the Company and the Underwriters as follows: the
Depositary 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. The Depositary 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 the Depositary. Access to the Depositary'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 the Depositary only
through participants.
Unless and until they are exchanged in whole or in part for certificated
Securities in definitive form, the Global Securities may not be transferred
except as a whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary.
S-14
<PAGE>
The Securities represented by the Global Securities will not be exchangeable
for certificated Securities, provided that if the Depositary 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 Securities 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 Securities in definitive form in exchange for the Global
Securities previously representing all such Securities. In either instance, an
owner of a beneficial interest in a Global Security will be entitled to
physical delivery of Securities in definitive form equal in principal amount
to such beneficial interest and to have such Securities registered in its
name. Individual Securities 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 Securities will be made by the
Company through the Trustee to the Depositary 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 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 the Depositary, 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 the Depositary. 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.
S-15
<PAGE>
UNDERWRITING
Under the terms and subject to the conditions contained in the Underwriting
Agreement and the Pricing Agreement, each dated July 31, 1997 (collectively,
the "Underwriting Agreement"), the Underwriters named below (the
"Underwriters") have severally but not jointly agreed to purchase from the
Company the following respective principal amounts of the Securities:
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT OF AMOUNT OF
UNDERWRITER NOTES DEBENTURES
----------- ------------ ------------
<S> <C> <C>
Credit Suisse First Boston Corporation............ $ 67,200,000 $ 33,600,000
Goldman, Sachs & Co. ............................. 67,200,000 33,600,000
BancAmerica Securities, Inc. ..................... 33,600,000 16,800,000
BT Securities Corporation......................... 6,400,000 3,200,000
CIBC Wood Gundy Securities Corp. ................. 6,400,000 3,200,000
Credit Lyonnais Securities (USA) Inc. ............ 6,400,000 3,200,000
J.P. Morgan Securities Inc. ...................... 6,400,000 3,200,000
Societe Generale Securities Corporation........... 6,400,000 3,200,000
------------ ------------
Total......................................... $200,000,000 $100,000,000
============ ============
</TABLE>
The Underwriting Agreement provides that the obligations of the Underwriters
are subject to certain conditions precedent and that the Underwriters will be
obligated to purchase all the Securities, if any are purchased. The
Underwriting Agreement provides that in the event of default by an
Underwriter, in certain circumstances the purchase commitments of the non-
defaulting Underwriters may be increased or the Underwriting Agreement may be
terminated.
The Company has been advised by the Underwriters that the Underwriters
propose to offer the Securities to the public initially at the public offering
prices set forth on the cover page of this Prospectus Supplement and to
certain dealers at such prices less a concession of 0.40% of the principal
amount per Note and 0.50% per Debenture, and the Underwriters and such dealers
may allow a discount of 0.25% of such principal amount per Note and Debenture
on sales to certain other dealers. After the initial public offering, the
public offering prices and concessions and discounts to dealers may be changed
by the Underwriters.
The Securities are new issues of securities with no established trading
market. The Securities will not be listed on any securities exchange. The
Underwriters have advised the Company that they intend to act as market makers
for the Securities. However, the Underwriters are not obligated to do so and
may discontinue any market making at any time without notice. No assurance can
be given as to the liquidity of the trading market for the Securities.
The Company has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended, or contribute to payments which any Underwriter may be required to
make in respect thereof.
The Underwriters may engage in over-allotment, stabilizing transactions,
syndicate covering transactions and penalty bids. Over-allotment involves
syndicate sales in excess of the offering size, which creates a syndicate
short position. Stabilizing transactions permit bids to purchase the
Securities so long as the stabilizing bids do not exceed a specified maximum.
Syndicate covering transactions involve the purchase of the Securities in the
open market after the distribution has been completed in order to cover
syndicate short positions. Penalty bids permit the Underwriters to reclaim a
selling concession from a syndicate member when the Securities originally sold
by such syndicate member are purchased in a syndicate covering transaction to
cover syndicate short positions. Such stabilizing transactions, syndicate
covering transactions and penalty bids may cause the prices of the Securities
to be higher than they would otherwise be in the absence of such transactions.
The Underwriters and their respective affiliates may be customers of,
lenders to, engage in transactions with and perform services for the Company
and its subsidiaries in the ordinary course of business. Each of BancAmerica
Securities, Inc., BT Securities Corporation, CIBC Wood Gundy Securities Corp.,
Credit Lyonnais
S-16
<PAGE>
Securities (USA) Inc., J.P. Morgan Securities Inc. and Societe Generale
Securities Corporation is 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 Securities to
repay outstanding amounts due under the revolving bank credit facility. See
"Use of Proceeds." As a result, this offering of the Securities is being made
pursuant to the provisions of Rule 2710(c)(8) of the Conduct Rules of The
National Association of Securities Dealers, Inc.
NOTICE TO CANADIAN RESIDENTS
RESALE RESTRICTIONS
The distribution of the Securities in Canada is being made only on a private
placement basis exempt from the requirement that the Company prepare and file
a prospectus with the securities regulatory authorities in each province where
trades of Securities are effected. Accordingly, any resale of the Securities
in Canada must be made in accordance with applicable securities laws which
will vary depending on the relevant jurisdiction, and which may require
resales to be made in accordance with available statutory exemptions or
pursuant to a discretionary exemption granted by the applicable Canadian
securities regulatory authority. Purchasers are advised to seek legal advice
prior to any resale of the Securities.
REPRESENTATIONS OF PURCHASERS
Each purchaser of Securities in Canada who receives a purchase confirmation
will be deemed to represent to the Company and the dealer from whom such
purchase confirmation is received that (i) such purchaser is entitled under
applicable provincial securities laws to purchase such Securities without the
benefit of a prospectus qualified under such securities laws, (ii) where
required by law, that such purchaser is purchasing as principal and not as
agent, and (iii) such purchaser has reviewed the text under "Resale
Restrictions" above.
RIGHTS OF ACTION (ONTARIO PURCHASERS)
The Securities being offered are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
section 32 of the Regulation under the Securities Act (Ontario). As a result,
Ontario purchasers must rely on other remedies that may be available,
including common law rights of action for damages or rescission or rights of
action under the civil liability provisions of the U.S. federal securities
laws.
ENFORCEMENT OF LEGAL RIGHTS
All of the Company's directors and officers as well as the experts named
herein may be located outside of Canada and, as a result, it may not be
possible for Canadian purchasers to effect service of process within Canada
upon the Company or such persons. All or a substantial portion of the assets
of the Company and such persons may be located outside of Canada and, as a
result, it may not be possible to satisfy a judgment against the Company or
such persons in Canada or to enforce a judgment obtained in Canadian courts
against the Company or such persons outside of Canada.
NOTICE TO BRITISH COLUMBIA RESIDENTS
A purchaser of Securities to whom the Securities Act (British Columbia)
applies is advised that such purchaser is required to file with the British
Columbia Securities Commission a report within 10 days of the sale of any
Securities acquired by such purchaser pursuant to this offering. Such report
must be in the form attached to British Columbia Securities Commission Blanket
Order BOR #95/17, a copy of which may be obtained from the Company. Only one
such report must be filed in respect of Securities acquired on the same date
and under the same prospectus exemption.
S-17
<PAGE>
TAXATION AND ELIGIBILITY FOR INVESTMENT
Canadian purchasers of Securities should consult their own legal and tax
advisers with respect to the tax consequences of an investment in the
Securities in their particular circumstances and with respect to the
eligibility of the Securities for investment by the purchaser under relevant
Canadian legislation.
LEGAL MATTERS
Certain legal matters in connection with this offering will be passed upon
for the Company by Wolf, Block, Schorr and Solis-Cohen LLP, 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. Mr. Walsh
holds options to purchase 209,000 shares of the Company's common stock.
CERTAIN FORWARD-LOOKING STATEMENTS
Certain information included in this Prospectus Supplement and included or
incorporated by reference in the accompanying Prospectus contains forward-
looking statements, within the meaning of Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934. Such statements
include information 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, pending litigation, 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-18
<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.
---------------
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
2
<PAGE>
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 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.
3
<PAGE>
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.
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 1991
------------------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed
charges(1)........................ 12.1 8.2 4.5 1.5 1.4 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
4
<PAGE>
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 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,
5
<PAGE>
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 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
certain states may require that certain purchasers of securities take physical
delivery of
6
<PAGE>
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 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.
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"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 following: (i) failure of the
Company to pay (whether or not prohibited by applicable subordination
provisions, if any), interest for
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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.
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
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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.
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
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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 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.
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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 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.
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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.
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
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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 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.
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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 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
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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 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.
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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"), 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
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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.
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
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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 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
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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.
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.
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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.
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.
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NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFOR-
MATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS SUPPLE-
MENT OR THE ACCOMPANYING PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COM-
PANY OR ANY UNDERWRITER. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UN-
LAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UN-
DER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE SUCH DATE.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
PROSPECTUS SUPPLEMENT
<S> <C>
The Company................................................................ S-2
Gaming Regulation.......................................................... S-5
Use of Proceeds............................................................ S-6
Capitalization............................................................. S-7
Selected Financial Data.................................................... S-8
Recent Operating Results................................................... S-9
Description of Securities.................................................. S-11
Underwriting............................................................... S-16
Notice to Canadian Residents............................................... S-17
Legal Matters.............................................................. S-18
Certain Forward-Looking Statements......................................... S-18
PROSPECTUS
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.................................................................... 22
</TABLE>
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MIRAGE RESORTS, INCORPORATED
$200,000,000
6 3/4% Notes
Due August 1, 2007
$100,000,000
7 1/4% Debentures
Due August 1, 2017
PROSPECTUS SUPPLEMENT
CREDIT SUISSE FIRST BOSTON
GOLDMAN, SACHS & CO.
BANCAMERICA SECURITIES, INC.
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