<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 5, 1997
REGISTRATION NO. 333-38047
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
HILTON HOTELS CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 36-2058176
(State or other jurisdiction (I.R.S. Employer
of Identification No.)
incorporation or organization)
</TABLE>
------------------------------
9336 CIVIC CENTER DRIVE
BEVERLY HILLS, CALIFORNIA 90210
(310) 278-4321
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
------------------------------
THOMAS E. GALLAGHER
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
HILTON HOTELS CORPORATION
9336 CIVIC CENTER DRIVE
BEVERLY HILLS, CALIFORNIA 90210
(310) 278-4321
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------------
COPIES TO:
<TABLE>
<S> <C>
BRIAN G. CARTWRIGHT NICHOLAS P. SAGGESE
Latham & Watkins Skadden, Arps, Slate, Meagher & Flom, LLP
633 West Fifth Street, Suite 4000 300 South Grand Avenue, Suite 3400
Los Angeles, California 90071 Los Angeles, California 90071
(213) 485-1234 (213) 687-5000
</TABLE>
------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration
Statement as determined by market conditions.
------------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following box.
/ /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 (the "Securities Act"), other than securities offered only in connection
with dividend or interest investment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. /X/
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AGGREGATE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED PRICE(1) FEE
<S> <C> <C>
Debt Securities, Preferred Stock, $1.00 par value, Depositary Shares,
Common Stock, $2.50 par value, and Warrants(2).................................. $2,500,000,000 $757,580(3)
Series A Junior Participating Preferred Stock Purchase Rights ("Rights")(4)....... * *
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(o) of the rules and regulations under the Securities Act of
1933, as amended.
(2) This Registration Statement also covers such indeterminate amount of
securities as may be issued in exchange for, or upon conversion of, as the
case may be, the securities registered hereunder.
(3) Amount calculated pursuant to Section 6(b) under the Securities Act. The
Company paid the registration fee with its initial filing on October 16,
1997.
(4) The Rights are initially carried and traded with the Common Stock. The value
attributable to the Rights, if any, is reflected in the value of the Common
Stock.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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- --------------------------------------------------------------------------------
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO THE REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH
STATE.
<PAGE>
SUBJECT TO COMPLETION, PRELIMINARY PROSPECTUS DATED DECEMBER 5, 1997
PROSPECTUS
$2,500,000,000
[LOGO]
DEBT SECURITIES, PREFERRED STOCK
DEPOSITARY SHARES, COMMON STOCK AND WARRANTS
------------------
Hilton Hotels Corporation, a Delaware Corporation (the "Company" or
"Hilton"), may offer from time to time in one or more series (i) its debt
securities consisting of debentures, notes or other evidences of indebtedness
(the "Debt Securities"), (ii) shares or fractional shares of its preferred
stock, par value $1.00 per share (the "Preferred Stock"), (iii) shares of its
Preferred Stock represented by depositary shares (the "Depositary Shares"), (iv)
shares of its common stock, par value $2.50 per share (the "Common Stock"), or
(iv) warrants to purchase Common Stock, Preferred Stock, Depositary Shares or
Debt Securities (the "Warrants"), with an aggregate public offering price of up
to $2,500,000,000 (or the equivalent if the securities are denominated in
foreign currency or foreign currency units). The Debt Securities, Preferred
Stock, Depositary Shares, Common Stock and Warrants (collectively, the "Offered
Securities") may be offered, separately or together, in one or more separate
classes or series and in amounts, at prices and on terms to be determined at the
time of offering and to be set forth in one or more supplements to this
Prospectus (each, a "Prospectus Supplement").
The specific terms of the Offered Securities in respect of which this
Prospectus is being delivered will be set forth in the applicable Prospectus
Supplement and will include, where applicable: (i) in the case of Debt
Securities, the specific designation, aggregate principal amount, designated
currency (or currency unit), purchase price, maturity, interest rate (or manner
of calculation thereof), time of payment of interest (if any), terms (if any)
for the subordination, redemption or conversion thereof, and any other specific
terms of the Debt Securities; (ii) in the case of Preferred Stock, the specific
designation, number of shares, liquidation preference, purchase price, dividend,
voting, redemption and conversion provisions and any other specific terms of the
Preferred Stock; (iii) in the case of Depositary Shares, the aggregate number of
shares offered, the fractional share of Preferred Stock represented by each such
Depositary Share and the purchase price; (iv) in the case of Common Stock, the
number of shares, purchase price and terms of the offering and sale thereof; and
(v) in the case of Warrants, the specific designation, number, duration,
purchase price, exercise price, detachability and any other terms in connection
with the offering, sale and exercise of the Warrants, as well as the terms on
which and the securities for which such Warrants may be exercised.
The applicable Prospectus Supplement will also contain information, where
applicable, about certain material United States Federal income tax
considerations relating to, and any listing on a securities exchange of, the
Offered Securities covered by such Prospectus Supplement.
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.
NONE OF THE NEVADA GAMING COMMISSION, THE NEVADA STATE GAMING CONTROL BOARD,
THE NEW JERSEY CASINO CONTROL COMMISSION NOR THE REGULATORY AUTHORITY OF
ANY OTHER STATE HAS PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS OR THE INVESTMENT MERITS OF THE SECURITIES OFFERED
HEREBY. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
The Offered Securities may be offered to or through underwriters, dealers or
agents designated from time to time, as set forth in the applicable Prospectus
Supplement, and may be offered to other purchasers directly by the Company.
Certain terms of the offering and sale of Offered Securities, including, where
applicable, the names of any underwriters, dealers or agents, any applicable
commissions, discounts and other items constituting compensation of such
underwriters, dealers or agents, and the proceeds to the Company from such sale,
will be set forth in the accompanying Prospectus Supplement. See "Plan of
Distribution" for possible indemnification arrangements for underwriters,
dealers and agents.
No Offered Securities may be sold without delivery of the applicable
Prospectus Supplement describing the method and terms of the offering of the
Offered Securities.
------------------------
THE DATE OF THIS PROSPECTUS IS DECEMBER , 1997
<PAGE>
No person has been authorized to give any information or to make any
representations in connection with this offering other than those contained or
incorporated by reference in this Prospectus and any accompanying Prospectus
Supplement in connection with the offering described herein and therein, and, if
given or made, such information or representations must not be relied upon as
having been authorized by the Company or by any underwriter, dealer or agent.
Neither this Prospectus nor any Prospectus Supplement shall constitute an offer
to sell or a solicitation of an offer to buy Offered Securities in any
jurisdiction in which it is unlawful for such person to make such an offering or
solicitation. Neither the delivery of this Prospectus or any Prospectus
Supplement nor any sale made hereunder shall under any circumstances imply that
the information contained or incorporated by reference herein or in any
Prospectus Supplement is correct as of any date subsequent to the date hereof or
of such Prospectus Supplement.
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (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 Offered Securities. This
Prospectus and any Prospectus Supplement do not contain all of the information
set forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information with respect to the Company and the Offered Securities, reference is
hereby made to the Registration Statement and the exhibits and schedules
thereto. Any statements contained herein concerning the provisions of any
document filed as an exhibit to the Registration Statement or otherwise filed
with the Commission are not necessarily complete, and in each instance reference
is made to the copy of such document so filed. Each such statement is qualified
in its entirety by such reference.
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, registration statements and other
information with the Commission. Such reports, proxy statements, registration
statements and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Commission's regional offices located at Seven World Trade Center, 13th Floor,
New York, New York 10048, and at 500 West Madison Street, Room 1400, Chicago,
Illinois 60661. Copies of such materials can be obtained at prescribed rates
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. The Commission also maintains a site on the World Wide
Web at http://www.sec.gov which contains reports and other information regarding
registrants that file electronically with the Commission. Certain securities of
the Company are listed on the New York Stock Exchange and the Pacific Exchange.
Reports, proxy statements and other information concerning the Company can also
be inspected and copied at the offices of the New York Stock Exchange, 20 Broad
Street, New York, New York 10005 and the Pacific Exchange, 301 Pine Street, San
Francisco, California 94104, and 618 South Spring Street, Los Angeles,
California 90014.
2
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which the Company has filed with the Commission
pursuant to the Exchange Act, are hereby incorporated by reference in, and shall
be deemed to be a part of, this Prospectus.
(a) Annual Report on Form 10-K for the fiscal year ended December 31,
1996 (the "Form 10-K");
(b) Current Reports on Form 8-K dated December 18, 1996, January 21,
1997, April 14, 1997, April 15, 1997, June 4, 1997, July 17, 1997 and July
22, 1997;
(c) Quarterly Reports on Form 10-Q for the quarters ended March 31,
1997, June 30, 1997 and September 30, 1997 and Quarterly Report on Form
10-Q/A for the quarter ended September 30, 1997 filed with the Commission on
November 13, 1997;
(d) Description of the Company's Common Stock included in a Registration
Statement on Form 8-A filed with the Commission on May 18, 1986;
(e) Description of the Rights included in a Registration Statement on
Form 8-A filed with the Commission on July 22, 1988; and
(f) Description of the Company's Preferred Redeemable Increased Dividend
Equity Securities, 8% PRIDES, Convertible Preferred Stock included in a
Registration Statement on Form 8-A filed with the Commission on November 25,
1996.
The Company also hereby incorporates by reference in this Prospectus pages
S-17 to S-21 of the Company's filing with the Commission under Rule 424(b) of
the Securities Act on July 21, 1997. All documents filed by the Company pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date
of this Prospectus and prior to the termination of the offering made hereby
shall be deemed to be incorporated by reference into this Prospectus and to be a
part thereof from the respective dates of filing of such documents. Any
statement contained in this Prospectus or in any Prospectus Supplement or in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus and any
Prospectus Supplement to the extent that a statement contained herein or in any
Prospectus Supplement (or in any other subsequently filed document which also is
incorporated or deemed to be incorporated by reference in this Prospectus)
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed to constitute a part of this Prospectus or any
Prospectus Supplement except as so modified or superseded.
This Prospectus incorporates documents by reference which are not presented
herein or delivered herewith. The Company will provide without charge to any
person to whom this Prospectus is delivered, on the written or oral request of
such person, a copy of any or all of the foregoing documents incorporated herein
by reference (other than exhibits to such documents unless such exhibits are
specifically incorporated by reference therein). Requests should be directed to
the attention of Cheryl L. Marsh, Vice President and Corporate Secretary, Hilton
Hotels Corporation, 9336 Civic Center Drive, Beverly Hills, California 90210
(telephone number (310) 278-4321).
3
<PAGE>
THE COMPANY
The Company is a leading owner and operator of full service hotels and
hotel-casinos in the United States. The Hilton name is one of the best
recognized and most respected lodging brands in the world. The Company owns,
leases and operates major lodging and gaming properties in gateway cities, urban
and suburban centers and resort areas.
On December 18, 1996, Hilton consummated a merger with Bally Entertainment
Corporation ("Bally"), pursuant to which Bally was merged with and into Hilton
(the "Merger"), with Hilton surviving the Merger. Pursuant to the Merger, Hilton
acquired Bally's interests in casinos and casino hotel resorts, including
Bally's Park Place Casino - Resort and The Grand casino hotel resort in Atlantic
City, New Jersey; Bally's Las Vegas casino hotel resort in Las Vegas, Nevada;
Bally's Casino -STAR- Lakeshore Resort, a riverboat casino on Lake Pontchartrain
in New Orleans, Louisiana; and Bally's Saloon -STAR-Gambling Hall -STAR- Hotel,
a dockside casino and hotel in Robinsonville, Mississippi near Memphis,
Tennessee.
The Company's executive offices are located at 9336 Civic Center Drive,
Beverly Hills, California 90210, and its telephone number is (310) 278-4321.
USE OF PROCEEDS
Except as otherwise set forth in the accompanying Prospectus Supplement, the
Company intends to use the net proceeds from the sale of the Offered Securities
for general corporate purposes, which may include the repayment, redemption or
repurchase of existing indebtedness, additions to working capital, the
acquisition of, or investment in, new or existing properties and the financing
of capital expenditures. Funds not required immediately for such purposes may be
invested temporarily in short-term investment grade securities.
4
<PAGE>
RATIOS OF EARNINGS TO FIXED CHARGES
The Company's ratio of earnings to fixed charges for the nine months ended
September 30, 1997 and September 30, 1996 and for the years ended December 31,
1996, 1995, 1994, 1993 and 1992 was 3.8, 4.2, 3.3, 3.2, 2.8, 2.7 and 2.9,
respectively. The Company's ratio of earnings to combined fixed charges and
preferred stock dividends for the nine months ended September 30, 1997 and
September 30, 1996 and for the years ended December 31, 1996, 1995, 1994, 1993
and 1992 was 3.4, 4.2, 3.2, 3.2, 2.8, 2.7 and 2.9, respectively. Prior to
December 18, 1996, the Company had not issued any preferred stock and therefore
the ratios of earnings to combined fixed charges and preferred stock dividends
for prior periods are unchanged from the ratios of earnings to fixed charges for
such periods.
These ratios have been calculated by dividing (i) income before income taxes
and minority interest plus fixed charges (adjusted for capitalized interest) by
(ii) fixed charges and, in the case of the ratio of earnings to combined fixed
charges and preferred stock dividends, fixed charges plus total preferred stock
dividend requirements. Fixed charges consist of interest incurred (expensed or
capitalized) and the portion of rent expense which is deemed representative of
interest.
DESCRIPTION OF DEBT SECURITIES
The following sets forth certain general terms and provisions of the
Indenture (as defined below) under which the Debt Securities are to be issued.
The particular terms of the Debt Securities will be set forth in a Prospectus
Supplement relating to such Debt Securities.
The Debt Securities offered hereby will be issued under an indenture, dated
as of April 15, 1997, between the Company and BNY Western Trust Company, as
trustee (the "Trustee"), as it may be amended or supplemented from time to time
(the "Indenture"). The following summary of certain provisions of the Indenture
does not purport to be complete and is subject to, and is qualified in its
entirety by reference to, all provisions of the Indenture, including the
definitions therein of certain terms which are not otherwise defined in this
Prospectus. The terms of the Indenture are also governed by certain provisions
contained in the TIA. Certain capitalized terms used below but not defined
herein have the meanings ascribed to them in the Indenture.
GENERAL
The Debt Securities will be direct obligations of the Company, which may be
secured or unsecured, and which may be senior or subordinated indebtedness of
the Company. The Indenture provides that the Debt Securities may be issued
without limit as to aggregate principal amount, in one or more series, in each
case as established from time to time in or pursuant to authority granted by a
Board Resolution or as established in one or more indentures supplemental to the
Indenture. All Debt Securities of one series need not be issued at the same time
and, unless otherwise provided, a series may be reopened, without the consent of
the holders of the Debt Securities of such series, for issuances of additional
Debt Securities of such series.
The Indenture provides that there may be more than one Trustee thereunder,
each with respect to one or more series of Debt Securities. Any Trustee under
the Indenture may resign or be removed with respect to one or more series of
Debt Securities, and a successor Trustee may be appointed to act with respect to
such series. In the event that two or more persons are acting as Trustees with
respect to different series of Debt Securities, each such Trustee shall be a
Trustee of a trust under the Indenture separate and apart from the trust
administered by any other Trustee thereunder, and, except as otherwise indicated
herein, any action described herein to be taken by the Trustee may be taken by
each such Trustee with respect to, and only with respect to, the one or more
series of Debt Securities for which it is Trustee under the Indenture.
Reference is made to the Prospectus Supplement relating to the series of
Debt Securities being offered for the specific terms thereof, including:
(1) The title of such Debt Securities;
5
<PAGE>
(2) The aggregate principal amount of such Debt Securities and any
limit on such aggregate principal amount;
(3) The percentage of the principal amount at which such Debt
Securities will be issued and, if other than the principal amount thereof,
the portion of the principal amount thereof payable upon declaration of
acceleration of the maturity or upon redemption thereof and the rate or
rates at which original issue discount ("OID") will accrue;
(4) The date or dates on which the principal of such Debt Securities
will be payable (or the method by which such date or dates will be
determined);
(5) The rate or rates (which may be fixed or variable) and, if
applicable, the method used to determine the rate, at which such Debt
Securities will bear interest, if any, the date or dates from which such
interest will accrue, and the circumstances, if any, in which the Company
may defer interest payments, the dates on which such interest shall be
payable and the record date for the interest payable on any interest payment
date;
(6) The place or places where principal of, premium, if any, and
interest on such Debt Securities will be payable (or the method of such
payment), and such Debt Securities may be surrendered for conversion or
registration of transfer or exchange;
(7) The obligation, if any, of the Company to redeem or purchase such
Debt Securities pursuant to any sinking fund or analogous provisions or at
the option of a holder thereof and the right, if any, of the Company to
redeem such Debt Securities and the period or periods within which, the
price or prices at which, and the terms and conditions upon which, such Debt
Securities may be redeemed;
(8) The denominations in which such Debt Securities are issuable, if
other than denominations of $1,000 and any integral multiple thereof;
(9) Whether such Debt Securities are to be issued at a discount and
the portion of the principal amount of such Debt Securities that shall be
payable upon acceleration, if other than the principal amount thereof;
(10) Provisions, if any, for the defeasance or discharge of certain of
the Company's obligations with respect to such Debt Securities, which
provisions may be in addition to, in substitution for, or in modification of
(or any combination of the foregoing), the provisions of the Indenture;
(11) Whether such Debt Securities will be in registered or bearer form;
(12) The currency or currencies in which payment of principal of and
interest on such Debt Securities will be made;
(13) If payments of principal of, premium, if any, or interest on the
Debt Securities are to be made in currency other than the denominated
currency, the manner in which the exchange rate with respect to such
payments will be determined;
(14) The manner in which the amounts of payment of principal of,
premium, if any, or interest on such Debt Securities will be determined, if
such amounts may be determined by reference to an index based on a currency
or currencies other than that in which such Debt Securities are denominated
or designated to be payable or by reference to a commodity, commodity index,
stock exchange index or financial index;
(15) Any addition to, or modification or deletion of, any Events of
Default or covenants set forth in the Indenture;
(16) A discussion of any material and/or special United States Federal
income tax considerations applicable to such Debt Securities;
6
<PAGE>
(17) Any depositaries, trustees, interest rate calculation agents,
exchange rate calculation agents or other agents with respect to the Debt
Securities other than those originally appointed;
(18) Whether such Debt Securities will be issued in the form of one or
more global securities and whether such global securities are to be issuable
in a temporary global form or permanent global form;
(19) Any rights of the holders of Debt Securities to convert the Debt
Securities into Common Stock or other securities or property of the Company
and, if so, the terms and conditions, which may be in addition to or in lieu
of the provisions contained in the Indenture, upon which such Debt
Securities will be convertible;
(20) The terms, if any, on which such Debt Securities will be
subordinate to other debt of the Company;
(21) Any listing of the Debt Securities on a securities exchange;
(22) The provisions, if any, relating to any security provided for such
Debt Securities; and
(23) Any other terms of such Debt Securities, which other terms will
not be inconsistent with the provisions of the Indenture.
The Debt Securities may be sold at a discount below their principal amount.
Even if the Debt Securities are not issued at a discount below their principal
amount, such securities may, for United States Federal income tax purposes, be
deemed to have been issued with OID because of certain interest payment
characteristics. Special United States Federal income tax considerations
applicable to Debt Securities issued with OID will be described in more detail
in any applicable Prospectus Supplement. In addition, special United States
Federal tax considerations or other restrictions or terms applicable to any Debt
Securities issuable in bearer form, offered exclusively to foreigners, or
denominated in a currency other than United States dollars will be set forth in
a Prospectus Supplement relating thereto.
MERGER, CONSOLIDATION OR SALE OF ASSETS
The Indenture provides that the Company may not consolidate or merge with or
into, or sell, assign, convey, transfer or lease its properties and assets
substantially in their entirety (computed on a consolidated basis) to, another
corporation, person or entity unless (i) either (a) in the case of a merger or
consolidation, the Company is the surviving person or (b) the successor or
transferee is a corporation organized under the laws of the United States, any
state thereof or the District of Columbia and expressly assumes, by supplemental
indenture, all the obligations of the Company under the Debt Securities and the
Indenture, and (ii) immediately after such transaction no Default or Event of
Default shall exist.
DENOMINATIONS, REGISTRATION AND TRANSFER
Unless specified in the Prospectus Supplement, the Debt Securities of any
series shall be issuable only as Registered Securities in denominations of
$1,000, and any integral multiple thereof, and shall be payable only in U.S.
dollars. The Indenture also provides that Debt Securities of a series may be
issuable in global form. See "Global Securities."
Unless otherwise indicated in the Prospectus Supplement, Bearer Securities
(other than in global form) will have Coupons attached.
Registered Securities of any series will be exchangeable for other
Registered Securities of the same series of like aggregate principal amount and
of like Stated Maturity and with like terms and conditions. If so specified in
the applicable Prospectus Supplement, at the option of the holder thereof, to
the extent permitted by law, any Bearer Security of any series which by its
terms is registrable as to principal and interest may be exchanged for a
Registered Security of such series of like aggregate principal amount and
7
<PAGE>
of a like Stated Maturity and with like terms and conditions, upon surrender of
such Bearer Security at the corporate trust office of the applicable Trustee or
at any other office or agency of the Company designated for the purpose of
making any such exchanges. Subject to certain exceptions, any Bearer Security
issued with Coupons surrendered for exchange must be surrendered with all
unmatured Coupons and any matured Coupons in default attached thereto.
Notwithstanding the foregoing, the exchange of Bearer Securities for
Registered Securities will be subject to the provisions of United States Federal
income tax laws and regulations applicable to Debt Securities in effect at the
time of such exchange.
Except as otherwise specified in the Prospectus Supplement, in no event may
Registered Securities including Registered Securities received in exchange for
Bearer Securities, be exchanged for Bearer Securities.
Upon surrender for registration of transfer of any Registered Security of
any series at the office or agency of the Company maintained for such purpose,
the Company shall deliver, in the name of the designated transferee, one or more
new Registered Securities of the same series of like aggregate principal amount
of such denominations as are authorized for Registered Securities of such series
and of a like Stated Maturity and with like terms and conditions. No service
charge will be made for any transfer or exchange of Debt Securities, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
The Company shall not be required (i) to register, transfer or exchange Debt
Securities of any series during a period beginning at the opening of business 15
days before the day of the transmission of a notice of redemption of Debt
Securities of such series selected for redemption and ending at the close of
business on the day of such transmission, or (ii) to register, transfer or
exchange any Debt Security so selected for redemption in whole or in part,
except the unredeemed portion of any Debt Security being redeemed in part.
EVENTS OF DEFAULT
Events of Default defined in the Indenture with respect to Debt Securities
of any series are: (a) default in the payment of any interest upon any Debt
Security of that series when it becomes due and payable, and continuance of such
default for a period of 30 days; (b) default in the payment of principal of or
premium, if any, on any Debt Security of that series when due; (c) default in
the deposit of any sinking fund payment, when and as due in respect of any Debt
Security of that series; (d) default in the performance, or breach, of any
covenant or warranty of the Company in the Indenture (other than a covenant or
warranty that has been included in the Indenture solely for the benefit of a
series of Debt Securities other than that series), which default continues
uncured for a period of 60 days after written notice to the Company by the
applicable Trustee or to the Company and the applicable Trustee by the holders
of at least 25% in principal amount of the outstanding Debt Securities of that
series as provided in the Indenture; (e) the acceleration of the maturity of any
indebtedness of the Company (other than Non-recourse Indebtedness (as defined
below)), at any one time, in an amount in excess of the greater of (i) $25
million and (ii) 5% of Consolidated Net Tangible Assets (as defined below), if
such acceleration is not annulled within 30 days after written notice to the
Company by the Trustee and the holders of at least 25% in principal amount of
the outstanding Debt Securities of that series; and (f) certain events of
bankruptcy, insolvency or reorganization in respect of the Company. The
Prospectus Supplement may provide for any other Event of Default with respect to
Debt Securities of that particular series.
"Non-recourse Indebtedness" means indebtedness the terms of which provide
that the lender's claim for repayment of such indebtedness is limited solely to
a claim against the property which secures such indebtedness.
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"Consolidated Net Tangible Assets" means the total amount of assets
(including investments in Joint Ventures) of the Company and its subsidiaries
(less applicable depreciation, amortization and other valuation reserves) after
deducting therefrom (a) all current liabilities of the Company and its
subsidiaries (excluding (i) the current portion of long-term indebtedness, (ii)
intercompany liabilities and (iii) any liabilities which are by their terms
renewable or extendible at the option of the obligor thereon to a time more than
12 months from the time as of which the amount thereof is being computed) and
(b) all goodwill, trade names, trademarks, patents, unamortized debt discount
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.
If an Event of Default with respect to Debt Securities of any series at the
time outstanding occurs and is continuing, then in every such case the
applicable Trustee or the holders of not less than 25% in principal amount of
the outstanding Debt Securities of that series may, by a notice in writing to
the Company (and to the applicable Trustee if given by the holders), declare to
be due and payable immediately the principal (or, if the Debt Securities of that
series are Discount Securities, such portion of the principal amount as may be
specified in the terms of that series) and premium, if any, of all Debt
Securities of that series. At any time after a declaration of acceleration with
respect to Debt Securities of any series has been made, but before a judgment or
decree for payment of the money due has been obtained by the applicable Trustee,
the holders of a majority in principal amount of the outstanding Debt Securities
of that series may, subject to the Company having paid or deposited with such
Trustee a sum sufficient to pay overdue interest and principal which has become
due other than by acceleration and certain other conditions, rescind and annul
such acceleration if all Events of Default, other than the non-payment of
accelerated principal and premium, if any, with respect to Debt Securities of
that series, have been cured or waived as provided in the Indenture. For
information as to waiver of defaults see the discussion set forth below under
"--Modification and Waiver." Reference is made to the Prospectus Supplement
relating to any series of Debt Securities that are Discount Securities for the
particular provisions relating to acceleration of a portion of the principal
amount of such Discount Securities upon the occurrence of an Event of Default
and the continuation thereof.
The Indenture provides that the Trustee will be under no obligation to
exercise any of its rights or powers under the Indenture at the request of any
holder of outstanding Debt Securities, unless the Trustee receives indemnity
satisfactory to it against any loss, liability or expense. Subject to certain
rights of the Trustee, the holders of a majority in principal amount of the
outstanding Debt Securities of any series shall have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or exercising any trust or power conferred on the Trustee with
respect to the Debt Securities of that series.
No holder of any Debt Security of any series will have any right to
institute any proceeding, judicial or otherwise, with respect to the Indenture
or for the appointment of a receiver or trustee, or for any remedy under the
Indenture, unless such holder shall have previously given to the applicable
Trustee written notice of a continuing Event of Default with respect to Debt
Securities of that series and the holders of at least 25% in principal amount of
the outstanding Debt Securities of that series shall have made written request,
and offered reasonable indemnity, to such Trustee to institute such proceeding
as trustee, and the Trustee shall not have received from the holders of a
majority in principal amount of the outstanding Debt Securities of that series a
direction inconsistent with such request and shall have failed to institute such
proceeding within 60 days. Notwithstanding the foregoing, the holder of any Debt
Security will have an absolute and unconditional right to receive payment of the
principal of, premium, if any, and any interest on such Debt Security on or
after the due dates expressed in such Debt Security and to institute suit for
the enforcement of any such payment.
The Indenture requires the Company, within 120 days after the end of each
fiscal year, to furnish to the Trustee a statement as to compliance with the
Indenture. The Indenture provides that the Trustee may withhold notice to the
holders of Debt Securities of any series of any Default or Event of Default
(except
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in payment on any Debt Securities of such series) with respect to Debt
Securities of such series if it in good faith determines that withholding such
notice is in the interest of the holders of Debt Securities.
MODIFICATION AND WAIVER
Without prior notice to or consent of any holders, the Company and the
applicable Trustee, at any time and from time to time, may modify the Indenture
for any of the following purposes: (1) to evidence the succession of another
corporation to the rights of the Company and the assumption by such successor of
the covenants and obligations of the Company in the Indenture and in the Debt
Securities in accordance with the terms of the Indenture; (2) to add to the
covenants of the Company for the benefit of the holders of all or any series of
Debt Securities (and if such covenants are to be for the benefit of less than
all series, stating that such covenants are expressly being included solely for
the benefit of such series), or to surrender any right or power conferred in the
Indenture upon the Company; (3) to add any additional Events of Default (and if
such Events of Default are to be applicable to less than all series, stating
that such Events of Default are expressly being included solely to be applicable
to such series); (4) to add or change any of the provisions of the Indenture to
such extent as shall be necessary to permit or facilitate the issuance
thereunder of Debt Securities of any series in bearer form, registrable or not
registrable, and with or without Coupons, to permit Bearer Securities to be
issued in exchange for Registered Securities, to permit Bearer Securities to be
issued in exchange for Bearer Securities of other authorized denominations or to
permit the issuance of Debt Securities of any series in uncertificated form,
provided that any such action shall not adversely affect the interests of the
holders of Debt Securities of any series or any related Coupons in any material
respect; (5) to change or eliminate any of the provisions of the Indenture,
provided that any such change or elimination will become effective only when
there is no outstanding Debt Security issued thereunder or Coupon of any series
created prior to such modification which is entitled to the benefit of such
provision and as to which such modification would apply; (6) to secure the Debt
Securities issued thereunder or to provide that any of the Company's obligations
under the Debt Securities or the Indenture shall be guaranteed and the terms and
conditions for the release or substitution of such security or guarantee; (7) to
supplement any of the provisions of the Indenture to such extent as is necessary
to permit or facilitate the defeasance and discharge of any series of Debt
Securities, provided that any such action will not adversely affect the
interests of the holders of Debt Securities of such series or any other series
of Debt Securities issued under the Indenture or any related Coupons in any
material respect; (8) to establish the form or terms of Debt Securities and
Coupons, if any, as permitted by the Indenture; (9) to evidence and provide for
the acceptance of appointment thereunder by a successor Trustee with respect to
one or more series of Debt Securities and to add to or change any of the
provisions of the Indenture as is necessary to provide for or facilitate the
administration of the trusts thereunder by more than one Trustee; or (10) to
cure any ambiguity, to correct or supplement any provision in the Indenture
which may be defective or inconsistent with any other provision therein, to
eliminate any conflict between the terms of the Indenture and the Debt
Securities issued thereunder and the Trust Indenture Act or to make any other
provisions with respect to matters or questions arising under the Indenture
which will not be inconsistent with any provision of the Indenture; PROVIDED
such other provisions shall not adversely affect the interests of the holders of
outstanding Debt Securities or Coupons, if any, of any series created thereunder
prior to such modification in any material respect.
With the written consent of the holders of not less than a majority in
principal amount of the outstanding Debt Securities of each series affected by
such modification voting separately, the Company and the applicable Trustee may
modify the Indenture for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of the Indenture or of modifying
in any manner the rights of the holders of Debt Securities and Coupons, if any,
under the Indenture; PROVIDED, HOWEVER, that such modifications may not, without
the consent of the holder of each outstanding Debt Security of each series
affected thereby: (i) change the Stated Maturity of any Debt Security or reduce
the principal amount thereof or the rate (or extend the time for payment) of
interest thereon or any premium payable upon the redemption thereof, or change
the Stated Maturity of or reduce the amount of any
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payment to be made with respect to any Coupon, or change the coin or currency in
which, any Debt Security or any premium or the interest thereon is payable, or
reduce the amount of the principal of a Discount Security that would be due and
payable upon a declaration of acceleration of the Maturity thereof or impair the
right to institute suit for the enforcement of any such payment on or after the
due date thereof (including, in the case of redemption, on or after the
Redemption Date), or alter any redemption provisions in a manner adverse to the
holders of such Debt Securities; (ii) reduce the percentage in principal amount
of the outstanding Debt Securities, the consent of whose holders of such Debt
Securities is required for any such amendment, supplemental indenture or waiver
provided for in the Indenture; (iii) adversely affect the right of such holder
to convert any Debt Security; (iv) modify any of the waiver provisions, except
to increase any required percentage or to provide that certain other provisions
of the Indenture cannot be modified or waived without the consent of the holder
of each outstanding Debt Security affected thereby; or (v) modify any provision
described in the applicable Prospectus Supplement as requiring the consent of
each affected holder of Debt Securities.
A modification which changes or eliminates any covenant or other provision
of the Indenture with respect to one or more particular series of Debt
Securities and Coupons, if any, or which modifies the rights of the holders of
Debt Securities and Coupons of such series with respect to such covenant or
other provision, shall be deemed not to affect the rights under the Indenture of
the holders of Debt Securities and Coupons, if any, of any other series.
The Indenture provides that the holders of not less than a majority in
aggregate principal amount of the then outstanding Debt Securities of any
series, by notice to the relevant Trustee, may on behalf of the holders of the
Debt Securities of such series waive any default and its consequences under the
Indenture, except (1) a continuing default in the payment of interest on,
premium, if any, or the principal of, any such Debt Security held by a
nonconsenting holder or (2) a default in respect of a covenant or provision
hereof which cannot be modified or amended without the consent of the holder of
each outstanding Debt Security of each series affected.
DEFEASANCE OF DEBT SECURITIES OR CERTAIN COVENANTS IN CERTAIN CIRCUMSTANCES
DEFEASANCE AND DISCHARGE. The Indenture provides that the Company may be
discharged from any and all obligations in respect of the Debt Securities of any
series (except for certain obligations to pay additional amounts, if any, upon
the occurrence of certain tax, assessment or governmental charge events with
respect to payments on such Debt Securities, to register the transfer or
exchange of Debt Securities of such series, to replace stolen, lost or mutilated
Debt Securities of such series, to maintain paying agencies and to hold money
for payment in trust) upon the irrevocable deposit with the Trustee, in trust,
of money and/or government obligations that, through the payment of interest and
principal in respect thereof in accordance with their terms, will provide money
in an amount sufficient in the opinion of a nationally recognized firm of
independent public accountants to pay and discharge each installment of
principal (and premium, if any) and interest on, and any mandatory sinking fund
payments in respect of, the Debt Securities of such series on the dates such
payments are due. Such discharge may occur only if, among other things, (a) the
Company shall have delivered to the Trustee an opinion of counsel or a ruling
from the United States Internal Revenue Service (an "IRS Ruling"), in either
case to the effect that holders of the Debt Securities of such series will not
recognize income, gain or loss for United States Federal income tax purposes as
a result of such deposit, defeasance and discharge; and (b) if the Debt
Securities of such series are then listed on any national securities exchange,
the Company shall have delivered to the Trustee an opinion of counsel or other
instrument from such exchange to the effect that such discharge would not cause
said Debt Securities to be delisted.
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DEFEASANCE OF CERTAIN COVENANTS. Upon compliance with certain conditions,
the Company may omit to comply with certain restrictive covenants contained in
the Indenture (or, if provided for in the applicable Prospectus Supplement, any
other restrictive covenant relating to any series of Debt Securities provided
for in a Board Resolution or supplemental indenture which, by its terms may be
defeased pursuant to the terms of such series of Debt Securities) and any
omission to comply with such obligations shall not constitute a Default or Event
of Default with respect to any Debt Securities. The conditions include, among
others: the deposit with the Trustee of money and/or government obligations
that, through the payment of interest and principal in respect thereof in
accordance with their terms, will provide money in an amount sufficient in the
opinion of a nationally recognized firm of independent public accountants to pay
principal, premium, if any, and interest on and any mandatory sinking fund
payments in respect of the Debt Securities of such series on the dates such
payments are due; and the delivery to the Trustee of an opinion of counsel or an
IRS Ruling to the effect that the holders of the Debt Securities of such series
will not recognize income, gain or loss for United States Federal income tax
purposes as a result of such deposit and related covenant defeasance.
LIMITED LIABILITY OF CERTAIN PERSONS
The Indenture provides that no stockholder, incorporator, employee officer
or director, as such, past, present or future of the Company or any successor
corporation or any of the Company's Affiliates shall have any personal liability
in respect of the obligations of the Company under the Indenture or the Debt
Securities by reason of his, her or its status as such stockholder,
incorporator, employee officer or director.
MANDATORY DISPOSITION PURSUANT TO GAMING LAWS
The Indenture provides that each holder, by accepting any of the Debt
Securities subject thereto, shall be deemed to have agreed that if the gaming
authority of any jurisdiction of which the Company or any of its subsidiaries
conducts or proposes to conduct gaming requires that a person who is a holder 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 within the required time period. If such person
fails to apply or become licensed or qualified or is found unsuitable, 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 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, plus accrued and unpaid interest,
if any, to the earlier of the redemption date or the date of the finding of
unsuitability, which may be less than 30 days following the notice of redemption
if so requested or prescribed by the applicable gaming authority. The Company
shall notify the Trustee in writing of any such redemption as soon as
practicable. The Company shall not be responsible for any costs or expenses any
such holder may incur in connection with its application for a license,
qualification or a finding of suitability.
CONVERSION RIGHTS
The terms and conditions, if any, upon which the Debt Securities are
convertible into Common Stock or Preferred Stock will be set forth in the
applicable Prospectus Supplement relating thereto. Such terms will include
whether such Debt Securities are convertible into Common Stock or Preferred
Stock, the conversion price (or manner of calculation thereof), the conversion
period, provisions as to whether conversion will be at the option of the holders
or the Company, the events requiring an adjustment of the conversion price and
provisions affecting conversion in the event of the redemption of such Debt
Securities.
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PAYMENT AND PAYING AGENTS
The Indenture contains the Company's covenant and agreement for the benefit
of each series of Debt Securities that it will duly and punctually pay the
principal of (and premium, if any) and interest on the Debt Securities in
accordance with the terms of the Debt Securities and the Indenture.
If Debt Securities of a series are issuable only as Registered Securities,
the Company will maintain in each Place of Payment for such series an office or
agency where Debt Securities of that series may be presented or surrendered for
payment, where Debt Securities of that series may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Debt Securities of that series and the Indenture
may be served.
If Debt Securities of a series are issuable as Bearer Securities, the
Company will maintain or cause to be maintained (A) in the Borough of Manhattan,
the City and State of New York, an office or agency where any Registered
Securities of that series may be presented or surrendered for payment, where any
Registered Securities of that series may be surrendered for registration of
transfer, where Debt Securities of that series may be surrendered for exchange
or redemption, where notices and demands to or upon the Company in respect of
the Debt Securities of that series and the Indenture may be served and where
Bearer Securities of that series and related Coupons may be presented or
surrendered for payment in the circumstances described in the following
paragraph (and not otherwise), (B) subject to any laws or registration
applicable thereto, in a Place of Payment for that series which is located
outside the United States, an office or agency where Debt Securities of that
series and related Coupons may be presented and surrendered for payment
(including payment of any additional amounts payable on Debt Securities of that
series, if so provided in such series); provided, however, that if the Debt
Securities of that series are listed on The Stock Exchange of the United Kingdom
and the Republic of Ireland, the Luxembourg Stock Exchange or any other stock
exchange located outside the United States and such stock exchange shall so
require, the Company will maintain a Paying Agent for the Debt Securities of
that series in London, Luxembourg or any other required city located outside the
United States, as the case may be, so long as the Debt Securities of that series
are listed on such exchange, and (C) subject to any laws or regulations
applicable thereto, in a Place of Payment for that series located outside the
United States an office or agency where any Registered Securities of that series
may be surrendered for registration of transfer, where Debt Securities of that
series may be surrendered for exchange or redemption and where notices and
demands to or upon the Company in respect of the Debt Securities of that series
and the applicable Indenture may be served. The Company will give prompt written
notice to the applicable Trustee of the locations, and any change in the
locations, of such offices or agencies. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the
applicable Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the corporate trust office of the
applicable Trustee, except that Bearer Securities of that series and the related
coupons may be presented and surrendered for payment at the offices specified in
the applicable Debt Security and the Company has appointed the applicable
Trustee (or in the case of Bearer Securities, may appoint such other agent as
may be specified in the applicable Prospectus Supplement) as its agent to
receive all presentations surrenders, notices and demands.
No payment of principal, premium or interest on Bearer Securities shall be
made at any office or agency of the Company in the United States or by check
mailed to any address in the United States or by transfer to an account
maintained with a bank located in the United States; provided, however, that, if
the Debt Securities of a series are denominated and payable in U.S. dollars,
payment of principal of and any premium and interest on Debt Securities
(including any additional amounts payable on Securities of such series) of such
series, if specified in the applicable Prospectus Supplement, shall be made at
the office of the Company's Paying Agent in the Borough of Manhattan, the City
and State of New York, if (but only if) payment in U.S. dollars of the full
amount of such principal, premium, interest or additional amounts, as the case
may be, at all offices or agencies outside the United States maintained for the
purpose by the
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Company in accordance with the Indenture is illegal or effectively precluded by
exchange controls or other similar restrictions.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global securities (the "Global Securities") that will be
deposited with, or on behalf of, a depositary (the "Depositary") identified in
the applicable Prospectus Supplement relating to such series. Global Securities
may be issued in either registered or bearer form and in either temporary or
permanent form. The specific terms of the depositary arrangement with respect to
a series of Debt Securities will be described in the applicable Prospectus
Supplement relating to such series.
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DESCRIPTION OF CAPITAL STOCK
As of November 15, 1997, the Company was authorized to issue 400,000,000
shares of Common Stock, $2.50 par value, of which 251,922,810 shares were issued
and outstanding, and 24,832,700 shares of Preferred Stock, $1.00 par value, of
which 14,832,300 shares designated as the "Preferred Redeemable Increased
Dividend Equity Securities, 8% PRIDES, Convertible Preferred Stock" (the
"PRIDES") were issued and outstanding.
The following summary does not purport to be complete and is qualified in
its entirety by reference to the applicable provisions of Delaware law and the
Company's Restated Certificate of Incorporation, as amended (the "Certificate of
Incorporation").
COMMON STOCK
Subject to such preferential rights as may be granted by the Board of
Directors of the Company (the "Board of Directors") in connection with the
future issuance of Preferred Stock, holders of shares of Common Stock are
entitled to one vote per share on all matters to be voted on by stockholders and
are entitled to receive ratably such dividends as may be declared on the Common
Stock by the Board of Directors in its discretion from funds legally available
therefor. In the event of the liquidation, dissolution or winding up of the
Company, after payment of all debts and other liabilities and any liquidation
preference of the holders of Preferred Stock, each holder of shares of Common
Stock is entitled to receive, ratably with each other holder of Common Stock,
$2.50 per share out of the net assets of the Company available for distribution
to its stockholders, and after such payment, holders of shares of Common Stock
are entitled to share ratably in all remaining assets of the Company available
for distribution. Holders of Common Stock have no subscription, redemption,
conversion or preemptive rights. Matters submitted for stockholder approval
generally require a majority vote of the shares of Common Stock present and
voting thereon. The outstanding shares of Common Stock are, and any shares of
Common Stock offered hereby will, when issued, be fully paid and nonassessable.
DELAWARE GENERAL CORPORATION LAW SECTION 203
As a corporation organized under the laws of the State of Delaware, the
Company is subject to Section 203 of the General Corporation Law of the State of
Delaware (the "DGCL"), which restricts certain business combinations between the
Company and an "interested stockholder" (in general, a stockholder owning 15% or
more of the Company's outstanding voting stock) or such stockholder's affiliates
or associates for a period of three years following the date on which the
stockholder becomes an "interested stockholder." The restrictions do not apply
if (i) prior to an interested stockholder becoming such, the Board of Directors
approves either the business combination or the transaction in which the
stockholder becomes an interested stockholder, (ii) upon consummation of the
transaction in which such stockholder becomes an interested stockholder, such
interested stockholder owns at least 85% of the voting stock of the Company
outstanding at the time the transaction commenced (excluding shares owned by
certain employee stock ownership plans and persons who are both directors and
officers of the Company) or (iii) on or subsequent to the date an interested
stockholder becomes such, the business combination is both approved by the Board
of Directors and authorized at an annual or special meeting of the Company's
stockholders (and not by written consent) by the affirmative vote of at least
66 2/3% of the outstanding voting stock not owned by the interested stockholder.
PREFERRED STOCK
Under the Certificate of Incorporation, shares of Preferred Stock may be
issued from time to time, in one or more classes or series, as authorized by the
Board of Directors, generally without the approval of the stockholders. Prior to
issuance of shares of each series, the Board of Directors is required by the
DGCL and the Certificate of Incorporation to adopt resolutions and file a
Certificate of Designation (the "Certificate of Designation") with the Secretary
of State of the State of Delaware, fixing for each such
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class or series the designations, powers, preferences and rights of the shares
of such class or series and the qualifications, limitations or restrictions
thereon, including, but not limited to, dividend rights, dividend rate or rates,
conversion rights, voting rights, rights and terms of redemption (including
sinking fund provisions), the redemption price or prices, and the liquidation
preferences as are permitted by the DGCL. The Board of Directors could authorize
the issuance of shares of Preferred Stock with terms and conditions which could
have the effect of discouraging a takeover or other transaction which holders of
some, or a majority, of such shares might believe to be in their best interests
or in which holders of some, or a majority, of such shares might receive a
premium for their shares over the then-market price of such shares.
Subject to limitations prescribed by the DGCL, the Certificate of
Incorporation and Bylaws, the Board of Directors is authorized to fix the number
of shares constituting each class or series of Preferred Stock and the
designations and powers, preferences and relative, participating, optional or
other special rights and qualifications, limitations or restrictions thereof,
including such provisions as may be desired concerning voting, redemption,
dividends, dissolution or the distribution of assets, conversion or exchange,
and such other subjects or matters as may be fixed by resolution of the Board of
Directors or duly authorized committee thereof. The Preferred Stock offered
hereby will, when issued, be fully paid and nonassessable and will not have, or
be subject to, any preemptive or similar rights.
Reference is made to the Prospectus Supplement relating to the class or
series of Preferred Stock being offered for the specific terms thereof,
including:
(1) The title and stated value of such Preferred Stock;
(2) The number of shares of such Preferred Stock offered, the
liquidation preference per share and the purchase price of such Preferred
Stock;
(3) The dividend rate(s), period(s) and/or payment date(s) or method(s)
of calculation thereof applicable to such Preferred Stock;
(4) Whether dividends shall be cumulative or non-cumulative and, if
cumulative, the date from which dividends on such Preferred Stock shall
accumulate;
(5) The procedures for any auction and remarketing, if any, for such
Preferred Stock;
(6) The provisions for a sinking fund, if any, for such Preferred
Stock;
(7) The provisions for redemption, if applicable, of such Preferred
Stock;
(8) Any listing of such Preferred Stock on any securities exchange;
(9) The terms and conditions, if applicable, upon which such Preferred
Stock will be convertible into shares of Common Stock, including the
conversion price (or manner of calculation thereof) and conversion period;
(10) Voting rights, if any, of such Preferred Stock;
(11) Whether interests in such Preferred Stock will be represented by
Depositary Shares;
(12) A discussion of any material and/or special United States Federal
income tax considerations applicable to such Preferred Stock;
(13) The relative ranking and preferences of such Preferred Stock as to
dividend rights and rights upon liquidation, dissolution or winding up of
the affairs of the Company;
(14) Any limitations on issuance of any class or series of Preferred
Stock ranking senior to or on a parity with such series of Preferred Stock
as to dividend rights and rights upon liquidation, dissolution or winding up
of the affairs of the Company; and
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(15) Any other specific terms, preferences, rights, limitations or
restrictions of such Preferred Stock.
Unless otherwise specified in the Prospectus Supplement, the Preferred Stock
will, with respect to dividend rights and rights upon liquidation, dissolution
or winding up of the Company, rank: (i) senior to all classes or series of
Common Stock of the Company, and to all equity securities ranking junior to such
Preferred Stock with respect to dividend rights or rights upon liquidation,
dissolution or winding up of the Company; (ii) on a parity with all equity
securities issued by the Company the terms of which specifically provide that
such equity securities rank on a parity with the Preferred Stock with respect to
dividend rights or rights upon liquidation, dissolution or winding up of the
Company; and (iii) junior to all equity securities issued by the Company the
terms of which specifically provide that such equity securities rank senior to
the Preferred Stock with respect to dividend rights or rights upon liquidation,
dissolution or winding up of the Company. As used in the Certificate of
Incorporation for these purposes, the term "equity securities" does not include
convertible debt securities.
PREFERRED STOCK RIGHTS AGREEMENT
On July 14, 1988, the Company adopted a Preferred Share Purchase Rights Plan
("Rights Plan") and declared a dividend distribution of one Right on each
outstanding share of Common Stock and one Right on each share of Common Stock
issued between July 14, 1988 and the earliest of the Distribution Date, the
Redemption Date and the Final Expiration Date (as such terms are defined in the
Rights Plan). The Rights are transferable only with the Common Stock until they
become exercisable.
Generally, the Rights become exercisable only if a person or group (other
than Hilton Interests, as hereinafter defined) acquires 20% or more of the then
outstanding shares of Common Stock or announces a tender offer, the consummation
of which would result in ownership by a person or group of 20% or more of the
then outstanding shares of Common Stock. Each Right entitles stockholders to buy
one one-hundredth of a share of a new series of junior participating preferred
stock at an exercise price of $150.
If the Company is acquired in a merger or other business combination
transaction, each Right entitles its holder to purchase, at the Right's then
current price, a number of the acquiring company's common shares having a then
current market value of twice the Right's exercise price. In addition, if a
person or group (other than Hilton Interests) acquires 30% or more of the then
outstanding shares of Common Stock, other than pursuant to a cash tender offer
for all shares in which such person or group increases its stake from below 20%
to 80% or more of the outstanding shares of Common Stock, each Right entitles
its holder (other than such person or members of such group) to purchase, at the
Right's then current exercise price, shares of the Common Stock having a market
value of twice the Right's exercise price.
Following the acquisition by a person or group of beneficial ownership of
30% or more of the Common Stock (other than the Hilton Interests) and prior to
an acquisition of 50% or more of the Common Stock, the Company's Board of
Directors may exchange the Rights (other than Rights owned by such person or
group), in whole or in part, at an exchange ratio of one share of Common Stock
(or one one-hundredth of a share of the new series of junior participating
preferred stock) per Right.
Prior to the acquisition by a person or group of beneficial ownership of 20%
or more of the Common Stock, the Rights are redeemable for one cent per Right at
the option of the Board of Directors.
"Hilton Interests" refer to Barron Hilton and the Conrad N. Hilton Fund and
the shares of Common Stock beneficially owned by them.
REGISTRAR AND TRANSFER AGENT
The registrar and transfer agent for the Common Stock is ChaseMellon
Shareholder Services LLC.
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DESCRIPTION OF DEPOSITARY SHARES
GENERAL
The Company may issue receipts ("Depositary Receipts") for Depositary
Shares, each of which will represent a fractional interest of a share of a
particular series of Preferred Stock, as specified in the applicable Prospectus
Supplement. Shares of Preferred Stock of each series represented by Depositary
Shares will be deposited under a separate Deposit Agreement (each, a "Deposit
Agreement") among the Company and the depositary named therein (the "Preferred
Stock Depositary"). Subject to the terms of the Deposit Agreement, each owner of
a Depositary Receipt will be entitled, in proportion to the fractional interest
of a share of a particular series of Preferred Stock represented by the
Depositary Shares evidenced by such Depositary Receipt, to all the rights and
preferences of the Preferred Stock represented by such Depositary Shares
(including dividend, voting, conversion, redemption and liquidation rights).
The Depositary Shares will be evidenced by Depositary Receipts issued
pursuant to the applicable Deposit Agreement. Immediately following the issuance
and delivery of the Preferred Stock by the Company to the Preferred Stock
Depositary, the Company will cause the Preferred Stock Depositary to issue, on
behalf of the Company, the Depositary Receipts. Copies of the applicable form of
Deposit Agreement and Depositary Receipt may be obtained from the Company upon
request, and the statements made hereunder relating to the Deposit Agreement and
the Depositary Receipts to be issued thereunder are summaries of certain
provisions thereof and do not purport to be complete and are subject to, and
qualified in their entirety by reference to, all of the provisions of the
applicable Deposit Agreement and related Depositary Receipts.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Preferred Stock Depositary will distribute all cash dividends or other
cash distributions received in respect of the Preferred Stock to the record
holders of Depositary Receipts evidencing the related Depositary Shares in
proportion to the number of such Depositary Receipts owned by such holders,
subject to certain obligations of holders to file proofs, certificates and other
information and to pay certain charges and expenses to the Preferred Stock
Depositary.
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 Receipts entitled thereto, subject to certain obligations of holders
to file proofs, certificates and other information and to pay certain charges
and expenses to the Preferred Stock Depositary, unless the Preferred Stock
Depositary determines that it is not feasible to make such distribution, in
which case the Preferred Stock Depositary may, with the approval of the Company,
sell such property and distribute the net proceeds from such sale to such
holders.
No distribution will be made in respect of any Depositary Share to the
extent that it represents any Preferred Stock converted into other securities.
WITHDRAWAL OF STOCK
Upon surrender of the Depositary Receipts at the corporate trust office of
the Preferred Stock Depositary (unless the related Depositary Shares have
previously been called for redemption or converted into other securities), the
holders thereof will be entitled to delivery at such office, to or upon such
holder's order, of the number of whole or fractional shares of the Preferred
Stock and any money or other property represented by the Depositary Shares
evidenced by such Depositary Receipts. Holders of Depositary Receipts will be
entitled to receive whole or fractional shares of the related Preferred Stock on
the basis of the proportion of Preferred Stock represented by such Depositary
Share as specified in the applicable Prospectus Supplement, but holders of such
shares of Preferred Stock will not thereafter be entitled 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 shares of
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Preferred Stock to be withdrawn, the Preferred Stock Depositary will deliver to
such holder at the same time a new Depositary Receipt evidencing such excess
number of Depositary Shares.
REDEMPTION OF DEPOSITARY SHARES
Whenever the Company redeems shares 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 shares of the
Preferred Stock so redeemed, provided the Company shall have paid in full to the
Preferred Stock Depositary the redemption price of the Preferred Stock to be
redeemed plus an amount equal to any accrued and unpaid dividends thereon to the
date fixed for redemption. The redemption price per Depositary Share will be
equal to the corresponding proportion of the redemption price and any other
amounts per share payable with respect to the Preferred Stock. If fewer than all
the Depositary Shares are to be redeemed, the Depositary Shares to be redeemed
will be selected pro rata (as nearly as may be practicable without creating
fractional Depositary Shares) or by any other equitable method determined by the
Company.
From and after the date fixed for redemption, all dividends in respect of
the shares of Preferred Stock so called for redemption will cease to accrue, the
Depositary Shares so called for redemption will no longer be deemed to be
outstanding and all rights of the holders of the Depositary Receipts evidencing
the Depositary Shares so called for redemption will cease, except the right to
receive any moneys payable upon such redemption and any money or other property
to which the holders of such Depositary Receipts were entitled upon such
redemption and surrender thereof to the Preferred Stock Depositary.
VOTING OF THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders 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 Receipts evidencing the Depositary Shares which represent such
Preferred Stock. Each record holder of Depositary Receipts evidencing Depositary
Shares on the record date (which will be the same date as the record date for
the Preferred Stock) will be entitled to instruct the Preferred Stock Depositary
as to the exercise of the voting rights pertaining to the amount of Preferred
Stock represented by such holder's Depositary Shares. The Preferred Stock
Depositary will vote the amount of Preferred Stock represented by such
Depositary Shares in accordance with such instructions, and the Company will
agree to take all reasonable action which 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 the amount of
Preferred Stock represented by such Depositary Shares to the extent it does not
receive specific instructions from the holders of Depositary Receipts evidencing
such Depositary Shares. The Preferred Stock Depositary shall not be responsible
for any failure to carry out any instruction to vote, or for the manner or
effect of any such vote made, as long as such action or non-action is in good
faith and does not result from negligence or wilful misconduct of the Preferred
Stock Depositary.
LIQUIDATION PREFERENCE
In the event of the liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary, the holders of each Depositary Receipt will be
entitled to the fraction of the liquidation preference accorded each share of
Preferred Stock represented by the Depositary Shares evidenced by such
Depositary Receipt, as set forth in the applicable Prospectus Supplement.
CONVERSION OF PREFERRED STOCK
The Depositary Shares, as such, are not convertible into Common Stock or any
other securities or property of the Company. Nevertheless, if so specified in
the applicable Prospectus Supplement relating to
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an offering of Depositary Shares, the Depositary Receipts may be surrendered by
holders thereof to the Preferred Stock Depositary with written instructions to
the Preferred Stock Depositary to instruct the Company to cause conversion of
the Preferred Stock represented by the Depositary Shares evidenced by such
Depositary Receipts into whole shares of Common Stock, other shares of Preferred
Stock of the Company or other shares of stock, and the Company has agreed that
upon receipt of such instructions and any amounts payable in respect thereof, it
will cause the conversion thereof utilizing the same procedures as those
provided for delivery of Preferred Stock to effect such conversion. If the
Depositary Shares evidenced by a Depositary Receipt are to be converted in part
only, a new Depositary Receipt or Receipts will be issued for any Depositary
Shares not to be converted. No fractional shares of Common Stock will be issued
upon conversion, and if such conversion would result in a fractional share being
issued, an amount will be paid in cash by the Company equal to the value of the
fractional interest based upon the closing price of the Common Stock on the last
business day prior to the conversion.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares which
represent the Preferred Stock and any provision of the Deposit Agreement may at
any time be amended by agreement between the Company and the Preferred Stock
Depositary. However, any amendment that materially and adversely alters the
rights of the holders of Depositary Receipts or that would be materially and
adversely inconsistent with the rights granted to the holders of the related
Preferred Stock will not be effective unless such amendment has been approved by
the existing holders of at least 66 2/3% of the Depositary Shares evidenced by
the Depositary Receipts then outstanding. No amendment shall impair the right,
subject to certain exceptions in the Depositary Agreement, of any holder of
Depositary Receipts to surrender any Depositary Receipt with instructions to
deliver to the holder the related Preferred Stock and all money and other
property, if any, represented thereby, except in order to comply with law. Every
holder of an outstanding Depositary Receipt at the time any such amendment
becomes effective shall be deemed, by continuing to hold such Receipt, to
consent and agree to such amendment and to be bound by the Deposit Agreement as
amended thereby.
The Deposit Agreement may be terminated by the Company upon not less than 30
days' prior written notice to the Preferred Stock Depositary if a majority of
each series of Preferred Stock affected by such termination consents to such
termination, whereupon the Preferred Stock Depositary shall deliver or make
available to each holder of Depositary Receipts, upon surrender of the
Depositary Receipts held by such holder, such number of whole or fractional
shares of Preferred Stock as are represented by the Depositary Shares evidenced
by such Depositary Receipts together with any other property held by the
Preferred Stock Depositary with respect to such Depositary Receipt. In addition,
the Deposit Agreement will automatically terminate if (i) all outstanding
Depositary Shares shall have been redeemed, (ii) there shall have been a final
distribution in respect of the related Preferred Stock in connection with any
liquidation, dissolution or winding up of the Company and such distribution
shall have been distributed to the holders of Depositary Receipts evidencing the
Depositary Shares representing such Preferred Stock or (iii) each share of the
related Preferred Stock shall have been converted into securities of the Company
not so represented by Depositary Shares.
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CHARGES OF PREFERRED STOCK DEPOSITARY
The Company will pay all transfer and other taxes and governmental charges
arising solely from the existence of the Deposit Agreement. In addition, the
Company will pay the fees and expenses of the Preferred Stock Depositary in
connection with the performance of its duties under the Deposit Agreement.
However holders of Depositary Receipts will pay the fees and expenses of the
Preferred Stock Depositary for any duties requested by such holders to be
performed which are outside of those expressly provided for in the Deposit
Agreement.
RESIGNATION AND REMOVAL OF DEPOSITORY
The Preferred Stock Depositary may resign at any time by delivering to the
Company notice of its election to do so, and the Company may at any time remove
the Preferred Stock Depositary, any such resignation or removal to take effect
upon the appointment of a successor Preferred Stock Depositary. A 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 holders of Depositary
Receipts any reports and communications from the Company which are received by
the Preferred Stock Depositary with respect to the related Preferred Stock.
Neither the Preferred Stock Depositary nor the Company will be liable if it
is prevented from or delayed in, by law or any circumstances beyond its control,
performing its obligations under the Deposit Agreement. The obligations of the
Company and the Preferred Stock Depositary under the Deposit Agreement will be
limited to performing their duties thereunder in good faith and without
negligence (in the case of any action or inaction in the voting of Preferred
Stock represented by the Depositary Shares), gross negligence or willful
misconduct, and the Company and the Preferred Stock Depositary will not be
obligated to prosecute or defend any legal proceeding in respect of any
Depositary Receipts, Depositary Shares or shares of Preferred Stock represented
thereby unless satisfactory indemnity is furnished. The Company and the
Preferred Stock Depositary may rely on written advice of counsel or accountants,
or information provided by persons presenting shares of Preferred Stock
represented thereby for deposit, holders of Depositary Receipts or other persons
believed in good faith to be competent to give such information, and on
documents believed in good faith to be genuine and signed by a proper party.
In the event the Preferred Stock Depositary shall receive conflicting
claims, requests or instructions from any holders of Depositary Receipts, on the
one hand, and the Company, on the other hand, the Preferred Stock Depositary
shall be entitled to act on such claims, requests or instructions received from
the Company.
DESCRIPTION OF WARRANTS
The Company may issue warrants to purchase Debt Securities (the "Debt
Warrants"), Preferred Stock (the "Preferred Stock Warrants"), Depositary Shares
(the "Depositary Shares Warrants") or Common Stock (the "Common Stock Warrants,"
collectively with the Debt Warrants, the Preferred Stock Warrants and the
Depositary Shares Warrants (the "Warrants"). Warrants may be issued
independently or together with any other Offered Securities and may be attached
to or separate from such other Offered Securities. The Warrants are to be issued
under warrant agreements (each a "Warrant Agreement") to be entered into between
the Company and a bank or trust company, as warrant agent (the "Warrant Agent"),
all as shall be set forth in the Prospectus Supplement relating to the Warrants
being offered pursuant thereto.
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DEBT WARRANTS
The applicable Prospectus Supplement will describe the terms of Debt
Warrants offered thereby, the Warrant Agreement relating to such Debt Warrants
and the Debt Warrant certificates representing such Debt Warrants, including the
following: (i) the title of such Debt Warrants; (ii) the aggregate number of
such Debt Warrants; (iii) the price or prices at which such Debt Warrants will
be issued; (iv) 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; (v)
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
security; (vi) the date, if any, on and after which such Debt Warrants and the
related Debt Securities will be separately transferable; (vii) 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; (viii) the date on which the right to exercise such Debt
Warrants shall commence, and the date on which such right shall expire; (ix) the
maximum or minimum number of such Debt Warrants which may be exercised at any
time; (x) a discussion of the material United States Federal income tax
considerations applicable to the exercise of such Debt Warrants; and (xi) any
other terms of such Debt Warrants and terms, procedures and limitations relating
to the exercise of such 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 securities purchasable upon such exercise and will not be entitled to
payments of principal of (or premium, if any) or interest, if any, on the
securities purchasable upon such exercise.
OTHER WARRANTS
The applicable Prospectus Supplement will describe the following terms of
Preferred Stock Warrants, Depositary Shares Warrants and Common Stock Warrants
in respect of which this Prospectus is being delivered: (i) the title of such
Warrants; (ii) the Securities for which such Warrants are exercisable; (iii) the
price or prices at which such Warrants will be issued; (iv) the number of such
Warrants issued with each share of Preferred Stock, Common Stock or Depositary
Share; (v) any provisions for adjustment of the number or amount of shares of
Preferred Stock, Common Stock or Depositary Share receivable upon exercise of
such Warrants or the exercise price of such Warrants; (vi) if applicable, the
date on and after which such Warrants and the related Preferred Stock, Common
Stock or Depositary Share will be separately transferable; (vii) if applicable,
a discussion of the material United States Federal income tax considerations
applicable to the exercise of such Warrants; (viii) any other terms of such
Warrants, including terms, procedures and limitations relating to the exchange
and exercise of such Warrants; (ix) the date on which the right to exercise such
Warrants shall commence, and the date on which such right shall expire; and (x)
the maximum or minimum number of such Warrants which may be exercised at any
time.
EXERCISE OF WARRANTS
Each Warrant will entitle the holder of Warrants to purchase for cash such
principal amount of Debt Securities or shares of Preferred Stock, Common Stock
or Depositary Share at such exercise price as shall in each case be set forth
in, or be determinable as set forth in, the Prospectus Supplement relating to
the Warrants offered thereby. Warrants may be exercised at any time up to the
close of business on the expiration date set forth in the Prospectus Supplement
relating to the Warrants offered thereby. After the close of business on the
expiration date, unexercised Warrants will become void.
Warrants may be exercised as set forth in the Prospectus Supplement relating
to the Warrants offered thereby. Upon receipt of payment and the Warrant
certificate properly completed and duly executed at the
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corporate trust office of the Warrant Agent or any other office indicated in the
Prospectus Supplement, the Company will, as soon as practicable, forward the
Debt Securities, Depositary Share or shares of Preferred Stock or Common Stock
purchasable upon such exercise. If less than all of the Warrants represented by
such Warrant certificate are exercised, a new Warrant certificate will be issued
for the remaining Warrants.
GAMING REGULATION
The ownership and operation of casino gaming facilities are the subject of
exclusive state and local regulation. The states of Louisiana, Missouri,
Mississippi, New Jersey and Nevada and the applicable local authorities, and the
Province of Ontario, Canada, the Province of Queensland, Australia, and the
countries of Turkey and Uruguay 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
Louisiana Gaming Control Board, the Missouri Gaming Commission, the Mississippi
Gaming Commission, the New Jersey Casino Control Commission, the Nevada Gaming
Commission, the Ontario Gaming Control Commission and the gaming authorities in
Queensland, Australia, Turkey and Uruguay (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 Louisiana, Missouri, Mississippi, New Jersey, Nevada, Ontario,
Queensland, Turkey and Uruguay operations, respectively, 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 the 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 gaming activities. However, Gaming Licenses and related
approvals are deemed to be privileges under the laws of Louisiana, Missouri,
Mississippi, New Jersey, Nevada, Ontario, Queensland, Turkey and Uruguay, and no
assurances can be given that any new Gaming Licenses that may be required in the
future will be granted or that existing Gaming Licenses will not be revoked or
suspended.
The Nevada Gaming Control Act (the "Nevada Act") requires any person who
acquires a beneficial ownership of more than 5% of the Company's voting
securities to report the acquisition to the Nevada Gaming Commission. The Nevada
Act requires that beneficial owners of more than 10% of the Company's voting
securities apply to the Nevada Gaming Commission for a finding of suitability
within 30 days after the Chairman of the Nevada Gaming Control Board mails the
written notice requiring such filing. Under certain circumstances, an
"institutional investor," as defined in the Nevada Act, which acquires
beneficial ownership of more than 10%, but not more than 15%, of the Company's
voting securities may apply to the Nevada Gaming Commission for a waiver of such
finding of suitability if such institutional investor holds such voting
securities for investment purposes only.
The Nevada Gaming Commission may, in its discretion, require the holder of
any debt security issued by the Company to file applications, be investigated
and be found suitable to own such debt security. If the Nevada Gaming Commission
determines that a person is unsuitable to own such debt security, then pursuant
to the Nevada 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, liquidation, or similar
transaction.
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The applicable Gaming Authorities in Missouri, Mississippi, New Jersey,
Ontario, Queensland, Turkey and Uruguay also have jurisdiction over the
beneficial holders of debt securities and voting securities issued by the
Company and may require their investigation and approval.
In certain jurisdictions, the Company may not make a public offering of its
securities without the prior approval of the applicable Gaming Authorities if
the securities or proceeds therefrom are intended to be used to contract,
acquire or finance gaming facilities in such jurisdictions, or to retire or
extend obligations incurred for such purposes or for similar transactions. On
September 25, 1997 the Nevada Gaming Commission granted the Company prior
approval to make public offerings for a period of two years, subject to certain
conditions ("Shelf Approval"). The Shelf Approval also applies to any affiliate
company wholly owned by the Company (a "Gaming Affiliate") which is a publicly
traded corporation or would thereby become a publicly traded corporation
pursuant to a public offering. The Shelf Approval also includes approval for the
Company's registered and licensed Nevada subsidiaries to guarantee any security
issued by, or to hypothecate their assets to secure the payment or performance
of any obligations used by, the Company or a Gaming Affiliate in a public
offering under the Shelf Registration. However, the Shelf Approval may be
rescinded for good cause without prior notice upon the issuance of an
interlocutory stop order by the Chairman of the Nevada State Gaming Control
Board and must be renewed annually. The Shelf Approval does not constitute a
finding, recommendation or approval by the Nevada Gaming Commission or the
Nevada State Gaming Control Board as to the accuracy or adequacy of the
prospectus or the investment merits of the securities offered. Any
representation to the contrary is unlawful. The public offering of the Offered
Securities will be made pursuant to the Shelf Approval.
In November 1997, the Missouri Supreme Court ruled in a lawsuit that
riverboat casinos operating in man-made basins must meet certain requirements as
to contiguity with the Mississippi or Missouri rivers in order to comply with
the Missouri constitution. The Company is not a party to this lawsuit, but if it
is determined that the ruling is applicable to the Company's Kansas City
Missouri riverboat casino, as well as other similarly situated riverboat casino
operators, the Company's Kansas City gaming operations could be adversely
affected.
The foregoing is only a summary of the regulatory requirements applicable to
the Company. For a more detailed description of the regulatory requirements
applicable to the Company, see "Regulation and Licensing" in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1996,
incorporated by reference herein.
PLAN OF DISTRIBUTION
The Company may sell the Offered Securities being offered hereby: (i)
directly to purchasers; (ii) through agents; (iii) through dealers; (iv) through
underwriters; or (v) through a combination of any such methods of sale.
The distribution of the Offered Securities may be effected from time to time
in one or more transactions either: (i) at a fixed price or prices, which may be
changed; (ii) at market prices prevailing at the time of sale; (iii) at prices
related to such prevailing market prices; or (iv) at negotiated prices.
Offers to purchase Offered Securities may be solicited directly by the
Company. Offers to purchase Offered Securities may also be solicited by agents
designated by the Company from time to time. Any such agent, who may be deemed
to be an "underwriter" as that term is defined in the Securities Act, involved
in the offer or sale of the Offered Securities in respect of which this
Prospectus is delivered will be named, and any commissions payable by the
Company to such agent will be set forth, in the Prospectus Supplement.
If a dealer is utilized in the sale of the Offered Securities in respect of
which this Prospectus is delivered, the Company will sell such Offered
Securities to the dealer, as principal. The dealer, who may be
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deemed to be an "underwriter" as that term is defined in the Securities Act, may
then resell such Offered Securities to the public at varying prices to be
determined by such dealer at the time of resale.
If an underwriter is, or underwriters are, utilized in the sale, the Company
will execute an underwriting agreement with such underwriters at the time of
sale to them and the names of the underwriters will be set forth in the
Prospectus Supplement, which will be used by the underwriters to make resales of
the Offered Securities in respect of which this Prospectus is delivered to the
public. In connection with the sale of Offered Securities, such underwriters may
be deemed to have received compensation from the Company in the form of
underwriting discounts or commissions and may also receive commissions from
purchasers of Offered Securities for whom they may act as agents. Underwriters
may also sell Offered Securities to or through dealers, and such dealers may
receive compensation in the form of discounts, concessions or commissions from
the underwriters and/or commissions from the purchasers for whom they may act as
agents. Any underwriting compensation paid by the Company to underwriters in
connection with the offering of Offered Securities, and any discounts,
concessions or commissions allowed by underwriters to participating dealers,
will be set forth in the applicable Prospectus Supplement.
Underwriters, dealers, agents and other persons may be entitled, under
agreements that may be entered into with the Company, to indemnification by the
Company against certain civil liabilities, including liabilities under the
Securities Act, or to contribution with respect to payments which they may be
required to make in respect thereof. Underwriters and agents may engage in
transactions with, or perform services for, the Company in the ordinary course
of business.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize underwriters, dealers or other persons to solicit offers by certain
institutions to purchase Offered Securities pursuant to contracts providing for
payment and delivery on a future date or dates. Institutions with which such
contracts may be made include commercial and savings banks, insurance companies,
pension funds, investment companies, educational and charitable institutions and
others. The obligations of any purchaser under any such contract will not be
subject to any conditions except that (a) the purchase of the Offered Securities
shall not at the time of delivery be prohibited under the laws of the
jurisdiction to which such purchaser is subject and (b) if the Offered
Securities are also being sold to underwriters, the Company shall have sold to
such underwriters the Offered Securities not sold for delayed delivery. The
underwriters, dealers and such other persons will not have any responsibility in
respect to the validity or performance of such contracts. The Prospectus
Supplement relating to such contracts will set forth the price to be paid for
Offered Securities pursuant to such contracts, the commissions payable for
solicitation of such contracts and the date or dates in the future for delivery
of Offered Securities pursuant to such contracts.
The anticipated date of delivery of Offered Securities will be set forth in
the applicable Prospectus Supplement relating to each offer.
LEGAL MATTERS
The validity of the Offered Securities will be passed upon for the Company
by Latham & Watkins, Los Angeles, California. Unless otherwise indicated in the
Prospectus Supplement, if the Offered Securities are being distributed in an
underwritten offering or through agents, Skadden, Arps, Slate, Meagher & Flom,
LLP, Los Angeles, California, will act as counsel for such underwriters or
agents.
EXPERTS
The consolidated financial statements and schedules in the Company's Annual
Report on Form 10-K incorporated by reference into this Prospectus have been
audited by Arthur Andersen LLP, independent public accountants, as indicated in
their reports with respect thereto, and are incorporated by reference herein in
reliance upon the authority of said firm as experts in giving said reports.
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The consolidated financial statements of Bally Entertainment Corporation
appearing in Bally Entertainment Corporation's Annual Report (Form 10-K) for the
year ended December 31, 1995 have been audited by Ernst & Young LLP, independent
auditors, as set forth in their reports thereon included therein, and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
26
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF INSURANCE AND DISTRIBUTION.
Set forth below is an estimate of the fees and expenses, other than
underwriting discounts and commissions, payable or reimbursable by the Company
in connection with the issuance and distribution of the Offered Securities.
<TABLE>
<S> <C>
SEC registration fee.............................. $ 757,580
Fees and expenses of the Trustee.................. 40,000
Printing and engraving expenses................... 400,000
Rating agency fees................................ 30,000
Legal fees and expenses........................... 300,000
Accounting fees and expenses...................... 90,000
Miscellaneous..................................... 40,000
----------
$1,657,580
----------
----------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law, Article XI of the
Restated Certificate of Incorporation and Paragraph 35 of Hilton's By-Laws as
amended, authorize and empower Hilton to indemnify its directors, officers,
employees and agents, and agreements with each of Hilton's directors and
officers provide for indemnification against liabilities incurred in connection
with, and related expenses resulting from, any claim, action or suit brought
against any such person as a result of such person's relationship with Hilton,
PROVIDED that such persons acted in accordance with a stated standard of conduct
in connection with the acts or events on which such claim, action or suit is
based. The finding of either civil or criminal liability on the part of such
persons in connection with such acts or events is not necessarily determinative
of the question of whether such persons have met the required standard of
conduct and are, accordingly, entitled to be indemnified.
Hilton has purchased for the benefit of its officers and directors and those
of certain subsidiaries insurance policies whereby the insurance companies
agree, among other things, that in the event any such officer or director
becomes legally obligated to make a payment (including legal fees and expenses)
in connection with an alleged wrongful act, such insurance companies will pay
Hilton up to $100,000,000. Wrongful act means any breach of duty, neglect,
error, misstatement, misleading statement or other act done by an officer or
director of Hilton or any subsidiary.
Reference is made to any Underwriting Agreement to be incorporated by
reference in the Prospectus, for provisions regarding indemnification of Hilton
and its officers, directors and controlling persons against certain liabilities.
II-1
<PAGE>
ITEM 16. EXHIBITS.
This Registration Statement includes the following exhibits:
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ------------- ------------------------------------------------------------------------------------------------
<C> <S>
*1.1 Form of Underwriting Agreement.
+4.1 Indenture dated as of April 15, 1997 by and among the Company and BNY Western Trust Company, as
trustee.
+4.2 Form of Note (included in Exhibit 4.1).
*4.3 Form of Warrant.
*4.4 Form of Warrant Agreement.
+5.1 Opinion of Latham & Watkins as to the legality of the securities being registered.
12 Computation of Ratios of Earnings to Fixed Charges.
+23.1 Consent of Latham & Watkins (included in Exhibit 5.1).
23.2 Consent of Arthur Andersen LLP.
23.3 Consent of Ernst & Young LLP.
+24 Powers of Attorney of certain directors and officers of the Company.
+25 Statement of Eligibility of Trustee on Form T-1.
</TABLE>
- ------------------------
* To be filed by amendment or incorporated by reference in connection with the
offering of the securities.
+ Previously filed.
ITEM 17. UNDERTAKINGS.
(a) The Company hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the Registration Statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
PROVIDED HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the registrant
pursuant to section 13 or section 15(d) of the Exchange Act that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities
II-2
<PAGE>
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) Hilton hereby undertakes that, for purposes of determining any liability
under the Securities Act of 1933, as amended, each filing of Hilton's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(h) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions or otherwise, the Company has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
(j) The Company hereby undertakes to file an application for the purpose of
determining the eligibility of the trustee to act under subsection (a) of
Section 310 of the Trust Indenture Act ("TIA") in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of the TIA.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Beverly Hills, State of California, on December
5, 1997.
<TABLE>
<S> <C>
HILTON HOTELS CORPORATION
By: /s/ SCOTT A. LAPORTA
-------------------------------------
Scott A. LaPorta
SENIOR VICE PRESIDENT AND TREASURER
</TABLE>
S-1
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to Registration Statement has been signed by the following persons in the
capacities indicated on December 5, 1997:
* *
- --------------------------------------------------------------------------------
Stephen F. Bollenbach Dieter H. Huckestein
Director, President and Chief Executive Director
Officer
* *
- ----------------------------------------
----------------------------------------
A. Steven Crown Robert L. Johnson
Director
Director
* *
- ----------------------------------------
----------------------------------------
Matthew J. Hart Donald R. Knab
Executive Vice President and Director
Chief Financial Officer
(Chief Financial and Accounting Officer)
* *
- ----------------------------------------
----------------------------------------
Arthur M. Goldberg Benjamin V. Lambert
Director Director
* *
- ----------------------------------------
----------------------------------------
Barron Hilton Donna F. Tuttle
Director Director
* *
- ----------------------------------------
----------------------------------------
Eric M. Hilton Sam D. Young, Jr.
Director Director
*
----------------------------------------
Peter M. George
Director
* Power of Attorney by
/s/ SCOTT A. LAPORTA
- ----------------------------------------
Scott A. LaPorta
Senior Vice President and Treasurer
S-2
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ------------- ------------------------------------------------------------------------------------------------
<C> <S>
*1.1 Form of Underwriting Agreement.
+4.1 Indenture dated as of April 15, 1997 by and among the Company and BNY Western Trust Company, as
trustee.
+4.2 Form of Note (included in Exhibit 4.1).
*4.3 Form of Warrant.
*4.4 Form of Warrant Agreement.
+5.1 Opinion of Latham & Watkins as to the legality of the securities being registered.
12 Computation of Ratios of Earnings to Fixed Charges.
+23.1 Consent of Latham & Watkins (included in Exhibit 5.1).
23.2 Consent of Arthur Andersen LLP.
23.3 Consent of Ernst & Young LLP.
+24 Powers of Attorney of certain directors and officers of the Company.
+25 Statement of Eligibility of Trustee on Form T-1.
</TABLE>
- ------------------------
* To be filed by amendment or incorporated by reference in connection with the
offering of the securities.
+ Previously filed.
<PAGE>
HILTON HOTELS CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(dollar amounts in millions) (unaudited)
<TABLE>
<CAPTION>
Nine months ended
September 30, Years Ended December 31,
----------------- ---------------------------------------------
1997 1996 1996 1995 1994 1993 1992
----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Income from continuing operations before income
taxes and minority interest (1) $433 $223 $231 $262 $184 $156 $157
Add:
Interest expense (1) 137 62 96 114 95 90 74
Distributions from less than 50% owned
companies 6 8 18 13 12 6 5
Interest component of rent expense (1) (2) 3 3 4 4 3 3 3
----- ----- ----- ----- ----- ----- -----
Earnings available for fixed charges $579 $296 $349 $393 $294 $255 $239
----- ----- ----- ----- ----- ----- -----
----- ----- ----- ----- ----- ----- -----
Fixed charges:
Interest expense (1) $137 $ 62 $ 96 $114 $ 95 $ 90 $ 74
Capitalized interest 13 6 7 3 8 2 5
Interest component of rent expense (1) (2) 3 3 4 4 3 3 3
----- ----- ----- ----- ----- ----- -----
Total fixed charges $153 $ 71 $107 $121 $106 $ 95 $ 82
----- ----- ----- ----- ----- ----- -----
----- ----- ----- ----- ----- ----- -----
Ratio of earnings to fixed charges 3.8x 4.2x 3.3x 3.2x 2.8x 2.7x 2.9x
----- ----- ----- ----- ----- ----- -----
----- ----- ----- ----- ----- ----- -----
</TABLE>
- -----------------
(1) Includes 50% owned companies.
(2) Assumed interest component to be one-third of rent expense.
<PAGE>
HILTON HOTELS CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO COMBINED
FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(dollar amounts in millions) (unaudited)
<TABLE>
<CAPTION>
Nine months ended
September 30, Years Ended December 31,
----------------- ---------------------------------------------
1997 1996 1996 1995 1994 1993 1992
----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Income from continuing operations before income
taxes and minority interest (1) $433 $223 $231 $262 $184 $156 $157
Add:
Interest expense (1) 137 62 96 114 95 90 74
Distributions from less than 50% owned
companies 6 8 18 13 12 6 5
Interest component of rent expense (1) (2) 3 3 4 4 3 3 3
----- ----- ----- ----- ----- ----- -----
Earnings available for combined fixed
charges and preferred stock dividends $579 $296 $349 $393 $294 $255 $239
----- ----- ----- ----- ----- ----- -----
----- ----- ----- ----- ----- ----- -----
Fixed charges and preferred stock dividends:
Interest expense (1) $137 $ 62 $ 96 $114 $ 95 $ 90 $ 74
Capitalized interest 13 6 7 3 8 2 5
Interest component of rent expense (1) (2) 3 3 4 4 3 3 3
Preferred stock dividends 17 - 1 - - - -
----- ----- ----- ----- ----- ----- -----
Total fixed charges and preferred stock dividends $170 $ 71 $108 $121 $106 $ 95 $ 82
----- ----- ----- ----- ----- ----- -----
----- ----- ----- ----- ----- ----- -----
Ratio of earnings to combined fixed charges
and preferred stock dividends 3.4x 4.2x 3.2x 3.2x 2.8x 2.7x 2.9x
----- ----- ----- ----- ----- ----- -----
----- ----- ----- ----- ----- ----- -----
</TABLE>
- -----------------
(1) Includes 50% owned companies.
(2) Assumed interest component to be one-third of rent expense.
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Hilton Hotels Corporation:
As independent public accountants, we hereby consent to the incorporation by
reference in this Form S-3 registration statement of our reports dated
February 14, 1997 included in Hilton Hotels Corporation's Form 10-K for the
year ended December 31, 1996 and to all references to our Firm included in
this registration statement.
ARTHUR ANDERSEN LLP
Los Angeles, California
December 3, 1997
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Hilton Hotels
Corporation for the registration of $2,500,000,000 debt securities, preferred
stock, depository shares, common stock and warrants, and to the incorporation
by reference therein of our report dated February 7, 1996, with respect to
the consolidated financial statements and schedules of Bally Entertainment
Corporation in its Annual Report (Form 10-K) for the year ended December 31,
1995, and included as Exhibit 99(a) in the Hilton Hotels Corporation Form 8-K
dated December 18, 1996, both filed with the Securities and Exchange
Commission.
ERNST & YOUNG LLP
Chicago, Illinois
December 4, 1997
