<PAGE>
As filed with the Securities and Exchange Commission on November 18, 1994
REGISTRATION NO. 33-18278
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
POST EFFECTIVE AMENDMENT NO. 6
TO
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
CIRCUS CIRCUS ENTERPRISES, INC.
(EXACT NAME OF ISSUER AS SPECIFIED IN ITS CHARTER)
NEVADA 88-0121916
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
2880 LAS VEGAS BOULEVARD SOUTH
LAS VEGAS, NEVADA 89109
(702) 734-0410
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, ZIP CODE AND TELEPHONE NUMBER)
----------------
CIRCUS CIRCUS EMPLOYEES' PROFIT SHARING,
INVESTMENT AND EMPLOYEE STOCK OWNERSHIP PLAN
----------------
MIKE SLOAN, GENERAL COUNSEL
CIRCUS CIRCUS ENTERPRISES, INC.
2880 LAS VEGAS BOULEVARD SOUTH
LAS VEGAS, NEVADA 89109
(702) 734-0410
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
COPY TO:
HOWELL J. REEVES, ESQUIRE
FOX, ROTHSCHILD, O'BRIEN & FRANKEL
2000 MARKET STREET
PHILADELPHIA, PENNSYLVANIA 19103
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- --------------------------------------------------------------------------------
<PAGE>
CIRCUS CIRCUS ENTERPRISES, INC.
CROSS-REFERENCE SHEET
PURSUANT TO RULE 404 AND ITEM 501 OF REGULATION S-K
<TABLE>
<CAPTION>
FORM S-8 ITEM NO. HEADING IN PROSPECTUS
----------------- ---------------------
<C> <S>
1. Plan Information
(a) General Plan Information............ Cover Page; General Information;
Definitions; The Plan;
Applicable Requirements of
ERISA; Reports of the Company;
Incorporation of Certain
Documents by Reference
(b) Securities to be Offered............ Cover Page; The Plan
(c) Employees Who May Participate in the
Plan............................... The Plan--Eligibility
(d) Purchase of Securities Pursuant to
the Plan and Payments for
Securities Offered................. The Plan--Contributions and --
Investment of Contributions
(e) Resale Restrictions................. The Plan--Assignment; Liens
(f) Tax Effects of Plan Participation... Federal Tax Aspects
(g) Investment of Funds................. The Plan--Investment of
Contributions
(h) Withdrawal from the Plan; Assignment
of Interest........................ The Plan--Withdrawals on Account
of Hardship and--Benefits Under
the Plan
(i) Forfeitures and Penalties........... The Plan--Contributions,--
Limitations on Contributions and
--Investment of Contributions
(j) Charges and Deductions and Liens
Therefor........................... The Plan--Investment of
Contributions
2. Registrant Information and Employee Plan
Annual Information..................... Reports of the Company;
Incorporation of Certain
Documents by Reference
</TABLE>
i
<PAGE>
PROSPECTUS
[LOGO OF CIRCUS CIRCUS ENTERPRISES, INC. APPEARS HERE]
2,700,000 SHARES
OF
COMMON STOCK
($.01 2/3PAR VALUE)
----------------
CIRCUS CIRCUS EMPLOYEES'
PROFIT SHARING, INVESTMENT AND EMPLOYEE STOCK
OWNERSHIP PLAN
----------------
This Prospectus covers interests in the Circus Circus Employees' Profit
Sharing, Investment and Employee Stock Ownership Plan (the "Plan") as well as
2,700,000 shares of Common Stock, $.01 2/3 par value, of Circus Circus
Enterprises, Inc. (the "Company") which may be acquired pursuant to the Plan as
more fully set forth herein.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
----------------
THE NEVADA GAMING COMMISSION HAS NOT PASSED UPON THE ADEQUACY OR ACCURACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
----------------
The date of this Prospectus is November 18, 1994.
<PAGE>
ADDITIONAL INFORMATION
The Company has filed a Registration Statement with the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended, with respect to the shares offered hereby. This Prospectus does not
contain all of the information set forth in the Registration Statement, certain
items of which are contained in schedules and exhibits to the Registration
Statement as permitted by the rules and regulations of the Commission. For
further information, reference is made to the Registration Statement, including
the financial schedules and exhibits filed or incorporated as a part thereof.
Items of information omitted from this Prospectus but contained in the
Registration Statement may be inspected and copies may be obtained (at
prescribed rates) at the Commission's Public Reference Section at 450 Fifth
Street, N.W., Washington, D.C. 20549.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 and, in accordance therewith, files reports, proxy
statements and other information with the Commission. Such reports, proxy
statements and other information can be inspected and copied (at prescribed
rates) at the Public Reference Section offices of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's regional offices
at Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511; and Seven World Trade Center, 13th Floor, New York, New
York 10048. In addition, the Company's Common Stock is listed on the New York
Stock Exchange and the Pacific Stock Exchange and similar information
concerning the Company can be inspected and copied at the New York Stock
Exchange, 20 Broad Street, New York, New York 10005 and at the Pacific Stock
Exchange, 301 Pine Street, San Francisco, California 94104.
No person is authorized to give any information or to make any
representations not contained in this Prospectus in connection with the offer
described herein, and any information or representation not contained herein
must not be relied upon as having been authorized by the Company. This
Prospectus does not constitute an offer to sell these securities in any state
to any person to whom it is unlawful to make such offer in such state. Neither
the delivery of this Prospectus nor any sale made hereunder shall, under any
circumstances, create an implication that information herein is correct as of
any time subsequent to its date.
GENERAL INFORMATION
This Prospectus relates to interests in the Circus Circus Employees' Profit
Sharing, Investment and Employee Stock Ownership Plan of Circus Circus
Enterprises, Inc., and its participating subsidiaries, and to shares of the
Company's Common Stock, $.01 2/3 par value ("Common Stock"), which may be
purchased by the Trustee or contributed by the Employer pursuant to the Plan.
The information set forth in this Prospectus has been adjusted to reflect a 3-
for-2 split of the Company's Common Stock effective July 9, 1993. The Company
is a Nevada corporation having its principal executive offices located at 2880
Las Vegas Boulevard South, Las Vegas, Nevada 89109 (telephone number 702-734-
0410). The principal provisions of the Plan are summarized in this Prospectus.
2
<PAGE>
DEFINITIONS
The following terms, as used in this Prospectus, have the following meanings:
"Account" means, as required by the context, the entire amount held from time
to time for the benefit of any one Participant, or the portion thereof
attributable to Savings Contributions, ESOP Matching Contributions, ESOP
Automatic Contributions, Discretionary Contributions or Rollover Contributions,
as well as 401(k) Automatic Contributions for Plan Years beginning before
January 1, 1989 and 401(k) Matching Contributions for Plan Years beginning
before January 1, 1990.
"Actual Deferral Percentage" means, with respect to a group of Participants
for a Plan Year, the average of the ratios (calculated separately for each
member of the group) of the amount of Savings Contributions as well as 401(k)
Matching Contributions and 401(k) Automatic Contributions on behalf of each
Participant who is a member of such group (other than Family Members of certain
Highly Compensated Employees) to the amount of the Compensation for each
Participant who is a member of such group for the Plan Year.
"Agreement of Trust" means the Third Amendment and Restatement of the Circus
Circus Employees' Profit Sharing, Investment and Employee Stock Ownership Trust
entered into between the Company and the Trustee effective as of January 1,
1993, except as otherwise provided therein.
"Automatic Contribution" means, as the context requires, the ESOP Automatic
Contribution, or for Plan Years beginning prior to January 1, 1989, the 401(k)
Automatic Contribution.
"Code" means the Internal Revenue Code of 1986, as amended, or any successor
statute.
"Company" means Circus Circus Enterprises, Inc., or its successors.
"Compensation" means regular salaries and wages, overtime pay, bonuses and
commissions paid or accrued by an Employer, tips declared by or distributed to
an Employee while performing services for an Employer, Savings Contributions to
this Plan, and elective contributions to any plan maintained by an Employer
pursuant to Section 125 of the Code, but does not include third party
disability payments, stock options, relocation expense payments, credits or
benefits under the Plan (other than Savings Contributions), any amount
contributed to any pension, employee welfare, life insurance or health
insurance plan or arrangement, or any other tax-favored fringe benefits (other
than elective contributions to a Section 125 plan). However, no Compensation in
excess of $150,000 (adjusted under such regulations as may be issued by the
Secretary of the Treasury) will be taken into account for any Employee. In
applying such limit, the Compensation of a Highly Compensated Employee who is
(i) a 5% owner of an Employer, or (ii) one of the ten Highly Compensated
Employees paid the greatest amount of Compensation during the Plan Year will be
aggregated with the Compensation of any spouse or minor child of such Employee
who is also receiving Compensation from the Employer.
"Contract" means the Group Annuity Contract No. GA70867, effective as of
November 1, 1985, between the Custodian and the Company, and the related
letters dated November 15 and December 4, 1985, respectively, from the
Custodian.
"Custodian" means Principal Financial Group, Des Moines, Iowa, acting in its
capacity under the Contract.
"Discretionary Contribution" generally means a Discretionary Contribution
under the Plan by an Employer on behalf of a Participant. However,
Discretionary Contributions will not be made on behalf of
3
<PAGE>
officers, directors, 10% owners of the Company, or any other Participants who
are required to file reports under Section 16(a) of the Securities Exchange Act
of 1934.
"Diversification Election" means a Participant's election to diversify a
portion of his ESOP Matching Contribution Account, ESOP Automatic Contribution
Account and/or Discretionary Contribution Account pursuant to the
Diversification provisions of the Plan.
"Diversification Election Period" means the six Plan Year period beginning
with the later of: (1) the Plan Year after the Plan Year in which the
Participant attains age 55; or (2) the Plan Year after the Plan Year in which
the Participant first completes ten (10) years of participation in the Plan
(disregarding participation before January 1, 1989).
"Earnings" means, with respect to a Valuation Period, the aggregate of the
unrealized appreciation or depreciation accruing to the Trust Fund (or any Fund
or separate portion of a Segregated Investment Fund) during such a period; and
the income earned or the loss sustained by the Trust Fund (or any Fund or
separate portion of a Segregated Investment Fund) during such period, whether
from investments or from the sale or exchange of assets.
"Eligibility Date" means January 1 and July 1 in any Plan Year.
"Employee" means, except as otherwise provided in the Plan, any person
employed by the Employer, but generally does not include union employees other
than participating union employees at Circus Circus Reno, Circus Circus Las
Vegas, Excalibur and Luxor.
"Employer" means the Company, Circus Circus Casinos, Inc., Slots-A-Fun, Inc.,
Edgewater Hotel Corporation and Colorado Belle Corp., New Castle Corp., Racing
Boats, Inc., and Ramparts, Inc., all Nevada corporations, Circus Circus
Mississippi, Inc., a Mississippi corporation, and any other subsidiary or
related corporation or other entity that adopts the Plan with the consent of
the Company.
"Employer Securities" means securities of the Company that are readily
tradable on an established securities market or meet other conditions of
Section 4975 of the Code.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ESOP Automatic Contribution" means an Automatic Contribution pursuant to the
Plan, attributable to any Plan Year beginning on or after January 1, 1989, by
an Employer on behalf of a Participant, other than an officer, director, 10%
owner of the Company, or any other Participant who is required to file reports
under Section 16(a) of the Securities Exchange Act of 1934.
"ESOP Contribution" means an ESOP Automatic Contribution, an ESOP Matching
Contribution, or a Discretionary Contribution attributable to any Plan Year
beginning on or after January 1, 1989.
"ESOP Fund" means a Fund established under the Plan based upon all
contributions other than (i) Savings Contributions, (ii) Matching Contributions
for years beginning prior to January 1, 1990, and (iii) Automatic Contributions
for years beginning prior to January 1, 1989.
"ESOP Matching Contribution" means a Matching Contribution pursuant to the
Plan, attributable to any Plan Year beginning on or after January 1, 1990, by
an Employer on behalf of a Participant, other than an officer, director, 10%
owner of the Company, or any other Participant who is required to file reports
under Section 16(a) of the Securities Exchange Act of 1934.
"Family Member" of a Highly Compensated Employee generally means such
Employee's spouse, lineal descendent or ascendent, or the spouse of his lineal
descendant or ascendent. However, for certain
4
<PAGE>
circumstances as enumerated in the Plan, Family Member of a Highly Compensated
Employee includes only the Employee's spouse and his lineal descendants who
have not attained age 19 before the close of the Plan Year.
"401(k) Automatic Contribution" means an Automatic Contribution under the
Plan, attributable to any Plan Year beginning before January 1, 1989, on behalf
of a Participant by an Employer.
"401(k) Matching Contribution" means a Matching Contribution under the Plan,
attributable to any Plan Year beginning before January 1, 1990, on behalf of a
Participant by an Employer.
"Fund" means a fund established under the Plan.
"Gross Compensation" means, with respect to an Employee during a Plan Year,
total taxable compensation of such Employee for such Plan Year as defined in
the Plan, subject to certain limits defined in the Plan, plus the amount of
such Employee's Savings Contribution for such Plan Year.
"Highly Compensated Employee" means, subject to certain further limitations
set forth in the Plan, any Employee during the Plan Year or the immediately
preceding Plan Year:
(1) who was a 5% owner of an Employer;
(2) whose Section 415 Compensation was more than $99,000 (adjusted under
such regulations as may be issued by the Secretary of the Treasury);
(3) whose Section 415 Compensation was more than $66,000 (adjusted under
such regulations as may be issued by the Secretary of the Treasury), and
who was a member of the "top paid group." As used herein, "top paid group"
means all Employees who are in the top 20% of the Employer's work force on
the basis of Section 415 Compensation paid during the year; or
(4) who was an officer of an Employer and received compensation in excess
of 50% of the amount in effect under Section 415(b)(1)(A) of the Code for
any such Plan Year. However, no more than 50 Employees will be considered
Highly Compensated Employees merely by reason of their status as officers
of an Employer.
"Hour of Service" means, as set forth in detail in the Plan, an hour for
which an Employee performs services, an hour for which he is paid for reasons
other than the performance of services (i.e., sick pay and vacation pay), or an
hour of unpaid maternity or paternity leave within certain limits described in
the Plan.
"Matching Contribution" means, as the context requires, the ESOP Matching
Contribution, or for Plan Years beginning prior to January 1, 1990, the 401(k)
Matching Contribution.
"Net Compensation" means, with respect to an Employee during a Plan Year, the
amount of such Employee's Gross Compensation for such Plan Year less the amount
of such Employee's Savings Contribution for such Plan Year.
"Normal Retirement Date" means the date on which a Participant attains the
age of 65 years, or the 5th anniversary of the date the Participant commenced
participation in the Plan, whichever date occurs later.
"One Year Break in Service" means a Plan Year (and, for purposes of
eligibility and participation, the year beginning with the date the Employee's
employment commenced), in which an Employee has 500 or fewer Hours of Service,
and it is deemed to occur on the last day of any such year.
"Participant" means:
(1) any eligible Employee of an Employer who has become a Participant
under the Plan, except that an Employee who has made a Rollover
Contribution prior to his Eligibility Date is considered a Participant
solely with respect to his Rollover Contribution Account; and
(2) any former employee of an Employer who became a Participant under the
Plan and who still has a balance in an Account under the Plan.
"Plan" means the profit sharing, investment and employee stock ownership plan
described in this Prospectus.
5
<PAGE>
"Plan Administrator" means the Company.
"Plan Year" means each 12-month period ending on December 31.
"Savings Contribution" means a contribution to the Plan by or on behalf of an
Employee pursuant to paragraph (a) of Article VI of the Plan.
"Section 415 Compensation" means all compensation received by or made
available to the Participant from all Employers and all affiliates for personal
services actually rendered, as well as tips which the Employer is required to
report to the Employee and the Internal Revenue Service, but does not include
Savings Contributions, elective contributions to any plan maintained by an
employer pursuant to Section 125 of the Code, deferred compensation, stock
options and other distributions that receive special tax benefit.
"Segregated Investment Fund" means a Fund established under the Plan for
designated investments, in which the assets of each Participant selecting the
Fund are separately invested, and the Earnings attributable to such assets are
separately accounted for.
"Transfer of Functions Date" means the date on or about January 1, 1991 when
there was transferred to the Trustee the responsibility for investments made
with respect to the General Common Stock Fund and the Money Market Fund.
"Trust" means, collectively, the trust or trusts established by the Agreement
and Declarations of Trust and the account or accounts established by the
Contract.
"Trust Fund" means, collectively, the trust funds and accounts established
under all Agreements of Trust and all Contracts from which the amounts of
supplementary compensation provided for by the Plan are to be paid or are to be
funded.
"Trustee" means Bank of America, Nevada (formerly Valley Bank of Nevada), in
its capacity as trustee under the Agreement of Trust.
"Valuation Date" means, with respect to the Trust Fund, March 31, June 30,
September 30 and December 31 of each year and such other dates as the Plan
Administrator may select.
"Valuation Period" means the period beginning with the first day after a
Valuation Date and ending with the next Valuation Date.
"Year of Credited Service" means, in general, a Plan Year beginning on or
after the Employee's date of employment or most recent date of reemployment,
whichever is later, during which the Employee completed 1,000 or more Hours of
Service. However, an Employee who becomes a Participant after November 20, 1989
will not receive credit for any Plan Year before the Plan Year in which he
became a Participant, except that any Employee who would have become a
Participant in an earlier Plan Year if he had not been a member of a collective
bargaining unit will have the same number of Years of Credited Service that he
would have had if he had not been a member of such unit.
"Year of Service" means a Year of Vesting Service or a Year of Eligibility
Service, as required by the context as follows:
(A) "Year of Vesting Service" means a Plan Year during which an Employee
completes 1,000 or more Hours of Service.
(B) "Year of Eligibility Service" means the consecutive 12-month period
beginning with the date the Employee is first credited with an Hour of
Service, provided he completes 1,000 Hours of Service during that 12-month
period; otherwise, any Plan Year during which the Employee completes 1,000
or
6
<PAGE>
more Hours of Service. (The Year of Service is not completed until the end
of the 12-month period or the Plan Year, as the case may be, even if 1,000
Hours of Service are completed earlier).
An Employee receives credit for his Hours of Service for the Employer or an
"Affiliate" of the Employer (as defined in the Plan) whether or not he was an
Employee at the time such Hours of Service were completed. However, an
Employee's "Years of Service" do not include any Year of Service completed
before January 1, 1985.
7
<PAGE>
THE PLAN
GENERAL
The Plan covers the Employees of the Employer. The Plan was originally
adopted in 1985. In 1989, employee stock ownership plan ("ESOP") features were
added to the Plan, and it was renamed the Circus Circus Employees' Profit
Sharing, Investment and Employee Stock Ownership Plan. Thereafter, the Board of
Directors of the Company adopted additional amendments to the Plan and the
Trust. The Company has obtained from the Internal Revenue Service (the "IRS") a
favorable determination letter dated September 14, 1993, that the Plan, as
amended through November 20, 1992, meets the requirements of a qualified profit
sharing plan under Section 401(a) of the Code, a qualified cash or deferred
arrangement under Section 401(k) of the Code, and a qualified ESOP under
Section 4975(e)(7) of the Code, and that the Trust, as amended through the
Second Trust Amendment, is exempt from Federal income tax under Section 501(a)
of the Code. However, the favorable determination letter was conditioned upon
the adoption of an additional amendment on or before December 13, 1993, and
does not apply to plan years beginning on or after January 1, 1994. The
required additional amendment was in fact adopted on November 22, 1993.
Also on November 22, 1993, the Company adopted an Eighth Amendment and
Restatement of the Plan and a Third Amendment and Restatement of the Trust
(collectively the "1993 Amendments"). In conjunction with the 1993 Amendments,
the Company has resubmitted the Plan, as so amended, to the IRS to seek its
determination that the Plan, in its present form, continues to meet the
requirements of a qualified profit sharing plan under Section 401(a) of the
Code, a qualified cash or deferred arrangement under Section 401(k) of the
Code, and a qualified ESOP under Section 4975(e)(7) of the Code, and that the
Trust continues to be exempt from Federal income tax under Section 501(a) of
the Code. It is possible that the IRS could request further amendments to the
Plan or the Trust, and could condition any determination letter upon timely
adoption of such amendments. Trenam, Simmons, Kemker, Scharf, Barkin, Frye &
O'Neill, special counsel to the Company ("Trenam Simmons"), has provided the
Company with their opinion that subject to certain limitations set forth
therein, principally related to adoption of final regulations by the IRS and
the U.S. Department of Labor, the adoption of the 1993 Amendments will not
cause the Plan or Trust documents to fail to be in substantial compliance with
Sections 401(a), 401(k) and 4975(e) of the Code, so long as any further
amendments requested by the IRS are adopted within 90 days after the issuance
of any determination letter that is conditioned upon timely adoption of such
amendments, and that the adoption of the 1993 Amendments will not cause the
Plan to fail to be in substantial compliance with the applicable portions of
ERISA that did not amend the Code.
PURPOSE
The Plan is designed to provide eligible Employees an opportunity to increase
their retirement savings by offering the advantages of a qualified cash or
deferred arrangement under Section 401(k) of the Code, and to provide the
advantages of a qualified employee stock ownership plan. See "Federal Tax
Aspects." In general, an Employee who meets the Plan's eligibility requirements
becomes a Participant. A Participant may authorize the Company to make a 401(k)
Savings Contribution (as described under "Contributions," below) by reducing
the Participant's salary by an amount not in excess of his base pay and not in
excess of 15% of his Gross Compensation. Subject to limitations set forth in
the Plan, the Company will partially match Savings Contributions, and will make
Automatic Contributions. The Company further may choose to make Discretionary
Contributions. A Participant may direct the investment of all of his Savings
Contributions, together with Matching Contributions for years beginning prior
to January 1, 1990 and Automatic Contributions for years beginning prior to
January 1, 1989, into one or more of five investment options. See "Investment
of Contributions," below. All other contributions will be ESOP Contributions,
which will generally remain invested, pursuant to an Agreement of Trust, in
Employer Securities in the ESOP Fund.
8
<PAGE>
ADMINISTRATION
The Company, as Plan Administrator, is responsible for the control and
management of the operation and administration of the Plan. As Plan
Administrator, the Company is a "named fiduciary" as such term is defined in
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). The
Plan Administrator has the power and the duty to take all action and to make
all decisions necessary or proper to administer the Plan. To the extent
consistent with applicable law, the determination of the Plan Administrator as
to any question involving the general administration and interpretation of the
Plan is conclusive and binding on any person making a claim under the Plan. The
Plan Administrator may make and enforce rules and regulations relating to the
Plan. In administering the Plan, the Plan Administrator must act in a
nondiscriminatory manner. Each year, the Plan Administrator prepares a report
concerning the financial condition and operation of the Plan.
The assets of the Plan constitute a Trust Fund. The Plan Administrator has no
duty with respect to the investments to be made of the funds in the Trust Fund.
The Trustee has such function with respect to each of the Plan's funds other
than with respect to amounts which remain invested in GIAs constituting part of
the Custodian's general account, as described under "Investments of
Contributions--II. Fixed Income Fund," below.
The Trustee has powers and responsibilities with respect to the
administration of the Circus Circus Stock Fund, the ESOP Fund, the Fixed Income
Fund (except to the extent amounts remain invested in GIAs constituting part of
the Custodian's general account, as described under "Investment of
Contributions--II. Fixed Income Fund," below), the General Common Stock Fund,
the U.S. Government Securities Fund and the Capital Fund, including (i) initial
investment of the funds deposited in each such Fund, (ii) reinvestment, sale,
exchange or other disposition of all or any portion of each such Fund's assets,
(iii) exercise of the voting rights associated with any securities constituting
a part of each such Fund's assets (except that any shares in the ESOP Fund that
are allocated to a Participant's Account are voted by the Trustee in accordance
with instructions from the Participant), (iv) disbursement from each such Fund
in accordance with instructions from the Plan Administrator, and (v) the
valuation of each such Fund.
Except where the Plan expressly provides that the Trustee is subject to the
direction of a named fiduciary or where authority to manage, acquire or dispose
of assets of the Plan is delegated by a named fiduciary to one or more
investment managers, the Circus Circus Stock Fund, the ESOP Fund, the Fixed
Income Fund (except to the extent amounts remain invested in GIAs constituting
part of the Custodian's general account as described under "Investment of
Contributions--II. Fixed Income Fund," below), the General Common Stock Fund,
the U.S. Government Securities Fund and the Capital Fund are under the control
and management of the Trustee. In connection with its control and management of
the Circus Circus Stock Fund and the ESOP Fund, the Trustee selects brokers to
effect particular securities transactions resulting in the most favorable net
results for the Plan by taking into account such factors as price, commission,
size of order and execution by the broker. Factors such as the broker's
execution and capital commitment capabilities, initiation of trades and
securities syndication are evaluated by the Trustee in selecting a broker.
Brokerage transactions are not directed to brokers because of their research
services. The Trustee periodically evaluates the reasonableness of brokerage
commissions paid by the Circus Circus Stock Fund and the ESOP Fund by reviewing
such factors as the competitive negotiated rate structure at the time the
commission was charged and the effectiveness of the brokers' executions. The
Trustee may pay a brokerage commission in excess of that which another broker
might have charged for effecting the same transaction in recognition of the
value of the brokerage execution services performed by the selected broker.
The Company is responsible for all expenses incurred in implementing the Plan
and the Trust. Except as otherwise described in this Prospectus, the expenses
of the administration of the Trust Fund, including compensation payable to the
Trustee and the Custodian, the compensation of any investment manager, the
expenses incurred by the Plan Administrator in discharging its duties, all
income or other taxes of any kind
9
<PAGE>
levied or assessed upon or with respect to the Trust Fund and any interest that
may be payable on money borrowed for the benefit of the Trust by the Trustee or
the Custodian are to be paid or provided for by the Company and, if not paid by
the Company, are to be paid out of the assets of the Trust Fund. However, no
excise tax or other liability imposed upon the Trustee, the Custodian, the Plan
Administrator or anyone else, for failure to comply with the provisions of any
federal law will be subject to payment or reimbursement from the assets of the
Trust. For information regarding certain fees to be paid out of the assets of
the Funds, see "Description of Investment Options," below.
ELIGIBILITY
Participation in the Plan is available to eligible Employees of the Company
and any of the Company's subsidiaries that adopt the Plan with the Company's
consent. The subsidiaries of the Company presently participating in the Plan
are Circus Circus Casinos, Inc., Colorado Belle Corp., Edgewater Hotel
Corporation, Slots-A-Fun, Inc., New Castle Corp., Ramparts, Inc. and Racing
Boats, Inc., all Nevada corporations, and Circus Circus Mississippi, Inc., a
Mississippi corporation. Such entities are herein referred to collectively with
the Company and individually, as the context requires, as the "Employer."
The eligibility requirements for participation in the Plan restrict
participation to Employees who have completed one Year of Eligibility Service
and have attained the age of 21 years.
The number of employees eligible to participate in the Plan as of October 31,
1994 was approximately 9,300.
PARTICIPATION IN THE PLAN
Under the terms of the Plan, an Employee initially becomes a Participant in
the Plan on the first January 1 or July 1 on which such Employee meets all of
the requirements for eligibility to participate in the Plan. In addition, the
Plan Administrator may accept a Rollover Contribution from an Employee who is
expected to become a Participant, and any Employee who has made a Rollover
Contribution prior to entering the Plan is considered a Participant with
respect to his Rollover Contribution Account. Each Participant in the Plan
remains a Participant until his termination of employment.
Participation in the Plan is not terminated by transfers between the Company
and its participating subsidiaries, provided the Participant continues to be an
eligible Employee after the transfer. If a Participant transfers to a
subsidiary or business of the Company that is not an Employer, no further
contributions to the Plan may be made on his behalf. However, amounts credited
to his Account remain invested under the terms of the Plan.
An Employee who ceases to be a Participant in the Plan, and who later is
reemployed by an Employer, will become a Participant again on the date of his
reemployment. An Employee who has completed one Year of Service before becoming
an Employee of an Employer (as a result of his employment with an "Affiliate,"
as defined in the Plan, or his exclusion as a result of a collective bargaining
agreement) will enter the Plan as a Participant on the later to occur of (i)
the first Eligibility Date concurring with or occurring after the Employee's
21st birthday and (ii) the date he becomes an Employee of the Employer.
CONTRIBUTIONS
As described below, a Participant may make Savings Contributions to the Plan,
and an Employer makes Matching Contributions and Automatic Contributions and
may make Discretionary Contributions.
Savings Contributions. Savings Contributions are those made to the Plan at
the election of a Participant pursuant to Section 401(k) of the Code. The
Participant selects the amount of his Savings Contributions which, under the
terms of the Plan, may be in any amount not exceeding 15% of his Gross
Compensation,
10
<PAGE>
up to a maximum of $9,240 (subject to annual adjustment) in any Plan Year. See
"Limitations on Contributions," below. The Participant's Employer will make the
appropriate reduction in the salary of the Participant. Savings Contributions
are forwarded by the Plan Administrator to the Trustee to be invested in
accordance with the Participant's investment election. The Savings
Contributions specified by the Participant are made by the Employer and,
provided the Actual Deferral Percentage is within the limits described under
"Limitations on Contributions", below, will not be included in the
Participant's compensation for Federal income tax purposes at the time the
contribution is made. See "Federal Tax Aspects."
Each Participant must indicate the amount of his Savings Contributions in a
written salary reduction agreement between the Participant and the Employer,
which must be executed and in effect before the first day of the first pay
period to which it applies. Savings Contributions may be changed or suspended,
as discussed below. A Savings Contribution is made through a payroll deduction
and must be paid by the Employer to the Plan within a reasonable period after
it is withheld from the Participant's pay, and in no event later than 12 months
after the end of the Plan Year in which the withholding occurs.
The amount of a Participant's Savings Contribution is credited to the
Participant's Account and invested in accordance with his instructions. See
"Investment of Contributions," below. Savings Contributions are fully (100%)
vested and nonforfeitable.
If a Participant selects a specified dollar contribution, that contribution
will be subject to certain limits, so that it may have to be reduced under
certain circumstances. However, it will not be increased unless the Participant
formally changes his election. If a Participant elects to contribute a
specified percentage of his compensation, any increase or decrease in such
Participant's compensation at any time will automatically result in a
corresponding adjustment to the Participant's Savings Contribution.
11
<PAGE>
Matching Contributions. Matching Contributions for each eligible Participant
generally are made by the Employer in Employer Securities (or in cash, which is
then used to purchase Employer Securities). Subject to the Plan's limitation on
Matching Contributions in any Plan Year, a Matching Contribution is made for
each Plan Year, for each Participant who is an Employee on the last day of such
Plan Year, in an amount equal to 25% of the Participant's Savings Contributions
for the Plan Year. Under the Plan, the Matching Contribution made to a
Participant's Account in a Plan Year will not exceed the amount determined from
the following table based on the Participant's Years of Credited Service:
<TABLE>
<CAPTION>
MAXIMUM AMOUNT OF ESOP
YEARS OF MATCHING CONTRIBUTIONS
CREDITED SERVICE PER PLAN YEAR
---------------- ----------------------
<S> <C>
1 $ 62.50
2 75.00
3 87.50
4 100.00
5 125.00
6 150.00
7 175.00
8 or more 200.00
</TABLE>
The amount of the ESOP Matching Contribution made on behalf of a Participant
is credited to the Participant's ESOP Matching Contributions Account and
invested pursuant to an Agreement of Trust in the ESOP Fund, which must invest
primarily in Employer Securities (unless the Participant has made a
Diversification Election, in which case such Participant will have certain
investment direction rights). ESOP Matching Contributions become vested and
nonforfeitable according to a vesting schedule as described under "Vesting,"
below.
Automatic Contributions. Automatic Contributions are made by the Employer for
each Plan Year on behalf of each eligible Participant who completes 1,000 Hours
of Service during such Plan Year and who is an Employee on the last day of such
Plan Year. Automatic Contributions are generally made in Employer Securities
(or in cash, which is then used to purchase Employer Securities). The amount of
the Automatic Contribution for a Participant in any Plan Year is determined
from the following table based on the Participant's Years of Credited Service:
<TABLE>
<CAPTION>
AMOUNT OF ESOP
YEARS OF AUTOMATIC CONTRIBUTIONS
CREDITED SERVICE PER PLAN YEAR
---------------- -----------------------
<S> <C>
1 $250.00
2 300.00
3 350.00
4 400.00
5 500.00
6 600.00
7 700.00
8 or more 800.00
</TABLE>
The amount of the ESOP Automatic Contribution made on behalf of a Participant
is credited to the Participant's ESOP Automatic Contributions Account and
invested pursuant to an Agreement of Trust in the ESOP Fund, which must invest
primarily in Employer Securities (unless the Participant has made a
Diversification Election, in which case the Participant will have certain
investment direction rights). Automatic Contributions become vested and
nonforfeitable according to a vesting Schedule as described under "Vesting,"
below.
Amounts that are forfeited during a Plan Year ("Forfeitures"), to the extent
they are not needed to restore the Forfeitures of returning Participants who
have "bought back" their prior Forfeitures, will be reallocated as additional
Automatic Contributions to Participants who otherwise qualify for Automatic
12
<PAGE>
Contributions for that Plan Year. A Participant's share of any such additional
Automatic Contributions will be a fraction, the numerator of which is his
regular Automatic Contribution for the Plan Year and the denominator of which
is the aggregate of all regular Automatic Contributions for all Participants
for the Plan Year.
Discretionary Contributions. Discretionary Contributions may be made by the
Employer at its discretion. The Discretionary Contributions made by the
Employer generally will be in Employer Securities. A Participant's share of any
Discretionary Contributions in a Plan Year will be determined as of the last
day of such Plan Year by multiplying the total Discretionary Contribution for
the Plan Year by a fraction, the numerator of which is the Participant's
Compensation for such Plan Year and the denominator of which is aggregate
Compensation for such Plan Year for all Participants receiving an allocation.
The amount of the Discretionary Contribution credited to a Participant's
Account is invested pursuant to an Agreement of Trust in the ESOP Fund, which
must invest primarily in Employer Securities (unless the Participant has made a
Diversification Election, in which case the Participant will have certain
investment direction rights). Discretionary Contributions will become vested
and nonforfeitable according to a vesting schedule described under "Vesting,"
below.
An Employee will be entitled to share in a Discretionary Contribution for a
Plan Year only if he completes 1,000 Hours of Service during that Plan Year and
only if he is employed by the Employer on the last day of the Plan Year.
Excluded Employees. Participants who are officers or directors of the
Company, or owners of 10% or more of the Company's Common Stock, are not
entitled to share in ESOP Matching Contributions, ESOP Automatic Contributions
or Discretionary Contributions.
Top Heavy Rules. If the Plan becomes "top heavy" as defined in Section 416 of
the Code, certain limitations may be placed on contributions made on behalf of
"key employees" as defined in Section 416 and certain minimum contributions may
be required on behalf of certain other Participants as set forth in the Plan.
ROLLOVER CONTRIBUTIONS
Any Participant of the Plan (or an Employee who is expected to become a
Participant), at any time, may submit a written application requesting the Plan
Administrator to direct the Trustee to accept a Rollover Contribution. A
Rollover Contribution accepted by the Plan Administrator will be placed in a
Rollover Contribution Account established for the Participant and will become
part of the Trust Fund. The amount placed in a Rollover Contribution Account
will be invested in accordance with the contributing Participant's
instructions. See "Investment of Contributions," below. Rollover Contributions
are not subject to the limits outlined under "Limitations on Contributions,"
below.
LIMITATIONS ON CONTRIBUTIONS
Section 401(k) of the Code limits the Savings Contributions of Participants
who are Highly Compensated Employees. Under the Plan, the Actual Deferral
Percentage ("ADP") for the group of Highly Compensated Employees for a Plan
Year (the "HC ADP") may not exceed 125% of the ADP for the group of all other
eligible employees (the "non-HC ADP"). Alternatively, the excess of the HC ADP
for a Plan Year over the non-HC ADP may not exceed two percentage points (or
such lesser amount as may be established by applicable regulations); and the HC
ADP for a Plan Year may not exceed 200% of the non-HC ADP. Savings
Contributions that are in violation of these limits must be returned to the
Highly Compensated Employees on whose behalf the excess Savings Contributions
were made, as provided in Section 401(k) of the Code.
13
<PAGE>
Under Section 401(k) of the Code, no Participant's Savings Contributions for
any Plan Year can exceed $9,240 (subject to annual adjustment). Any Savings
Contribution in excess of this limit must be returned to the Participant making
such contribution, as provided in Section 401(k) of the Code.
As described above, the Plan limits each Participant's Savings Contributions
to 15% of his Gross Compensation. However, Section 415 of the Code also limits
overall allocations on behalf of any Participant to 25% of the Participant's
Net Compensation. (Section 415 also establishes other limitations, which are
described below.) All contributions including both Savings Contributions and
all employer contributions, are counted toward the overall limit, and the
maximum Savings Contributions that can be made in a Plan Year without exceeding
the 25% of Net Compensation overall limit will be difficult to calculate.
Illustration: In general, a Savings Contribution equal to 15% of
Gross Compensation will equal approximately 18% of Net Compensation,
thus leaving a margin of only 7% of Net Compensation for Employer
contributions. Thus, if Employer contributions for a Participant for
any year are to exceed 7% of Net Compensation, then the Participant
must contribute less than 18% of Net Compensation (or less than 15% of
Gross Compensation) in order to stay within the overall limit of 25%
of Net Compensation.
Section 401(m) of the Code further limits ESOP Matching Contributions of
Participants who are Highly Compensated Employees. Under the Plan, the Actual
Contribution Percentage ("ACP") for the group of Highly Compensated Employees
for a Plan Year (the "HC ACP") may not exceed 125% of the ACP for the group of
all other eligible employees (the "Non-HC ACP"). Alternatively, the excess of
the HC ACP for a Plan Year over the Non-HC ACP may not exceed two percentage
points (or such lesser amount as may be established by applicable regulations);
and the HC ACP for a Plan Year may not exceed 200% of the Non--HC ACP. Matching
Contributions that are in violation of these limits, but that are vested under
the schedule set forth herein, will be distributed to the Highly Compensated
Employees on whose behalf the excess Matching Contributions were made, and such
amounts that are not vested will be forfeited, and held in the Plan to be
allocated to the Accounts of other Participants in the manner set forth in the
Plan.
Under Section 415 of the Code, the total of all Savings, Matching, Automatic
and Discretionary Contributions allocated to a Participant's Account for any
year generally may not exceed the lesser of (a) $30,000 or (b) 25% of his
Compensation for the year. The $30,000 limitation is subject to cost of living
adjustments. If, for any year, these limitations are exceeded, the Plan
currently provides as follows:
1. The excess will be deemed first to consist of Discretionary
Contributions (but only up to the amount of Discretionary Contributions
to which the Participant would have been entitled in the absence of
these limitations). Excess Discretionary Contributions will be allocated
to the Accounts of Participants who have not yet reached their
respective Section 415 limits.
2. Any remaining excess will be deemed to consist next of Savings
Contributions (but only up to the amount of Savings Contributions made
by the Participant). Excess Savings Contributions will be refunded (with
the earnings, if any, on the excess amounts) to the Participant
following the end of the Plan Year.
3. Any remaining excess will be deemed next to consist of Automatic
Contributions (but only up to the Automatic Contributions to which the
Participant would have been entitled in the absence of these
limitations), and finally Matching Contributions. Excess Automatic and
Matching Contributions will be allocated to the Automatic Contribution
Accounts of Participants who have not yet reached their respective
Section 415 limits.
CHANGE OF CONTRIBUTIONS
A Participant may elect to increase or decrease the amount of the Savings
Contribution made on his behalf by revising his salary reduction agreement with
the approval of the Plan Administrator. Changes in
14
<PAGE>
the amount of a Participant's Savings Contribution may be made by the
Participant, with the approval of the Plan Administrator, as of the first day
of any calendar quarter, for pay periods beginning after the date a revised
salary reduction agreement is executed and made effective. A new salary
reduction agreement, reflecting a change in the amount of a Participant's
Savings Contribution, must be signed before the first day of the first pay
period to which the change applies. Salary reduction agreements with respect to
cash bonuses must be executed and in effect prior to the date on which the
bonus is declared. Any increase or decrease in the rate of contributions must
be within the percentage limits set forth above. See "Contributions" and
"Limitations on Contributions," above. However, a Participant may always
suspend or reduce further Savings Contributions to the Plan at any time,
provided the Plan Administrator receives the request for such suspension or
reduction before the first day of the first pay period to which the suspension
or reduction applies. A Participant who suspends further Savings Contributions
may reinstate such contributions, but only as provided in the Plan.
ACCOUNTS
The accounts and records of the Plan are maintained by the Plan Administrator
and disclose the status of the Account of each Participant. Each Participant
will be advised from time to time, at least once each year, of the balance of
his Account.
Each Participant's Account under the Plan represents the Participant's
interest in the Funds established under the Plan. Separate accounting records
are kept for those parts of the Participant's Account that result from Savings,
401(k) Matching, 401(k) Automatic, ESOP Matching, ESOP Automatic, Discretionary
and Rollover Contributions.
INVESTMENT OF CONTRIBUTIONS
Generally, each Participant must direct how the portion of his Savings
Contributions Account, 401(k) Matching Contribution Account, 401(k) Automatic
Contribution Account and Rollover Contribution Account are to be allocated
among the five investment options available under the Plan. Furthermore, each
Participant who has made a Diversification Election must direct the applicable
portion of his ESOP Matching Contribution Account, ESOP Automatic Contribution
Account and Discretionary Contribution Account to be invested among four
investment options available under the Plan.
If a Participant does not specifically designate the investment option or
options for all or part of his Account, the Plan requires the Trustee to
determine the Fund in which such portion is to be invested until a designation
can be obtained from the Participant. Also, if the Plan Administrator has been
notified that the Participant (or the beneficiary of a deceased Participant) is
incompetent, or if the beneficiary of a deceased Participant is a child, the
Trustee will determine the fund in which the Participant's Account is invested
unless a legal guardian has been appointed for such Participant or beneficiary.
A Participant may change his investment election with respect to the
investment of future contributions or transfer previously contributed amounts
among the available investment options described below. However, a Participant
may not change investment options other than as of the beginning of a calendar
quarter, and any change will not be effective until the first January 1, April
1, July 1 or October 1, following the Plan Administrator's receipt of the
Participant's written notice of such change. The Plan Administrator will accept
a Participant's written notice of a change in investment options on or prior to
the last business day (Saturdays, Sundays and holidays are not business days)
immediately preceding the January 1, April 1, July 1 or October 1 for which the
change is to be effective. If, as a result of a change of investment election
by a Participant, there occurs any withdrawal of funds from the Fixed Income
Fund (referred to in the Plan as "Fund B") prior to maturity other than for
termination of employment, retirement, disability or death benefits, the
Participant's Account may be subject to a surrender charge. See the description
of the "Fixed Income Fund," below.
15
<PAGE>
Each Participant is solely responsible for the investment of the amounts in
his Account other than those invested in the ESOP Fund, as described below.
Neither the Trustee, the Custodian, any investment advisors to the Funds, the
Plan Administrator, nor any officer or employee of the Company is empowered to
advise a Participant as to the manner in which his Account should be invested.
THE FACT THAT A PARTICULAR INVESTMENT OPTION IS AVAILABLE TO PARTICIPANTS FOR
INVESTMENT UNDER THE PLAN IS NOT TO BE CONSTRUED AS A RECOMMENDATION FOR
INVESTMENT IN SUCH INVESTMENT OPTION. A PARTICIPANT ASSUMES ALL RISKS IN
CONNECTION WITH CHANGES IN VALUE OF THE FUND OR FUNDS IN WHICH HE INVESTS.
EARNINGS, IF ANY, OF EACH FUND WILL BE REINVESTED IN THE SAME FUND, AND LOSSES,
IF ANY, WILL BE ALLOCATED ONLY TO THE FUND INCURRING THE LOSS.
The Plan is intended to constitute a plan described in Section 404(c) of
ERISA and the regulations thereunder (which may be found at Section 2550.404c-1
of the Code of Federal Regulations). Information required by those regulations
will be provided by the Plan Administrator, and the designated contact for such
information is the Corporate Director--Human Resources. Fiduciaries will be
relieved of liability for any losses that are the direct and necessary result
of investment instructions given by the Participant (or beneficiary).
The portion of a Participant's ESOP Matching Contributions Account, ESOP
Automatic Contributions Account, and Discretionary Contributions Account that
is not invested pursuant to a Diversification Election will be invested,
pursuant to an Agreement of Trust, in the ESOP Fund which will, except in
certain circumstances provided in the Plan, invest primarily in Employer
Securities. Contributions to the ESOP Fund may be made, at the Employer's
election on a year-to-year basis, in Employer Securities, cash, or any
combination thereof. Where possible, it is the Company's intention to credit
Participants' accounts in the ESOP Fund with the amounts of ESOP Matching
Contributions, ESOP Automatic Contributions and Discretionary Contributions
(whether in cash, Employer Securities or combinations thereof) on or as of
December 31 of the Plan Year as follows:
1. Where the contribution is made in cash, the credit to the
Participant's ESOP Fund Account will initially reflect the
Participant's pro-rata entitlement to the cash contribution. The
Trustee has sole investment discretion. However, the Trustee has
indicated that it will generally attempt to purchase, at their
market price, the number of Employer Securities which can be
purchased with the cash contribution on such funding date or such
alternative date as the Trustee may elect consistent with its duties
to the Participants.
2. Upon such purchase of Employer Securities, each Participant's ESOP
Account will reflect the number of shares so acquired in
substitution of the cash credit previously reflected therein.
DESCRIPTION OF INVESTMENT OPTIONS
There currently are five investment options available to Participants under
the Plan. Set forth below is information concerning each of such investment
options.
I. CIRCUS CIRCUS STOCK FUND
This Fund (referred to in the Plan as "Fund A") is invested by the Trustee
primarily in the Common Stock of the Company, subject to the right of the
Trustee to invest this Fund or any part thereof in other investments. The
Trustee has discretion as to the timing and manner of purchasing shares. Such
purchases may include open-market or privately negotiated transactions. Cash
dividends, if any, will be reinvested in this Fund, and any stock dividends or
shares issued pursuant to a stock split on the shares held by this Fund
16
<PAGE>
will be added to this Fund. The Company declared two-for-one splits of its
Common Stock effective at the close of business on July 1, 1986 and July 12,
1991, respectively, and a three-for-two split of its Common Stock effective at
the close of business on July 9, 1993, but has not declared any cash dividends
on its Common Stock since it became publicly owned in 1983 and there is no
assurance such dividends will be paid in the future. The Company's current
policy is to retain earnings for the operation and expansion of its business.
Various loan agreements to which the Company is a party contain covenants
limiting the amount of dividends the Company may pay on its Common Stock and
there is no assurance the Company may not enter into other agreements which
impose other restrictions on the payment of dividends.
Participants investing in this Fund will not have any voting rights with
respect to the shares held in this Fund. The voting rights with respect to such
shares are vested in the Trustee. Participants who have made Diversification
Elections may not direct investments into this Fund with respect to applicable
portions of their ESOP Matching Contribution, ESOP Automatic Contribution and
Discretionary Contribution Accounts.
THE VALUE OF THIS FUND IS DETERMINED BY THE MARKET PRICE OF THE COMPANY'S
COMMON STOCK. AS THE MARKET PRICE OF THE COMMON STOCK FLUCTUATES UP OR DOWN, SO
DOES THE VALUE OF A PARTICIPANT'S SHARE OF THIS FUND. AND, COMMISSIONS PAID ON
ACCOUNT OF TRANSACTIONS BY THIS FUND ARE NOT PAID BY THE COMPANY BUT ARE
CHARGED AGAINST THE ASSETS OF THE FUND. ACCORDINGLY, THE VALUE OF A
PARTICIPANT'S SHARE OF THIS FUND COULD BE LESS THAN HIS CONTRIBUTIONS TO THIS
FUND. SINCE THIS FUND IS NOT DIVERSIFIED, IT HAS A HIGHER DEGREE OF RISK THAN
THE OTHER FUNDS.
The Company's Common Stock is listed on the New York Stock Exchange and on
the Pacific Stock Exchange. The following table sets forth for the calendar
quarters shown the low and high sale prices for the Common Stock on the New
York Stock Exchange Composite Tape (adjusted retroactively to reflect a two-
for-one split effective July 12, 1991 and a three-for-two split effective July
9, 1993, rounded to the nearest one-eighth). The last reported sale price of
the Common Stock on November 16, 1994 on the New York Stock Exchange Composite
Tape was $21 5/8 per share.
<TABLE>
<CAPTION>
1991 LOW HIGH
---- ------ ------
<S> <C> <C>
First Quarter................................................ 16 22 7/8
Second Quarter............................................... 20 1/4 26 1/4
Third Quarter................................................ 23 7/8 27 3/8
Fourth Quarter............................................... 20 3/4 26 1/8
1992
----
First Quarter................................................ 23 3/8 31 1/8
Second Quarter............................................... 25 1/2 31 1/2
Third Quarter................................................ 26 7/8 36 1/8
Fourth Quarter............................................... 32 5/8 38 1/2
1993
----
First Quarter................................................ 27 7/8 39 7/8
Second Quarter............................................... 27 5/8 41 1/2
Third Quarter................................................ 33 3/4 48 1/8
Fourth Quarter............................................... 31 1/4 49 3/4
1994
----
First Quarter................................................ 30 1/8 40 3/4
Second Quarter............................................... 20 1/2 32 3/8
Third Quarter................................................ 21 1/2 28 5/8
Fourth Quarter (through November 16)......................... 20 1/2 23 3/4
</TABLE>
None of the Company's Common Stock purchased for the Circus Circus Stock Fund
pursuant to the Plan will be purchased from the Company. Because all of the
Company's Common Stock purchased for the
17
<PAGE>
Circus Circus Stock Fund pursuant to the Plan will be previously issued and
outstanding, the Company will not receive any proceeds on account of any
purchase of its Common Stock for the Circus Circus Stock Fund.
In order to facilitate compliance with Section 16 of the Securities Exchange
Act of 1934 (the "1934 Act") and the regulations promulgated thereunder, a
Participant in the Plan who is subject to the reporting requirements of Section
16(a) of the 1934 Act (i.e., an "officer" of the Company within the meaning of
Rule 16a-1 under the 1934 Act, a director of the Company or the beneficial
owner of 10% or more of the issued and outstanding shares of the Company's
Common Stock within the meaning of Rule 16a-1(a)(1) under the 1934 Act) will
not be permitted to invest in the Circus Circus Stock Fund.
II. FIXED INCOME FUND
Amounts allocated to this Fund (referred to in the Plan as "Fund B"), and
amounts originally invested in Guaranteed Interest Accounts ("GIAs") which are
reinvested in this Fund as GIAs mature, are invested by the Trustee in the
Merrill Lynch Retirement Preservation Trust, a collective trust fund whose
primary objective is to achieve high current income consistent with
preservation of capital and liquidity through a diversified portfolio of
guaranteed investments, U.S. Government and U.S. Government Agency securities
and money market instruments. Merrill Lynch Trust Company, the trustee of the
Merrill Lynch Retirement Preservation Trust, utilizes the services of Merrill
Lynch Asset Management as a nondiscretionary investment advisor, but Merrill
Lynch Trust Company makes all investment decisions for the Merrill Lynch
Retirement Preservation Trust. WHILE THE MERRILL LYNCH RETIREMENT PRESERVATION
TRUST INVESTS IN GUARANTEED INVESTMENTS, NEITHER THE MERRILL LYNCH RETIREMENT
PRESERVATION TRUST NOR ITS UNITS ARE GUARANTEED.
Although there can be no assurances that the Merrill Lynch Retirement
Preservation Trust's objectives will be achieved, the Merrill Lynch Retirement
Preservation Trust seeks to achieve an effective yield that is typically higher
than money market fund yields and the yields of sponsor-managed GIC portfolios
of comparable duration. The portfolio is also structured to produce yields that
are sensitive to market opportunities. The return on this Fund's investment in
the Merrill Lynch Retirement Preservation Trust will be a blend of all the
rates on each GIC, U.S. Government Agency Obligation and money market
instrument in the Merrill Lynch Retirement Preservation Trust's portfolio, less
its fees and expenses, during the period of the investment. Since the Merrill
Lynch Retirement Preservation Trust will remain in the market to make new
investments, the effective rate may change frequently.
The Merrill Lynch Retirement Preservation Trust invests in GICs (i.e.,
contracts issued by insurance companies or banks which provide for a return of
principal plus interest, either periodically or at maturity), or similar
investments which pay a fixed or variable rate of return on an agreed schedule
and are benefit responsive (collectively "Guaranteed Investments"). Benefit
responsiveness may be provided by the issuer of the Guaranteed Investment or a
third party. A maximum of 80% of the Merrill Lynch Retirement Preservation
Trust will be invested in Guaranteed Investments and a minimum of 20% of the
assets of the Merrill Lynch Retirement Preservation Trust will be invested in
money market instruments.
The Merrill Lynch Retirement Preservation Trust reviews the quality of each
issuer's credit at least quarterly and each issuer must be determined to have a
AA- or better rating from Standard & Poors Corporation or an Aa3 or better
rating from Moody's Investors Service, or be determined to be of comparable
quality in order to qualify for investment of Merrill Lynch Retirement
Preservation Trust assets. As of September 30, 1994, approximately 29 insurance
carriers and approximately 17 banks satisfied the credit criteria for
investment of the Merrill Lynch Retirement Preservation Trust's assets.
There are no voting rights associated with this Fund's investment in the
Merrill Lynch Retirement Preservation Trust to which Participants who invest in
this Fund or the Trustee are entitled.
A DESCRIPTION OF THE CREDIT REQUIREMENTS FOR THE INVESTMENTS MADE BY THE
MERRILL LYNCH RETIREMENT PRESERVATION TRUST, WHICH IS A SUMMARY OF INFORMATION
PROVIDED TO THE COMPANY BY MERRILL LYNCH TRUST COMPANY, IS SET FORTH IN
APPENDIX A TO THIS PROSPECTUS.
18
<PAGE>
The following information concerning the performance of the Merrill Lynch
Retirement Preservation Trust has been provided to the Company on an unaudited
basis by Merrill Lynch Trust Company.
<TABLE>
<CAPTION>
NET ANNUAL EFFECTIVE YIELD(1)(2)(3)
-----------------------------------
1994 1993 1992 1991
-------- -------- -------- --------
<S> <C> <C> <C> <C>
January............................. 5.54% 6.22% 6.88% 8.16%
February............................ 5.99% 6.71% 6.90% 8.01%
March............................... 5.45% 6.18% 6.76% 7.92%
April............................... 5.81% 6.22% 7.05% 7.88%
May................................. 5.79% 6.10% 6.92% 7.71%
June................................ 5.21% 6.24% 7.02% 7.66%
July................................ 5.85% 5.94% 6.77% 7.66%
August.............................. 5.89% 5.99% 6.61% 7.57%
September........................... 5.93% 5.98% 6.63% 7.50%
October............................. -- 5.88% 6.63% 7.39%
November............................ -- 6.06% 6.66% 7.37%
December............................ -- 5.90% 6.68% 7.30%
</TABLE>
- --------
(1) The net annual effective yield for the period from September 22, 1989
(commencement of operations) through September 30, 1994 was 7.19%.
(2) These yields are net of the .30% fee payable to Merrill Lynch Trust Company
at the current level of investment by this Fund in the Merrill Lynch
Retirement Preservation Trust ($11,078,000 at October 20, 1994). Such fee,
which is not paid by the Company but is charged against the assets of this
Fund, is based upon the amount of assets invested by this Fund in the
Merrill Lynch Retirement Preservation Trust. Accordingly, such fee may
increase or decrease in the future, as described below, depending on
subsequent levels of investment by this Fund in the Merrill Lynch
Retirement Preservation Trust.
(3) The net annual effective yield assumes that income earned from investments
in the Merrill Lynch Retirement Preservation Trust during the applicable
period is reinvested and is expressed as an annual percentage rate.
The following table sets forth certain information provided to the Company by
Merrill Lynch Trust Company concerning the fee payable to Merrill Lynch Trust
Company, which is not paid by the Company but is charged against the assets of
this Fund.
<TABLE>
<CAPTION>
ANNUAL
PERCENTAGE
ASSETS(1) RATE(2)
--------- ----------
<S> <C>
$10,000-$100,000.................................................. 1.00%
$100,001-$500,000................................................. .80%
$500,001-$1,000,000............................................... .60%
$1,000,001-$3,000,000............................................. .50%
$3,000,001-$10,000,000............................................ .40%
$10,000,001-$15,000,000........................................... .30%
$15,000,001-$50,000,000........................................... .20%
$50,000,001-$100,000,000.......................................... .15%
$100,000,001-$500,000,000......................................... .13%
</TABLE>
- --------
(1) Represents the assets of this Fund projected by the Merrill Lynch Trust
Company to be invested in the Merrill Lynch Retirement Preservation Trust
during the 12-month period for which the fee is payable. Once established
for a 12-month period, the fee will not be adjusted for such period, even
if the actual amount of assets is different than the amount projected.
(2) The rate payable on account of this Fund's participation in the Merrill
Lynch Retirement Preservation Trust is determined initially as of the date
such participation commences and on each subsequent anniversary of such
date and, in each case, is applicable to the 12-month period commencing on
the applicable determination date. The fee for the 12-month periods of this
Fund's participation in the Merrill Lynch Retirement Preservation Trust
ending December 31, 1994 and 1995 will be .30% and .30%, respectively.
19
<PAGE>
Amounts allocated to this Fund prior to the Transfer of Functions Date were
invested in GIAs which constitute part of the Custodian's general account. The
Custodian's general account is invested principally in privately placed bonds
and mortgage loans with maturities that generally parallel the Custodian's
guarantees under its GIAs. The Custodian's GIAs offer guaranteed principal and
interest for different length guarantee periods ranging from two through seven
years, but five year terms were generally selected. All contributions received
during the first year (hereinafter referred to as the "Deposit Year") of each
guarantee period became part of that year's GIA. Each contribution made during
a Deposit Year received the then available guaranteed interest rate for the
guarantee period selected by the Plan Administrator, as declared from time to
time by the Custodian. At the end of the Deposit Year, the average guaranteed
rate (weighted by the size and timing of each deposit) was determined. The
average guaranteed rate was then credited and is compounded annually to the
account balance for the remaining years of the guarantee period. At the end of
each Deposit Year, that GIA was closed and no additional contributions were
made to it. At the end of its guarantee period, a GIA matures. At maturity,
GIAs are reinvested (without penalty or adjustment) by the Trustee in the
Merrill Lynch Retirement Preservation Trust unless the funds are transferred to
one or more of the other investment options then available under the Plan in
accordance with the terms of the Plan.
Any transfer out of a GIA prior to the end of its guarantee period (other
than for benefit payments at retirement, death, disability, or termination of
employment) will be subject to a charge if the guaranteed interest rate for an
account with the same guarantee period on the surrender date is greater than
the guaranteed interest rate being credited to the GIA from which the transfer
is being made. The charge, a percentage of the amount being withdrawn, is the
difference between the guaranteed interest rate for new deposits to an account
with the same guarantee period and the guaranteed interest rate being credited
to the GIA from which the transfer is being made, multiplied by the number of
years and fractions (to the nearest day) remaining in the guarantee period of
the GIA from which the transfer is being made. If the guaranteed interest rate
for new deposits to an account with the same guarantee period is equal to or
less than the average credited rate for the GIA from which the transfer is
being made, the transfer will involve no charge. If a Participant has more than
one GIA and does not specify the GIA from which the transfer is to be made, the
transfer will be made proportionally from each of the Participant's GIAs.
III. GENERAL COMMON STOCK FUND
This Fund (referred to in the Plan as "Fund C") is invested by the Trustee in
the S&P 500 Index Portfolio (the "Portfolio"), one of the portfolios of SEI
Index Funds ("SEI Index Funds"). SEI Index Funds is an open-end management
investment company that has diversified portfolios. The Portfolio seeks to
provide investment results that correspond to the aggregate price and dividend
performance of the securities in the Standard & Poor's 500 Composite Stock
Price Index (the "S&P 500 Index") which is comprised of 500 selected common
stocks, most of which are listed on the New York Stock Exchange. However, there
can be no assurance that the Portfolio will achieve its investment objective.
The Portfolio is not sponsored, endorsed, sold or promoted by Standard &
Poor's Corporation ("S&P"). S&P makes no representation or warranty, implied or
express, regarding the advisability of investing in index funds or the
Portfolio or the ability of the S&P 500 Index to track general stock market
performance.
Information included in this Prospectus concerning the Portfolio is a summary
of certain of the information contained in the current prospectus of SEI Index
Funds, dated July 29, 1994, relating to the Portfolio and an unrelated Bond
Index Portfolio of SEI Index Funds (the "Portfolio's 1994 Prospectus"). Such
summary is qualified in its entirety by reference to the Portfolio's 1994
Prospectus. A copy of the most recent prospectus of the SEI Index Funds for the
Portfolio which has been provided to the Company will be provided to a
Participant by the Company upon request, and a copy of such prospectus will be
provided to a Participant as soon as practicable following such Participant's
initial investment in this Fund unless, prior to such initial investment, a
copy had been provided to the Participant. ANY PARTICIPANT WHO IS CONTEMPLATING
AN INVESTMENT IN THIS FUND IS ADVISED TO OBTAIN A COPY OF SUCH PROSPECTUS AND
TO READ AND RETAIN IT FOR FUTURE REFERENCE.
A DESCRIPTION OF THE PORTFOLIO'S INVESTMENT OBJECTIVES AND POLICIES AND ITS
INVESTMENT LIMITATIONS IS SET FORTH IN APPENDIX B TO THIS PROSPECTUS.
20
<PAGE>
SEI Financial Management Corporation, the Portfolio's manager and a wholly-
owned subsidiary of SEI Corporation (the "Manager"), provides overall
management services, regulatory reporting, all necessary office space,
equipment, personnel and facilities, and acts as transfer agent, dividend
disbursing agent, and shareholder servicing agent for SEI Index Funds. The
Manager is entitled to receive from the Portfolio a fee for these services
which is calculated daily and paid monthly at an annual rate of .22% of the
Portfolio's average daily net assets. The Manager may from time to time waive
all or a portion of its fee in order to limit the operating expenses of the
Portfolio. This waiver is voluntary and may be terminated by the Manager at any
time in its sole discretion. For the fiscal year ended March 31, 1994, the
Portfolio paid the Manager a fee of .14% of its average daily net assets after
fee waivers.
Woodbridge Capital Management, Inc., the investment administrator for the
Portfolio (the "Administrator"), determines which securities to purchase and
sell in order to keep the Portfolio in balance with the S&P 500 Index and
provides the Trust with certain other record keeping and management services.
The Administrator makes no attempt to "manage" the Portfolio in the traditional
sense by using economic, financial or market analysis. The adverse financial
situation of a company usually will not result in the elimination of a stock
from the Portfolio. However, SEI Index Funds reserves the right, without the
obligation, to remove an investment from the Portfolio if, in the judgment of
the Administrator, the merit of the investment has been substantially impaired
by extraordinary events or financial conditions. Furthermore, administrative
adjustments may be made in the portfolio from time to time because of mergers,
changes in the composition of the S&P 500 Index and similar reasons. In certain
circumstances, the Administrator may exercise discretion in determining whether
to exercise warrants or rights issued in respect to portfolio securities or
whether to tender portfolio securities pursuant to a tender or exchange offer.
For its services, the Administrator is entitled to a fee, which is calculated
daily and paid monthly, at an annual rate of .03% of the average daily net
assets of the Portfolio.
The following table sets forth certain information taken from the Portfolio's
1994 Prospectus concerning the Portfolio's annual operating expenses expressed
as a percentage of the Portfolio's average net assets.
<TABLE>
<CAPTION>
EXPENSES (1) AMOUNT
------------ ------
<S> <C>
Management/Administrative Fees (After Fee Waiver) (2)................ .17 %
12b-1 Fees (After Fee Waiver) (3).................................... .05 %
Other Expenses....................................................... .03 %
---
Total Operating Expenses (After Fee Waiver) (4)...................... .25 %
</TABLE>
- --------
(1) These expenses are not paid by the Company but are charged against the
assets of the Portfolio.
(2) The Manager has waived, on a voluntary basis, a portion of its fee, and the
management advisory fee shown reflects this voluntary waiver. The Manager
reserves the right to terminate its waiver at any time in its sole
discretion. Absent such fee waiver, management fees would be .22% of
average net assets.
(3) The 12b-1 fee shown reflects the Portfolio's current 12b-1 budget for
reimbursement of expenses. The maximum 12b-1 fee payable by the Portfolio
is .30%.
(4) Absent fee waivers, total operating expenses would have been .33% of
average net assets.
21
<PAGE>
EXAMPLE:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
An investor would pay the following expenses on
a $1,000 investment assuming (1) 5% annual re-
turn and (2) redemption at the end of each
time period................................... $3.00 $8.00 $14.00 $32.00
</TABLE>
THE EXAMPLE, WHICH IS TAKEN FROM THE PORTFOLIO'S 1994 PROSPECTUS, SHOULD NOT
BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES
MAY BE GREATER OR LESS THAN THOSE SHOWN. THE PURPOSE OF THE TABLE AND EXAMPLE
IS TO ASSIST THE INVESTOR IN UNDERSTANDING THE VARIOUS COSTS AND EXPENSES THAT
MAY BE DIRECTLY OR INDIRECTLY BORNE BY INVESTORS IN THE PORTFOLIO. ADDITIONAL
INFORMATION MAY BE FOUND UNDER THE HEADINGS "THE MANAGER AND SHAREHOLDER
SERVICING AGENT", "THE ADMINISTRATOR" AND "DISTRIBUTION" IN THE PORTFOLIO'S
1994 PROSPECTUS.
The following table sets forth financial highlights taken from the
Portfolio's 1994 Prospectus. This table should be read in conjunction with the
financial statements and notes thereto included in the Statement of Additional
Information referred to on the cover page of the Portfolio's 1994 Prospectus.
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
------------------------------------------------
1994 1993 1992 1991 1990
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of $ 15.80 $ 14.17 $ 13.43 $ 12.45 $ 10.88
Period...................... -------- -------- -------- -------- --------
Income from Investment Opera-
tions:
Net Investment Income(1)... 0.43 0.40 0.40 0.43 0.42
Net Realized and Unrealized
Gain (Loss) on Invest- (0.22) 1.69 1.01 1.24 1.64
ments..................... -------- -------- -------- -------- --------
Total from Investment Op- 0.21 2.09 1.41 1.67 2.06
erations.................. -------- -------- -------- -------- --------
Less Distributions:
Dividends from Net Invest-
ment Income............... (0.42) (0.40) (0.41) (0.43) (0.43)
Distributions from Capital
Gains..................... (0.52) (0.06) (0.26) (0.26) (0.06)
Returns of Capital......... -- -- -- -- --
-------- -------- -------- -------- --------
Total Distributions...... (0.94) (0.46) (0.67) (0.69) (0.49)
-------- -------- -------- -------- --------
Net Asset Value, End of $ 15.07 $ 15.80 $ 14.17 $ 13.43 $ 12.45
Period.................... -------- -------- -------- -------- --------
Total Return............... 1.19% 14.97% 10.71% 14.18% 19.02%
-------- -------- -------- -------- --------
Net Assets, End of Period $424,647 $675,484 $470,847 $261,165 $192,154
(000)....................... ======== ======== ======== ======== ========
RATIOS AND SUPPLEMENTAL DATA
Ratio of Expenses to Average
Net Assets.................. 0.25% 0.25% 0.25% 0.25% 0.25%
Ratio of Expenses to Average
Net Assets Excluding Fee
Waivers..................... 0.33% 0.35% 0.34% 0.32% 0.36%
Ratio of Net Investment
Income to Average
Net Assets.................. 2.57% 2.75% 2.99% 3.56% 3.58%
Ratio of Net Investment
Income to Average
Net Assets Excluding Fee
Waivers..................... 2.49% 2.65% 2.90% 3.49% 3.47%
Portfolio Turnover Rate...... 23.00% 1.00% 1.00% 40.00% 10.00%
======== ======== ======== ======== ========
</TABLE>
- --------
(1) Had management fees not been waived and certain other expenses not been
absorbed by the Manager for the Portfolio, the net investment income per
share would have been $.41, $.39, $.38, $.42 and $.41 for the periods ended
3/31/94, 3/31/93, 3/31/92, 3/31/91 and 3/31/90, respectively.
22
<PAGE>
Participants investing in this Fund will not have any voting rights with
respect to the interest in the Portfolio held in this Fund. The voting rights
with respect to such interest are vested in the Trustee.
The value of this Fund depends on the market prices of the securities held by
the Portfolio. As the market prices of the securities held by the Portfolio
fluctuate, the value of a Participant's share of this Fund may fluctuate up or
down. Commissions paid on account of transactions by the Fund also are charged
against the assets of the Fund. Accordingly, the value of a Participant's share
of this Fund could be less than such Participant's contributions to this Fund.
IV. U.S. GOVERNMENT SECURITIES FUND
This Fund (referred to in the Plan as "Fund D") will be invested by the
Trustee in shares of Federated Intermediate Government Trust (the "FIG Trust"),
an open-end management investment company (a mutual fund) investing in U.S.
Government securities. The investment objective of the FIG Trust is current
income. According to the FIG Trust's prospectus dated March 31, 1994 (the "FIG
Trust 1994 Prospectus"), the FIG Trust pursues this investment objective by
investing in U.S. government securities with remaining maturities of five years
or less. According to the FIG Trust 1994 Prospectus, as a matter of operating
policy, which may be changed without approval of the FIG Trust's shareholders,
the dollar-weighted average maturity of the FIG Trust's portfolio will not be
less than two years nor more than five years. While there is no assurance that
the FIG Trust will achieve its investment objective, it endeavors to do so by
following the investment policies described in the FIG Trust 1994 Prospectus.
The FIG Trust's investment objective and the policies and limitations described
in Appendix C to this Prospectus cannot be changed without approval of the FIG
Trust's shareholders. THE FIG TRUST SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF
ANY BANK, ARE NOT ENDORSED OR GUARANTEED BY ANY BANK, AND ARE NOT INSURED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY
OTHER GOVERNMENT AGENCY. FIG Trust shares are currently sold and redeemed at
net asset value without a sales charge imposed by the FIG Trust.
The following table sets forth selected per share data and ratios for the
shares of the FIG Trust which appears in the FIG Trust 1994 Prospectus. This
information should be read in conjunction with the financial statements of the
FIG Trust included in the FIG Trust 1994 Prospectus, a copy of which may be
obtained from the Company upon request.
<TABLE>
<CAPTION>
YEAR ENDED JANUARY 31,
------------------------------------------------
1994 1993 1992 1991 1990
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD................. $ 10.61 $ 10.25 $ 9.87 $ 9.59 $ 9.42
Income from investment op-
erations
Net investment income..... 0.46 0.57 0.71 0.75 0.79
Net realized and
unrealized gain (loss) on
investments.............. 0.17 0.36 0.38 0.28 0.17(b)
-------- -------- -------- -------- --------
Total from investment op-
erations................. 0.63 0.93 1.09 1.03 0.96
Less distributions
Dividends to shareholders
from net investment in-
come..................... (0.46) (0.57) (0.71) (0.75) (0.79)
Distributions for
shareholders from net
realized gain on
investment transactions.. -- -- -- -- --
-------- -------- -------- -------- --------
Total distributions........ (0.46) (0.57) (0.71) (0.75) (0.79)
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF PE-
RIOD...................... $ 10.78 $ 10.61 $ 10.25 $ 9.87 $ 9.59
======== ======== ======== ======== ========
Total return(a)............ 6.07% 9.37% 11.44% 11.18% 10.52%
Ratios to average net as-
sets
Expenses.................. 0.52% 0.50% 0.50% 0.51% 0.51%
Net investment income..... 4.30% 5.52% 7.08% 7.75% 8.26%
Supplemental data
Net assets, end of period
(000 omitted)............ 951,528 845,620 779,686 791,131 959,728
Portfolio turnover rate... 131% 85% 108% 60% 166%
</TABLE>
- --------
(a) Based on net asset value which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(b) The effect on the 1990 per share data as a result of the Trust's change in
recording interest income to include amortization of market discounts and
premiums (see Note 2C on page 19 of the FIG Trust 1994 Prospectus) was to
increase investment income by $0.05 per share and decrease net realized and
unrealized gain (loss) on investments by a corresponding amount.
23
<PAGE>
Information included in this Prospectus concerning the FIG Trust is a summary
of certain of the information contained in the FIG Trust 1994 Prospectus. Such
summary is qualified in its entirety by reference to the FIG Trust 1994
Prospectus. A copy of the most recent prospectus of the FIG Trust which has
been provided to the Company will be provided to a Participant by the Company
upon request, and a copy of such prospectus will be provided to a Participant
as soon as practicable following such Participant's initial investment in this
Fund unless, prior to such initial investment, a copy had been provided to the
Participant. ANY PARTICIPANT WHO IS CONTEMPLATING AN INVESTMENT IN THIS FUND IS
ADVISED TO OBTAIN A COPY OF SUCH PROSPECTUS AND TO READ AND RETAIN IT FOR
FUTURE REFERENCE.
A DESCRIPTION OF THE FIG TRUST'S INVESTMENT OBJECTIVE AND POLICIES IS SET
FORTH IN APPENDIX C TO THIS PROSPECTUS.
The following table sets forth certain information from the FIG Trust 1994
Prospectus concerning shareholder transaction expenses and annual institutional
shares operating expenses of the FIG Trust. Such expenses are not paid by the
Company but are charged against the assets of the FIG Trust.
<TABLE>
<CAPTION>
CHARGE
SHAREHOLDER TRANSACTION EXPENSES: ------
<S> <C> <C>
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)......................... None
Maximum Sales Load Imposed on Reinvested
Dividends (as a percentage of offering price)............... None
Contingent Deferred Sales Charge (as a percentage of
original purchase price or redemption
proceeds, as applicable).................................... None
Redemption Fees (as a percentage of amount
redeemed, if applicable).................................... None
Exchange Fee................................................. None
ANNUAL INSTITUTIONAL SHARES OPERATING EXPENSES (AS A PERCENT-
AGE OF AVERAGE NET ASSETS):
Management Fee............................................... 0.40%
12b-1 Fees................................................... None
Total Other Expenses......................................... 0.14%
Shareholder Services Fee(1)................................. 0.00%
Total Institutional Share Operating Expenses(2)............... 0.54%
====
</TABLE>
- --------
(1) The maximum shareholder services fee is 0.25%.
(2) The Total Institutional Shares Operating Expenses in the table above are
based on expenses expected during the fiscal year ending January 31, 1995.
The Total Institutional Shares Operating Expenses were 0.52% for the fiscal
year ended January 31, 1994.
EXAMPLE:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following expenses on a
$1,000 investment assuming (1) 5% annual re-
turn and (2) redemption at the end of each
time period. As noted in the table above, the
FIG Trust charges no redemption fees......... $5 $16 $28 $63
</TABLE>
THE PURPOSE OF THE FOREGOING TABLE, WHICH IS TAKEN FROM THE FIG TRUST 1994
PROSPECTUS, IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE VARIOUS COSTS AND
EXPENSES THAT A SHAREHOLDER OF THE FIG TRUST WILL BEAR, EITHER DIRECTLY OR
INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS OF THE VARIOUS COSTS AND EXPENSES,
SEE THE INFORMATION APPEARING UNDER THE HEADINGS "TRUST INFORMATION" AND
"INVESTING IN INSTITUTIONAL SHARES" IN THE FIG TRUST 1994 PROSPECTUS. THE
FOREGOING EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
Investment decisions for the FIG Trust are made by Federated Management, the
FIG Trust's investment adviser, subject to direction by the FIG Trust's Board
of Trustees. The adviser continually conducts
24
<PAGE>
investment research and supervision for the FIG Trust and is responsible for
the purchase or sale of portfolio instruments. For its services to the FIG
Trust, the adviser receives an annual investment advisory fee equal to .40 of
1% of the FIG Trust's average daily net assets. For additional information
concerning the FIG Trust's investment adviser, reference is made to the FIG
Trust 1994 Prospectus, a copy of which is available from the Company upon
request.
Participants investing in this Fund will not have any voting rights with
respect to the interest in the FIG Trust held in this Fund. The voting rights
with respect to such interest are vested in the Trustee.
V. CAPITAL FUND
This Fund (referred to in the Plan as "Fund E") will be invested by the
Trustee in Class A shares of Merrill Lynch Capital Fund, Inc. (the "Capital
Fund"). The Capital Fund seeks to achieve the highest total investment return
consistent with prudent risk through a fully managed investment policy
utilizing equity, debt and convertible securities. This permits management of
the Capital Fund to vary investment policy based on its evaluation of changes
in economic and market trends. Total investment return is the aggregate of
income and capital value changes. Consistent with this policy, the Capital
Fund's portfolio may, at any given time, be invested substantially in equity
securities, corporate bonds or money market securities. It is the expectation
of the Capital Fund's management that, over longer periods, a major portion of
the Capital Fund's portfolio will consist of equity securities of larger market
capitalization, quality companies. Since January 1, 1974, the portion of the
Capital Fund's portfolio invested in equity securities has ranged from
approximately 43% to 98% with the balance being invested in corporate bonds and
money market securities. On March 31, 1994, approximately 60% of the Capital
Fund's portfolio was invested in equity securities.
The following table sets forth selected per share data for the Class A shares
of the Capital Fund taken from the current prospectus of the Capital Fund,
dated July 28, 1994 (the "Capital Fund 1994 Prospectus"). This information
should be read in conjunction with the financial statements of the Capital Fund
included in the Statement of Additional Information referred to on the cover
page of the Capital Fund 1994 Prospectus, a copy of which may be obtained from
the Company upon request.
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MARCH 31,
--------------------------------------------------------
1994 1993 1992 1991 1990
---------- ---------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PER-
FORMANCE:
INCREASE (DECREASE) IN
NET ASSET VALUE:
OPERATING PERFORMANCE:
Net asset value, begin-
ning of year........... $ 27.89 $ 26.90 $ 25.38 $ 23.65 $ 22.33
---------- ---------- ---------- ---------- --------
Investment income
(loss) net............. .97 .87 1.02 1.17 1.11
Realized and
unrealized gain (loss)
on investments--net.... .50 1.99 2.12 2.24 2.03
---------- ---------- ---------- ---------- --------
Total from investment
operations............. 1.47 2.86 3.14 3.41 3.14
---------- ---------- ---------- ---------- --------
Less dividends and dis-
tributions:
Investment income--
net.................... (.95) (.87) (1.02) (1.14) (1.10)
Realized gains on in-
vestments--net......... (.95) (1.00) (.60) (.54) (.72)
---------- ---------- ---------- ---------- --------
Total dividends and dis-
tributions............. (1.90) (1.87) (1.62) (1.68) (1.82)
---------- ---------- ---------- ---------- --------
Net asset value, end of
period................. $ 27.46 $ 27.89 $ 26.90 $ 25.38 $ 23.65
========== ========== ========== ========== ========
TOTAL INVESTMENT RETURN
(EXCLUSIVE OF EFFECTS
OF SALES LOADS):
Based on net asset value
per share.............. +5.39% +11.33% +12.96% +15.17% +14.04%
========== ========== ========== ========== ========
RATIOS TO AVERAGE NET
ASSETS:
Expenses, net of reim-
bursement and excluding
distribution fees...... .53% .55% .56% .58% .60%
========== ========== ========== ========== ========
Expenses................ .53% .55% .56% .58% .60%
========== ========== ========== ========== ========
Investment income--net.. 3.52% 3.56% 4.21% 5.13% 4.80%
========== ========== ========== ========== ========
SUPPLEMENTAL DATA:
Net assets, end of pe-
riod (in thousands).... $2,237,492 $2,056,023 $1,553,530 $1,083,741 $866,924
========== ========== ========== ========== ========
Portfolio turnover...... 86% 55% 59% 86% 85%
========== ========== ========== ========== ========
</TABLE>
25
<PAGE>
Certain of the information included in this Prospectus concerning the Capital
Fund is a summary of information contained in the Capital Fund 1994 Prospectus.
Such summary is qualified in its entirety by reference to the Capital Fund 1994
Prospectus. A copy of the most recent prospectus of the Capital Fund which has
been provided to the Company will be provided to a Participant by the Company
upon request, and a copy of such prospectus will be provided to a Participant
as soon as practicable following such Participant's initial investment in this
Fund unless, prior to such initial investment, a copy had been provided to the
Participant. ANY PARTICIPANT WHO IS CONTEMPLATING AN INVESTMENT IN THIS FUND IS
ADVISED TO OBTAIN A COPY OF SUCH PROSPECTUS AND TO READ AND RETAIN IT FOR
FUTURE REFERENCE.
A DESCRIPTION OF THE CAPITAL FUND'S INVESTMENT OBJECTIVE AND POLICIES IS SET
FORTH IN APPENDIX D TO THIS PROSPECTUS.
The Capital Fund offers two classes of shares which may be purchased at a
price equal to the next determined net asset value per share, plus a sales
charge which, at the election of the purchaser, may be imposed (i) at the time
of purchase (the "Class A shares"), or (ii) on a deferred basis (the "Class B
shares"). Each Class A and Class B share represents an identical interest in
the investment portfolio of the Capital Fund and has the same rights, except
that Class B shares bear the expenses of the account maintenance fee,
distribution fee and certain other costs resulting from the deferred sales
charge arrangement, which will cause Class B shares to have a higher expense
ratio and to pay lower dividends than those related to Class A shares, and that
Class B shares have exclusive voting rights with respect to the account
maintenance and distribution fees. The two classes also have different exchange
privileges. ALL OF THIS FUND'S INVESTMENT IN THE CAPITAL FUND WILL BE
EXCLUSIVELY IN CLASS A SHARES. The aforementioned sales charge applicable to
the purchase of Class A shares has been waived for purchases by this Fund so
that the purchase price paid for each Class A share acquired by this Fund is
the Capital Fund's per share net asset value at the time of the purchase.
Participants investing in this Fund will not have any voting right with
respect to the interest in the Capital Fund held by this Fund. The voting
rights with respect to such interest are vested in the Trustee.
The Capital Fund pays certain expenses incurred in the operation of the
Capital Fund including, among others, taxes, expenses for legal and auditing
services, costs of printing proxies and stock certificates, charges of the
custodian and transfer agent, expenses of redemption, brokerage costs,
Securities and Exchange Commission fees, all expenses of shareholders' and
Directors' meetings and certain of the expenses of printing prospectuses,
statements of additional information and reports to shareholders. For the
fiscal year ended March 31, 1994, the ratio of total expenses to average net
assets for the Class A shares was 0.53%.
Financial Data Services, Inc. ("FDS"), which is a wholly-owned subsidiary of
Merrill Lynch & Co., Inc., acts as the Capital Fund's transfer agent pursuant
to a transfer agency, dividend disbursing agency and shareholder servicing
agency agreement (the "Transfer Agency Agreement"). Pursuant to the Transfer
Agency Agreement, FDS is responsible for the issuance, transfer and redemption
of shares and the opening and maintenance of shareholder accounts. Pursuant to
the Transfer Agency Agreement, the Capital Fund pays FDS a fee of $7.00 per
Class A shareholder account and $9.00 per Class B shareholder account and FDS
is entitled to reimbursement from the Capital Fund for out-of-pocket expenses
incurred by it under the Transfer Agency Agreement. For the fiscal year ended
March 31, 1994, the Capital Fund paid FDS $5,299,415 pursuant to the Transfer
Agency Agreement. At April 30, 1994 the Capital Fund had 201,249 Class A
shareholder accounts and 269,571 Class B shareholder accounts. At this level of
accounts, the annual fee payable to FDS would aggregate approximately
$3,834,882 plus out-of-pocket expenses.
26
<PAGE>
The following table sets forth certain information from the Capital Fund 1994
Prospectus concerning the annual operating expenses of the Capital Fund. Such
expenses are not paid by the Company but are charged against the assets of the
Capital Fund.
<TABLE>
<CAPTION>
CHARGE
------
<S> <C> <C>
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE
NET ASSETS) FOR THE YEAR ENDED MARCH 31, 1994:
Investment Advisory Fees.................................... 0.41%
12b-1 Fees.................................................. None
Other Expenses
Custodial Fees............................................. 0.01%
Shareholder Servicing Costs................................ 0.09%
Other...................................................... 0.02%
----
Total Other Expenses..................................... 0.12%
----
TOTAL FUND OPERATING EXPENSES................................ 0.53%
====
</TABLE>
EXAMPLE:
<TABLE>
<CAPTION>
CUMULATIVE EXPENSES PAID FOR
THE PERIOD OF
-------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following expenses on a
$1,000 investment based on the aforementioned
waiver of any front-end sales charge for
Class A shares acquired by this Fund and
assuming (1) an operating expense ratio of
0.53% for Class A shares, (2) a 5% annual
return throughout the periods and (3)
redemption at the end of the period.......... $5.07 $15.89 $27.70 $62.17
You would pay the following expenses on the
same $1,000 investment assuming no redemption
at the end of the period..................... $5.07 $15.89 $27.70 $62.17
</TABLE>
THE FOREGOING FEE TABLE (WHICH IS BASED ON A FEE TABLE IN THE CAPITAL FUND
1994 PROSPECTUS, AS ADJUSTED TO ELIMINATE THE MAXIMUM $65 FRONT-END SALES
CHARGE WAIVED WITH RESPECT TO THIS FUND'S PURCHASE OF CLASS A SHARES) IS
INTENDED TO ASSIST INVESTORS IN UNDERSTANDING THE COSTS AND EXPENSES THAT A
SHAREHOLDER IN THE CAPITAL FUND WILL BEAR DIRECTLY OR INDIRECTLY. THE EXAMPLE
SET FORTH ABOVE ASSUMES REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS AND
UTILIZES A 5% ANNUAL RATE OF RETURN AS MANDATED BY SECURITIES AND EXCHANGE
COMMISSION REGULATIONS. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION
OF PAST OR FUTURE EXPENSES OR ANNUAL RATE OF RETURN, AND ACTUAL EXPENSES OR
ANNUAL RATE OF RETURN MAY BE MORE OR LESS THAN THOSE ASSUMED FOR PURPOSES OF
THE EXAMPLE.
Merrill Lynch Asset Management, L.P. (the "Investment Adviser"), an affiliate
owned and controlled by Merrill Lynch & Co., Inc., a financial services holding
company, acts as the investment adviser for the Capital Fund and provides the
Capital Fund with management and investment advisory services. Achieving the
Capital Fund's investment objective depends on informed decisions to buy, sell
or hold particular securities. Subject to the direction of the Capital Fund's
Board of Directors, the Investment Adviser has created a comprehensive
management system that sets objectives and establishes a framework for the
selection of particular securities and the distribution of assets. The system
appraises economic and other forces affecting securities markets and
industries, and assesses short- and long-term prospects. The Investment Adviser
regularly reviews the research and analysis of other brokerage firms with which
the Capital Fund does business.
The Capital Fund pays the Investment Adviser a monthly fee based on the
average daily value of the Capital Fund's net assets at the following annual
rates: 0.50% of average daily net assets not exceeding $250 million; 0.45% of
average daily net assets exceeding $250 million, but not exceeding $300
million; 0.425% of average daily net assets exceeding $300 million, but not
exceeding $400 million; and 0.40% of average daily net assets exceeding $400
million. For the fiscal year ended March 31, 1994, the Investment Adviser
earned a fee of $20,844,212 and the effective fee rate was 0.41%.
27
<PAGE>
The Investment Adviser is responsible for placing the Capital Fund's
brokerage business and for negotiating prices, commissions and the charges for
other services. The Investment Adviser is not restricted in its choice of
brokers or dealers. According to the Capital Fund 1994 Prospectus, the
Investment Adviser seeks the most favorable rates and services from any number
of brokers and dealers, including Merrill Lynch, Pierce, Fenner & Smith
Incorporated.
----------------
AVAILABILITY OF ADDITIONAL INFORMATION CONCERNING INVESTMENT OPTIONS
A Participant or a Participant's beneficiary will be provided, upon request,
the following information, which will be based on the latest information
available to the Plan:
(i) A description of the annual operating expenses of each designated
investment alternative (e.g., investment management fees, administrative
fees, transaction costs) which reduce the rate of return to Participants
and beneficiaries, and the aggregate amount of such expenses expressed as a
percentage of average net assets of the designated investment alternative;
(ii) Copies of any prospectuses, financial statements and reports, and of
any other materials relating to the investment alternatives available under
the Plan, to the extent such information is provided to the Plan;
(iii) A list of the assets comprising the portfolio of each designated
investment alternative which constitute Plan assets within the meaning of
29 CFR 2510.3-101, the value of each such asset (or the proportion of the
investment alternative which it comprises), and, with respect to each such
asset which is a fixed rate investment contract issued by a bank, savings
and loan association or insurance company, the name of the issuer of the
contract, the term of the contract and the rate of return on the contract;
(iv) Information concerning the value of shares or units in designated
investment alternatives available to Participants and beneficiaries under
the Plan, as well as the past and current investment performance of such
alternatives, determined, net of expenses, on a reasonable and consistent
basis; and
(v) Information concerning the value of shares or units in designated
investment alternatives held in the account of the Participant or
beneficiary.
The information described above may be obtained by a Participant or a
beneficiary upon his or her request, which should be directed to Kathryn
Turner, Corporate Director--Human Resources, Circus Circus Enterprises, Inc.,
2880 Las Vegas Boulevard South, Las Vegas, Nevada 89109 (702-734-0410).
VALUATION OF THE FUNDS
As of March 31, June 30, September 30 and December 31 of each Plan Year and
such other dates as the Plan Administrator may designate from time to time (the
"Valuation Date"), the Custodian and the Trustee will determine the "net worth"
of the respective investment Funds in their custody. The "net worth" of an
investment Fund as of any Valuation Date is equal to the "adjusted net worth"
of the assets of such investment Fund as of such Valuation Date, as determined
by the Custodian or Trustee, as the case may be, and reported to the Plan
Administrator, including withdrawals, distributions and transfers chargeable to
such investment Fund which have been incurred but not yet paid as of such
Valuation Date. The Account of each Participant is adjusted upward or downward
as of each Valuation Date in proportion to the amounts credited to the
respective Accounts of all of the Participants that are invested in each of
such Funds so that the sum of the amounts credited to the Accounts of all of
the Participants that are invested in each such Fund will be equal to the
"adjusted net worth" of that Fund and so that the sum of the Accounts of all of
the Participants will be equal to the "adjusted net worth" of the investment
Funds.
VESTING
A participant will be 100% vested in all amounts allocated to his Savings
Contribution Account or his Rollover Contribution Account at all times.
28
<PAGE>
If a Participant first worked as an Eligible Employee before July 3, 1989, he
will be 100% vested in all amounts allocated to his other Accounts at all
times, provided he entered the Plan by December 31, 1992. If he first worked as
an eligible Employee on or after July 3, 1989, or if he enters the Plan after
December 31, 1992, the vested portion of his ESOP Matching Contributions, ESOP
Automatic Contributions and any Discretionary Contributions, as well as the
earnings thereon, will be determined under the following schedule based upon
the Participant's total number of Years of Vesting Service as of the date his
eligible service terminates:
<TABLE>
<CAPTION>
NUMBER OF VESTED
YEARS OF VESTING SERVICE INTEREST
------------------------ --------
<S> <C>
Less than 3...................................................... 0%
3................................................................ 25%
4................................................................ 50%
5................................................................ 75%
6 or more........................................................ 100%
</TABLE>
However, a Participant will be 100% vested in all of his accounts upon
reaching his Normal Retirement Date.
The vested portion of a Participant's Account will be available for payment
after the end of the calendar quarter in which his employment terminates. See
"Benefits Under the Plan," below. Any non-vested portion will be forfeited at
the time the vested benefits are paid, or, if earlier, at the time the
Participant has incurred five consecutive One Year Breaks in Service.
Forfeitures during any Plan Year, to the extent not needed to restore the
Forfeitures of returning Participants who have "bought back" their prior
Forfeitures, will be reallocated to other Participants as additional Automatic
Contributions. See "Contributions," above.
If a Participant who has incurred a Forfeiture returns to work after
incurring five consecutive One Year Breaks in Service, the Forfeiture cannot be
reclaimed for any reason.
If a Participant returns before incurring five consecutive One Year Breaks in
Service, then:
--If the Participant did not receive his vested benefits, his entire
Account will remain intact, and he will not incur a Forfeiture.
--If the vested benefits were paid to the Participant, he will have
incurred a Forfeiture, but he has the right to "buy back" his
Forfeiture by paying back to the Trustee the full amount of the prior
distribution, generally within five years after the date he returns to
employment.
WITHDRAWALS ON ACCOUNT OF HARDSHIP
An Employee who has been a Participant in the Plan for at least 18 months may
request a distribution from his Account of his Savings Contributions, plus
earnings credited directly to those contributions prior to January 1, 1989, for
reasons of a "hardship," as defined in the Plan, as determined in the Plan
Administrator's discretion exercised in a uniform and nondiscriminatory manner.
In exercising its discretion, the Plan Administrator will request a detailed
financial statement from the Participant explaining his need for the funds and
available access to funds from other sources.
"Hardship" may include expenses for (a) the purchase of a Participant's
primary residence (excluding mortgage payments), (b) payment of tuition for the
next 12 months of post-secondary education of the Participant, his spouse,
children, or other dependents, (c) payments needed to prevent the Participant's
eviction from or foreclosure on the mortgage on his principal residence, and
(d) medical expenses described in Section 213(d) of the Code incurred by the
Participant, the Participant's spouse or any dependents of the
29
<PAGE>
Participant (as defined in Section 152 of the Code) or that are necessary in
order to permit the Participant or dependent to obtain medical care.
A distribution based on financial hardship may not exceed the amount required
to meet the immediate financial needs created by the hardship and not
reasonably available from the Participant's other resources, nor may such a
distribution be in an amount less than $1,000.
The Plan Administrator has the discretion to determine whether the
requirements for a hardship withdrawal have been met. The Plan Administrator
must deny any request for a financial hardship withdrawal that does not meet
those requirements. The Plan requires that the Plan Administrator strictly
construe the application of facts to the "hardship" definition.
The amount of funds withdrawn by a Participant will be charged against the
Participant's Account.
WITHDRAWALS AFTER AGE 59 1/2
A Participant who is fully vested in his Account balance and has attained the
age of 59 1/2 may request a withdrawal, which will be paid to the qualifying
Participant in a single lump sum payment.
DIVERSIFICATION ELECTION
During the Diversification Election Period a qualifying Participant may
(subject to the minimum amounts specified in the Plan) make a Diversification
Election by directing the Trustee in writing as to the investment of a portion
of his ESOP Matching Contribution Account, ESOP Automatic Contribution Account
and/or Discretionary Contribution Account through the sale of Employer
Securities attributable to the amount to be diversified.
Such a Participant may elect, within 90 days after the close of the first
Plan Year in the Diversification Election Period, to diversify an amount not
exceeding 25% of the balance of his ESOP Matching, ESOP Automatic and
Discretionary Contribution Accounts, determined as of the last day of such Plan
Year. Within 90 days after the close of the second, third, fourth and fifth
Plan Years in the Diversification Election Period, such a Participant may elect
to diversify the ESOP Matching, ESOP Automatic and Discretionary Contribution
Accounts, determined as of the last day of such Plan Year, and the amount with
respect to which diversification was previously elected. In the last Plan Year
of the Diversification Election Period, the Participant may elect to diversify
the difference between 50% of the balance of his ESOP Matching, ESOP Automatic
and Discretionary Contribution Accounts, determined as of the last day of such
Plan Year, and the amount with respect to which diversification was previously
elected.
The Trustee may offer Employer Securities being sold pursuant to a
Diversification Election to the Company or its affiliates or in the organized
trading market. The terms of any such offer to the Company or its affiliates
will require that such entities purchase the Employer Securities at fair market
value, as determined at the time of acquisition of the Employer Securities,
without the payment of any sales commissions. The proceeds of diversification
sales are required to be invested in the Funds referred to in the Plan as Funds
B, C, D and/or E in the proportions elected by the Participant.
BENEFITS UNDER THE PLAN
Retirement Benefit. A Participant will be entitled to full retirement
benefits under the Plan upon such Participant's attaining the age of 65 years
or, if later, the date on which he completes five full years of participation
in the Plan. Until a Participant reaches the age of 70 1/2 or actually retires
from the employ of the Employer, generally no retirement benefits will be
payable to him, and he will continue to be treated in all respects as a
Participant. Upon retirement of a Participant or his reaching age 70 1/2, such
Participant is entitled to a retirement benefit in an amount equal to 100% of
the balance in his Account as of the Valuation Date concurring with or next
following the date of his retirement.
30
<PAGE>
Generally, a Participant will be required to begin receiving payment of his
vested retirement benefit, whether or not he has retired, no later than the
first April 1 following the end of the calendar year in which he attains age 70
1/2. Thereafter, additional distributions will be made to him from his Account
in amounts determined under Section 401(a)(9) of the Code, not later than
December 31 of each year, until his entire vested Account balance has been
distributed to him.
Severance of Employment Benefit. A Participant whose employment with the
Employer is terminated for reasons other than retirement or death will be
entitled to a severance of employment benefit in an amount equal to the vested
portion of his Account as of the Valuation Date concurring with or next
following the date on which such termination of employment occurs.
Death Benefit. If a Participant dies, his beneficiary will be entitled to a
death benefit in an amount equal to 100% of the balance in his Account as of
the Valuation Date immediately preceding or concurring with the date of his
death. Each Participant may designate a beneficiary to receive his death
benefit, and may change or revoke any such designation. Each designation or
revocation must be in writing and filed with the Plan Administrator on forms
prescribed by the Plan Administrator.
If a Participant dies without designating a beneficiary or beneficiaries, or
if any such designation is legally ineffective, or if such beneficiary or
beneficiaries do not survive the Participant, then the Participant's death
benefit will be paid to his estate. However, if no personal representative is
appointed for the Participant's estate, then his next of kin under the laws of
descent and distribution in the state where he resided at the time of his death
will be deemed to be his beneficiary or beneficiaries.
Notwithstanding the foregoing, if the Participant is married as of the date
of his death, the Participant's surviving spouse will be his sole beneficiary,
and will receive the full amount of his death benefit unless the spouse
consents to, or has consented to, the Participant's designation of another
beneficiary. Any such consent to the designation of another beneficiary must be
in writing, must acknowledge the effect of the consent, must be witnessed by a
Plan representative or by a notary public, and will be effective only with
respect to that spouse.
To the extent permitted by Internal Revenue Service Rules, any death benefit
payable to a minor child will generally be held until the child has reached the
age of majority unless a legal guardian is appointed for the child.
Deferred Benefit. A Participant or beneficiary who is eligible to receive a
benefit under the Plan, but who does not receive the benefit on the Valuation
Date as of which it is determined, will continue to have his Account held and
invested under the Plan, where it will continue to share in the earnings and
losses of the trust fund and separately invested Funds in which it is invested.
Payment of Benefits. The benefit to which a Participant is entitled will be
paid to him (or, in the case of a death benefit, will be paid to his
beneficiary or beneficiaries) in a lump sum, as soon as practicable after the
Valuation Date that coincides with or immediately follows the Participant's
retirement, disability, severance of employment or death, as the case may be.
No distribution may be made of the benefit of any Participant prior to his
Normal Retirement Date unless the value of his benefit does not exceed $3,500,
or unless the Participant consents to the distribution. In any event,
retirement or disability benefits must begin no later than the April 1 of the
year immediately following the calendar year in which the Participant reaches
age 70 1/2.
Any benefits attributable to a Participant's ESOP Matching Contribution
Account, ESOP Automatic Contribution Account and Discretionary Contribution
Account (except as invested pursuant to a Diversification Election) will be
paid to the Participant (or, if applicable, his beneficiary or beneficiaries),
to the extent possible, in whole units of Employer Securities. Fractional
interests will be paid in cash based on the market price of the Employer
Securities at the distribution date.
31
<PAGE>
Any other benefits payable under the Plan may be paid to the Participant (or,
if applicable, his beneficiary or beneficiaries) in cash or in kind.
Under certain circumstances, set forth in detail in the Plan, if Employer
Securities distributed to a Participant or beneficiary are not then listed on a
national securities exchange or quoted by a national securities association,
the Participant or beneficiary will have an option to put any of the units of
such Employer Securities to the Company.
VOTING AND OTHER RIGHTS
As the owner of record of the Employer Securities held under the terms of the
Plan, the Trustee exercises any and all voting and other rights with respect to
such securities. However, a Participant may direct the Trustee regarding the
exercise of such rights for the Employer Securities (including fractional
shares) allocated to his ESOP Matching Contribution Account, ESOP Automatic
Contribution Account, or Discretionary Contribution Account.
If possible, the Trustee will notify each Participant at least 30 days before
the date upon which any voting or other rights are to be exercised, and will
provide each Participant with copies of all information distributed to the
security holders of record by the Employer regarding the exercise of such
rights. However, if the notice received by the Trustee, as stockholder of
record, makes it impossible for the Trustee to give the Participants 30 days
notice, the Trustee will notify the Participants regarding the exercise of such
rights as soon as practicable after it receives the information.
Under the terms of the Plan, if the Trustee receives no direction regarding
exercise of voting or other rights with respect to Employer Securities
allocated to a Participant's ESOP Matching Contribution Account, ESOP Automatic
Contribution Account, or Discretionary Contribution Account, the Trustee will
exercise such rights in the manner it deems appropriate.
Notwithstanding the provisions of the Plan relating to the voting of
allocated shares, it is also possible that ERISA requirements might be
interpreted, in limited situations, to require the Trustee to make an
independent decision regarding the voting of allocated shares even when
instructions are received from Participants.
Any voting and other rights with respect to Employer Securities (including
fractional shares) held by the Trustee that are allocated to any ESOP loan
suspense account or to the Circus Circus Stock Fund are exercised by the
Trustee at its sole discretion.
DIVIDENDS
Cash dividends paid for any Plan Year with respect to Employer Securities
(including fractional shares) allocated to the Participant's ESOP Matching
Contribution Account, ESOP Automatic Contribution Account and Discretionary
Contribution Account will be used, if the Company so directs, to make payments
on any loans entered into by the Trustee for the purpose of purchasing Employer
Securities ("Employer Securities Loans"), but only if the value of the Employer
Securities (including fractional shares) allocated to each Participant's
Accounts for such Year as ESOP Matching Contributions, ESOP Automatic
Contributions and Discretionary Contributions equal or exceed such cash
dividends.
Any such cash dividends which are not used to make payments on Employer
Securities Loans will be retained by the Trustee and allocated in the same
manner as other income of the ESOP Fund.
Once cash dividends have been allocated to each Participant's ESOP Matching
Contribution Account, ESOP Automatic Contribution Account, and Discretionary
Contribution Account they may be exchanged by the Trustee for additional
Employer Securities (including fractional shares) that were previously
allocated
32
<PAGE>
to an ESOP loan suspense account. Any cash dividends thus transferred to an
ESOP loan suspense account by the Trustee will be used, if the Company so
directs, to make payments on any Employer Securities Loans.
Any cash dividends paid with respect to Employer Securities (including
fractional shares) allocated to any ESOP loan suspense account as of the
payment date will be used, if the Company so directs, to make payments on any
Employer Securities Loans.
Stock Dividends paid with respect to Employer Securities (including
fractional shares) allocated to each Participant's ESOP Matching Contribution
Account, ESOP Automatic Contribution Account and Discretionary Contribution
Account will be retained by the Trustee and allocated in the same manner as
other income of the ESOP Fund. Stock dividends paid with respect to units of
Employer Securities (including fractional shares) allocated to any ESOP loan
suspense account will be used, directly or indirectly, to make payments on any
Employer Securities Loans.
ASSIGNMENT; LIENS
A Participant or his beneficiary may not alienate, sell, transfer, assign,
pledge, encumber or charge his interest in the Plan. No interest in the Plan
may be attached or subjected to other legal process except to the extent
provided in the Plan or as may be required by law. Pursuant to the Retirement
Equity Act of 1984 amending Section 401(a)(13) of the Code, a "qualified
domestic relations order" will not be treated as an illegal assignment or
attachment. Detailed procedures regarding the administration of such orders are
set forth in the Plan's Summary Plan Description, which is available on request
from the Corporate Director--Human Resources. Also, an Internal Revenue Service
levy on an Account is not considered an illegal assignment or attachment.
AMENDMENT AND TERMINATION
The Company anticipates that the Plan will continue indefinitely as a
qualified plan under the Code, but reserves the right to terminate the Plan at
any time by action of the Board of Directors of the Company or to amend the
Plan by action of the Company's Board of Directors. However, such an amendment
or termination cannot transfer assets of the Plan for purposes other than for
the exclusive benefit of Participants and their beneficiaries, and cannot cause
or permit any assets of the Plan, its Trusts or Contracts to revert to or
become the property of the Company except in the case of a contribution made to
the Plan under a mistake of fact or in the case of a contribution disallowed as
a deduction under the Code with respect to the Company.
REFERENCE TO THE PLAN
The above summary of the Plan and the Agreement of Trust does not purport to
be complete and is subject in all respects to the provisions of the Plan and
the Agreement of Trust, copies of which are available from the Company on
request and which have been filed with the Securities and Exchange Commission
as exhibits to the Company's Registration Statement (SEC File No. 33-18278).
FEDERAL TAX ASPECTS
The Company has obtained from the Internal Revenue Service a favorable
determination letter that the Plan, including the cash or deferred arrangements
under Section 401(k) of the Code and the ESOP features under Section 4975(e)(7)
of the Code, constitutes a qualified profit sharing plan under Section 401(a)
of the Code and a qualified ESOP under Section 4975(e)(7) of the Code, and that
the Trust is exempt from Federal income tax under Section 501(a) of the Code.
In conjunction with the 1993 Amendments, the Company has submitted the Plan to
the Internal Revenue Service to seek its determination that the Plan, in its
present form, continues to meet the requirements of a qualified profit sharing
plan under Section 401(a) of the Code, a qualified cash or deferred arrangement
under Section 401(k) of the Code, and a qualified ESOP under Section 4975(e)(7)
of the Code, and that the Trust continues to be exempt from Federal income tax
under Section 501(a) of the Code. Trenam Simmons, special counsel to the
Company, has provided the Company with their opinion that, subject to certain
limitations set forth therein, principally related to the adoption of
33
<PAGE>
final regulations by the Internal Revenue Service and the U.S. Department of
Labor, the adoption of the 1993 Amendments will not cause the Plan or Trust
documents to fail to be in substantial compliance with Sections 401(a), 401(k)
and 4975(e)(7) of the Code, and the adoption of the 1993 Amendments will not
cause the Plan to fail to be in substantial compliance with the applicable
portions of ERISA that did not amend the Code. The IRS could request further
amendments to the Plan, and could condition any determination letter upon
timely adoption of such amendments. The opinion of Trenam Simmons is
conditioned upon the adoption by the Company of any IRS requested amendments
within 90 days after the issuance of a determination letter that is conditioned
upon timely adoption of such amendments. So long as the Code requirements
continue to be met, the amounts contributed by the Company on behalf of a
Participant will be deductible by the Company for Federal income tax purposes
and amounts contributed by the Company as Savings Contributions on behalf of a
Participant who has executed a salary reduction agreement will be excluded from
the Participant's gross income. Contributions made on a Participant's behalf
and the income and appreciation on Employer contributions will not be subject
to income tax while held in the Trust Fund and will not be includable in the
Participant's taxable income until distributed to him.
If an amount in a Participant's Account is withdrawn, the amount withdrawn
will be taxable to him as ordinary income (except for certain lump sum
distributions made after a member has attained age 59 1/2). Any withdrawal
prior to age 59 1/2 will also be subject to a 10% excise tax unless an
exemption from such excise tax is applicable. If a Participant rolls the
distribution over into an IRA or another eligible qualified plan, the excise
tax will not be imposed on the portion of the distribution that is rolled over.
The excise tax also will not be imposed if the Participant is over age 59 1/2
when the distribution is received, or if he is over age 55 and has retired. Any
distribution made after the death of the Participant is exempt from the 10%
excise tax regardless of the age of the Participant. Also, any distribution to
a spouse, former spouse, child or other dependent of the Participant pursuant
to a qualified domestic relations order will be exempt from the excise tax.
Upon distribution of a Participant's entire Account in a lump sum by reason
of his death or other termination of employment, or after his attainment of age
59 1/2, the distribution will constitute taxable (ordinary) income to the
Participant which may qualify for special five-year forward income averaging if
the Participant has been a Participant in the Plan for five or more taxable
years. The availability of the election to be taxed under the five-year forward
income averaging provision is subject to a number of limitations including the
limitations that the election be made only once, and that it be made only after
attaining age 59 1/2. Certain Participants who attained the age of 50 before
January 1, 1986, whether or not they have reached age 59 1/2 at the time of
distribution, may elect to be taxed under either ten-year forward income
averaging, as in effect immediately before to the adoption of the Tax Reform
Act of 1986, or five-year forward averaging.
If a Participant, or an alternate payee under a qualified domestic relations
order who is a spouse or former spouse of a Participant, receives a qualifying
rollover distribution from the Plan, he may transfer, on or before the 60th day
after the day on which he receives such distribution, all or part of the
distribution to: (i) another exempt employees' trust which is part of a
"qualified" plan for Federal income tax purposes, (ii) an "annuity" plan
described in Section 403(a) of the Code, or (iii) an "individual retirement
account," or an "individual retirement annuity" as such terms are described in
the Code, and thereby avoid current taxation of the portion of the distribution
so transferred. Moreover, if the spouse of a Participant receives a qualifying
rollover distribution by reason of the Participant's death, the spouse may
transfer, within the period described in the preceding sentence, all or a
portion of such distribution to an "individual retirement plan" and thereby
avoid current taxation on the portion of the distribution so transferred. Any
lump sum distribution from the Plan to a Participant, to the surviving spouse
of a Participant, or to an alternate payee under a qualified domestic relations
order who is a spouse or former spouse of a Participant, will be a qualifying
rollover distribution. A hardship withdrawal will also constitute a qualifying
rollover distribution, although any intent of the Participant to roll the money
over to an IRA may be inconsistent with the requirements for receipt of
34
<PAGE>
the distribution. A minimum distribution that is required to be paid at age 70
1/2 is not a qualifying rollover distribution, and may not be rolled over to an
IRA.
If a Participant, or an alternate payee under a qualified domestic relations
order who is a spouse or former spouse of a Participant, is to receive a
qualifying rollover distribution, he may direct the Trustee to transfer the
amount to be distributed directly to: (i) another exempt employees' trust which
is part of a "qualified" plan for Federal income tax purposes, (ii) an
"annuity" plan described in Section 403(a) of the Code, or (iii) an "individual
retirement account" or an "individual retirement annuity," as such terms are
described in the Code. If he does not elect such a transfer, the Trustee must
withhold 20% of the amount of the distribution to be applied toward his Federal
income tax obligation. In that case, the Participant or alternate payee may
still roll the entire amount of his distribution over to another plan or an
IRA, but the withholding cannot be waived and he will have to use other funds
to complete the rollover.
Similarly, if the surviving spouse of a deceased Participant, is to receive a
qualifying rollover distribution, he may direct the Trustee to transfer the
amount to be distributed directly to an "individual retirement account" or an
"individual retirement annuity," as such terms are described in the Code. In
the absence of a direct transfer election, the same 20% withholding requirement
will apply.
The Plan Administrator will notify all eligible Participants, surviving
spouses and alternate payees who are spouses or former spouses of Participants
of their rights to elect a direct transfer and the procedures for doing so.
If a distribution during a calendar year to a Participant exceeds $150,000,
it may be subject to a 15% excise tax on the portion of the distribution that
is in excess of that amount. In determining whether the $150,000 threshold has
been reached, all distributions from all "qualified" plans, certain similar
types of plans, and IRAs are aggregated. The $150,000 amount is subject to cost
of living adjustments, and also may be a different amount for certain
individuals who filed a "grandfather election" with their 1988 federal income
tax returns. The excise tax may be avoided for the year of distribution by
rolling the distribution over into another "qualified" plan, "annuity" plan or
IRA on or before the 60th day after receipt of the distribution.
The 15% excise tax on any lump sum distribution from the Plan that is made on
account of termination of employment or termination of the Plan, or that is
made after attainment of age 59 1/2, is imposed only on the portion of the
distribution that, when aggregated with all other plan and IRA distributions
received by the Participant or spouse in a calendar year, exceeds $750,000.
However, this $750,000 threshold is only available if five-year or ten-year
forward income averaging, as explained above, is elected, and if no portion of
the distribution is rolled over into an IRA.
With respect to Federal estate tax, distributions under the Plan made as a
result of the death of a Participant or former Participant will generally be
included in determining the taxable amount of the Participant's estate.
However, amounts payable to the deceased Participant's spouse may be eligible
for the Federal estate tax marital deduction. For Federal income tax purposes,
amounts distributed to the beneficiary or estate of a Participant will be
treated in substantially the same way as if distributed to a Participant after
termination of employment.
If a Participant dies with an accumulation that exceeds a threshold
determined under Section 4980A of the Code, the Participant's estate may be
subject to a 15% excise tax on the amount of the "excess accumulation." This
excise tax cannot be avoided by a rollover to an IRA, although in certain
circumstances the Participant's surviving spouse may have the right, if the
spouse is the beneficiary of substantially all of the Participant's "qualified"
plan, "annuity" plan and IRA death benefits, to make an election to convert the
Participant's accumulation to the spouse's distribution for purposes of this
excise tax. In the event that the spouse makes such an election and then
receives a lump sum distribution, the spouse may avoid the excise tax for the
year of distribution by rolling the distribution over into an IRA on or before
the 60th day after receipt of the distribution. Spousal rollovers to other
"qualified" or "annuity" plans are not permitted.
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The foregoing description of tax effects is intended to be general in nature,
and is based on interpretations of present Federal statutory and regulatory
authority which may be subject to change. Each Participant or beneficiary
should discuss specific questions with his own tax adviser or attorney. In
addition, there may be tax considerations under foreign, state and local laws
applicable to Participants.
Any material changes in the tax effects of participation in the Plan will be
described in a Supplement to this Prospectus.
APPLICABLE REQUIREMENTS OF ERISA
The Plan is a "defined contribution plan" as described in Section 3(34) of
ERISA. As such, the Plan is subject to the applicable provisions set forth in
Part 1 (Reporting and Disclosure), Part 2 (Participation and Vesting), Part 4
(Fiduciary Responsibility) and Part 5 (Administration and Enforcement) of
Subtitle B of Title I of ERISA which relate to employee pension benefit plans
which are defined contribution plans.
The Plan is not subject to Part 3 (Funding) of Subtitle B of Title I of ERISA
nor is it subject to any of the provisions of Title IV of ERISA. Those portions
of ERISA pertain to "money purchase plans" and "defined benefit plans."
AMENDMENTS AND OTHER CHANGES AFFECTING THIS PROSPECTUS
After the date hereof, the Plan may from time to time be amended and certain
other changes in respect of the Plan, such as changes in applicable law, may
also occur. Any such amendments or changes that are material for purposes of
this Prospectus will be reflected in a Supplement to this Prospectus.
REPORTS OF THE COMPANY
The Company's Quarterly and Annual Reports to Stockholders, proxy soliciting
material and other communications distributed to the Company's stockholders
generally will be provided to all Participants of the Plan whether or not such
Participants are stockholders of the Company. If a Participant does not for
some reason receive a copy of any of such reports, material or other
communications, he may obtain copies of the same which the Company will provide
promptly without charge upon written or oral request made to the Company's
Corporate Director--Human Resources in the manner described under
"Incorporation of Certain Documents by Reference."
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission are incorporated in this
Prospectus by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
January 31, 1994;
(b) The Company's Quarterly Reports on Form 10-Q for the fiscal quarters
ended April 30, 1994 and July 31, 1994, respectively;
(c) The Company's Current Reports on Form 8-K dated July 14, 1994 and
August 15, 1994, respectively;
(d) The description of the Common Stock contained in the Company's Form
8-A Registration Statement declared effective by the Commission on October
25, 1983, and any amendments or reports filed for the purpose of updating
such description;
36
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(e) The description of the Company's Common Stock Purchase Rights
contained in the Company's Form 8-A Registration Statement declared
effective by the Commission on August 12, 1994, and any amendments or
reports filed for the purpose of updating such description;
(f) The Plan's Annual Report on Form 11-K for the year ended December 31,
1993; and
(g) All documents subsequently filed by the Company or the Plan pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the
filing of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities offered
hereby then remaining unsold, shall be deemed to be incorporated herein by
reference and to be a part hereof from the date of filing of such
documents.
Copies of the documents incorporated by reference herein, except for the
exhibits to such documents (unless such exhibits are specifically incorporated
by reference into the documents which this Prospectus incorporates), and copies
of any other documents to which a Participant is entitled as described in this
Prospectus, are available to any Participant receiving a copy of this
Prospectus upon written or oral request. Such request should be directed to
Kathryn Turner, Corporate Director--Human Resources, Circus Circus Enterprises,
Inc., 2880 Las Vegas Boulevard South, Las Vegas, Nevada 89109 (702-734-0410).
See "Additional Information."
LEGAL OPINIONS
The validity of the participation interests in the Plan has been passed upon
by the firm of Schreck, Jones, Bernhard, Woloson & Godfrey, Chartered, Las
Vegas, Nevada. Certain legal matters relating to compliance of the Plan with
the requirements of ERISA have been passed upon by the firm of Trenam, Simmons,
Kemker, Scharf, Barkin, Frye & O'Neill, P.A., Tampa, Florida.
EXPERTS
The consolidated financial statements and schedules included in the Company's
Annual Report on Form 10-K for the fiscal year ended January 31, 1994 and the
Plan's financial statements included in its Annual Report on Form 11-K for the
fiscal year ended December 31, 1993, incorporated by reference in this
Prospectus and elsewhere in the Registration Statement, to the extent and for
the periods indicated in their reports, have been audited by Arthur Andersen
LLP, independent public accountants, and are incorporated herein by reference
in reliance upon the authority of said firm as experts in giving said reports.
Future consolidated financial statements of the Company and financial
statements of the Plan and the reports thereon of Arthur Andersen LLP also will
be incorporated by reference herein in reliance upon the authority of that firm
as experts in giving those reports to the extent that firm has audited those
consolidated financial statements and consented to the use of their reports
thereon.
37
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APPENDIX A
INFORMATION CONCERNING CREDIT REQUIREMENTS APPLICABLE
TO INVESTMENTS OF THE MERRILL LYNCH RETIREMENT PRESERVATION TRUST
THE FOLLOWING DESCRIPTION OF CREDIT REQUIREMENTS IS A SUMMARY OF INFORMATION
PROVIDED TO THE COMPANY BY MERRILL LYNCH TRUST COMPANY.
GUARANTEED INVESTMENTS
The Merrill Lynch Retirement Preservation Trust invests in GICs (i.e.,
contracts issued by insurance companies which provide for a return of principal
plus interest, either periodically or at maturity), BICs (i.e., contracts
issued by domestic and foreign banks which provide for a return of principal
plus interest, either periodically or at maturity) or similar investments which
pay a fixed or variable rate of return on an agreed schedule and are benefit
responsive (collectively "Guaranteed Investments"). Benefit responsiveness may
be provided by the issuer of the Guaranteed Investment or a third party. A
maximum of 80% of the Trust will be invested in Guaranteed Investments.
The types of Guaranteed Investments and the applicable investment standards
for the Merrill Lynch Retirement Preservation Trust are as follows:
GICs. Guaranteed Investment Contracts (also referred to as "Guaranteed
Interest Contracts," "Guaranteed Insurance Contracts" and "Funding
Agreements") may be participating or non-participating. They may have fixed
rates or variable rates which are indexed to some other instrument. They
may have fixed maturity dates (single or installment) or variable maturity
dates. They may be supported by United States Government Securities or
other high quality assets. Some variable rate contracts may have no
specific nominal maturity date; such contracts must contain a provision
which allows either party to terminate the contract on a reset date upon
reasonable notice. The minimum credit requirement for an issuer of a GIC is
either an Aa3 claims paying rating from Moody's Investors Service or an AA-
claims paying rating from Standard and Poors. Additionally a minimum of $1
billion in admitted assets will be required of an insurance company at the
time of purchase. Currently, approximately 34 insurers meet the above
criteria.
BICs. Bank Investment Contracts (also referred to as "Deposit
Agreements") may be participating or non-participating. They may have fixed
rates or variable rates which are indexed to some other instrument. They
may have fixed maturity dates (single or installment) or variable maturity
dates. They may be supported by United States Government Securities or
other high quality assets. Some variable rate contracts may have no
specific nominal maturity date; such contracts must contain a provision
which allows either party to terminate the contract on a reset date upon
reasonable notice. The minimum credit requirement for a bank which issues
BICs purchased by the Merrill Lynch Retirement Preservation Trust is an Aa3
long term deposit rating from Moody's Investors Service for purchases
exceeding one year. A short term deposit rating of P-2 or higher is
required for purchases which do not exceed one year. Additionally, a
minimum of $1 billion in assets will be required of a bank at the time of
purchase. Currently, approximately 16 banks meet the above criteria.
MONEY MARKET INSTRUMENTS
A minimum of 20% of the assets of the Merrill Lynch Retirement Preservation
Trust must be invested in the below-described money market instruments. All
money market instruments must meet both the Standard and Poors A-1 and the
Moody's P-1 short-term investment ratings. The types of investments and the
applicable investment standards are as follows:
United States Government Securities. Marketable securities issued or
guaranteed as to principal and interest by the United States Government and
supported by the full faith and credit of the United States with no more
than two years remaining to maturity at the date of settlement. The
aggregate value of these securities may constitute up to 100% of the money
market portion of the Merrill Lynch Retirement Preservation Trust's
portfolio.
A-1
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United States Government Agency Securities. Debt securities issued by
United States Government sponsored enterprises, Federal agencies and
certain international institutions which are not direct obligations of the
United States but involve United States Government sponsorship or
guarantees by United States Government agencies or enterprises. The United
States Government is not obligated to provide financial support to these
instrumentalities. These agencies include, but are not limited to, Federal
Home Loan Bank, Federal Home Loan Mortgage Corporation, Federal National
Mortgage Association, Student Loan Marketing Association, Federal Farm
Credit Bank, and the International Bank for Reconstruction and Development.
The aggregate value of these securities may constitute up to 100% of the
money market portion of the Merrill Lynch Retirement Preservation Trust's
portfolio. Up to 25% of the aggregate value of such portfolio may be
invested in the obligations of any single agency or instrumentality.
Bank Money Instruments. Obligations of commercial banks, savings banks or
savings and loan associations such as certificates of deposit, including
variable rate certificates of deposit, time deposits, deposit notes and
bankers acceptances. The savings banks and savings and loan associations
must be organized and operating in the United States. The obligations of
commercial banks may be issued by United States banks, foreign branches or
subsidiaries of United States banks ("Eurodollar" obligations), United
States branches or subsidiaries of foreign banks ("Yankee" obligations) or
Eurodollar obligations of foreign banks. The aggregate value of these
securities may constitute up to 75% of the money market portfolio of the
Merrill Lynch Retirement Preservation Trust with no more than one year
remaining to maturity at the date of settlement. The Merrill Lynch
Retirement Preservation Trust may purchase up to 10% of the value of its
total money market assets (taken at market value) with each issuer.
Short-Term Corporate Debt Instruments. Commercial paper (including
variable amount master demand notes) which refers to short-term, unsecured
promissory notes issued by a corporation to finance short-term credit needs
and non-convertible corporate debt securities (e.g., bonds and debentures)
with no more than one year remaining to maturity at the date of settlement.
The aggregate value of these securities may constitute up to 80% of the
Merrill Lynch Retirement Preservation Trust's money market portfolio. The
Merrill Lynch Retirement Preservation Trust may purchase up to 5% of the
value of its total money market assets (taken at market value) with an
issuer.
Repurchase Agreements or Purchase and Sale Contracts. Under such
agreements or contracts, the bank or primary dealer agrees, upon entering
into the contract, to repurchase the security at a mutually agreed upon
time and price, thereby determining the yield during the term of the
agreement. This results in a fixed rate of return insulated from market
fluctuations during such period. Repurchase agreements and purchase and
sale contracts may be entered into only with a member bank of the Federal
Reserve System or a primary dealer in United States Government securities.
The Merrill Lynch Retirement Preservation Trust may purchase up to 10% of
the money market portion of its portfolio with any one entity.
Reverse Repurchase Agreements. The sale of securities held by the Merrill
Lynch Retirement Preservation Trust, with an agreement to repurchase the
securities at an agreed upon price, date and interest payment. During the
time a reverse purchase agreement is outstanding, the Merrill Lynch
Retirement Preservation Trust will maintain a segregated custodial account
containing United States Government or other appropriate high-grade debt
securities having a value equal to the repurchase price. The Merrill Lynch
Retirement Preservation Trust may purchase up to 10% of the money market
portion of its portfolio with any one entity.
A-2
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APPENDIX B
INVESTMENT OBJECTIVE AND POLICIES OF THE S&P
500 INDEX PORTFOLIO OF SEI INDEX FUNDS
THE FOLLOWING DESCRIPTION OF THE INVESTMENT OBJECTIVE AND POLICIES AND
INVESTMENT LIMITATIONS OF THE PORTFOLIO IS BASED ON INFORMATION SET FORTH IN
THE PORTFOLIO'S 1994 PROSPECTUS AND IN THE STATEMENT OF ADDITIONAL INFORMATION
REFERRED TO ON THE COVER PAGE OF THE PORTFOLIO'S 1994 PROSPECTUS (THE
"PORTFOLIO'S STATEMENT"), AND SUCH DESCRIPTION IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH PROSPECTUS AND STATEMENT.
Investment Objectives and Policies. The Portfolio seeks to provide investment
results that correspond to the aggregate price and dividend performance of the
securities in the Standard & Poor's 500 Composite Stock Price Index (the
"Index") which is comprised of 500 selected common stocks, most of which are
listed on the New York Stock Exchange. There can be no assurance that the
Portfolio will achieve its investment objective.
The Portfolio's ability to duplicate the performance of the Index will depend
to some extent on the size and timing of cash flows into and out of the
Portfolio as well as the extent of the Portfolio's expenses. Adjustments made
to accommodate cash flows will track the Index to the maximum extent possible
and may result in brokerage expenses for the Portfolio. Over time, the
correlation between the performance of the Portfolio and the Index is expected
to be over 0.95. A correlation of 1.00 would indicate perfect correlation,
which would be achieved when the net asset value of the Portfolio, including
the value of its dividend and capital gains distributions, increased or
decreased in exact proportion to changes in the Index. An investment in shares
of the Portfolio involves risks similar to those of investing in a portfolio
consisting of the common stocks of some or all of the companies included in the
Index.
The Portfolio attempts to duplicate the capital performance and dividend
income of the Index. The Portfolio will normally be invested in all of the
stocks which comprise the Index, except when changes are made to the Index
itself. The Portfolio's policy is to be fully invested in common stocks, and it
is expected that cash reserve items would normally be less than 10% of net
assets.
The Portfolio may lend up to 20% of its total assets to qualified
institutions for the purpose of realizing additional income; however the
Portfolio has no present intention to lend its securities.
The weightings of stocks in the Index are based on each stock's relative
total market value (i.e., market price per share times the number of shares
outstanding). Because of this weighting, approximately 50% of the Index is
currently composed of the 50 largest companies in the Index, and the Index
currently represents over 65% of the market value of all U.S. common stocks
listed on the New York Stock Exchange.
The Portfolio is not sponsored, endorsed, sold or promoted by Standard &
Poor's Corporation ("S&P"). S&P makes no representation or warranty, implied or
express, to the purchasers of the Portfolio or any member of the public
regarding the advisability of investing in index funds or the Portfolio or the
ability of the Index to track general stock market performance.
S&P does not guarantee the accuracy and/or the completeness of the Index or any
data included therein. S&P makes no warranty, express or implied, as to the
results to be obtained by the Portfolio, owners of the Portfolio, or any data
included therein. S&P makes no express or implied warranties and expressly
disclaims all such warranties of merchantability or fitness for a particular
purpose for use with respect to the Index or any data included therein. S&P's
only relationship to the Portfolio is the licensing of the S&P marks and the
Index, which is determined, composed and calculated by S&P without regard to
the Portfolio.
B-1
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The Portfolio may invest cash reserves in securities issued by the United
States Government, its agencies or instrumentalities, bankers' acceptances,
commercial paper rated at least A-1 by S&P and/or Prime-1 by Moody's Investors
Service, Inc., certificates of deposit, and repurchase agreements involving
such obligations. Such investments will not be used for defensive purposes.
Stock Index Futures. The Portfolio may enter into stock index futures
contracts, provided that the value of these contracts does not exceed 20% of
the Portfolio's total assets. The Portfolio may purchase futures contracts
solely to maintain adequate liquidity to meet its redemption demands while
maximizing the level of the Portfolio's assets which are tracking the
performance of the Index. In addition, the Portfolio may only purchase those
stock index futures contracts--such as futures contracts on the Index--that are
likely to closely duplicate the performance of the Index. The Portfolio also
can sell such futures contracts in order to close out a previously established
position. The Portfolio will not enter into any stock index futures contract
for the purpose of speculation, and will only enter into contracts traded on
national securities exchanges with standardized maturity dates. The Portfolio
will not purchase or sell futures contracts if immediately thereafter the sum
of the amount of margin deposits on its existing futures positions would exceed
5% of its total assets.
A stock index futures contract is a bilateral agreement pursuant to which two
parties agree to take or make delivery of an amount of cash equal to a
specified dollar amount times the difference between the stock index value at
the close of trading of the contract and the price at which the futures
contract is originally struck. No physical delivery of the stocks comprising
the Index is made; generally contracts are closed out prior to the expiration
date of the contract. No price is paid upon entering into futures contracts.
Instead, the Portfolio would be required to deposit an amount of cash or U.S.
Treasury securities known as "initial margin". Subsequent payments, call
"variation margin", to and from the broker, would be made on a daily basis as
the value of the futures position varies (a process known as "marking to
market"). The margin is in the nature of a performance bond or good-faith
deposit on a futures contract.
In order to avoid leveraging and related risks, when the Portfolio purchases
futures contracts, it will collateralize its position by depositing an amount
of cash or cash equivalents, equal to the market value of the futures positions
held, less margin deposits, in a segregated account with the Trust's custodian.
Collateral equal to the current market value of the futures position will be
marked to market on a daily basis.
In considering the proposed use of futures contracts, particular note should
be taken that futures contracts relate to the anticipated levels at some point
in the future, not to the current level of the underlying instrument. Thus
trading of stock index futures may not reflect the trading of the securities
which are used to formulate an index or even actual fluctuations in the
relevant index itself. There is, in addition, a risk that movements in the
price of futures contracts will not correlate with the movement in prices of
the stock index being tracked.
Investment In Securities of Foreign Issuers. The Portfolio may invest in the
stock of foreign issuers which is traded in the United States. The Portfolio
ordinarily will purchase securities of foreign issuers in U.S. markets.
However, the Portfolio may purchase securities of foreign issuers directly in
foreign markets if the Administrator determines that it is in the best interest
of the Portfolio to do so.
Shareholders should recognize that investing in foreign securities involves
considerations and possible risks not typically associated with investing in
U.S. markets. Such investments may be favorably or unfavorably affected by
changes in interest rates, currency exchange rates and exchange control
regulations, and costs may be incurred in connection with conversions between
various currencies. In addition, investment in stock of foreign issuers could
be affected by other factors generally not thought to be present in the United
States including the possibility of heavy taxation, political or social
instability, limitations on the removal of funds or other assets of the
Portfolio, expropriation of assets, diplomatic developments adverse to U.S.
investment, and difficulties in enforcing contractual obligations. The
Portfolio ordinarily will purchase foreign securities in U.S. markets.
B-2
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Investing in the securities of foreign companies involves special risks and
considerations not typically associated with investing in U.S. companies. These
risks and considerations include differences in accounting, auditing and
financial reporting standards, generally higher commission rates on foreign
portfolio transactions, the possibility of expropriation or confiscatory
taxation, adverse changes in investment or exchange control regulations,
political instability which could affect U.S. investment in foreign countries
and potential restrictions on the flow of international capital and currencies.
Foreign companies may also be subject to less government regulation than U.S.
companies. Moreover, the dividends payable on the Portfolio's foreign
securities may be subject to foreign withholding taxes, thus reducing the net
amount of income available for distribution to the Portfolio's shareholders.
Further, foreign securities often trade with less frequency and volume than
domestic securities and, therefore, may exhibit greater price volatility. Also,
changes in foreign exchange rates will affect, favorably or unfavorably, the
value of those securities which are denominated or quoted in currencies other
than the U.S. dollar.
Investment Limitations. The following investment limitations are fundamental
policies of the Portfolio and cannot be changed with respect to the Portfolio
without the consent of the holders of a majority of the Portfolio's outstanding
shares.
The Portfolio may not:
1. Purchase securities of any issuer (except securities issued or
guaranteed by the U.S. Government, its agencies or instrumentalities) if,
as a result, more than 5% of the total assets of the Portfolio would be
invested in the securities of such issuer. This restriction applies to 75%
of the Portfolio's total assets.
2. Purchase any securities which would cause more than 25% of the total
assets of the Portfolio to be invested in the securities of one or more
issuers conducting their principal business activities in the same
industry, provided that this limitation does not apply to investments in
obligations issued or guaranteed by the United States Government or its
agencies and instrumentalities.
3. Borrow money except for temporary or emergency purposes and then only
in an amount not exceeding 10% of the value of the total assets of the
Portfolio. This borrowing provision is included solely to facilitate the
orderly sale of portfolio securities to accommodate heavy redemption
requests if they should occur and is not for investment purposes. All
borrowings in the Portfolio will be repaid before making additional
investments and any interest paid on such borrowings will reduce the income
of the Portfolio.
4. Make loans, except that the Portfolio may enter into repurchase
agreements, provided that repurchase agreements and time deposits maturing
in more than seven days, and other illiquid securities, including
securities which are not readily marketable or are restricted, are not to
exceed, in the aggregate, 10% of the Portfolio's total assets, may engage
in securities lending as described in the Portfolio's 1994 Prospectus, and
may purchase or hold debt instruments in accordance with its investment
objectives and policies.
5. Pledge, mortgage or hypothecate the assets of the Portfolio except to
secure temporary borrowings, as described in the Portfolio's 1994
Prospectus, in aggregate amounts not to exceed 10% of the net assets of the
Portfolio taken at current value at the time of incurring such loan, and in
connection with stock index futures trading as provided in the Portfolio's
1994 Prospectus and the Portfolio's Statement.
6. Invest in companies for the purpose of exercising control.
7. Purchase or sell real estate, real estate limited partnership
interests, commodities or commodities contracts. However, subject to its
permitted investments, the Portfolio may purchase obligations issued by
companies which invest in real estate, commodities or commodities
contracts.
8. Make short sales of securities, maintain a short position or purchase
securities on margin, except that SEI Index Funds may obtain short-term
credits as necessary for the clearance of security transactions.
B-3
<PAGE>
9. Act as an underwriter of securities of other issuers except as it may
be deemed an underwriter in selling a portfolio security.
10. Purchase securities of other investment companies except as permitted
by the Investment Company Act of 1940 and the rules and regulations
thereunder and may only purchase securities of money market funds.
11. Issue senior securities (as defined in the Investment Company Act of
1940) except in connection with permitted borrowings as described in the
Portfolio's 1994 Prospectus and the Portfolio's Statement or as permitted
by rule, regulation or order of the Securities and Exchange Commission.
12. Purchase or retain securities of an issuer if, to the knowledge of
SEI Index Funds, an officer, trustee, partner or director of SEI Index
Funds or any investment adviser of SEI Index Funds owns beneficially more
than 1/2 of 1% of the shares or securities of such issuer and all such
officers, trustees, partners and directors owning more than 1/2 of 1% of
such shares or securities together own more than 5% of such shares or
securities.
13. Purchase securities of any company which has (with predecessors) a
record of less than three years continuing operations if, as a result, more
than 5% of the total assets of the Portfolio (taken at current value) would
be invested in such securities.
14. Purchase warrants, puts, calls, straddles, spreads or combinations
thereof.
15. Invest in interests in oil, gas or other mineral exploration or
development programs.
16. Purchase restricted securities (securities which must be registered
under the Securities Act of 1933 before they may be offered or sold to the
public) or other illiquid securities except as described in the Portfolio's
1994 Prospectus and the Portfolio's Statement.
The foregoing percentages will apply at the time of the purchase of a
security and shall not be considered violated unless an excess or deficiency
occurs or exists immediately after and as a result of a purchase of such
security.
B-4
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APPENDIX C
INVESTMENT OBJECTIVE AND INVESTMENT POLICIES OF
FEDERATED INTERMEDIATE GOVERNMENT TRUST
THE FOLLOWING DESCRIPTION OF THE INVESTMENT OBJECTIVE AND INVESTMENT POLICIES
AND LIMITATIONS OF THE FIG TRUST IS BASED ON INFORMATION SET FORTH IN THE FIG
TRUST 1994 PROSPECTUS AND THE COMBINED STATEMENT OF ADDITIONAL INFORMATION
REFERRED TO ON THE COVER PAGE OF THE FIG TRUST 1994 PROSPECTUS (THE "FIG
STATEMENT"), AND SUCH DESCRIPTION IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH PROSPECTUS AND STATEMENT.
INVESTMENT OBJECTIVE
The investment objective of the Federated Intermediate Government Trust (the
"FIG Trust") is to provide current income. The FIG Trust pursues this
investment objective by investing in U.S. government securities with remaining
maturities of five years or less. While there is no assurance that the FIG
Trust will achieve its investment objective, it endeavors to do so by following
the investment policies described in the FIG Trust 1994 Prospectus. The
investment objective and the policies and limitations described below cannot be
changed without approval of shareholders.
INVESTMENT POLICIES
Acceptable Investments. The U.S. government securities in which the FIG Trust
invests are either issued or guaranteed by the U.S. government, its agencies,
or instrumentalities. The securities in which the FIG Trust may invest are
limited to:
. direct obligations of the U.S. Treasury, such as U.S. Treasury bills,
notes, and bonds; and
. notes, bonds, and discount notes of U.S. government agencies or
instrumentalities, such as Federal Home Loan Banks, Federal National
Mortgage Association, Government National Mortgage Association, Federated
Farm Credit Banks, Tennessee Valley Authority, Export-Import Bank of the
United States, Federal Financing Bank, The Student Loan Marketing
Association and Federal Home Loan Mortgage Corporation.
Some obligations issued or guaranteed by agencies or instrumentalities of the
U.S. government, such as Government National Mortgage Association participation
certificates, are backed by the full faith and credit of the U.S. Treasury. No
assurances can be given that the U.S. government will provide financial support
to other agencies or instrumentalities, since it is not obligated to do so.
These instrumentalities are supported by:
. the issuer's right to borrow an amount limited to a specific line of
credit from the U.S. Treasury;
. discretionary authority of the U.S. government to purchase certain
obligations of an agency or instrumentality; or
. the credit of the agency or instrumentality.
Repurchase Agreements. Repurchase agreements are arrangements in which banks,
broker/dealers, and other recognized financial institutions sell U.S.
government securities or other securities to the FIG Trust and agree at the
time of sale to repurchase them at a mutually agreed upon time and price. To
the extent that the original seller does not repurchase the securities from the
FIG Trust, the FIG Trust could receive less than the repurchase price on any
sale of such securities. In the event that such a defaulting seller filed for
bankruptcy or became insolvent, disposition of such securities by the FIG Trust
might be delayed pending court action. According to the FIG Statement, the FIG
Trust believes that under the regular procedures normally in effect for custody
of the FIG Trust's portfolio securities subject to repurchase agreements, a
court of competent jurisdiction would rule in favor of the FIG Trust and allow
retention or disposition of such securities. According to the FIG Statement,
the FIG Trust will only enter into repurchase agreements with
C-1
<PAGE>
banks and other recognized financial institutions such as broker/dealers which
are deemed by the FIG Trust's adviser to be creditworthy pursuant to guidelines
established by the FIG Trust's Board of Trustees.
As a matter of investment practice, which can be changed without shareholder
approval, the FIG Trust will not invest more than 10% of its total assets in
securities which are illiquid, including repurchase agreements providing for
settlement in more than seven days after notice.
When-Issued and Delayed Delivery Transactions. The FIG Trust may purchase
U.S. government securities on a when-issued or delayed delivery basis. These
transactions are arrangements in which the FIG Trust purchases securities with
payment and delivery scheduled for a future time. The FIG Trust engages in
when-issued and delayed delivery transactions only for the purpose of acquiring
portfolio securities consistent with the FIG Trust's investment objective and
policies, and not for investment leverage. The FIG Trust may engage in these
transactions to an extent that would cause the segregation of an amount up to
20% of the total value of its assets. These transactions are made to secure
what is considered to be an advantageous price and yield for the FIG Trust.
Settlement dates will occur no more than 120 days after entering into these
transactions, and the market values of the securities purchased may vary from
the purchase prices. No fees or other expenses, other than normal transaction
costs, are incurred. However, liquid assets of the FIG Trust sufficient to make
payment for the securities to be purchased are segregated at the trade date.
These securities are marked to market daily and maintained until the
transaction is settled. In when-issued and delayed delivery transactions, the
FIG Trust relies on the seller to complete the transaction. The seller's
failure to complete the transaction may cause the FIG Trust to miss a price or
yield considered to be advantageous.
Portfolio Turnover. The FIG Trust conducts portfolio transactions to
accomplish its investment objective as interest rates change, to invest new
money obtained from selling its shares, and to meet redemption requests. The
FIG Trust may dispose of portfolio securities at any time if it appears that
selling the securities will help the FIG Trust achieve its investment
objective. According to the FIG Statement, the FIG Trust will not attempt to
set or meet a portfolio turnover rate since any turnover would be incidental to
transactions undertaken in an attempt to achieve the FIG Trust's investment
objective. During the fiscal years ended January 31, 1994 and 1993, the FIG
Trust's portfolio turnover rates were 131% and 85%, respectively.
INVESTMENT LIMITATIONS
The FIG Trust will not borrow money or pledge securities except, under
certain circumstances, the FIG Trust may borrow up to one-third of the value of
its total assets and pledge up to 10% of the value of those assets to secure
such borrowings.
The FIG Statement includes the following investment limitations which,
according to the FIG Statement, will not be changed without approval of the FIG
Trust's shareholders.
Selling Short and Buying on Margin. The FIG Trust will not sell any
securities short or purchase any securities on margin but may obtain such
short-term credits as may be necessary for clearance of purchases and sales of
portfolio securities.
Borrowing Money. The FIG Trust will not borrow money except as a temporary
measure for extraordinary or emergency purposes and then only in amounts not in
excess of 5% of the value of its total assets or in an amount up to one-third
of the value of its total assets, including the amount borrowed, in order to
meet redemption requests without immediately selling portfolio securities. This
borrowing provision is not for investment leverage but solely to facilitate
management of the portfolio by enabling the FIG Trust to meet redemption
requests when the liquidation of portfolio securities would be inconvenient or
disadvantageous. Interest paid on borrowed funds will not be available for
investment. The FIG Trust will liquidate any such borrowings as soon as
possible and may not purchase any portfolio securities while any borrowings are
outstanding.
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Pledging Assets. The FIG Trust will not mortgage, pledge, or hypothecate any
assets except to secure permitted borrowings. In those cases, it may mortgage,
pledge, or hypothecate assets having a market value not exceeding 10% of the
value of total assets at the time of the borrowing.
Lending Cash or Securities. The FIG Trust will not lend any of its assets,
except that it may purchase or hold U.S. government securities, including
repurchase agreements, permitted by its investment objective and policies.
Issuing Senior Securities. The FIG Trust will not issue senior securities,
except as permitted by its investment objective and policies.
Except with respect to borrowed money, if a percentage limitation is adhered
to at the time of investment, a later increase or decrease in percentage
resulting from any change in value or net assets will not result in a violation
of such restriction.
According to the FIG Statement, the FIG Trust did not borrow money or pledge
securities in excess of 5% of the value of its total assets during the last
fiscal year and has no present intent to do so in the coming fiscal year.
As a matter of operating policy, the FIG Trust will not, according to the FIG
Statement, purchase any securities while borrowings in excess of 5% of its
total assets are outstanding.
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<PAGE>
APPENDIX D
INVESTMENT OBJECTIVE AND POLICIES OF THE
MERRILL LYNCH CAPITAL FUND, INC.
THE FOLLOWING DESCRIPTION OF THE INVESTMENT OBJECTIVE AND POLICIES OF THE
CAPITAL FUND IS BASED ON INFORMATION SET FORTH IN THE CAPITAL FUND 1994
PROSPECTUS AND IN THE STATEMENT OF ADDITIONAL INFORMATION REFERRED TO ON THE
COVER PAGE OF THE CAPITAL FUND 1994 PROSPECTUS (THE "CAPITAL FUND STATEMENT"),
AND SUCH DESCRIPTION IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
PROSPECTUS AND STATEMENT.
The Capital Fund's objective is to achieve the highest total investment
return consistent with prudent risk. To do this, management of the Capital Fund
shifts the emphasis among equity, debt and convertible securities. This
flexible, total investment return approach is called a "fully managed"
investment policy. It distinguishes the Capital Fund from other investment
companies which often seek either capital growth or current income. Of course,
there is no assurance that the Capital Fund will attain this objective.
The Capital Fund's investment philosophy is based on the belief that, as in
the past, the structure of the United States and other economies and their
securities markets will undergo continuous change. Thus, the fully managed
approach puts maximum emphasis on flexibility.
The two principal features of the Capital Fund's management approach are
flexibility and concentration in "quality" companies.
Flexibility. The Capital Fund's fully managed investment approach makes use
of equity, debt and convertible securities. Freedom to move among these
different types of securities as prevailing trends change is the keystone of
the Capital Fund's investment policy.
Concentration in "Quality" Companies. The earnings of quality companies
generally tend to grow consistently. Their internal strengths--good financial
resources, a strong balance sheet, a satisfactory rate of return on capital, a
good industry position and superior management skills--give the Capital Fund
confidence that these companies consistently will achieve at high levels. The
Capital Fund considers quality companies to be those which conform most closely
to these characteristics. Most of the Capital Fund's equity portfolio is in the
common stocks of these larger market capitalization, quality companies.
Sometimes, to reduce risk and to achieve the highest total investment return,
the Capital Fund may invest in other securities.
. non-convertible, long-term debt securities, including "deep discount"
corporate debt securities of investment grade.
. convertible securities--fixed income issues which give the owner the
option of a later exchange for common stock.
. cash or money-market securities to produce interest income during periods
of defensive investment.
Merrill Lynch Asset Management, L.P. (the "Investment Adviser"), expects that
over longer periods a larger portion of the Capital Fund's portfolio will
consist of equity securities. However, the flexible fully managed investment
approach enables the Capital Fund to switch its emphasis to debt and
convertible securities if, in the opinion of the Investment Adviser, prevailing
market or economic conditions warrant. The Investment Adviser will determine
the emphasis among equity and debt securities, including convertible
securities, based on its evaluation as to the types of securities presently
providing the opportunity for the highest total investment return consistent
with prudent risk. On March 31, 1994, approximately 60% of the Capital Fund's
portfolio was invested in equity securities.
The Capital Fund may invest up to 25% of its total assets in securities of
foreign issuers. Investments in securities of foreign issuers involve certain
risks, including fluctuations in foreign exchange rates, future
D-1
<PAGE>
political and economic developments, and the possible imposition of exchange
controls or other foreign governmental laws or restrictions. In addition,
foreign companies are not subject to accounting, auditing and financial
reporting standards and requirements comparable to those of United States
companies. The foreign markets also have different clearance and settlement
procedures, and in certain markets there have been times when settlements have
been unable to keep pace with the volume of securities transactions, making it
difficult to conduct such transactions. Delays in settlement could result in
temporary periods when assets of the Capital Fund are uninvested and no return
is earned thereon. The inability of the Capital Fund to make intended security
purchases due to settlement problems could cause the Capital Fund to miss
attractive investment opportunities. Inability to dispose of a portfolio
security due to settlement problems could result either in losses to the
Capital Fund due to subsequent declines in value of such portfolio security or,
if the Capital Fund has entered into a contract to sell the security, could
result in possible liability to the purchaser. To the extent such investments
are subject to withholding or other taxes or to regulations relating to
repatriation of assets, the Capital Fund's distributable income will be
reduced. The prices of securities in different countries may be subject to
different economic, financial, political and social factors.
Portfolio Turnover. The rate of portfolio turnover is not a limiting factor
and, given the Capital Fund's investment policies, it is anticipated that there
may be periods when high portfolio turnover will exist. The use of covered call
options at times when the underlying securities are appreciating in value may
result in higher portfolio turnover. The Capital Fund pays brokerage
commissions in connection with writing call options and effecting closing
purchase transactions, as well as in connection with purchases and sales of
portfolio securities. Although the Capital Fund anticipates that its annual
portfolio turnover rates should not exceed 100%, the turnover rate may vary
greatly from year to year or during periods within a year. A high rate of
portfolio turnover results in correspondingly greater brokerage commission
expenses. The portfolio turnover rate is calculated by dividing the lesser of
the Capital Fund's annual sales or purchases of portfolio securities (exclusive
of purchases or sales of all securities with maturities at the time of
acquisition of one year or less) by the monthly average value of the securities
in the portfolio during the year. The rates of portfolio turnover for the years
ended March 31, 1992, 1993 and 1994 were 59%, 55% and 86%, respectively.
Investment Restrictions. The Capital Fund has adopted the following
investment policies and restrictions. These may not be changed without the
approval of the holders of a majority of the Capital Fund's outstanding voting
shares, which for this purpose means the lesser of (a) more than 50% of the
outstanding shares, or (b) 67% of the shares represented at a meeting where
more than 50% of the outstanding shares are represented. Unless otherwise
provided, all references to the assets of the Capital Fund below are in terms
of current market value. The Capital Fund may not:
1. Invest in the securities of any one issuer (other than the United
States Government, its agencies or instrumentalities) if, immediately after
and as a result of such investment, the acquisition cost of the holdings of
the Capital Fund in the securities of such issuer exceeds 5% of the Capital
Fund's total assets.
2. Invest in the securities of any single issuer if, immediately after
and as a result of such investment, the Capital Fund owns more than 10% of
the outstanding securities, or more than 10% of the outstanding voting
securities, of such issuer.
3. Concentrate its investments in any particular industry; provided that
if it is deemed appropriate for the attainment of the Capital Fund's
investment objective, up to 25% of its total assets (taken at acquisition
cost at the time of each investment) may be invested in any one industry.
4. Make investments for the purpose of exercising control or management.
5. Purchase securities of other investment companies, except in
connection with a merger, consolidation, acquisition or reorganization, or
by purchase in the open market of securities of closed- end investment
companies where no underwriter or dealer's commission or profit, other than
customary broker's commission, is involved and only if immediately
thereafter no more than 10% of the Capital Fund's total assets, taken at
market value, would be invested in such securities.
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<PAGE>
6. Purchase or sell real estate; provided that the Capital Fund may
invest in securities secured by real estate or interests therein or issued
by companies, including real estate investment trusts, which invest in real
estate or interests therein.
7. Purchase or sell commodities or commodity contracts.
8. Purchase any securities on margin, except that the Capital Fund may
obtain such short-term credit as may be necessary for the clearance of
purchases and sales of portfolio securities.
9. Make short sales of securities or maintain a short position.
10. Make loans to other persons; provided that the acquisition of bonds,
debentures, or other corporate debt securities and investment in government
obligations, short-term commercial paper, certificates of deposit, bankers'
acceptances and variable amount notes which are a portion of an issue to
the public shall not be deemed to be the making of a loan and provided
further that the Capital Fund may lend its portfolio securities as set
forth in (11) below.
11. Lend its portfolio securities in excess of 20% of its total assets,
taken at market value; provided that such loans may be made only to New
York Stock Exchange member firms, other brokerage firms having net capital
of at least $10 million and financial institutions, such as registered
investment companies, banks and insurance companies, having at least $10
million in capital and surplus, and provided further that such loans shall
be in accordance with the guidelines established by the Securities and
Exchange Commission for such loans and by the Board of Directors of the
Capital Fund, including maintaining collateral from borrowers equal at all
times to the current market value of the securities loaned. See "Lending of
Portfolio Securities", below.
12. Borrow amounts in excess of 5% of its total assets, taken at
acquisition cost or market value, whichever is lower, and then only from
banks as a temporary measure for extraordinary or emergency purposes.
13. Mortgage, pledge, hypothecate or in any manner transfer (except as
provided in (11) above), as security for indebtedness, any securities owned
or held by the Capital Fund except as may be necessary in connection with
borrowings mentioned in (12) above, and then such mortgaging, pledging or
hypothecating may not exceed 15% of the Capital Fund's total assets, taken
at acquisition cost or market value, whichever is lower. (The deposit in
escrow of underlying securities in connection with the writing of call
options is not deemed to be a pledge.) [In order to comply with certain
statutes, the Capital Fund will not, as a matter of operating policy,
mortgage, pledge or hypothecate its portfolio securities to the extent that
at any time the percentage of pledged securities plus the sales charge will
exceed 10% of the offering price of the Capital Fund's shares.]
14. Invest in securities for which there are legal or contractual
restrictions on resale.
15. Invest in securities for which there is no readily available market,
if at the time of acquisition more than 5% of its total assets would be
invested in such securities.
16. Underwrite securities of other issuers except insofar as the Capital
Fund may technically be deemed an underwriter under the Securities Act of
1933, as amended, in selling portfolio securities.
Additional investment restrictions adopted by the Capital Fund, which may be
changed by the Board of Directors of the Capital Fund, provide that the Capital
Fund may not:
1. Invest in securities of foreign issuers if at the time of acquisition
more than 25% of its total assets, taken at market value, would be invested
in such securities.
2. Purchase or sell interests in oil, gas or other mineral exploration or
development programs.
3. Write, purchase or sell puts, calls, straddles, spreads or
combinations thereof, provided however, the Capital Fund may write "covered
call options". See "Writing of Covered Call Options", below.
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<PAGE>
4. Invest in warrants if at the time of acquisition more than 2% of its
total assets, taken at market value, would be invested in warrants. For
purposes of this restriction, warrants acquired by the Capital Fund in
units or attached to securities may be deemed to be without value.
5. Invest in securities of companies having a record, together with
predecessors, of less than three years of continuous operation if at the
time of acquisition more than 5% of its total assets, taken at market
value, would be invested in such securities.
6. Purchase or retain the securities of any issuer, if those individual
officers and directors of the Capital Fund, Merrill Lynch & Co., Inc. or
any subsidiary thereof each owning beneficially more than 1/2 of 1% of the
securities of such issuer own in the aggregate more than 5% of the
securities of such issuer.
In addition to (6) above, the Capital Fund also has a policy of not
purchasing securities of companies in which directors or management personnel
of the Capital Fund, Merrill Lynch & Co., Inc. or any subsidiary thereof have a
substantial beneficial interest. Portfolio securities of the Capital Fund may
not be purchased from or sold or loaned to Merrill Lynch & Co., Inc. or any
subsidiary thereof or any of their directors, officers or employees.
Because of the affiliation of Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch") with the Capital Fund, the Capital Fund is
prohibited from engaging in certain transactions involving Merrill Lynch except
pursuant to an exemptive order or otherwise in compliance with the provisions
of the Investment Company Act of 1940, as amended (the "Investment Company
Act"), and the rules and regulations thereunder. Included among such restricted
transactions are purchases from or sales to Merrill Lynch of securities in
transactions in which Merrill Lynch acts as principal. Where Merrill Lynch is a
participant in a public offering of securities, purchases by the Capital Fund
of such securities and, in certain instances, other securities of the issuer
will be subject to limitations set forth in the Investment Company Act, and the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder. See "Portfolio Transactions and Brokerage" in the Capital Fund
Statement.
Lending of Portfolio Securities. Subject to investment restriction (11)
above, the Capital Fund from time to time lends securities from its portfolio
to approved borrowers and receives therefor collateral in cash or securities
issued or guaranteed by the United States Government which are maintained at
all times in an amount equal to at least 100% of the current market value of
the loaned securities. The purpose of such loans is to permit the borrower to
use such securities for delivery to purchasers when such borrower has sold
short. If cash collateral is received by the Capital Fund, it is invested in
short-term money market securities, and a portion of the yield received in
respect of such investment is retained by the Capital Fund; and if securities
are delivered to the Capital Fund as collateral, the Capital Fund and the
borrower negotiate a rate for the loan premium to be received by the Capital
Fund for lending its portfolio securities. In either event, the total yield on
the Capital Fund's portfolio is increased by loans of its portfolio securities.
The Capital Fund will have the right to regain record ownership of loaned
securities to exercise beneficial rights such as voting rights, subscription
rights and rights to dividends, interest or other distributions. Such loans are
terminable at any time. The Capital Fund may pay reasonable finder's,
administrative and custodial fees in connection with such loans.
Writing of Covered Call Options. The Capital Fund may from time to time
write, i.e. sell, covered call options on its portfolio securities and enter
into closing purchase transactions with respect to certain of such options. A
call option is considered covered where the writer of the option owns the
underlying securities. By writing a covered call option, the Capital Fund, in
return for the premium income realized from the sale of the option, may give up
the opportunity to profit from a price increase in the underlying security
above the option exercise price. In addition, the Capital Fund will not be able
to sell the underlying security until the option expires, is exercised or the
Capital Fund effects a closing purchase transaction as described below. A
closing purchase transaction cancels out the Capital Fund's position as the
writer of an option by means of an offsetting purchase of an identical option
prior to the expiration of the option it has written. If the option
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expires unexercised, the Capital Fund realizes a gain in the amount of the
premium received for the option which may be offset by a decline in the market
price of the underlying security during the option period. The Capital Fund may
not write covered options on underlying securities exceeding 15% of the value
of its total assets.
All options referred to herein and in the Capital Fund 1994 Prospectus are
options issued by The Options Clearing Corporation (the "Clearing Corporation")
which are currently traded on the Chicago Board Options Exchange, American
Stock Exchange, Philadelphia Stock Exchange, Pacific Stock Exchange or New York
Stock Exchange. A call option gives the purchaser of an option the right to
buy, and obligates the writer (seller) to sell, the underlying security at the
exercise price during the option period. The option period normally ranges from
three to nine months from the date the option is written. For writing an
option, the Capital Fund receives a premium, which is the price of such an
option on the exchange on which it is traded. The exercise price of the option
may be below, equal to or above the current market value of the underlying
security at the time the option is written.
The writer may terminate its obligation prior to the expiration date of the
option by executing a closing purchase transaction which is effected by
purchasing on an exchange an option of the same series (i.e., same underlying
security, exercise price and expiration date) as the option previously written.
Such a purchase does not result in ownership of an option. A closing purchase
transaction ordinarily will be effected to realize a profit on an outstanding
call option, to prevent an underlying security from being called, to permit the
sale of the underlying security or to permit the writing of a new call option
containing different terms on such underlying security. The cost of such a
liquidation purchase plus transaction costs may be greater than the premium
received on the original option, in which case the Capital Fund will have
incurred a loss in the transaction. An option may be closed out only on an
exchange which provides a secondary market for an option of the same series and
there is no assurance that a secondary market will exist for any particular
option. A covered option writer unable to effect a closing purchase transaction
will not be able to sell the underlying security until the option expires or
the underlying security is delivered upon exercise, with the result that the
writer will be subject to the risk of market decline in the underlying security
during such period. The Capital Fund will write an option on a particular
security only if management believes that a secondary market will exist on an
exchange for options of the same series which will permit the Capital Fund to
make a closing purchase transaction in order to close out its position.
Due to the relatively short time that exchanges have been dealing with
options, options involve risks of possible unforeseen events which can be
disruptive to the option markets or could result in the institution of certain
procedures including restriction of certain types of orders.
D-5
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NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS
IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS OTHER THAN THOSE CONTAINED
IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THESE
SECURITIES IN ANY STATE TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER
OR SOLICITATION IN SUCH STATE.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Additional Information .................................................... 2
General Information ....................................................... 2
Definitions ............................................................... 3
The Plan .................................................................. 8
General ................................................................. 8
Purpose ................................................................. 8
Administration .......................................................... 9
Eligibility ............................................................. 10
Participation in the Plan ............................................... 10
Contributions ........................................................... 10
Rollover Contributions .................................................. 13
Limitations on Contributions ............................................ 13
Change of Contributions ................................................. 14
Accounts ................................................................ 15
Investment of Contributions ............................................. 15
Description of Investment Options........................................ 16
Availability of Additional Information Concerning Investment Options..... 28
Valuation of the Funds .................................................. 28
Vesting ................................................................. 28
Withdrawals on Account of Hardship ...................................... 29
Withdrawals After Age 59 1/2 ............................................ 30
Diversification Election ................................................ 30
Benefits Under the Plan ................................................. 30
Voting and Other Rights ................................................. 32
Dividends ............................................................... 32
Assignment; Liens ....................................................... 33
Amendment and Termination ............................................... 33
Reference to the Plan ................................................... 33
Federal Tax Aspects ....................................................... 33
Applicable Requirements of ERISA .......................................... 36
Amendments and Other Changes Affecting this Prospectus..................... 36
Reports of the Company .................................................... 36
Incorporation of Certain Documents By Reference............................ 36
Legal Opinions ............................................................ 37
Experts ................................................................... 37
Appendix A................................................................. A-1
Appendix B................................................................. B-1
Appendix C................................................................. C-1
Appendix D................................................................. D-1
</TABLE>
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NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UN-
DER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY OR THE PLAN SINCE THE DATE HEREOF.
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[LOGO OF CIRCUS CIRCUS ENTERPRISES, INC. APPEARS HERE]
ENTERPRISES, INC.
---------------
CIRCUS CIRCUS EMPLOYEES'
PROFIT SHARING, INVESTMENT
AND EMPLOYEE STOCK
OWNERSHIP PLAN
---------------
PROSPECTUS
---------------
NOVEMBER 18, 1994
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
Reference is made to the information appearing under the heading
"Incorporation of Certain Documents by Reference" in the Prospectus
constituting a part of this Registration Statement, which information is
incorporated herein by this reference.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 78.751 of the Nevada Revised Statutes (the "Nevada Law") permits a
corporation to indemnify any of its directors, officers, employees and agents
against costs and expenses arising from claims, suits and proceedings if such
persons acted in good faith and in a manner reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. Notwithstanding the foregoing, in an action by or in the right of
the corporation, no indemnification may be made in respect of any claim, issue
or matter, as to which such person is adjudged to be liable to the corporation
unless a court of competent jurisdiction determines that in view of all the
circumstances of the case, indemnification would be appropriate. The
indemnification provisions of the Nevada Law expressly do not exclude any other
rights a person may have to indemnification under any bylaw, among other
things.
In accordance with Nevada Revised Statutes 78.037, Article XI of the
Company's Restated Articles of Incorporation provides that no director or
officer of the Company shall be personally liable to the Company or its
stockholders for damages for breach of fiduciary duty as a director or officer,
except for (a) acts or omissions which include intentional misconduct, fraud or
a knowing violation of law, or (b) the payment of dividends in violation of
Nevada Revised Statutes 78.300.
Article X, Section 10.2 of the Company's Restated Bylaws provides for
mandatory indemnification of directors and officers to the fullest extent now
or hereafter permitted by law.
The Company maintains a liability insurance policy under which officers and
directors are generally indemnified against losses and liability (including
costs, expenses, settlements, and judgments) incurred by them in such
capacities, individually or otherwise, other than specified excluded losses.
The insurance policy will pay on behalf of the Company all covered losses for
which the Company grants indemnification of each officer or director as
permitted by law which the officer or director becomes legally obligated to pay
on account of an indemnifiable claim. The policy would generally cover, in
addition to other liabilities, liabilities arising under the federal securities
laws; however, the subject of loss may not include any claim or claims under
federal or state law arising out of or relating to (i) the filing of a
registration statement with the Securities and Exchange Commission or the offer
or sale by means of a prospectus of any security with respect to which a
registration statement has been filed, including, but not limited to, any claim
asserting that such registration statement or prospectus contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, (ii)
any underwriting agreement for the offer or sale of any security, or (iii) any
accounting of profits from the purchase or sale of securities of the Company
under Section 16(b) of the Securities Exchange Act of 1934 or a similar state
law.
II-1
<PAGE>
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
<TABLE>
<C> <S>
3(i)(a) Restated Articles of Incorporation of the Company as of July 15, 1988
and Certificate of Amendment thereto, dated June 29, 1989
(Incorporated by reference to Exhibit 3(a) to the Company's Annual
Report on Form 10-K for the fiscal year ended January 31, 1991).
3(i)(b) Certificate of Division of Shares into Smaller Denominations, dated
June 20, 1991 (Incorporated by reference to Exhibit 3(b) to the
Company's Annual Report on Form 10-K for the fiscal year ended
January 31, 1992).
3(i)(c) Certificate of Division of Shares into Smaller Denominations, dated
June 22, 1993 (Incorporated by reference to Exhibit 3(i) to the
Company's Current Report on Form 8-K dated July 21, 1993).
3(ii)(a) Restated Bylaws of the Company dated June 20, 1991 (Incorporated by
reference to Exhibit 3(c) to the Company's Annual Report on Form 10-K
for the fiscal year ended January 31, 1992).
3(ii)(b) Amendments, dated March 29, 1993, to the Restated Bylaws of the
Company dated June 20, 1991 (Incorporated by reference to Exhibit
3(d) to the Company's Annual Report on Form 10-K for the fiscal year
ended January 31, 1993).
4(a) Rights Agreement, dated as of July 14, 1994, between the Company and
First Chicago Trust Company of New York (Incorporated by reference to
Exhibit 4 to the Company's Current Report on Form 8-K dated August
15, 1994.
4(b) Group Annuity Contract No. GA70867, effective as of November 1, 1985,
between Bankers Life Company and Circus Circus Enterprises, Inc., and
related letters dated November 15, 1985 and December 4, 1985--
Incorporated by reference to Exhibit 4(c) to the Company's
Registration Statement on Form S-8 (No. 33-1459).
4(c) Eighth Amendment and Restatement of the Circus Circus Employees'
Profit Sharing, Investment and Employee Stock Ownership Plan.*
4(d) Third Amendment and Restatement of the Circus Circus Employees'
Profit Sharing, Investment, and Employee Stock Ownership Trust.*
5(a) Opinion of Schreck, Jones, Bernhard, Woloson & Godfrey, Chartered,
Las Vegas, Nevada.*
5(b) Internal Revenue Service determination letter, dated April 28, 1987--
Incorporated by reference to Exhibit 5(b) to the Company's
Registration Statement on Form S-8 (No. 33-1459).
5(c) Opinion of Trenam, Simmons, Kemker, Scharf, Barkin, Frye & O'Neill,
Tampa, Florida.
5(d) Internal Revenue Service determination letter, dated September 14,
1993.*
23(a) Consent of Schreck, Jones, Bernhard, Woloson & Godfrey, Chartered.
Reference is made to Exhibit 5(a) hereto.
23(b) Consent of Trenam, Simmons, Kemker, Scharf, Barkin, Frye & O'Neill.
Reference is made to Exhibit 5(c) hereto.
23(c) Consent of Arthur Andersen & Co.
24 Power of Attorney**
</TABLE>
- --------
* Previously filed as an exhibit to this Registration Statement.
** Previously filed as part of the signature pages of Post Effective Amendment
No. 5 to this Registration Statement.
II-2
<PAGE>
ITEM 9. UNDERTAKINGS.
The undersigned registrant 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 of 1933;
(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;
(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 15(d) of
the Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment 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.
(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.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
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.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant 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 registrant 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 whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
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 THE
REQUIREMENTS FOR FILING ON FORM S-8 AND HAS DULY CAUSED THIS AMENDMENT TO BE
SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY
OF LAS VEGAS, STATE OF NEVADA, ON THE 18TH DAY OF NOVEMBER, 1994.
Circus Circus Enterprises, Inc.
By Clyde T. Turner
----------------------------------
CLYDE T. TURNER, CHAIRMAN OF THE
BOARD AND CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
Clyde T. Turner Chairman of the November 18, 1994
- ------------------------------------ Board and Chief
CLYDE T. TURNER Executive Officer
(Principal
Executive Officer)
Daniel N. Copp Executive Vice November 18, 1994
- ------------------------------------ President and
DANIEL N. COPP Chief Financial
Officer (Principal
Financial Officer)
* Director November 18, 1994
- ------------------------------------
WILLIAM G. BENNETT
* Director November 18, 1994
- ------------------------------------
JAMES CASHMAN III
* Director November 18, 1994
- ------------------------------------
TONY COELHO
Director November , 1994
- ------------------------------------
CARL F. DODGE
Director November , 1994
- ------------------------------------
WILLIAM N. PENNINGTON
* Director November 18, 1994
- ------------------------------------
FRED W. SMITH
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
Director November , 1994
- -------------------------------------
ARTHUR M. SMITH, JR.
Kurt D. Sullivan Director November 18, 1994
- -------------------------------------
KURT D. SULLIVAN
Les Martin Controller November 18, 1994
- -------------------------------------
LES MARTIN
</TABLE>
*By Clyde T. Turner
----------------------------
Clyde T. Turner,
Attorney-in-Fact
The Plan. Pursuant to the requirements of the Securities Act of 1933, the
Plan has duly caused this Amendment to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Las Vegas, State of
Nevada, on the 18th day of November, 1994.
Circus Circus Employees' Profit
Sharing, Investment and Employee
Stock Ownership Plan
By Circus Circus Enterprises, Inc.
Plan Administrator
By Clyde T. Turner
----------------------------------
Clyde T. Turner, Chairman of the
Board and Chief Executive Officer
II-5
<PAGE>
EXHIBIT 5(C)
TRENAM, SIMMONS, KEMKER, SCHARF, BARKIN, FRYE & O'NEILL, P.A.
November 13, 1994
Circus Circus Enterprises, Inc.
2880 Las Vegas Boulevard, South
Las Vegas, Nevada 89109
Re: Circus Circus Employees' Profit Sharing, Investment and Employee Stock
Ownership Plan
Gentlemen:
You have requested our opinion as to whether the amendment and restatement of
the Circus Circus Employees' Profit Sharing and Investment Plan (the "Plan"),
adopted by Circus Circus Enterprises, Inc. (the "Company") on November 22,
1993, as set forth in the Eighth Amendment and Restatement of the Circus Circus
Employees' Profit Sharing, Investment and Employee Stock Ownership Plan (the
"Restated Plan"), and the Third Amendment and Restatement of the Plan's related
trust (the "Restated Trust"), have adversely affected the compliance of the
Plan and the Trust with Sections 401 and 501 of the Internal Revenue Code of
1986, as amended (the "Code"), and with the Employee Retirement Income Security
Act of 1974, as amended ("ERISA").
The Plan and the Trust received a determination letter dated April 28, 1987,
from the Internal Revenue Service ("IRS") that the plan met the requirements of
a qualified profit sharing plan under Section 401(a) of the Code and a
qualified cash or deferred arrangement under Section 401(k) of the Code, and
that the Trust was exempt from federal income taxation pursuant to Section
501(a) of the Code. The Plan and the Trust received a second determination
letter dated September 14, 1993 (but not effective for plan years beginning on
or after January 1, 1994), from the IRS that the Plan met the requirements of a
qualified profit sharing plan under Section 401(a) of the Code, a qualified
cash or deferred arrangement under Section 401(k) of the Code, and a qualified
employee stock ownership plan under Section 4975(e)(7) of the Code, and that
the Trust was exempt from federal income taxation pursuant to Section 501(a) of
the Code. On October 14, 1994, the Company requested an additional
determination letter from the IRS that the Plan meets the requirements of a
qualified profit sharing plan under Section 401(a) of the Code, a qualified
cash or deferred arrangement under Section 401(k) of the Code, and a qualified
employee stock ownership plan under Section 4975(c)(7) of the Code, and that
the Trust is exempt from federal income taxation pursuant to Section 501(a) of
the Code.
In connection with the rendering of this opinion, we have examined the Plan
and all amendments thereto, the Trust (of which Bank of America is the current
trustee) and all amendments thereto, a Contract with Principal Financial Group
(formerly known as Bankers Life Company) designated as Group Contract GA 70867
(including certain letters that form part of such Group Contract), the Restated
Plan and the Restated Trust. We have also examined such corporate records of
the Company as we consider necessary for the purpose of this opinion. As to
various questions of fact material to the opinions expressed below, we have
relied, without independent investigation, on oral or written statements,
letters or certificates of public officials or officers of the Company. With
respect to such factual matters upon which legal conclusions expressed below
are based, we have not undertaken any independent audit, examination,
investigation or inspection of the matters described or contained in such
statements, letters, or certificates, and have relied solely upon the facts and
circumstances described therein. In our examination, we have assumed the
authenticity of all documents submitted to us as originals, the genuineness of
all signatures not actually witnessed by us, the legal capacity of all natural
persons executing instruments or documents examined or relied upon by us
(whether on their own behalf or on behalf of an entity), and the completeness
and conformity to original documents of all documents submitted to us as
certified, conformed, photostatic, telecopied or draft copies.
<PAGE>
To date, only certain final regulations have been issued by the U.S. Treasury
and Department of Labor with respect to the requirements of the Code and ERISA.
Accordingly, our opinion concerning compliance of the Plan with the Code and
ERISA is necessarily based on our present understanding of the applicable
requirements of the Code and ERISA. In addition, this letter relates only to
the Plan's tax status under Sections 401 and 501 of the Code and its status
under ERISA, and further relates to the Plan's provisions as specifically set
forth in writing, and not to its operation. Furthermore, this opinion is given
as of the date hereof. We undertake no obligation, and hereby specifically
disclaim any obligation, to advise of any change in any matter set forth
herein.
Based on the foregoing reviews, understandings and assumptions, and subject
to the exceptions and limitations described above, we are of the opinion that:
1. The adoption of the Restated Plan and the Restated Trust did not cause
the Plan to fail to be in substantial compliance with the requirements of
Sections 401(a), 401(k) and 4975(e)(7) of the Code so long as any further
amendments requested by the IRS are adopted within 90 days after the
issuance of any determination letter that is conditioned upon timely
adoption of such amendments; and the IRS, without requiring material
amendments thereto, should issue a favorable determination letter with
respect to the Restated Plan and the Restated Trust; and
2. The Restated Plan and the Restated Trust substantially comply with the
applicable portions of ERISA that did not amend the Code, and the adoption
of the Restated Plan and the Restated Trust does not cause the Plan or the
Trust to fail to be in compliance with such provisions.
We hereby consent to the use of this opinion as an Exhibit to the Company's
Registration Statement No. 33-18278 on Form S-8 and to the reference to us
under the caption "Legal Opinions" in the Prospectus, and any amendments
thereto, filed in connection with the Plan. In giving this consent, we do not
hereby admit that we come within a category of persons whose consent is
required under Section 7 of the Securities Act of 1933, as amended, or the
rules and regulations thereunder.
Sincerely,
Trenam, Simmons, Kemker, Scharf,
Barkin, Frye & O'Neill, P.A.
By: Roberta Casper Watson
---------------------------------
Roberta Casper Watson
<PAGE>
EXHIBIT 23(C)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Form S-8 Registration Statement (File No. 33-18278) of our
reports dated February 23, 1994 included in Circus Circus Enterprises, Inc.'s
Annual Report on Form 10-K for the year ended January 31, 1994, and our report
dated May 25, 1994 included in the Circus Circus Employees' Profit Sharing,
Investment and Employee Stock Ownership Plan's Annual Report on Form 11-K for
the year ended December 31, 1993 and to all references to our Firm included in
this registration statement.
Arthur Andersen LLP
Las Vegas, Nevada
November 17, 1994
