<PAGE>
Filed Pursuant to Rule 424(b)(2)-
Registration Statement No. 333-16327.
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED NOVEMBER 20, 1996
[LOGO]
$150,000,000
CIRCUS CIRCUS ENTERPRISES, INC.
7.0% DEBENTURES DUE NOVEMBER 15, 2036
-----------------
The 7.0% Debentures will not be redeemable at the option of Circus Circus
Enterprises, Inc. (the "Company") prior to maturity. The 7.0% Debentures will be
redeemable at the option of the holders thereof on November 15, 2008 at 100% of
their principal amount plus accrued interest. See "Description of the 7.0%
Debentures -- Redemption At The Option Of The Holders." The 7.0% Debentures will
be represented by one global security registered in the name of a nominee of The
Depository Trust Company, as depositary (the "Depositary"). Beneficial interests
in the 7.0% Debentures will be shown on, and transfers thereof will be effected
only through, records maintained by the Depositary and its participants. Except
as described herein, 7.0% Debentures in definitive form will not be issued.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT
OR THE ACCOMPANYING PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-------------------
NEITHER THE NEVADA GAMING COMMISSION, THE NEVADA STATE GAMING CONTROL BOARD,
THE MISSISSIPPI GAMING COMMISSION NOR ANY OTHER GAMING REGULATORY
AUTHORITY HAS PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS TO WHICH THIS RELATES OR THE
INVESTMENT MERITS OF THE SECURITIES OFFERED HEREBY. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
-------------------
<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE (1) DISCOUNT (2) COMPANY (1)(3)
----------------------- ----------------------- -----------------------
<S> <C> <C> <C>
Per 7.0% Debenture.................... 99.892% 0.675% 99.217%
Total................................. $149,838,000 $1,012,500 $148,825,500
</TABLE>
- ----------------
(1) Plus accrued interest, if any, from November 15, 1996.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
(3) Before deducting estimated expenses of $150,000 payable by the Company.
------------------------
The 7.0% Debentures offered hereby are offered severally by the
Underwriters, as specified herein, subject to receipt and acceptance by them and
subject to their right to reject any order in whole or in part. It is expected
that the 7.0% Debentures will be ready for delivery in book-entry form only
through the facilities of the Depositary in New York, New York on or about
November 26, 1996, against payment therefor in immediately available funds.
GOLDMAN, SACHS & CO. MORGAN STANLEY & CO.
INCORPORATED
CS FIRST BOSTON
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
SALOMON BROTHERS INC
SCHRODER WERTHEIM & CO.
BA SECURITIES, INC.
--------------
The date of this Prospectus Supplement is November 21, 1996.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE 7.0% DEBENTURES
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
THE COMPANY
The Company is one of the largest and most diversified gaming entertainment
companies in the world, with interests in 17 gaming properties located primarily
in Nevada, and also in Mississippi, Illinois and Canada. The Company's marketing
and operating strategies emphasize high volume business by providing reasonably
priced hotel rooms, restaurants and entertainment in conjunction with the
Company's gaming activities.
The Company owns and operates, through wholly owned subsidiaries, 10
hotel-casino properties with approximately 16,000 rooms in the State of Nevada,
including four properties in Las Vegas (Circus Circus-Las Vegas, Luxor,
Excalibur and the Hacienda Hotel and Casino which will close December 1, 1996 to
make way for the construction of a new hotel-casino complex with approximately
4,000 rooms), two properties in Jean (Gold Strike Hotel and Gambling Hall and
Nevada Landing Hotel and Casino), the Circus Circus Hotel and Casino in Reno,
the Railroad Pass Hotel and Casino in Henderson, and the Colorado Belle Hotel
and Casino and the Edgewater Hotel and Casino which are located on the Colorado
River in Laughlin. The Company also owns and operates a dockside casino situated
on a 24-acre site in Tunica County, Mississippi and operates two smaller casinos
on the Las Vegas Strip, Slots-A-Fun (which the Company also owns) and the Silver
City Casino (which the Company operates under a long-term lease).
The Company also holds interests in joint ventures which own and operate
hotel and casino properties, including 50% interests in joint venture entities
that own and operate a recently opened 3,000-room hotel-casino on the Las Vegas
Strip, a 1,711-room hotel-casino in Reno, Nevada and a riverboat casino in
Elgin, Illinois. The Company also holds a one-third interest in a company which
is operating an interim casino in Windsor, Ontario, Canada.
As part of its growth strategy, the Company is in the process of expanding
and renovating several of its current properties. The Company is simultaneously
moving forward with several new developments, including a new hotel-casino in
Las Vegas and a new hotel-casino development on the Mississippi Gulf Coast.
While the Company has attempted to conduct the expansions and renovations at
these properties in a manner intended to minimize the impact upon operations and
earnings, the Company has experienced substantial decreases in operating results
in the fiscal second and third quarters at those properties undergoing major
expansions and renovations, primarily Luxor and Circus Circus-Las Vegas. Some
level of disruption is expected to continue through the completion of these
projects.
The Company is nearing completion of a casino renovation and room expansion
at Luxor that will add approximately 2,000 rooms (bringing the total number of
rooms at that property to approximately 4,500). The rooms are situated in two
identical 22-story towers located between Luxor and Excalibur. The expansion
will continue into 1997 and is planned to include additional casino space,
retail areas, restaurants, a multipurpose showroom, and a reworking of the
attractions floor. A majority of the rooms are currently scheduled to open by
the end of 1996. The estimated cost of this expansion is $280 million.
The Company is also nearing completion of a 1,000-room tower at Circus
Circus-Las Vegas. This addition will bring the total number of rooms at that
property to approximately 3,800. These rooms are also currently scheduled to
open by the end of 1996. Concurrent with the opening of the new rooms, the
Company plans on having completed the refurbishment of approximately 1,200 rooms
in the existing Skyrise Tower, as well as the improvements in the casino and
midway. The remainder of the older rooms at this property are planned to be
refurbished in the coming year. The total cost of the new rooms and other
improvements at this property is estimated to be $95 million.
S-2
<PAGE>
The Company has announced that it expects to commence construction before
fiscal year-end on an entertainment megastore of approximately 4,000 rooms on
the site of the current Hacienda Hotel and Casino, which will close on December
1, 1996. The theme, cost and other elements of this complex will be announced
later this year. This new resort is currently expected to open in the second
half of 1998.
In Tunica County, Mississippi, the Company has announced that it plans to
add a 1,200-room tower to its property. The Company intends to remodel and
retheme the property into a more elegant resort under the name Gold Strike. This
project is slated for completion in late 1997 at an estimated cost of $125
million.
Also in Mississippi, the Company has announced that it plans to develop a
hotel-casino on the Mississippi Gulf Coast at the north end of the Bay of St.
Louis. As currently planned, the resort will feature 1,500 rooms and, assuming
receipt of all required approvals on a timely basis, would open in late 1998 or
early 1999. As presently structured, the Company will own 90% of this project,
with a partner contributing land in exchange for the remaining 10%. The
estimated cost of this project is currently $225 million.
At Circus Circus-Reno, the Company recently completed refurbishing all of
the rooms and is nearing completion on a new parking garage which is expected to
open by the end of November. Additionally, the Company is planning to remodel
the casino and other public areas, as well as add a new restaurant. The total
cost for this project is estimated at $35 million.
At Excalibur, the Company is undertaking the refurbishment of all 4,000
rooms commencing in 1997, as well as the addition of retail space and the
relocation of certain restaurants. The Company has already completed the
re-engineering of the pedestrian overpasses over Las Vegas Boulevard and
Tropicana Avenue to provide more direct pedestrian access to Excalibur. The cost
of the Excalibur renovations is anticipated to be approximately $50 million.
The Company has entered into an agreement with Mirage Resorts, Incorporated
to participate in the development of a 150-acre site located in the Marina
District of Atlantic City. The agreement provides for the Company to obtain
sufficient land for the development of a destination resort and casino of at
least 2,000 rooms, including dramatic public spaces, in an architectural format
that conforms to a "master plan". As currently contemplated, Mirage will act as
master-developer for the 150-acre site in the Marina District and Circus will
own its land and its resort project, which will connect to Mirage's resort as
well as to a joint-venture resort to be developed by Boyd Gaming Corporation and
Mirage. Mirage's development of the site is subject to the satisfaction of a
number of conditions. Accordingly, there can be no assurances as to whether or
when Mirage will proceed with its development of the site. The Company's
participation, among other conditions, is subject to Mirage's determination to
proceed with development of the site. The Company's ability to proceed is also
subject to its obtaining the requisite gaming and other approvals and licenses
in New Jersey, as well as the approval of the gaming authorities of various
other jurisdictions. While neither the exact extent of a potential development
nor a starting date for construction can be determined at this time, the Company
is currently contemplating an investment of approximately $600 million to
construct this hotel/ casino megaresort.
The Company's executive offices are located at 2880 Las Vegas Boulevard
South, Las Vegas, Nevada 89109, and its telephone number is (702) 734-0410.
Unless the context otherwise indicates, all references herein to the Company are
to Circus Circus Enterprises, Inc. and its subsidiaries.
CONCURRENT OFFERINGS
Concurrently with the offering of the 7.0% Debentures that are the subject
of the Registration Statement of which this Prospectus Supplement will be a
part, the Company is offering $150 million of its 6.70% Debentures Due 2096 (the
"6.70% Debentures") pursuant to a separate registration statement and prospectus
supplement. The proceeds received by the Company from the issuance of the 7.0%
Debentures and the 6.70% Debentures will be used for the purposes described
below. See "Use of Proceeds." The 7.0% Debentures and the 6.70% Debentures are
sometimes collectively referred to herein as the "Debentures".
S-3
<PAGE>
GAMING REGULATION
The ownership and operation of casino gaming facilities are subject to
extensive state and local regulation. The states of Illinois, Mississippi and
Nevada and the applicable local authorities, and the Province of Ontario, Canada
require various licenses, findings of suitability, registrations, permits and
approvals (individually a "Gaming License" and collectively "Gaming Licenses")
to be held by the Company and its subsidiaries and joint ventures that are
engaged in gaming operations. The Illinois Gaming Board, the Mississippi Gaming
Commission, the Nevada Gaming Commission and the Ontario Gaming Control
Commission (collectively, the "Gaming Authorities"), may, among other things,
limit, condition, suspend or revoke a Gaming License or approval to own the
stock or joint venture interests of any of the Company's Illinois, Mississippi,
Nevada and Ontario operations, respectively, for any cause deemed reasonable by
such licensing authority. Substantial fines or forfeiture of assets for
violations of gaming laws or regulations may be levied against the Company, such
subsidiaries and joint ventures and the persons involved. The suspension or
revocation of any of the Company's Gaming Licenses or the levy on the Company of
substantial fines or forfeiture of assets could have a material adverse effect
on the business of the Company.
To date, the Company has obtained all Gaming Licenses necessary for the
operation of its gaming activities. However, Gaming Licenses and related
approvals are deemed to be privileges under Illinois, Mississippi, Nevada and
Ontario law, and no assurances can be given that any new Gaming Licenses that
may be required in the future will be granted or that existing Gaming Licenses
will not be revoked or suspended.
The Nevada Gaming Commission may, in its discretion, require the holder of
any Debentures issued by the Company to file applications, be investigated and
be found suitable to own such Debentures. If the Nevada Gaming Commission
determines that a person is unsuitable to own such Debentures, then pursuant to
the Nevada Gaming Control Act, the Company can be sanctioned, including the loss
of its approvals, if without the prior approval of the Nevada Gaming Commission,
it: (i) pays to the unsuitable person any dividend, interest, or any
distribution whatsoever; (ii) recognizes any voting right by such unsuitable
person in connection with such securities; (iii) pays the unsuitable person
remuneration in any form; or (iv) makes any payment to the unsuitable person by
way of principal, redemption, conversion, exchange, liquidation, or similar
transaction. The Illinois Gaming Board, the Mississippi Gaming Commission and
the Ontario Gaming Control Commission also have jurisdiction over the beneficial
holders of the Debentures issued by the Company and may require their
investigation and approval.
In certain jurisdictions, the Company may not make a public offering of its
securities without the prior approval of the applicable Gaming Authorities if
the securities or proceeds therefrom are intended to be used to construct,
acquire or finance gaming facilities in such jurisdictions, or to retire or
extend obligations incurred for such purposes or for similar transactions. On
June 19, 1996, the Nevada Gaming Commission granted the Company prior approval
to make public offerings for a period of one year, subject to certain conditions
("Nevada Shelf Approval"). The Nevada Shelf Approval also applies to any
affiliated company wholly owned by the Company (a "Gaming Affiliate") which is a
publicly traded corporation or would thereby become a publicly traded
corporation pursuant to a public offering. The Nevada Shelf Approval also
includes approval for the Company's licensed Nevada subsidiaries to guarantee
any security issued by, or to hypothecate their assets to secure the payment or
performance of any obligations issued by, the Company or a Gaming Affiliate in a
public offering under the Registration Statement of which this Prospectus
Supplement is a part. However, the Nevada Shelf Approval may be rescinded for
good cause without prior notice upon the issuance of an interlocutory stop order
by the Chairman of the Nevada State Gaming Control Board and must be renewed
annually. The Nevada Shelf Approval does not constitute a finding,
recommendation or approval by the Nevada Gaming Commission or the Nevada State
Gaming Control Board as to the accuracy or adequacy of this Prospectus
Supplement or the accompanying Prospectus or the investment merits of the
securities offered. Any representation to the contrary is unlawful. The public
offering of the Debentures will be made pursuant to the Nevada Shelf Approval.
On January 31, 1996, the Mississippi Gaming Commission granted the Company
prior approval to make public offerings for a period of one year, subject to
certain conditions (the "Mississippi Shelf Approval").
S-4
<PAGE>
The Mississippi Shelf Approval also applies to any Gaming Affiliate which is a
publicly traded corporation or would thereby become a publicly traded
corporation pursuant to a public offering. The Mississippi Shelf Approval also
includes approval for the Company's licensed Mississippi subsidiaries to
guarantee any security issued by, or to hypothecate their assets to secure the
payment or performance of any obligations issued by, the Company or a Gaming
Affiliate in a public offering under the Registration Statement of which this
Prospectus Supplement is a part. However, the Mississippi Shelf Approval may be
rescinded for good cause without prior notice upon the issuance of an
interlocutory stop order by the Chairman or the Executive Director of the
Mississippi Gaming Commission and must be renewed annually. The Mississippi
Shelf Approval does not constitute a finding, recommendation or approval by the
Mississippi Gaming Commission as to the accuracy or adequacy of the prospectus
or the investment merits of the securities offered. Any representation to the
contrary is unlawful. The public offering of the Debentures will be made
pursuant to the Mississippi Shelf Approval.
The foregoing is only a summary of the regulatory requirements applicable to
the Company. For a more detailed description of the regulatory requirements
applicable to the Company, see "Regulation and Licensing" in the Company's
Annual Report on Form 10-K for the fiscal year ended January 31, 1996,
incorporated by reference herein.
Consistent with the foregoing, the Debentures will each be issued under an
Indenture that will provide that each beneficial or record holder thereof, by
accepting any of such Debentures, shall be deemed to have agreed that if the
Gaming Authority of any jurisdiction in which the Company or any of its
subsidiaries conducts or proposes to conduct gaming requires that a person who
is a beneficial or record holder must be licensed, qualified or found suitable
under applicable Gaming Laws, such holder shall apply for a license,
qualification or a finding of suitability within the required time period. If
such person fails to apply or become licensed or qualified or is found
unsuitable, the Company shall have the right, at its option, (i) to require such
person to dispose of its Debentures or beneficial interest therein within 30
days of receipt of notice of the Company's election or such earlier date as may
be requested or prescribed by such Gaming Authority or (ii) to redeem such
Debentures at a redemption price equal to the lesser of (A) such person's cost
and (B) 100% of the principal amount thereof, plus accrued and unpaid interest
to the earlier of the redemption date and the date of the finding of
unsuitability, which may be less than 30 days following the notice of redemption
if so requested or prescribed by the Gaming Authority. The Company shall notify
the trustee under the Indenture in writing of any such redemption as soon as
practicable. The Company shall not be responsible for any costs or expenses any
such holder may incur in connection with its application for a license,
qualification or a finding of suitability.
S-5
<PAGE>
USE OF PROCEEDS
The net proceeds received by the Company from the sale of the Debentures,
estimated at $297 million, are expected to be used to repay approximately $297
million of borrowings under the Company's corporate debt program, and to the
extent not used to repay such borrowings, for other general corporate purposes
of the Company, which may include acquisitions, capital expenditures,
repurchases by the Company of shares of its common stock and working capital
requirements. As of October 31, 1996, the Company had approximately $374 million
of outstanding amounts under its corporate debt program bearing interest at
floating rates with a weighted average of approximately 5.6%. The amounts
outstanding under the corporate debt program are short-term with varying
maturities. Certain of the amounts outstanding under the Company's corporate
debt program were originally incurred by the Company in connection with various
expansion and rennovation projects as described under "the Company" section
above and in connection with repurchases by the Company of its shares of common
stock.
RECENT DEVELOPMENTS
On November 21, 1996, the Company announced its third quarter earnings. For
the third quarter ended October 31, 1996, the company reported earnings per
share of $0.34 compared with $0.45 for the same quarter last year. As in the
second quarter, operating results were negatively affected by extensive
construction at both Circus Circus-Las Vegas and Luxor, which are two of the
Company's major profit producers. Operating cash flow at Circus Circus-Las Vegas
was approximately $8.5 million compared to $16.5 million in the prior comparable
quarter and Luxor generated approximately $14 million in operating cash flow
compared to $23 million in the prior comparable quarter. By December 24, 1996,
construction on the 1,000-room tower at Circus Circus-Las Vegas is expected to
be completed, and nearly all the approximately 2,000 new rooms at Luxor are
expected to be on line, along with casino and public area improvements.
Meanwhile, because of this on-going construction, the Company's earnings in the
fourth quarter are expected to fall below results compared to the prior year's
quarter.
Elsewhere in Las Vegas, the Company's resorts delivered strong results in
the third quarter. Excalibur generated approximately $26 million of operating
cash flow (up 2%), while the new Monte Carlo continued to exceed the Company's
expectations. This property, which opened in June and is a 50-50 joint venture
with Mirage Resorts, Incorporated, produced operating cash flow of approximately
$24.2 million in the quarter and posted a cash-flow margin of 36%.
In Reno, the Company produced $14.4 in operating cash flow between Circus
Circus-Reno and its 50% share of the Silver Legacy, slightly below last year's
combined results. In Laughlin, the Colorado Belle and Edgewater also were below
their operating results in the prior comparable quarter, as was Circus Circus-
Tunica, where three new competitors have entered the market. Construction has
begun on the 1,200-room hotel tower that will redefine the Company's presence in
Tunica -- involving both retheming and renaming of the existing casino property.
This $125 million expansion project is expected to be in operation by December
1997.
In Illinois, in the third quarter, The Grand Victoria contributed (and will
contribute on an ongoing basis) approximately 20% of its operating income to
public entities in Kane County and the City of Elgin, in accordance with prior
agreements. The Company's 50% interest in the vessel accounted for approximately
$11.9 million in operating cash flow (after contributions), compared with last
year's $14.9 million, which was before contributions began.
S-6
<PAGE>
DESCRIPTION OF THE 7.0% DEBENTURES
GENERAL
The 7.0% Debentures will be issued under an Indenture to be dated as of
November 15, 1996 between the Company and Wells Fargo Bank (Colorado), N.A., as
trustee (the "Trustee") (the "Base Indenture"), and a supplemental indenture
thereto to be dated as of November 15, 1996 between the Company and the Trustee.
Provisions of the Base Indenture are more fully described under "Description of
Debt Securities" in the attached Prospectus to which reference is hereby made.
The 7.0% Debentures will be limited to $150 million in aggregate principal
amount and will be senior unsecured obligations of the Company.
The 7.0% Debentures will mature on November 15, 2036. Interest on the 7.0%
Debentures will accrue from November 15 , 1996 and will be payable semiannually
on each May 15 and November 15, beginning May 15, 1997, to the persons in whose
names the 7.0% Debentures are registered at the close of business on the May 1
or November 1 prior to the payment date at the annual rate set forth on the
cover page of this Prospectus Supplement.
The principal of, and interest on, the 7.0% Debentures are to be payable at
the office or agency of the Company in New York, New York. Interest on the 7.0%
Debentures will be paid on the basis of a 360-day year consisting of twelve
30-day months.
REDEMPTION AT THE OPTION OF THE COMPANY
The 7.0% Debentures will not be redeemable at the option of the Company
prior to maturity.
REDEMPTION AT THE OPTION OF THE HOLDERS
The 7.0% Debentures will be redeemable on November 15, 2008 (the "Redemption
Date"), at the option of the holders thereof, at 100% of their principal amount,
together with interest payable to the date of redemption. Less than the entire
principal amount of any 7.0% Debenture may be redeemed on the Redemption Date,
provided the principal amount which is to be redeemed is equal to $1,000 or an
integral multiple of $1,000.
The Depositary or its nominee, as registered holder of the 7.0% Debentures,
will be entitled to tender the 7.0% Debentures on the Redemption Date for
repayment. During the period from and including the September 15 to and
including the October 15 immediately preceding the Redemption Date, the
Depositary will receive instructions from its participants (acting on behalf of
owners of beneficial interests in the 7.0% Debentures) to tender the 7.0%
Debentures for repayment under the Depository's procedures. Such tenders for
repayment will be made by the Depositary, provided that the Depositary receives
instructions from tendering participants by Noon on October 15, 2008. The
Depositary will notify the Paying Agent by the close of business on October 15,
2008 as to the aggregate principal amount of the 7.0% Debentures, if any, for
which the Depositary shall have received instructions to tender for repayment.
Owners of beneficial interests in 7.0% Debentures who wish to effectuate the
tender and repayment of such 7.0% Debentures must instruct their respective
Depositary Participant or Participants a reasonable period of time in advance of
October 15, 2008.
If at any time the use of a book-entry system through the Depositary (or any
successor securities depositary) is discontinued with respect to the 7.0%
Debentures, tenders for repayment of any 7.0% Debenture on the Redemption Date
shall be made according to the following procedures. The Company must receive at
the principal office of the Paying Agent, during the period from and including
September 15 to and including the October 15 immediately preceding the
Redemption Date (i) the 7.0% Debenture with the form entitled "Option to Elect
Repayment" attached thereto, duly completed; or (ii)(x) a telegram, telex,
facsimile transmission or letter from a member of a national securities exchange
or the National Association of Securities Dealers, Inc. or a commercial bank or
a trust company in the United States of America, setting forth the name of the
registered holder of the 7.0% Debenture, the principal amount of the 7.0%
Debenture, the amount of the 7.0% Debenture to be repaid, a statement that the
option to elect repayment is being exercised thereby and a guarantee that the
7.0% Debenture to be repaid, with the form entitled "Option to Elect Repayment"
attached thereto, duly completed, will be received by the Company not later than
five business days after the date of such telegram, telex, facsimile
transmission or letter; and (y) such 7.0% Debenture and form duly completed are
received by the Company such fifth business day. Any such notice received by the
Company during the period from and including
S-7
<PAGE>
such September 15 to and including such October 15 shall be irrevocable. All
questions as to the validity, eligibility (including time of receipt) and the
acceptance of any 7.0% Debenture for repayment will be determined by the
Company, whose determination will be final and binding.
For all purposes of this section, if such October 15 is not a business day,
it shall be deemed to refer to the next succeeding business day.
DEFEASANCE
The 7.0% Debentures will be subject to defeasance and covenant defeasance as
provided in the accompanying Prospectus.
BOOK-ENTRY SYSTEM
The 7.0% Debentures will be issued in the form of and be represented by a
fully registered global security (a "Registered Global Security") registered in
the name of the Depositary or its nominee. The Depositary or nominee will
credit, on its book entry registration and transfer system, participant accounts
with the respective principal amounts of 7.0% Debentures that are beneficially
owned by such participants and represented by the Registered Global Security. A
description of the depositary arrangements generally applicable to the 7.0%
Debentures is set forth in the accompanying Prospectus under the caption
"Description of Debt Securities - Registered Global Securities." The 7.0%
Debentures will not be issued in definitive form except in the circumstances
described under such caption in the accompanying Prospectus, and in such
circumstances, will only be issued in minimum denominations of $1,000.
The Depositary has advised the Company as follows: the Depositary is a
limited-purpose trust company organized under the Banking Law of the State of
New York, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provision of Section 17A of the Securities
Exchange Act of 1934, as amended. The Depositary was created to hold securities
of its participants and to facilitate the clearance and settlement of securities
transactions among its participants in such securities through electronic
book-entry changes in accounts of the participants, thereby eliminating the need
for physical movement of securities certificates. The Depositary's participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations, including the Underwriters. The
Depositary is owned by a number of participants and by the New York Stock
Exchange, Inc., the American Stock Exchange, Inc. and the National Association
of Securities Dealers, Inc. Access to the Depositary's book-entry system is also
available to others, such as banks, brokers, dealers and trust companies that
clear through or maintain a custodial relationship with a participant, either
directly or indirectly.
S-8
<PAGE>
UNDERWRITING
Subject to the terms and conditions contained in the Underwriting Agreement
dated the date hereof, the Company has agreed to sell to each of the
Underwriters named below, severally, and each of such Underwriters has severally
agreed to purchase, the principal amount of 7.0% Debentures set forth opposite
its name below:
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OF
YEAR
NAME DEBENTURES
- ----------------------------------------------------------------- --------------
<S> <C>
Goldman, Sachs & Co. ............................................ $ 37,650,000
Morgan Stanley & Co. Incorporated................................ 37,500,000
CS First Boston Corporation...................................... 19,950,000
Donaldson, Lufkin & Jenrette Securities Corporation.............. 19,950,000
Salomon Brothers Inc ............................................ 19,950,000
Schroder Wertheim & Co. Incorporated............................. 9,750,000
BA Securities, Inc. ............................................. 5,250,000
--------------
Total.......................................................... $ 150,000,000
--------------
--------------
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all of the 7.0% Debentures, if
any are taken.
The Underwriters propose to offer the 7.0% Debentures directly to the public
at the initial public offering price set forth on the cover page of this
Prospectus Supplement and in part to certain securities dealers at such price
less a concession of 0.400% of the principal amount of the 7.0% Debentures. The
Underwriters may allow, and such dealers may reallow, a concession not in excess
of 0.250% of the principal amount of the 7.0% Debentures to certain brokers and
dealers. After the 7.0% Debentures are released for sale to the public, the
public price and other selling terms may from time to time be varied by the
Underwriters.
The 7.0% Debentures are a new issue of securities with no established
trading market. The Company has been advised by the Underwriters that the
Underwriters intend to make a market in the 7.0% Debentures but are not
obligated to do so and may discontinue market making at any time without notice.
No assurance can be given as to the liquidity of the trading market for the 7.0%
Debentures.
The Company has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
Certain of the underwriters and their affiliates have from time to time
performed various investment banking and commercial banking services for the
Company and its subsidiaries, for which compensation has been received. BA
Securities, Inc. and CS First Boston Corporation are commercial paper placement
agents under the Company's corporate debt program. The Company intends to use a
significant portion of the net proceeds from the sale of the 7.0% Debentures to
repay outstanding amounts due under its corporate debt program. See "Use of
Proceeds." As a result, the offering of the 7.0% Debentures is being made
pursuant to the provisions of Rule 2710(c)(8) of the Conduct Rules of The
National Association of Securities Dealers, Inc.
LEGAL MATTERS
Certain legal matters will be passed upon for the Company by Latham &
Watkins, and, as to matters of Nevada law, by Schreck, Jones, Bernhard, Woloson
& Godfrey Chartered. Certain legal matters will be passed upon for the
Underwriters by Skadden, Arps, Slate, Meagher & Flom LLP.
S-9
<PAGE>
PROSPECTUS
$300,000,000
CIRCUS CIRCUS ENTERPRISES, INC.
DEBT SECURITIES
------------------
Circus Circus Enterprises, Inc., a Nevada corporation (the "Company"), may
offer from time to time in one or more series its debt securities consisting of
debentures, notes or other evidence of indebtedness (the "Debt Securities"), in
amounts as may be sold for an aggregate public offering price of up to
$300,000,000, or, if Debt Securities are issued at an original issue discount,
such greater amount as shall result in aggregate proceeds of $300,000,000 to the
Company, on terms to be determined at the time of the offering. At the option of
the Company, the Debt Securities may be issued as senior secured Debt
Securities, as senior unsecured Debt Securities, as senior subordinated Debt
Securities or as subordinated Debt Securities, and in any combination thereof.
The general terms and conditions of the Debt Securities are described under
"Description of Debt Securities" in this Prospectus. Debt Securities may be
offered separately or together, in separate series, in amounts, at prices and on
terms determined by market conditions at the time of sale and to be set forth in
one or more supplements to this Prospectus (each, a "Prospectus Supplement").
The specific terms of the Debt Securities for which this Prospectus is being
delivered will be set forth in the applicable Prospectus Supplement which will
include, where applicable, the specific title, aggregate principal amount, form
(which may be certificated or global), authorized denominations, maturity (which
may be fixed or extendible), interest rate or rates (which may be fixed or
variable) (or manner of calculation thereof), if any, the time of payment of
interest, if any, any terms of redemption at the option of the Company or
repayment at the option of the holder, any terms for sinking fund payments,
additional covenants, initial public offering price, purchase price and other
terms with respect to the Debt Securities. The Debt Securities may be issued as
original issue discount securities to be sold at a substantial discount below
their principal amount and, if issued, certain terms thereof will be set forth
in the Prospectus Supplement related thereto. See "Description of Debt
Securities."
The applicable Prospectus Supplement will also contain information, where
applicable, about certain United States federal income tax considerations
relating to, and any listing on a securities exchange of, the Debt Securities
covered by such Prospectus Supplement.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
NEITHER THE NEVADA GAMING COMMISSION, THE NEVADA STATE GAMING CONTROL BOARD,
THE MISSISSIPPI GAMING COMMISSION
NOR ANY OTHER GAMING REGULATORY AUTHORITY HAS PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS OR THE INVESTMENT MERITS OF THE
SECURITIES OFFERED HEREBY. ANY REPRESENTATION
TO THE CONTRARY IS UNLAWFUL.
------------------------
The Debt Securities may be offered directly to one or more purchasers,
through agents designated from time to time by the Company or to or through
underwriters or dealers. If any agents or underwriters are involved in the sale
of the Debt Securities, their names, and any applicable purchase price, fee,
commission or discount arrangement between or among them, will be set forth, or
will be calculable from the information set forth, in the applicable Prospectus
Supplement. See "Plan of Distribution." No Debt Securities may be sold without
delivery of a Prospectus Supplement describing the method and terms of the
offering of such Debt Securities.
------------------------
THE DATE OF THIS PROSPECTUS IS NOVEMBER 20, 1996
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
------------------------
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and in accordance therewith files
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information can be inspected and copied at the public reference facilities
maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C., and at the Commission's regional offices at 7 World Trade
Center, 13th Floor, New York, New York 10048 and Northwestern Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such
material can also be obtained at prescribed rates from the Public Reference
Section of the Commission at its principal office at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549. 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. Electronic
filings made through the Electronic Data Gathering, Analysis and Retrieval
System are publicly available through the Commission's Website
(http://www.sec.gov).
------------------------
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Company's (File No. 1-8570) (i) Annual Report on Form 10-K for the
fiscal year ended January 31, 1996, (ii) Amendment No. 1 to Annual Report on
Form 10-K for the fiscal year ended January 31, 1996, (iii) Quarterly Report on
Form 10-Q for the fiscal quarter ended April 30, 1996 and (iv) Quarterly Report
on Form 10-Q for the fiscal quarter ended July 31, 1996, each filed by the
Company with the Commission, are incorporated in this Prospectus by reference.
All reports and other documents filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the Debt Securities
hereunder shall be deemed to be incorporated by reference herein and to be a
part hereof from the date of the filing of such reports and documents. Any
statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document, as the case may be, which also is
or is deemed to be incorporated by reference herein, modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person to
whom a Prospectus is delivered, upon written or oral request of such person, a
copy of the Indentures (as hereinafter defined) or any document incorporated
herein by reference (other than exhibits to such documents). Requests should be
directed to Yvette E. Landau, Secretary, Circus Circus Enterprises, Inc., 2880
Las Vegas Boulevard South, Las Vegas, Nevada 89109, telephone number (702)
734-0410.
------------------------
The Company will furnish each holder of the Debt Securities annual reports
containing audited financial statements, quarterly reports containing unaudited
financial information and such other reports as may be required by applicable
law.
2
<PAGE>
THE COMPANY
Circus Circus Enterprises, Inc. (the "Company") is one of the largest and
most diversified gaming entertainment companies in the world, with interests in
17 gaming properties located primarily in Nevada, and also in Mississippi,
Illinois and Canada. The Company's marketing and operating strategies emphasize
high volume business by providing reasonably priced hotel rooms, restaurants and
entertainment in conjunction with the Company's gaming activities.
The Company owns and operates, through wholly owned subsidiaries, 10
hotel-casino properties with approximately 16,000 rooms in the State of Nevada,
including four properties in Las Vegas (Circus Circus-Las Vegas, Luxor,
Excalibur and the Hacienda Hotel and Casino which will close December 1, 1996 to
make way for the construction of a new hotel-casino complex with approximately
4,000 rooms), two properties in Jean (Gold Strike Hotel and Gambling Hall and
Nevada Landing Hotel and Casino), the Circus Circus Hotel and Casino in Reno,
the Railroad Pass Hotel and Casino in Henderson, and the Colorado Belle Hotel
and Casino and the Edgewater Hotel and Casino which are located on the Colorado
River in Laughlin. The Company also owns and operates a dockside casino situated
on a 24-acre site in Tunica County, Mississippi and operates two smaller casinos
on the Las Vegas Strip, Slots-A-Fun (which the Company also owns) and the Silver
City Casino (which the Company operates under a long-term lease).
The Company also holds interests in joint ventures which own and operate
hotel and casino properties, including 50% interests in joint venture entities
that own and operate a recently opened 3,000-room hotel-casino on the Las Vegas
Strip, a 1,711-room hotel-casino in Reno, Nevada and a riverboat casino in
Elgin, Illinois. The Company also holds a one-third interest in a company which
is operating an interim casino in Windsor, Ontario, Canada.
As part of its growth strategy, the Company is in the process of expanding
and renovating its current properties. The Company is simultaneously moving
forward with several new developments, including a new hotel-casino in Las Vegas
and a new hotel-casino development on the Mississippi Gulf Coast. While the
Company has attempted to conduct the expansions and renovations at its current
properties in a manner intended to minimize the impact upon operations and
earnings, the Company has experienced substantial decreases in operating results
in the fiscal second and third quarters at those properties undergoing major
expansions and renovations, primarily Luxor and Circus Circus-Las Vegas. Some
level of disruption is expected to continue through the completion of these
projects.
The Company is nearing completion of a casino renovation and room expansion
at Luxor that will add approximately 2,000 rooms (bringing the total number of
rooms at that property to approximately 4,500). The rooms are situated in two
identical 22-story towers located between Luxor and Excalibur. The expansion
will continue in 1997 and is planned to include additional casino space, retail
area, restaurants, a multipurpose showroom, and a reworking of the attractions
floor. A majority of the rooms are currently scheduled to open by the end of
1996. The estimated cost of this expansion is $280 million.
The Company is also nearing completion of a 1,000 room tower at Circus
Circus-Las Vegas. This addition will bring the total number of rooms at that
property to approximately 3,800. These rooms are also currently scheduled to
open by the end of 1996. Concurrent with the opening of the new rooms, the
Company plans on having completed the refurbishment of approximately 1,200 rooms
in the existing Skyrise Tower, as well as the improvements in the casino and
midway. The remainder of the older rooms at this property are planned to be
refurbished in the coming year. The total cost of the new rooms and other
improvements of this property is estimated to be $95 million.
The Company has announced that it expects to commence construction before
fiscal year-end on an entertainment megastore of approximately 4,000 rooms on
the site of the current Hacienda Hotel and Casino, which will close on December
1, 1996. The theme, cost and other elements of this complex
3
<PAGE>
will be announced later this year. This new resort is currently expected to open
in the second half of 1998.
In Tunica County, Mississippi, the Company has announced that it plans to
add a 1,200-room tower to its property. The Company intends to remodel and
retheme the property into a more elegant resort under the name Gold Strike. This
project is slated for completion in late 1997 at an estimated cost of $125
million.
Also in Mississippi, the Company has announced that it plans to develop a
hotel-casino on the Mississippi Gulf Coast at the north end of the Bay of St.
Louis. As currently planned, the resort will feature 1,500 rooms and, assuming
receipt of all required approvals, would open in late 1998 or early 1999. As
presently structured, the Company will own 90% of this project, with a partner
contributing land in exchange for the remaining 10%. The estimated cost of this
project is currently $225 million.
At Circus Circus-Reno, the Company recently completed refurbishing all of
the rooms and is nearing completion on a new parking garage which is expected to
open by the end of November. Additionally, the Company is planning to remodel
the casino and other public areas, as well as add a new restaurant. The total
cost for this project is estimated at $35 million.
At Excalibur, the Company is undertaking the refurbishment of all 4,000
rooms commencing in 1997, as well as the addition of retail space and the
relocation of certain restaurants. The Company has already completed the
re-engineering of the pedestrian overpasses over Las Vegas Boulevard and
Tropicana Avenue to provide more direct pedestrian access to Excalibur. The cost
of the Excalibur renovations is anticipated to be approximately $50 million.
The Company has entered into an agreement with Mirage Resorts, Incorporated
to participate in the development of a 150-acre site located in the Marina
District of Atlantic City. The agreement provides for the Company to obtain
sufficient land for the development of a destination resort and casino of at
least 2,000 rooms, including dramatic public spaces, in an architectural format
that conforms to a "masterplan". As currently contemplated, Mirage will act as
master-developer for the new Marina District and Circus will own its land and
its resort project, which will connect to Mirage's resort as well as to a
joint-venture resort to be developed by Boyd Gaming Corporation and Mirage.
Mirage's development of the site is subject to the satisfaction of a number of
conditions. Accordingly, there can be no assurances as to whether or when Mirage
will proceed with its development of the site. The Company's participation,
among other conditions, is subject to Mirage's determination to proceed with
development of the site. The Company's ability to proceed is also subject to its
obtaining the requisite gaming and other approvals and licenses in New Jersey,
as well as the approval of the gaming authorities of various other
jurisdictions. While neither the exact extent of a potential development nor a
starting date for construction can be determined at this time, the Company is
currently contemplating an investment of approximately $600 million to construct
this hotel/casino megaresort.
The Company's executive offices are located at 2880 Las Vegas Boulevard
South, Las Vegas, Nevada 89109, and its telephone number is (702) 734-0410.
Unless the context otherwise indicates, all references herein to the Company are
to Circus Circus Enterprises, Inc. and its subsidiaries.
4
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
The following are the consolidated ratios of earnings to fixed charges for
the Company for the six months ended July 31, 1996 and each of the fiscal years
1996, 1995, 1994, 1993 and 1992.
<TABLE>
<CAPTION>
YEAR ENDED JANUARY 31,
SIX MONTHS ENDED -----------------------------------------------------
JULY 31, 1996 1996 1995 1994 1993 1992
- ----------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
3.33(1) 4.12(2) 5.38 5.40 6.48 4.40
</TABLE>
For purposes of computing this ratio, earnings consist of income before
income taxes plus fixed charges (excluding capitalized interest) and minority
interests (relating to subsidiaries whose fixed charges are included in the
computation), excluding equity in undistributed earnings of less than 50% owned
investments. Fixed charges include interest, whether expensed or capitalized,
amortization of debt expense, discount or premium related to indebtedness and
such portion of rental expense deemed by the Company to be representative of
interest.
- ------------------------
(1) During the first and second quarters of fiscal 1997, the Company wrote-off
$48.3 million of assets which were demolished or replaced in the course of
upgrading and expanding several of its properties. The ratio of earnings to
fixed charges for six months ended July 31, 1996, excluding these
write-offs, would have been 4.91.
(2) During the second quarter of fiscal 1996, the Company wrote-off $45.1
million of costs associated with various assets which were disposed of or
whose values had otherwise become impaired. The ratio of earnings to fixed
charges for the year ended January 31, 1996, excluding this write-off, would
have been 4.85.
5
<PAGE>
USE OF PROCEEDS
The Company intends to use the net proceeds from the sale of the Debt
Securities for general corporate purposes, which may include acquisitions,
capital expenditures, repurchases of shares of the Company's Common Stock, and
working capital requirements; to repay, redeem or repurchase outstanding
indebtedness; or for such other purposes as may be specified in the Prospectus
Supplement. A description of any indebtedness to be refinanced with the proceeds
of the Debt Securities will be set forth in the applicable Prospectus
Supplement.
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
offered by any Prospectus Supplement and the extent to which such general
provisions may apply to the Debt Securities will be described in a Prospectus
Supplement relating to such Debt Securities.
The Debt Securities may constitute either senior secured debt ("Senior
Secured Debt Securities"), senior unsecured debt ("Senior Unsecured Debt
Securities"), senior subordinated debt ("Senior Subordinated Debt Securities")
or subordinated debt ("Subordinated Debt Securities"), or any combination
thereof, of the Company. Each such series of Debt Securities will be issued
under a separate indenture (the "Senior Secured Debt Indenture," the "Senior
Unsecured Debt Indenture," the "Senior Subordinated Debt Indenture," and the
"Subordinated Debt Indenture," respectively), in each case, between the Company,
as obligor, and Wells Fargo Bank (Colorado), N.A. ("Wells Fargo"), as Trustee
(the "Trustee"). The Senior Secured Debt Indenture, the Senior Unsecured Debt
Indenture, the Senior Subordinated Debt Indenture and the Subordinated Debt
Indenture are sometimes hereinafter referred to individually as an "Indenture"
and collectively as the "Indentures."
The terms of the Debt Securities include those stated in the applicable
Indenture and those made part of such Indenture by reference to the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and holders of
the Debt Securities are referred to the Indentures and the Trust Indenture Act
for a statement thereof. A copy of the form of each Indenture is filed as an
exhibit to the Registration Statement of which this Prospectus is a part. The
following summaries of certain provisions of the Debt Securities and the
Indentures, while including a discussion of all material aspects or features
thereof, do not purport to be complete and are subject to, and are qualified in
their entirety by reference to, all the provisions of the Debt Securities and
the Indentures, including the definitions therein of certain terms which are not
otherwise defined in this Prospectus. Wherever particular provisions or defined
terms of the Indentures are referred to, such provisions or defined terms are
incorporated herein by reference.
GENERAL
The Indentures will not limit the aggregate principal amount of Debt
Securities which may be issued thereunder. Debt Securities may be issued
thereunder from time to time as a single series or in two or more separate
series up to the aggregate principal amount from time to time authorized by the
Company for each series. As of the date of this Prospectus, the Company has
authorized the issuance under the Indentures of up to $300 million aggregate
principal amount of the Debt Securities.
The applicable Prospectus Supplement or Prospectus Supplements will
describe, among other things, the following terms of the Debt Securities, if
applicable to such Debt Securities: (i) the title of the Debt Securities; (ii)
any limit on the aggregate principal amount of the Debt Securities and whether
they will constitute Senior Secured Debt Securities, Senior Unsecured Debt
Securities, Senior Subordinated Debt Securities or Subordinated Debt Securities;
(iii) the price or prices (expressed as a percentage of the aggregate principal
amount thereof) at which the Debt Securities
6
<PAGE>
will be issued; (iv) the date or dates on which the principal of the Debt
Securities is payable or the method of determination thereof; (v) the rate or
rates (which may be fixed or variable) at which the Debt Securities will bear
interest (which rate may be zero in the case of certain Debt Securities issued
at an issue price representing a discount from the principal amount payable at
maturity), and the date or dates from which such interest, if any, will accrue,
and the circumstances, if any, in which the Company may defer interest payments;
(vi) the interest payment dates, if any, on which any interest on the Debt
Securities will be payable, and the record date for any interest payable on any
Debt Securities; (vii) the right or obligation, if any, of the Company to redeem
or purchase Debt Securities pursuant to any sinking fund or analogous provisions
or at the option of a holder thereof, or otherwise, the conditions, if any,
giving rise to such right or obligation, and the period or periods within which,
and the price or prices at which and the terms and conditions upon which Debt
Securities shall be redeemed or purchased, in whole or in part, and any
provisions for the marketing of such Debt Securities; (viii) if the amount of
payments of principal of, premium, if any, and interest, if any, on the Debt
Securities is to be determined by reference to an index, formula or other
method, the manner in which such amounts are to be determined and the
calculation agent, if any, with respect thereto; (ix) if other than the
principal amount thereof, the portion of the principal amount of the Debt
Securities which will be payable upon declaration or acceleration of the stated
maturity thereof pursuant to an Event of Default; (x) whether the Debt
Securities will be issued in certificated or book-entry form and, if so, the
identity of the depository for the Debt Securities; (xi) any listing of the Debt
Securities on a securities exchange; (xii) any additional restrictive covenants
included for the benefit of Holders of such Debt Securities; (xiii) any
additional events of default provided with respect to such Debt Securities; and
(xiv) any other material terms of the Debt Securities. Any such Prospectus
Supplement will also describe any special provisions for the payment of
additional amounts with respect to the Debt Securities.
GAMING REGULATION
The ownership and operation of casino gaming facilities are subject to
extensive state and local regulation. The states of Illinois, Mississippi and
Nevada and the applicable local authorities, and the Province of Ontario, Canada
require various licenses, findings of suitability, registrations, permits and
approvals (individually a "Gaming License" and collectively "Gaming Licenses")
to be held by the Company and its subsidiaries and joint ventures that are
engaged in gaming operations. The Illinois Gaming Board, the Mississippi Gaming
Commission, the Nevada Gaming Commission and the Ontario Gaming Control
Commission (collectively the "Gaming Authorities"), may, among other things,
limit, condition, suspend or revoke a Gaming License or approval to own the
stock or joint venture interests of any of the Company's Illinois, Mississippi,
Nevada and Ontario operations, respectively, for any cause deemed reasonable by
such licensing authority. Substantial fines or forfeiture of assets for
violations of gaming laws or regulations may be levied against the Company, such
subsidiaries and joint ventures and the persons involved. The suspension or
revocation of any of the Company's Gaming Licenses or the levy on the Company of
substantial fines or forfeiture of assets could have a material adverse effect
on the business of the Company.
To date, the Company has obtained all Gaming Licenses necessary for the
operation of its gaming activities. However, Gaming Licenses and related
approvals are deemed to be privileges under Illinois, Mississippi, Nevada and
Ontario law, and no assurances can be given that any new Gaming Licenses that
may be required in the future will be granted or that existing Gaming Licenses
will not be revoked or suspended.
The Nevada Gaming Commission may, in its discretion, require the holder of
any Debt Security issued by the Company to file applications, be investigated
and be found suitable to own such Debt Security. If the Nevada Gaming Commission
determines that a person is unsuitable to own such Debt Security, then pursuant
to the Nevada Gaming Control Act, the Company can be sanctioned, including
7
<PAGE>
the loss of its approvals, if without the prior approval of the Nevada Gaming
Commission, it: (i) pays to the unsuitable person any dividend, interest, or any
distribution whatsoever; (ii) recognizes any voting right by such unsuitable
person in connection with such securities; (iii) pays the unsuitable person
remuneration in any form; or (iv) makes any payment to the unsuitable person by
way of principal, redemption, conversion, exchange, liquidation, or similar
transaction. The Illinois Gaming Board, the Mississippi Gaming Commission and
the Ontario Gaming Control Commission also have jurisdiction over the beneficial
holders of Debt Securities issued by the Company and may require their
investigation and approval.
In certain jurisdictions, the Company may not make a public offering of its
securities without the prior approval of the applicable Gaming Authorities if
the securities or proceeds therefrom are intended to be used to construct,
acquire or finance gaming facilities in such jurisdictions, or to retire or
extend obligations incurred for such purposes or for similar transactions. On
June 19, 1996, the Nevada Gaming Commission granted the Company prior approval
to make public offerings for a period of one year, subject to certain conditions
(the "Nevada Shelf Approval"). The Nevada Shelf Approval also applies to any
affiliated company wholly owned by the Company (a "Gaming Affiliate") which is a
publicly traded corporation or would thereby become a publicly traded
corporation pursuant to a public offering. The Nevada Shelf Approval also
includes approval for the Company's licensed Nevada subsidiaries to guarantee
any security issued by, or to hypothecate their assets to secure the payment or
performance of any obligations issued by, the Company or a Gaming Affiliate in a
public offering under the Shelf Registration. However, the Nevada Shelf Approval
may be rescinded for good cause without prior notice upon the issuance of an
interlocutory stop order by the Chairman of the Nevada State Gaming Control
Board and must be renewed annually. The Nevada Shelf Approval does not
constitute a finding, recommendation or approval by the Nevada Gaming Commission
or the Nevada State Gaming Control Board as to the accuracy or adequacy of the
prospectus or the investment merits of the securities offered. Any
representation to the contrary is unlawful. The public offering of the Debt
Securities will be made pursuant to the Nevada Shelf Approval.
On January 31, 1996, the Mississippi Gaming Commission granted the Company
prior approval to make public offerings for a period of one year, subject to
certain conditions (the "Mississippi Shelf Approval"). The Mississippi Shelf
Approval also applies to any Gaming Affiliate which is a publicly traded
corporation or would thereby become a publicly traded corporation pursuant to a
public offering. The Mississippi Shelf Approval also includes approval for the
Company's licensed Mississippi subsidiaries to guarantee any security issued by,
or to hypothecate their assets to secure the payment or performance of any
obligations issued by, the Company or a Gaming Affiliate in a public offering
under the Shelf Registration. However, the Mississippi Shelf Approval may be
rescinded for good cause without prior notice upon the issuance of an
interlocutory stop order by the Chairman or the Executive Director of the
Mississippi Gaming Commission and must be renewed annually. The Mississippi
Shelf Approval does not constitute a finding, recommendation or approval by the
Mississippi Gaming Commission as to the accuracy or adequacy of the prospectus
or the investment merits of the securities offered. Any representation to the
contrary is unlawful. The public offering of the Debt Securities will be made
pursuant to the Mississippi Shelf Approval.
The foregoing is only a summary of the regulatory requirements applicable to
the Company. For a more detailed description of the regulatory requirements
applicable to the Company, see "Regulation and Licensing" in the Company's
Annual Report on Form 10-K for the fiscal year ended January 31, 1996,
incorporated by reference herein.
MANDATORY DISPOSITION PURSUANT TO GAMING LAWS
The Indentures will provide that each Holder, by accepting any of the Debt
Securities, shall be deemed to have agreed that if the Gaming Authority of any
jurisdiction in which the Company or any of its subsidiaries conducts or
proposes to conduct gaming requires that a person who is a Holder must
8
<PAGE>
be licensed, qualified or found suitable under applicable Gaming Laws, such
Holder shall apply for a license, qualification or a finding of suitability
within the required time period. If such person fails to apply or become
licensed or qualified or is found unsuitable, the Company shall have the right,
at its option, (i) to require such person to dispose of its Securities or
beneficial interest therein within 30 days of receipt of notice of the Company's
election or such earlier date as may be requested or prescribed by such Gaming
Authority or (ii) to redeem such Securities at a redemption price equal to the
lesser of (A) such person's cost and (B) 100% of the principal amount thereof,
plus accrued and unpaid interest to the earlier of the redemption date and the
date of the finding of unsuitability, which may be less than 30 days following
the notice of redemption if so requested or prescribed by the Gaming Authority.
The Company shall notify the Trustee in writing of any such redemption as soon
as practicable. The Company shall not be responsible for any costs or expenses
any such Holder may incur in connection with its application for a license,
qualification or a finding of suitability.
SUBORDINATION OF SECURITIES
The indebtedness evidenced by the Senior Subordinated Debt Securities and
Subordinated Debt Securities (collectively, the "Subordinated Securities") will
be subordinated to the prior payment when due of the principal of, premium, if
any, and interest on all current and future Senior Indebtedness (as defined
below). Upon maturity of any Senior Indebtedness by lapse of time, acceleration
or otherwise, payment in full must be made on such Senior Indebtedness before
any payment is made on or in respect of the Subordinated Securities. During the
continuance of any event of default with respect to Senior Indebtedness
entitling the holders thereof to accelerate the maturity thereof, or if such
event of default would be caused by any payment upon or in respect of the
Subordinated Securities, no payment may be made by the Company upon or in
respect of the Subordinated Securities; PROVIDED, HOWEVER, that if such event of
default is other than a default in payment of any amount due in connection with
such Senior Indebtedness, the Company shall be permitted to continue to make
payments of interest on the Subordinated Securities. Upon any distribution of
assets of the Company pursuant to any dissolution, winding up, liquidation or
reorganization of the Company, payment of the principal of and interest on the
Subordinated Securities will be subordinated, to the extent and in the manner
set forth in the applicable Indentures, to the prior payment in full of all
Senior Indebtedness. Such subordination will not prevent the occurrence of any
Event of Default.
"Senior Indebtedness" is defined in the Senior Subordinated Debt Indenture
as the principal of and interest on and other amounts due on or in connection
with (a) Indebtedness of the Company (other than the Subordinated Securities),
whether outstanding on the date of the Indenture or thereafter created,
incurred, assumed or guaranteed in any manner by the Company or in effect
guaranteed by the Company through an agreement to purchase or otherwise, and (b)
renewals, extensions, refunding or refinancing of Indebtedness of the kind
described in the preceding clause (a), unless, in the case of any particular
Indebtedness, renewal, extension, refunding, or refinancing, the instrument
creating or evidencing the same or the assumption or guarantee thereof expressly
provides that such Indebtedness, renewal, extension, refunding, or refinancing
does not constitute Senior Indebtedness. Notwithstanding anything to the
contrary in the foregoing, Senior Indebtedness shall include (i) all
Indebtedness, liabilities and obligations of the Company owed to banks and other
financial institutions and (ii) the Senior Secured Debt Securities, the Senior
Unsecured Debt Securities and the 6.45% Senior Notes of the Company Due 2006,
but shall not include (w) any Indebtedness hereafter incurred that is
subordinate or junior in right of payment to any Senior Indebtedness, (x)
Indebtedness of the Company to a subsidiary or affiliate of the Company for
money borrowed or advances from such subsidiary or affiliate, (y) the 10 5/8%
Senior Subordinated Notes of the Company Due 1997, the 6 3/4% Senior
Subordinated Notes of the Company Due 2003, and the 7 5/8% Senior Subordinated
Debentures of the Company Due 2013, with respect to which the Senior
Subordinated Debt Securities will rank PARI PASSU in right of payment, or (z)
any Indebtedness specified in an indenture supplemental to the Senior
Subordinated Debt Indenture or an Officers' Certificate as
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being excepted from the definition of Senior Indebtedness; PROVIDED, that any
guaranty by the Company of Indebtedness of a subsidiary of the Company to third
parties shall constitute Senior Indebtedness unless, in the case of any
particular guaranty, the instrument creating or evidencing the same provides
that such guaranty does not constitute Senior Indebtedness; PROVIDED FURTHER,
that in the event a subsidiary of the Company advances to the Company the
proceeds attributable to Indebtedness incurred by such subsidiary to a third
party which Indebtedness has been guaranteed by the Company, then such
obligation of the Company to repay such advance to the subsidiary shall
constitute Senior Indebtedness, unless the Company provides in writing that such
advance does not constitute Senior Indebtedness.
"Senior Indebtedness" is defined in the Subordinated Debt Indenture as the
principal of and interest on and other amounts due on or in connection with (a)
Indebtedness of the Company (other than the Subordinated Debt Securities),
whether outstanding on the date of the Indenture or thereafter created,
incurred, assumed or guaranteed in any manner by the Company or in effect
guaranteed by the Company through an agreement to purchase or otherwise, and (b)
renewals, extensions, refunding or refinancing of Indebtedness of the kind
described in the preceding clause (a), unless, in the case of any particular
Indebtedness, renewal, extension, refunding, or refinancing, the instrument
creating or evidencing the same or the assumption or guarantee thereof expressly
provides that such Indebtedness, renewal, extension, refunding, or refinancing
does not constitute Senior Indebtedness. Notwithstanding anything to the
contrary in the foregoing, Senior Indebtedness shall include (i) all
Indebtedness, liabilities and obligations of the Company owed to banks and other
financial institutions and (ii) the Senior Secured Debt Securities, the Senior
Unsecured Debt Securities, the 6.45% Senior Notes of the Company Due 2006, the
Senior Subordinated Debt Securities, the 10 5/8% Senior Subordinated Notes of
the Company Due 1997, the 6 3/4% Senior Subordinated Notes of the Company Due
2003, and the 7 5/8% Senior Subordinated Debentures of the Company Due 2013, but
shall not include (x) any Indebtedness hereafter incurred that is subordinate or
junior in right of payment to any Senior Indebtedness (other than Senior
Subordinated Debt and any other Indebtedness ranking PARI PASSU with such
Indebtedness), (y) Indebtedness of the Company to a subsidiary or affiliate of
the Company for money borrowed or advances from such subsidiary or affiliate or
(z) any Indebtedness specified in an indenture supplemental to the Subordinated
Debt Indenture or an Officers' Certificate as being excepted from the definition
of Senior Indebtedness; PROVIDED, that any guaranty by the Company of
Indebtedness of a subsidiary of the Company to third parties shall constitute
Senior Indebtedness unless, in the case of any particular guaranty, the
instrument creating or evidencing the same provides that such guaranty does not
constitute Senior Indebtedness; PROVIDED FURTHER, that in the event a subsidiary
of the Company advances to the Company the proceeds attributable to Indebtedness
incurred by such subsidiary to a third party which Indebtedness has been
guaranteed by the Company, then such obligation of the Company to repay such
advance to the subsidiary shall constitute Senior Indebtedness, unless the
Company provides in writing that such advance does not constitute Senior
Indebtedness.
The claims of third parties to the assets of the Company's subsidiaries
incurring such obligations will be superior to those of the Company as a
stockholder and, therefore, the Debt Securities may be deemed to be effectively
subordinated to the claims of such third parties. Substantially all of the
Company's business operations are conducted through such subsidiaries, and the
Debt Securities are effectively subordinated to the repayment of the liabilities
arising from those operations. The Indentures will not limit the amount of
additional Indebtedness, including Senior Indebtedness, which the Company or any
subsidiary may create, incur, assume or guarantee. As a result of the
subordination provisions contained in the Indentures, in the event of
insolvency, holders of the Subordinated Securities may recover less, ratably,
than other creditors of the Company or its subsidiaries.
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REGISTERED GLOBAL SECURITIES
The registered Debt Securities of a series may be issued in the form of one
or more Registered Global Securities that will be deposited with and registered
in the name of a depositary (a "Depositary") or its nominee identified in the
applicable Prospectus Supplement. In such case, one or more Registered Global
Securities will be issued in a denomination or aggregate denominations equal to
the portion of the aggregate principal amount of outstanding registered Debt
Securities of the series to be represented by such Registered Global Security or
Securities. Unless and until it is exchanged in whole or in part for Debt
Securities in definitive registered form, a Registered Global Security may not
be transferred except as a whole by the Depositary for such Registered Global
Security to a nominee of such Depositary, or by such a nominee to such
Depositary or to another nominee of such Depositary, or by such Depositary or
any such nominee to a successor Depositary or a nominee of such successor
Depositary.
The specific terms of the depositary arrangement with respect to any portion
of a series of Debt Securities to be represented by a Registered Global Security
will be described in the applicable Prospectus Supplement. The Company
anticipates that the following provisions will apply to all depositary
arrangements.
Ownership of beneficial interests in a Registered Global Security will be
limited to persons that have accounts with the Depositary for such Registered
Global Security ("participants") or persons holding interests through
participants. Upon the issuance of a Registered Global Security, the Depositary
for such Registered Global Security will credit, on its book-entry registration
and transfer system, the participants' accounts with the respective principal
amounts of the Debt Securities represented by such Registered Global Security
beneficially owned by such participants. The accounts to be credited shall be
designated by any dealers, underwriters or agents participating in the
distribution of such Debt Securities. Ownership of beneficial interests in such
Registered Global Security will be shown on, and the transfer of such ownership
interests will be effected only through, records maintained by the Depositary
for such Registered Global Security (with respect to interests of participants)
and on the records of participants (with respect to interests of persons holding
through participants). The laws of some states may require that certain
purchasers of securities take physical delivery of such securities in definitive
form. Such limits and such laws may impair the ability to own, transfer or
pledge beneficial interests in Registered Global Securities.
So long as the Depositary for a Registered Global Security, or its nominee,
is the registered owner of such Registered Global Security, such Depositary or
such nominee, as the case may be, will be considered the sole owner or holder of
the Debt Securities represented by such Registered Global Security for all
purposes under the Indentures. Except as set forth below, owners of beneficial
interests in a Registered Global Security will not be entitled to have the Debt
Securities represented by such Registered Global Security registered in their
names, will not receive or be entitled to receive physical delivery of such Debt
Securities in definitive form and will not be considered the owners or holders
thereof under the Indentures. Accordingly, each person owning a beneficial
interest in a Registered Global Security must rely on the procedures of the
Depositary for such Registered Global Security and, if such person is not a
participant, on the procedures of the participant through which such person owns
its interests, to exercise any rights of a holder under the Indentures. The
Company understands that under existing industry practices, if the Company
requests any action of holders or if an owner of a beneficial interest in a
Registered Global Security desires to give or take any action which a holder is
entitled to give or take under the applicable Indenture, the Depositary for such
Registered Global Security would authorize the participants holding the relevant
beneficial interests to give or take such action, and such participants would
authorize beneficial owners owning through such participants to give or take
such action or would otherwise act upon the instructions of beneficial owners
holding through them.
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Principal, premium, if any, and interest payments on Debt Securities
represented by a Registered Global Security registered in the name of a
Depositary or its nominee will be made to such Depositary or its nominee, as the
case may be, as the registered owner of such Registered Global Security. None of
the Company, the Trustee or any other agent of the Company or agent of the
Trustee will have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests in
such Registered Global Security or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
The Company expects that the Depositary for any Debt Securities represented
by a Registered Global Security, upon receipt of any payment of principal,
premium or interest in respect of such Registered Global Security, will
immediately credit participants' accounts with payments in amounts proportionate
to their respective beneficial interests in such Registered Global Security as
shown on the records of such Depositary. The Company also expects that payments
by participants to owners of beneficial interests in such Registered Global
Security held through such participants will be governed by standing customer
instructions and customary practices, as is now the case with the securities
held for the accounts of customers in bearer form or registered in "street
name," and will be the responsibility of such participants.
If the Depositary for any Debt Securities represented by a Registered Global
Security is at any time unwilling or unable to continue as Depositary or ceases
to be a clearing agency registered under the Exchange Act, and a successor
Depositary registered as a clearing agency under the Exchange Act is not
appointed by the Company within 90 days, the Company will issue such Debt
Securities in definitive form in exchange for such Registered Global Security.
In addition, the Company may at any time and in its sole discretion determine
not to have any of the Debt Securities of a series represented by one or more
Registered Global Securities and, in such event, will issue Debt Securities of
such series in definitive form in exchange for all of the Registered Global
Security or Securities representing such Debt Securities. Any Debt Securities
issued in definitive form in exchange for a Registered Global Security will be
registered in such name or names as the Depositary shall instruct the Trustee.
It is expected that such instructions will be based upon directions received by
the Depositary from participants with respect to ownership of beneficial
interests in such Registered Global Security.
CERTAIN COVENANTS
LIMITATION ON LIENS. Unless otherwise indicated in the applicable
Prospectus Supplement, the Senior Unsecured Debt Indenture and the Senior
Subordinated Debt Indenture will provide that neither the Company nor any of its
subsidiaries may issue, assume or guarantee any Indebtedness secured by a Lien
upon any Consolidated Property without effectively providing that the Debt
Securities shall be secured equally and ratably with (or prior to) such
Indebtedness so long as such Indebtedness shall be so secured, except that this
restriction will not apply to: (a) Liens existing on the date of original
issuance of the Debt Securities; (b) Liens affecting property of a corporation
or other entity existing at the time it becomes a subsidiary of the Company or
at the time it is merged into or consolidated with the Company or a subsidiary
of the Company; (c) Liens on property existing at the time of acquisition
thereof or incurred to secure payment of all or a part of the purchase price
thereof or to secure Indebtedness incurred prior to, at the time of, or within
24 months after the acquisition for the purpose of financing all or part of the
purchase price thereof; (d) Liens on any property to secure all or part of the
cost of improvements or construction thereon or Indebtedness incurred to provide
funds for such purpose in a principal amount not exceeding the cost of such
improvements or construction; (e) Liens which secure Indebtedness owing by a
subsidiary of the Company to the Company or to a subsidiary of the Company; (f)
Liens securing Indebtedness of the Company the proceeds of which are used
substantially simultaneously with the incurrence of such Indebtedness to retire
Funded Debt; (g) purchase money security Liens on personal property; (h) Liens
securing Indebtedness of the Company the proceeds of which are used within 24
months of the incurrence of
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such Indebtedness for the cost of the construction and development or
improvement of a Resort Property; (i) Liens on the stock, partnership or other
equity interest of the Company or any subsidiary in any Joint Venture (as
hereinafter defined) or any subsidiary which owns an equity interest in such
Joint Venture to secure Indebtedness, PROVIDED the amount of such Indebtedness
is contributed and/ or advanced solely to such Joint Venture; (j) Liens securing
any Senior Indebtedness (as defined in the Senior Subordinated Debt Indenture),
including without limitation, the Senior Secured Debt Securities; (k) certain
Liens to government entities, including pollution control or industrial revenue
bond financing; (l) Liens required by any contract or statute in order to permit
the Company or a subsidiary of the Company to perform any contract or
subcontract made by it with or at the request of a governmental entity; (m)
mechanic's, materialman's, carrier's or other like Liens, arising in the
ordinary course of business; (n) certain Liens for taxes or assessments and
similar charges; (o) zoning restrictions, easements, licenses, covenants,
reservations, restrictions on the use of real property and certain other minor
irregularities of title; and (p) any extension, renewal, replacement or
refinancing of any Lien referred to in the foregoing, clauses (a) through (j).
Notwithstanding the foregoing, the Company and any one or more of its
subsidiaries may, without securing the Debt Securities, issue, assume or
guarantee Indebtedness which would otherwise be subject to the foregoing
restrictions in an aggregate principal amount which, together with all other
such Indebtedness of the Company and its subsidiaries which would otherwise be
subject to the foregoing restrictions (not including Indebtedness permitted to
be secured under clauses (a) through (j) inclusive above) and the aggregate
Value of Sale and Lease-Back Transactions (other than those in connection with
which the Company has voluntarily retired Funded Debt) does not at any one time
exceed 15% of Consolidated Net Tangible Assets of the Company and its
consolidated subsidiaries.
LIMITATION ON SALE AND LEASE-BACK TRANSACTIONS. Unless otherwise indicated
in the applicable Prospectus Supplement, the Senior Unsecured Debt Indenture and
the Senior Subordinated Debt Indenture will provide that neither the Company nor
any of its subsidiaries will enter into any Sale and Lease-Back Transaction
unless either (a) the Company or such subsidiary would be entitled, pursuant to
the above provisions, to incur Indebtedness in a principal amount equal to or
exceeding the Value of such Sale and Lease-Back Transaction, secured by a Lien
on the property to be leased, without equally and ratably securing the
Securities or (b) the Company within 120 days after the effective date of such
Sale and Lease-Back Transaction applies to the voluntary retirement of its
Funded Debt an amount equal to the Value of the Sale and Lease-Back Transaction
(subject to credits for certain voluntary retirements of Funded Debt).
ADDITIONAL COVENANTS. Any additional covenants of the Company with respect
to any series of Debt Securities will be set forth in the Prospectus Supplement
relating thereto.
CERTAIN DEFINITIONS
"CONSOLIDATED NET TANGIBLE ASSETS" means the total amount of assets (less
applicable reserves and other properly deductible items) after deducting
therefrom (i) all current liabilities (excluding any thereof which are by their
terms extendible or renewable at the option of the obligor thereon to a time
more than 12 months after the time as of which the amount thereof is being
computed) and (ii) all goodwill, trade names, trademarks, patents, purchased
technology, unamortized debt discount and other like intangible assets, all as
set forth on the most recent quarterly balance sheet of the Company and its
consolidated subsidiaries and computed in accordance with generally accepted
accounting principles.
"CONSOLIDATED PROPERTY" means any property of the Company or any subsidiary
of the Company.
"EXISTING COMPLETION GUARANTEES AND MAKE-WELL AGREEMENTS" means (i) that
certain Amended and Restated Make-Well Agreement by the Company in favor of
Wells Fargo Bank, N.A., dated as of September 9, 1996 relating to the Circus and
Eldorado Joint Venture, a Nevada general partnership
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and (ii) that certain Guaranty by the Company in favor of Bank of America
National Trust and Savings Association dated as of July 12, 1995 relating to
Victoria Partners, a Nevada general partnership.
"FUNDED DEBT" means all Indebtedness of the Company which (i) matures by its
terms, or is renewable at the option of any obligor thereon to a date, more than
one year after the date of original issuance of such Indebtedness and (ii) ranks
at least PARI PASSU with the Debt Securities.
"INDEBTEDNESS" of any person means (a) any indebtedness of such person,
contingent or otherwise, in respect of borrowed money (whether or not the
recourse of the lender is to the whole of the assets of such person or only to a
portion thereof), or evidenced by bonds, notes, debentures or similar
instruments or letters of credit, or representing the balance deferred and
unpaid of the purchase price of any property, including any such indebtedness
incurred in connection with the acquisition by such person or any of its
subsidiaries of any other business or entity, if and to the extent such
indebtedness would appear as a liability upon a balance sheet of such person
prepared in accordance with generally accepted accounting principles, including
for such purpose obligations under capitalized leases, and (b) any guaranty,
endorsement (other than for collection or deposit in the ordinary course of
business), discount with recourse, agreement (contingent or otherwise) to
purchase, repurchase or otherwise acquire or to supply or advance funds with
respect to, or to become liable with respect to (directly or indirectly) any
indebtedness, obligation, liability or dividend of any person, but shall not
include indebtedness or amounts owed (except to banks or other financial
institutions) for compensation to employees, or for goods or materials
purchased, or services utilized, in the ordinary course of business of such
person. Notwithstanding anything to the contrary in the foregoing,
"Indebtedness" shall not include (i) any contracts providing for the completion
of construction or other payment or performance with respect to the
construction, maintenance or improvement of property or equipment of the Company
or its Affiliates or (ii) any contracts providing for the obligation to advance
funds, property or services on behalf of an Affiliate of the Company in order to
maintain the financial condition of such Affiliate, in each case, including
Existing Completion Guarantees and Make-Well Agreements. For purposes hereof, a
"capitalized lease" shall be deemed to mean a lease of real or personal property
which, in accordance with generally accepted accounting principles, is required
be capitalized.
"JOINT VENTURE" means (i) with respect to properties located in the United
States, any partnership, corporation or other entity, in which up to and
including 50% of the partnership interests, outstanding voting stock or other
equity interests is owned, directly or indirectly, by the Company and/or one or
more subsidiaries, and (ii) with respect to properties located outside the
United States, any partnership, corporation or other entity, in which up to and
including 60% of the partnership interests, outstanding voting stock or other
equity interests is owned, directly or indirectly, by the Company and/or one or
more subsidiaries.
"LIEN" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, security interest, lien (statutory or other), or
preference, priority or other security or similar agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement having substantially the
same economic effect as any of the foregoing).
"RESORT PROPERTY" means any property owned or to be owned by the Company or
any of its subsidiaries that is, or will be upon completion, a casino (including
a riverboat casino), casino-hotel, destination resort or a theme park.
"SALE AND LEASE-BACK TRANSACTION" means any arrangement with any person
(other than the Company or a subsidiary of the Company), or to which any such
person is a party, providing for the leasing to the Company or a subsidiary of
the Company for a period of more than three years of any Consolidated Property
which has been or is to be sold or transferred by the Company or such subsidiary
to such person or to any other person (other than the Company or a subsidiary of
the
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Company), to which funds have been or are to be advanced by such person on the
security of the leased property.
"subsidiary" of any person means (i) any corporation of which at least a
majority in interest of the outstanding stock having by the terms thereof voting
power under ordinary circumstances to elect a majority of the directors of such
corporation, irrespective of whether or not at the time stock of any other class
or classes of such corporation shall have or might have voting power by reason
of the happening of any contingency, is at the time, directly or indirectly,
owned or controlled by such person, or by one or more other corporations a
majority in interest of such stock of which is similarly owned or controlled, or
by such person and one or more other corporations a majority in interest of such
stock of which is similarly owned or controlled and (ii) any other person (other
than a corporation, or a partnership, corporation or other entity described in
clause (ii) of the definition of Joint Venture) in which such person or any
subsidiary, directly or indirectly, has greater than a 50% ownership interest.
"VALUE" means, with respect to a Sale and Lease-Back Transaction, as of any
particular time, the amount equal to the greater of (i) the net proceeds of the
sale or transfer of property leased pursuant to such Sale and Lease-Back
Transaction or (ii) the fair value, in the opinion of the Company's Board of
Directors as evidenced by a board resolution, of such property at the time of
entering into such Sale and Lease-Back Transaction.
SUCCESSOR CORPORATION AND ASSIGNMENT
The Indentures provide that the Company may not consolidate with, merge into
or transfer all or substantially all of its assets to, another person unless (i)
the successor, if other than the Company, is a corporation organized under the
laws of the United States or any state thereof or the District of Columbia, (ii)
it assumes all obligations of the Company under the Debt Securities and the
Indentures, and (iii) immediately after such transaction no Default or Event of
Default exists. Thereafter, all such obligations of the Company will terminate.
EVENTS OF DEFAULT AND NOTICE THEREOF
Unless otherwise indicated in the applicable Prospectus Supplement, the term
"Event of Default," when used in an Indenture with respect to any series of Debt
Securities, will mean any one of the following: (i) failure of the Company to
pay (whether or not prohibited by the subordination provisions (if any))
interest for 30 days on, or the principal when due of, such series of Debt
Securities; (ii) failure to perform any other covenant contained in such
Indenture for 30 days after notice; (iii) the occurrence of an event of default
under any instrument evidencing Indebtedness of the Company or its subsidiaries
entitling the holder or holders thereof to accelerate the payment of an
aggregate principal amount of $10,000,000 or more of such Indebtedness, which
event of default is not cured or waived in accordance with the provisions of
such instrument, or such Indebtedness is not discharged within 30 days after the
receipt by the Company of notice from the Trustee or the holders of 25% in
principal amount of such series of Debt Securities then outstanding of such
event of default; and (iv) certain events of bankruptcy, insolvency or
reorganization.
The Indentures will provide that the Trustee will, within 90 days after the
occurrence of a default that is known to the Trustee with respect to any series
of Debt Securities, give the holders of such series of Debt Securities, notice
of such default (the term "default" to include the events specified above
without grace or notice), PROVIDED, that, except in the case of default in the
payment of principal of or interest on such series of Debt Securities, the
Trustee shall be protected in withholding such notice if it in good faith
determines that the withholding of such notice is in the interest of the holders
of such series of Debt Securities.
In case an Event of Default occurs and is continuing with respect to any
series of Debt Securities, the Trustee or the holders of not less than 25% in
principal amount of such series of Debt Securities,
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by notice in writing to the Company (and to the Trustee if given by the holders
of such series of Debt Securities), may declare the principal of and all accrued
interest on all such series of Debt Securities (but in no event more than the
maximum amount of principal and interest thereon allowed by law) to be due and
payable immediately. Such declaration may be rescinded by holders of a majority
in principal amount of such series of Debt Securities then outstanding if, among
other conditions, all existing Events of Default relating to such series of Debt
Securities have been cured or waived and if the rescission would not conflict
with any judgment or decree.
Defaults with respect to any series of Debt Securities (except, unless
theretofore cured, a default in payment of principal of or interest on such
series of Debt Securities or default with respect to a provision which cannot be
modified under the terms of the applicable Indenture without the consent of each
holder of the Debt Securities affected) may be waived by the holders of a
majority in principal amount of such series of Debt Securities then outstanding
upon the conditions provided in such Indenture.
The Indentures will include a covenant that the Company will file annually
with the Trustee a statement regarding compliance by the Company with the terms
thereof and specifying any defaults of which the signers may have knowledge.
MODIFICATION OF THE INDENTURES
Under the Indentures, the rights and obligations of the Company and the
rights of the holders of the Debt Securities may be modified by the Company and
the Trustee only with the consent of the holders of not less than a majority in
principal amount of the class of Debt Securities then outstanding affected by
such modification; but no reduction in the principal, or extension of the
maturity, of any Debt Securities in a manner adverse to the holders of the Debt
Securities, or reduction of the interest rate or extension of the time of
payment of interest on the Debt Securities in a manner adverse to the holders of
the Debt Securities, or any modification of the subordination provisions (if
any) in a manner adverse to the holders of the Debt Securities, or reduction of
the percentage required for modification, will be effective against any holder
of the Debt Securities without such holder's consent. Under certain
circumstances, however, the Company may amend or supplement the Indentures
without notice to or the consent of any holders of the Debt Securities.
SATISFACTION AND DISCHARGE OF INDENTURES
Unless otherwise indicated in the applicable Prospectus Supplement, each
Indenture with respect to any series of Debt Securities will be discharged upon
payment in full of such series of Debt Securities outstanding thereunder, or
upon the deposit with the Trustee, in trust, of money and/or U.S. Government
Obligations which through the payment of interest and principal in respect
thereof in accordance with their terms will, without consideration of any
reinvestment of such interest, provide money in an amount sufficient to pay and
discharge the principal of and each installment of interest on such series of
Debt Securities on the maturity or redemption date, as the case may be, of such
payments in accordance with the terms of the applicable Indenture and such
series of Debt Securities issued thereunder. The Company will be entitled to
make such a deposit if, among other things, the Company has delivered to the
Trustee an Opinion of Counsel, reasonably satisfactory to the Trustee, to the
effect that (i) the holders of such series of Debt Securities will not recognize
income, gain or loss for federal income tax purposes as a result of such deposit
and defeasance of the applicable Indenture and will be subject to federal income
tax on the same amount and in the same manner and at the same times as would
have been the case if such deposit and defeasance had not occurred and (ii) the
trust funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally.
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COVENANT DEFEASANCE
Unless otherwise indicated in the applicable Prospectus Supplement, each
Indenture will provide that the Company may be released from its obligations
with respect to any series of Debt Securities relating to the Company's
obligations with respect to the payment of taxes and other claims, maintenance
of properties, limitations on liens, limitations on sale and lease-back
transactions, and limitations on when the Company may merge, and that such
release will not be deemed to be an Event of Default under such Indenture with
respect to any series of Debt Securities ("covenant defeasance"), upon the
deposit with the Trustee (or other qualifying trustee), in trust, of money
and/or U.S. Government Obligations which through the payment of interest and
principal in accordance with their terms will provide money in an amount
sufficient to pay and discharge the principal of and each installment of
interest on such series of Debt Securities on the maturity of such payments in
accordance with the terms of the applicable Indenture and such series of Debt
Securities issued thereunder. The Company will be entitled to make such a
deposit if, among other things, the Company has delivered to the Trustee an
Opinion of Counsel, reasonably satisfactory to the Trustee, to the effect that
(i) the holders of such series of Debt Securities will not recognize income,
gain or loss for federal income tax purposes as a result of such covenant
defeasance of certain obligations and will be subject to federal income tax on
the same amounts, in the same manner and at the same times as would have been
the case if such covenant defeasance had not occurred and (ii) the trust funds
will not be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally.
CONCERNING THE TRUSTEE
Wells Fargo will be the Trustee under each of the Indentures. All payments
of principal of, and interest on, and all registration, transfer, exchange,
authentication, and delivery (including authentication and delivery on original
issuance of the Debt Securities) of, the Debt Securities will be effected by the
Trustee in Denver, Colorado, or at an office designated by the Trustee in New
York, New York.
Each Indenture will contain certain limitations on the right of the Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases or to realize on certain property received in respect of any such
claim as security or otherwise. The Trustee will be permitted to engage in other
transactions; however, if it acquires any conflicting interest it must eliminate
such conflict or resign.
The Trustee, as successor in interest to First Interstate Bank of Nevada,
N.A., also serves as a trustee with respect to the 6.45% Senior Notes of the
Company Due 2006, the 10 5/8% Senior Subordinated Notes of the Company Due 1997,
the 6 3/4% Senior Subordinated Notes of the Company Due 2003, and the 7 5/8%
Senior Subordinated Debentures of the Company Due 2013. In case of any
conflicting interest relating to the Trustee's duties with respect to the
foregoing securities or the Debt Securities, the Trustee shall either eliminate
such conflicting interest or, except as otherwise provided in the Trust
Indenture Act, resign.
The holders of a majority in principal amount of any series of Debt
Securities then outstanding will have the right to direct the time, method and
place of conducting any proceeding for exercising any remedy available to the
Trustee with respect to such series of Debt Securities, PROVIDED that such
direction would not conflict with any rule of law or with the applicable
Indenture, would not be unduly prejudicial to the rights of another holder of
the Debt Securities, and would not involve the Trustee in personal liability.
The Indentures will provide that in case an Event of Default shall occur and be
known to the Trustee (and not be cured), the Trustee will be required to use the
degree of care of a prudent man in the conduct of his own affairs in the
exercise of its power. Subject to such provisions, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indentures at
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the request of any of the holders of the Debt Securities, unless they shall have
offered to the Trustee security and indemnity satisfactory to it.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, STOCKHOLDERS OR INCORPORATORS
The Indentures will provide that no past, present or future director,
officer, employee, stockholder or incorporator of the Company or any successor
corporation shall have any liability for any obligations of the Company under
the Debt Securities or the Indentures or for any claim based on, in respect of,
or by reason of such obligations or their creation, by reason of such person's
or entity's status as such director, officer, stockholder or incorporator.
OTHER AUTHORIZED BUT UNISSUED DEBT SECURITIES
The Company has also authorized the issuance under indentures having
covenants and conditions substantially the same as the Indentures (the "Existing
Shelf Indentures") of additional debt securities (the "Existing Shelf Debt
Securities"). On February 5, 1996, the Company issued $200 million of 6.45%
Senior Notes Due February 1, 2006 under an indenture having covenants and
conditions substantially the same as the Senior Unsecured Debt Indenture,
thereby leaving authorized but unissued up to an additional $200 million in
aggregate principal amount of the Existing Shelf Debt Securities.
$1.5 BILLION LOAN AGREEMENT
As of the date of this Prospectus, the Company's $1.5 Billion Loan Agreement
permits the Company to incur up to $500 million in pari passu senior
indebtedness, of which $200 million has been incurred through the issuance of
the 6.45% Senior Notes Due February 1, 2006. The Company may also be obligated
to fund up to a maximum of $30 million Canadian (approximately $22 million U.S.
as of the date of this Prospectus) pursuant to the Company's guarantee of a
revolving credit facility relating to the Company's joint venture in Windsor,
Ontario, Canada. Accordingly, the Company's ability to issue senior indebtedness
under the Existing Shelf Indentures and the Indentures may be limited by the
Loan Agreement.
PLAN OF DISTRIBUTION
The Company may offer the Debt Securities directly to purchasers or to or
through underwriters, dealers or agents. Any such underwriter(s), dealer(s) or
agent(s) involved in the offer and sale of the Debt Securities in respect of
which this Prospectus is delivered will be named in the applicable Prospectus
Supplement. The applicable Prospectus Supplement with respect to such Debt
Securities will also set forth the terms of the offering of such Debt
Securities, including the purchase price of such Debt Securities and the
proceeds to the Company from such sale, any underwriting discounts and other
items constituting underwriters' compensation, any initial public offering price
and any discounts or concessions allowed or reallowed or paid to dealers and any
securities exchanges on which such Debt Securities may be listed.
The distribution of the Debt Securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, or at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The applicable Prospectus
Supplement will describe the method of distribution of the Debt Securities.
If underwriters are used in an offering of Debt Securities, the name of each
managing underwriter, if any, and any other underwriters and terms of the
transaction, including any underwriting discounts and other items constituting
compensation of the underwriters and dealers, if any, will be set forth in the
applicable Prospectus Supplement relating to such offering and the Debt
Securities will be acquired by the underwriters for their own accounts and may
be resold from time to time in one
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or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. Any initial
public offering price and any discounts or concessions allowed or reallowed or
paid to dealers may be changed from time to time. It is anticipated that any
underwriting agreement pertaining to any Debt Securities will (1) entitle the
underwriters to indemnification by the Company against certain civil liabilities
under the Securities Act, or to contribution with respect to payments which the
underwriters may be required to make in respect thereof, (2) provide that the
obligations of the underwriters will be subject to certain conditions precedent
and (3) provide that the underwriters will be obligated to purchase all Debt
Securities offered in a particular offering if any such Debt Securities are
purchased.
If a dealer is used in an offering of Debt Securities, the Company will sell
such Debt Securities to the dealer, as principal. The dealer may then resell
such Debt Securities to the public at varying prices to be determined by such
dealer at the time of resale. The name of the dealer and the terms of the
transaction will be set forth in the applicable Prospectus Supplement relating
thereto.
If an agent is used in an offering of Debt Securities, the agent will be
named, and the terms of the agency will be set forth, in the applicable
Prospectus Supplement relating thereto. Unless otherwise indicated in such
applicable Prospectus Supplement, an agent will act on a best efforts basis for
the period of its appointment.
Dealers and agents named in an applicable Prospectus Supplement may be
deemed to be underwriters (within the meaning of the Securities Act) of the Debt
Securities described therein and, under agreements which may be entered into
with the Company, may be entitled to indemnification by the Company against
certain civil liabilities under the Securities Act. Underwriters, dealers and
agents may be customers of, engage in transactions with, or perform services
for, the Company in the ordinary course of business.
Offers to purchase Debt Securities may be solicited, and sales thereof may
be made, by the Company directly to institutional investors or others, who may
be deemed to be underwriters within the meaning of the Securities Act with
respect to any resales thereof. The terms of any such offer will be set forth in
the applicable Prospectus Supplement relating thereto.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize underwriters or other agents of the Company to solicit offers by
certain institutional investors to purchase Debt Securities from the Company
pursuant to contracts providing for payment and delivery at a future date.
Institutional investors with which such contracts may be made include commercial
and savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and others, but in all cases such
purchasers must be approved by the Company. The obligations of any purchaser
under any such contract will not be subject to any conditions except that (1)
the purchase of the Debt Securities shall not at the time of delivery be
prohibited under the laws of any jurisdiction to which such purchaser is subject
and (2) if the Debt Securities are also being sold to underwriters, the Company
shall have sold to such underwriters the Debt Securities not subject to delayed
delivery. Underwriters and other agents will not have any responsibility in
respect of the validity or performance of such contracts.
The anticipated date of delivery of Debt Securities will be set forth in the
applicable Prospectus Supplement relating to each offering.
LEGAL MATTERS
Certain legal matters will be passed upon for the Company by Latham &
Watkins, and, as to matters of Nevada law, by Schreck, Jones, Bernhard, Woloson
& Godfrey Chartered.
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EXPERTS
The consolidated financial statements incorporated by reference in the
Company's Annual Report on Form 10-K for the fiscal year ended January 31, 1996,
incorporated by reference in this Prospectus and elsewhere in the Registration
Statement have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report with respect thereto, and are
incorporated herein by reference in reliance upon the authority of said firm as
experts in giving said report.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS
SUPPLEMENT OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY
SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT
AS OF ANY TIME SUBSEQUENT TO ITS DATE.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
The Company................................... S-2
Concurrent Offerings.......................... S-3
Gaming Regulation............................. S-4
Use of Proceeds............................... S-6
Recent Developments........................... S-6
Description of the 7.0% Debentures............ S-7
Underwriting.................................. S-9
Legal Matters................................. S-9
PROSPECTUS
Available Information......................... 2
Incorporation of Certain Information by
Reference.................................... 2
The Company................................... 3
Ratio of Earnings to Fixed Charges............ 5
Use of Proceeds............................... 6
Description of Debt Securities................ 6
Plan of Distribution.......................... 18
Legal Matters................................. 19
Experts....................................... 20
</TABLE>
$150,000,000
[LOGO]
CIRCUS CIRCUS ENTERPRISES, INC.
7.0% DEBENTURES
DUE NOVEMBER 15, 2036
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PROSPECTUS SUPPLEMENT
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GOLDMAN, SACHS & CO.
MORGAN STANLEY & CO.
INCORPORATED
CS FIRST BOSTON
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
SALOMON BROTHERS INC
SCHRODER WERTHEIM & CO.
BA SECURITIES, INC.
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