As filed with the Securities and Exchange Commission on
June 26, 1997
Registration No. 33-39215
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST EFFECTIVE AMENDMENT NO. 4
TO
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CIRCUS CIRCUS ENTERPRISES, INC.
(Exact name of issuer as specified in its charter)
NEVADA 88-0121916
(State or other jurisdiction of (I.R.S. Employer incorporation
or organization) Identification No.)
2880 LAS VEGAS BOULEVARD SOUTH, LAS VEGAS, NEVADA 89109
(Address of Principal Executive Offices) (Zip Code)
CIRCUS CIRCUS ENTERPRISES, INC. 1989 STOCK OPTION PLAN
(Full Title of the Plan)
YVETTE E. LANDAU, 2880 LAS VEGAS BOULEVARD SOUTH
LAS VEGAS, NEVADA 89109
(Name and address of agent for service)
(702) 734-0410
(Telephone number, including area code, of agent for service)
CIRCUS CIRCUS ENTERPRISES, INC.
CROSS REFERENCE SHEET
Pursuant to Rule 404 and Item 501 of Regulations S-K
Form S-8 Item No. Heading in Prospectus
1. Plan Information
(a) General Plan
Information
Cover Page; Description of
the Plan - General and -
Purpose; Administration
(b) Securities to
be Offered
Cover Page; Description of
the Plan - General
(c) Employees Who
May
Participate in
the Plan
Description of the Plan -
General - Purpose and -
Eligibility
(d) Purchase of
Securities
Pursuant to
the Plan and
Payments for
Securities
Offered
Description of the Plan -
Purchase of Stock Pursuant to
the Plan, - Limitations and
Termination of Options
(e) Resale
Restrictions
Restrictions on Resale
(f) Tax Effects of
Plan
Participation
Federal Income Tax
Consequences
(g) Investment of
Funds
Not Applicable
(h) Withdrawal
from the Plan;
Assignment of
Interest
Description of the Plan -
Transferability and -
Termination of Options
(i) Forfeitures
and Penalties
Description of the Plan -
Termination of Options
(j) Charges and
Deductions and
Liens Therefor
Description of the Plan -
Termination of Options
2. Registrant Information
and Employee Plan Annual
Information
Reports of the Company;
Incorporation of Certain
Documents by Reference
PROSPECTUS
CIRCUS CIRCUS ENTERPRISES, INC.
1,500,000 Shares
Common Stock, $.01-2/3 Par Value
Offered Pursuant to the 1989 Stock Option Plan
The shares covered by this Prospectus are being offered by Circus
Circus Enterprises, Inc. (the Company ) pursuant to the
Company s 1989 Stock Option Plan, as amended (the Plan ), which
provides for the granting of stock options covering up to
1,500,000 shares of the Company s Common Stock, $.01-2/3 par
value ( Common Stock ), subject to adjustment in the event of any
charges in the Common Stock resulting from stock dividends, stock
splits and similar changes.
The Common Stock of the Company is listed on the New York
Stock Exchange and the Pacific Stock Exchange. On June 24, 1997,
the last reported sale price of the Common Stock on the New York
Stock Exchange Composite Tape was $25.69 per share.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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 ADEQUACY OR
ACCURACY OF THIS PROSPECTUS OR THE INVESTMENT MERITS OF THE
SECURITIES OFFERED HEREBY. ANY REPRESENTATION TO THE CONTRARY IS
UNLAWFUL.
The date of this Prospectus is June 26, 1997.
ADDITIONAL INFORMATION
The Company has filed a Registration Statement with the
Securities and Exchange Commission (the Commission ) under the
Securities Act of 1933, as amended, with respect to the shares
offered hereby. This Prospectus does not contain all of the
information set forth in the Registration Statement, certain
items of which are contained in schedules and exhibits to the
Registration Statement as permitted by the rules and regulations
of the Commission. For further information, reference is made to
the Registration Statement, including the financial schedules and
exhibits filed or incorporated by reference as a part thereof.
Items of information omitted from this Prospectus but contained
in the Registration Statement may be inspected and copies may be
obtained (at a prescribed rate) at the Commission s Public
Reference Section at 450 Fifth Street, N.W., Washington, D.C.
20549.
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934 and, in accordance therewith,
files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information
can be inspected and copied (at prescribed rates) at the Public
Reference Section offices of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the Commission s regional
offices at 500 West Madison Street, Suite 1400, Chicago, Illinois
60661 and Seven World Trade Center, 13th Floor, New York, New
York 10048. In addition, the Common Stock is listed on the New
York 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.
No person is authorized to give any information or to make
any representations not contained in this Prospectus in
connection with the offer described herein, and any information
or representation not contained herein must not be relied upon as
having been authorized by the Company. This Prospectus does not
constitute an offer to sell these securities in any state to any
person to whom it is unlawful to make such offer in such state.
Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create an implication
that information herein is correct as of any time subsequent to
its date.
The Company will provide, without charge, to each person to
whom this Prospectus is delivered, a copy of the Company s annual
report to stockholders for its last fiscal year together with a
copy of any document or part thereof incorporated by reference in
this Prospectus but not delivered herewith (not including
exhibits to such information, unless such exhibits are
specifically incorporated by reference into the information that
this Prospectus incorporates) upon the written or oral request of
such person. Requests should be directed to Yvette E. Landau,
Secretary of the Company, 2880 Las Vegas Boulevard South, Las
Vegas, Nevada 89109 (telephone 702-734-0410).
DESCRIPTION OF THE PLAN
General
This Prospectus relates to 1,500,000 shares of the Common
Stock, $.01-2/3 par value, of the Company, which are being
offered pursuant to the Company s 1989 Stock Option Plan to
certain directors, employees of, and consultants to, the Company
and its subsidiaries. Any corporation of which the Company owns,
directly or indirectly, stock with 50% or more of the total
voting power of all classes of stock in such corporation is
defined herein as a Subsidiary and, unless the context
otherwise requires, references in this Prospectus to the Company
include Circus Circus Enterprises, Inc. and its Subsidiaries.
The Plan is not subject to the provisions of the Employee
Retirement Income Security Act of 1974 ( ERISA ). All references
in this Prospectus to numbers of shares and to market or exercise
prices have been adjusted to reflect a two-for-one split of the
Company s Common Stock effective at the close of business on
July 12, 1991 and a three-for-two split of the Company s Common
Stock effective at the close of business on July 9, 1993.
The Plan was originally adopted by the Company s Board of
Directors on April 20, 1989, and approved by its stockholders at
the Annual Meeting of Stockholders held on June 15, 1989. The
Plan became effective as of April 20, 1989 and shall remain in
effect until April 20, 1999 unless previously terminated or
reinstated, in whole or in part, at any time by the Board of
Directors. A maximum of 1,500,000 shares of the Company s Common
Stock may be purchased pursuant to options granted under the
Plan, subject to adjustment in the event of any subsequent
changes in the Common Stock resulting from stock dividends, stock
splits and similar changes.
The description of the Plan contained herein does not
purport to be complete, and reference is made to the Plan itself
and to the individual agreements signed by each participant for a
full statement of the terms and provisions thereof.
The principal office of the Company is located at 2880 Las
Vegas Boulevard South, Las Vegas, Nevada 89109, and its telephone
number is (702) 734-0410.
Purpose
The purpose of the Plan is to enable the Company and its
Subsidiaries to attract and retain the services of key employees
and persons with managerial, professional or supervisory
responsibilities, including, but not limited to, members of the
Board of Directors, officers of, and consultants to, the Company
or its Subsidiaries responsible for the past and continued
success of the Company, and to provide them with increased
motivation and incentive to exert their best efforts on behalf of
the Company by enlarging their personal stake in its success.
Eligibility
The Plan allows for the grant of incentive stock options
( Incentive Stock Options ) which are options intended to qualify
as incentive stock options under Section 422 of the Internal
Revenue Code of 1986, as amended (the Code ), and non-qualified
stock options ( Non-Qualified Stock Options ) which are options
granted under the Plan but are not Incentive Stock Options. With
the exception of individuals who are members of the Committee
which administers the Plan (the Committee ), members of the
Board of Directors who are also employees of the Company,
officers and other key employees of the Company with managerial,
professional or supervisory responsibilities, who, in the opinion
of the Committee have the capacity to make a substantial
contribution to the Company, are eligible to receive Incentive
Stock Options under the Plan. With the exception of individuals
who are members of the Committee, the Committee may grant Non-
Qualified Stock Options under the Plan to members of the Board of
Directors who are not employees of the Company, as well as to
consultants to the Company and any individual to whom Incentive
Stock Options may be granted pursuant to the Plan. (Incentive
Stock Options and Non-Qualified Stock Options are hereinafter
sometimes collectively referred to as Options ).
Any employee owning more than 10% of the total combined
voting power of all classes of stock of the Company (a 10%
Stockholder ) is ineligible to receive an Incentive Stock Option
by reason of the provisions of Section 422 of the Code, unless
the purchase price of the shares of Common Stock which may be
acquired upon the exercise of such Incentive Stock Option by such
employee is at least 110% of the fair market value of the shares
subject to the Option (at the time the Incentive Stock Option is
granted) and the Incentive Stock Option is not exercisable more
than five years from the date it is granted.
A total of 1,500,000 shares of Common Stock have been
reserved for issuance under the Plan. The Plan provides that if
an Option or a portion thereof shall expire or is terminated,
cancelled or surrendered for any reason without being exercised
in full, the shares of Common Stock subject to such Option or
portion thereof which were not purchased shall be available for
future grants of Options under the Plan.
Special Provisions Applicable to Incentive Stock Options
Incentive Stock Options may only be granted to individuals
who are employees of the Company or a Subsidiary of the Company.
To the extent that the aggregate fair market value of Common
Stock with respect to which Incentive Stock Options are
exercisable for the first time by an Optionee during any calendar
year under the Plan and any other plan of the Company or a
Subsidiary exceeds $100,000, such stock options shall be treated
as Non-Qualified Stock Options. Any Optionee who disposes of
shares of Common Stock acquired upon the exercise of an Incentive
Stock Option by sale or exchange either within two (2) years
after the date of the grant of the Incentive Stock Option under
which the shares were acquired or within one (1) year of the
acquisition of such shares, shall be required to promptly notify
the Corporate Secretary of the Company at the principal office of
the Company of such disposition, the amount realized, the
purchase price per share paid upon exercise and the date of
disposition. Any Incentive Stock Option granted to an optionee
who, at the time of the grant, owns stock representing more than
ten percent (10%) of the total combined voting power of all
classes of stock either of the Company or any parent or
Subsidiary of the Company, must (A) be exercisable at a price
that is at least one hundred ten percent (110%) of the fair
market value of the Common Stock at the time the option is
granted and (B) not be exercisable more than five (5) years from
the date it is granted.
Term and Amendment of the Plan
Options may be granted under the Plan from time to time
through April 19, 1999, and Options theretofore granted will
remain exercisable for the term for which granted unless earlier
terminated, cancelled or surrendered in accordance with the terms
of the Plan. Under the Plan, with the exception of an Incentive
Stock Option granted to a 10% Stockholder, an Option may not be
exercised more than ten years from the date of grant. An
Incentive Stock Option granted to a 10% Stockholder may not be
exercised more than five years from the date of grant.
The Board of Directors may, at any time, insofar as
permitted by law, with respect to any shares covered by the Plan
but at the time not subject to Options, suspend, terminate or
reinstate the Plan or revise or amend it in any respect
whatsoever except that, without approval of the Company s
stockholders, no such revision or amendment shall be made which
(i) materially increases the maximum number of shares of Common
Stock which may be acquired pursuant to Options granted under the
Plan, except for specified adjustments in the event of certain
changes in the Company s capitalization such as those described
under Changes in Capitalization, below, (ii) extends the term
of the Plan, (iii) increases the period during which an Option
may be exercised beyond ten years from the date of grant, (iv)
materially increases the benefits accruing to participants under
the Plan, (v) materially modifies the requirements as to
eligibility for participation in the Plan, or (vi) causes Options
granted pursuant to the Plan to fail to meet the requirements of
Rule 16b-3 under the Securities Exchange Act of 1934.
Changes in Capitalization
In accordance with the terms of the Plan, each Option is
subject to adjustment of the kind and number of shares to which
the Option relates or adjustment of the purchase price per share
of any unexercised portion thereof ( Adjustments ) in the event
of any changes in the Common Stock resulting from stock
dividends, stock splits and similar changes which occur
subsequent to the grant of such Option. In the case of a
reorganization, merger or consolidation, or sale of all or
substantially all of the assets of the Company, the Committee
may, in lieu of Adjustments, in its discretion accelerate the
date after which an Option may or may not be exercised or the
stated expiration date thereof.
Sources of Stock
Common Stock issuable upon the exercise of Options granted
pursuant to the Plan can be either authorized and unissued shares
of Common Stock or authorized and issued shares of Common Stock
purchased or acquired by the Company for any purpose. However,
it is the Company s present intention that all shares issued
pursuant to the Plan will be authorized and issued shares of
Common Stock held as treasury shares.
Purchase of Stock Pursuant to the Plan
Options granted pursuant to the Plan are evidenced by a
written option agreement (the Option Agreement ) dated as of the
date of grant and executed by the Company and the optionee
( Optionee ). As to each Option granted, the terms of the
Option, including its duration, time of exercise and exercise
price, are stated in the Option Agreement or incorporated therein
by reference to the Plan. Each Option granted pursuant to the
Plan is subject to the following terms and conditions:
Exercise Price: The price to be paid for shares of Common
Stock upon the exercise of each Option is determined by the
Committee in accordance with the terms and conditions of the
Plan. The Option exercise price for the shares covered by
Incentive and Non-Qualified Stock Options may not be less than
100% of the fair market value of the shares on the date of the
granting of the Option; provided, however, that in the case of a
10% Stockholder, such price may not be less than 110% of the fair
market value on such date. For this purpose, fair market value
means the closing price of the Common Stock as reported on the
New York Stock Exchange Composite Tape on the date an Option is
granted.
Period of Exercise: Options granted pursuant to the Plan
are exercisable commencing and ending at such times as determined
by the Committee. The exercise period may not exceed ten years
from the date of grant (five years from the date of grant in the
case of an Incentive Stock Option granted to a 10% Stockholder).
Purchase of Shares: Subject to the limitations under
Period of Exercise , above, Options granted pursuant to the Plan
become exercisable at such times, or in installments at such
times, as may be provided in the Option Agreement as determined
by the Committee. An Optionee desiring to exercise an Option
must give written notice of the number of shares to be purchased
accompanied by payment of the full purchase price to the
Secretary of the Company at 2880 Las Vegas Boulevard South, Las
Vegas, Nevada 89109. If any Option is exercised only in part,
then the portion of the Option which is not exercised is carried
forward and is exercisable until the expiration of the Option.
The Option price is payable upon the exercise of the Option (i)
in cash or by check, bank draft, or money order payable in United
States Dollars to the order of the Company, or (ii) at the
discretion of the Committee, through the Optionee s delivery of
shares of Common Stock having an aggregate fair market value on
the date of payment equal to the aggregate purchase price of the
shares of Common Stock as to which the Option is then being
exercised, (iii) by the Company s withholding from the shares
otherwise issuable upon such exercise shares of Common Stock
having such fair market value, or (iv) at the discretion of the
Committee, any combination of (i), (ii) and (iii).
Options Outstanding
As of the close of business on May 30, 1997, there were
Options outstanding under the Plan to purchase an aggregate of
426,600 shares of Common Stock held by 38 individuals, which were
exercisable at prices ranging from $21.25 to $31.00 per share and
which had expiration dates ranging from April 14, 2004 to July
29, 2006. As of the close of business on May 30, 1997, 1,030,150
shares of Common Stock had been purchased pursuant to the Plan
and Options to purchase an additional 43,250 shares were
available for issuance pursuant to the Plan.
Limitations
Subject to the terms of the Plan, including the limitation
described in the next sentence, the Committee may grant Options
to eligible persons in such numbers and at such times during the
term of the Plan as it shall determine. No Optionee may be
granted Options to purchase in excess of 100,000 shares pursuant
to the Plan in 1997 or in any subsequent calendar year. Until an
Optionee has been issued a certificate or certificates for the
shares of Common Stock as to which an Option is exercised, such
Optionee will possess no rights as a stockholder with respect to
such shares.
Non-Transferability
No Option granted under the Plan is transferable by the
Optionee in any manner, including but not limited to resale,
other than by will or the laws of descent and distribution nor is
any Option exercisable during the lifetime of an Optionee by any
person other than the Optionee or his guardian or legal
representative.
Tax Withholding
Under the terms of the Plan, the Committee has the power to
withhold, or require an Optionee to remit to the Company, an
amount sufficient to satisfy any withholding or other tax due
with respect to any shares issuable under the Plan, and the
Committee may defer such issuance unless indemnified to its
satisfaction. An Optionee may, to the extent the Committee
consents (but only to such extent), make an irrevocable election
to have shares of Common Stock otherwise issuable pursuant to an
Option withheld, tender back to the Company shares of Common
Stock received pursuant to an Option or deliver to the Company
previously acquired shares of Common Stock having a fair market
value sufficient to satisfy all or part of the Optionee s
estimated tax obligations associated with the transaction. Such
election must be made by an Optionee prior to the date on which
the relevant tax obligation arises. The Committee may, in its
sole discretion, disapprove of any election and/or limit, suspend
or terminate the right of an Optionee to make such elections.
Termination of Options
In the event that an Optionee (i) shall cease to be employed
by the Company or a Subsidiary because of his discharge for
dishonesty, or because he violated any material provision of any
employment or other agreement between him and the Company or a
Subsidiary, or (ii) shall voluntarily resign or terminate his
employment with the Company or a Subsidiary under or followed by
such circumstances as would constitute a breach of any material
provisions of any employment or other agreement between him and
the Company or a Subsidiary, or (iii) shall have committed an act
of dishonesty not discovered by the Company or a Subsidiary prior
to the cessation of his employment but which would have resulted
in his discharge if discovered prior to such date, or (iv) shall
either before or after cessation of his employment with the
Company or a Subsidiary, without the written consent of his
employer, use (except for the benefit of his employer) or
disclose to any other person any confidential information
relating to the continuation or proposed continuation of his
employer s business or any trade secrets of the Company or a
Subsidiary obtained as a result of or in connection with such
employment, or (v) shall, either before or after the cessation of
his employment with the Company or a Subsidiary, without the
written consent of his employer, directly or indirectly, give
advice to, or serve as an employee, director, officer or trustee
of, or in any similar capacity with, or otherwise directly or
indirectly participate in the management, operation, or control
of, or have any direct or indirect financial interest in, any
corporation, partnership, or other organization which directly or
indirectly competes in any respect with the Company or its
Subsidiaries, then forthwith from the happening of any such
event, any Option then held by such Optionee shall terminate and
become void to the extent that it then remains unexercised. In
the event that an Optionee shall cease to be employed by the
company or a Subsidiary for any reason other than his death or
one or more of the reasons set forth in the immediately preceding
sentence, subject to the condition that no Option shall be
exercisable after the expiration of ten years from the date it is
granted, or in the case of an Incentive Stock Option granted to a
10% Stockholder, five years from the date it is granted, such
Optionee shall have the right to exercise the Option at any time
within three months after such termination of employment to the
extent his right to exercise such Option had accrued pursuant to
the Plan at the date of such termination and had not previously
been exercised. Such three-month limit shall be increased to one
year for any Optionee who ceases to be employed by the Company or
a Subsidiary because he is permanently and totally disabled
(within the meaning of Section 22(e)(3) of the Code). Whether
authorized leave of absence or absence for military or
governmental service shall constitute termination of employment,
for purposes of the Plan, shall be determined by the Committee,
which determination shall be final and conclusive.
If an Optionee dies while in the employ of the Company or a
Subsidiary or within a period of three months (one year in the
case of disability) after the termination of his employment with
the Company and all Subsidiaries and has not fully exercised any
Option under the Plan, such Option may (subject to the condition
that no Option can be exercised after the expiration of ten years
from the date it is granted or, in the case of an Incentive Stock
Option granted to a 10% Stockholder, five years from the date it
is granted) be exercised, to the extent that the Optionee s right
to exercise such Option has accrued pursuant to the Plan at the
time of his death and has not previously been exercised or
terminated, at any time within one year after the Optionee s
death, by the personal representative of the Optionee or by any
person or persons who have acquired the Option directly from the
Optionee by bequest or inheritance.
Governing Law
The Plan provides that its validity and construction, and
the validity and construction of its rules and regulations and
any agreements entered into thereunder, shall be governed by the
laws of the State of Nevada.
FEDERAL INCOME TAX CONSEQUENCES
Incentive Stock Options
Incentive Stock Options granted under the Plan are intended
to qualify for the favorable Federal income tax treatment
currently accorded Incentive Stock Options as defined under
Section 422 of the Code. The Plan is not the type of employee
benefit plan that is subject to being qualified under Section 401
of the Code.
Under the Code, no Federal income tax is imposed at the time
an Incentive Stock Option is granted or exercised, provided,
generally, that such exercise occurs not later than three months
after the termination of the Optionee s employment with the
Company or a subsidiary. The Code also provides that, (i) in the
case of an Optionee whose employment terminates as a result of
disability (as contemplated by Section 22(e) (3) of the Code),
the three-month period described in the preceding sentence is
extended to one year; and (ii) the general requirement that the
option be exercised within three months of the termination of the
Optionee s employment is not applicable to Incentive Stock
Options exercised after the death of an Optionee by his estate or
a person who acquired the right to exercise such Incentive Stock
Option by reason of the death of the Optionee.
Under the Plan, Incentive Stock Options are generally
exercisable only during the Optionee s employment by the Company
or one of its subsidiaries. However, an Optionee who ceases to
be employed by the Company or a subsidiary for any reason other
than his death or one or more of the reasons set forth under the
heading Description of the Plan-Termination of Options, may
exercise an outstanding Incentive Stock Option held by him for a
period of three months following such termination, unless such
Option expires earlier by its terms. Although, as described
above, the limitations imposed by the Code with respect to the
period during which Incentive Stock Options must be exercised
generally are not applicable to Incentive Stock Options exercised
after the death of an Optionee by his estate or a person who
acquired the right to exercise such Incentive Stock Options by
reason of the death of the Optionee, the Plan limits to one year
the maximum period during which an Incentive Stock Option may be
exercised by an Optionee s estate or a person who acquires the
right to exercise such Incentive Stock Option by reason of the
death of the Optionee. See Description of the Plan -
Termination of Options.
To the extent that the aggregate fair market value
(determined at the time the Incentive Stock Option is granted) of
the shares with respect to which Incentive Stock Options are
exercisable for the first time by such Optionee during any
calendar year under the Plan and under any other incentive stock
option plans of the Company (and any parent or subsidiary
corporation of the Company) exceeds $100,000, the options related
to such excess are deemed to be Non-Qualified Stock Options (as
hereinafter defined) for Federal income tax purposes.
While ordinarily no income is required to be recognized at
the time an Incentive Stock Option is exercised, it should be
noted that for purposes of the alternative minimum tax imposed by
Section 55 of the Code, an Incentive Stock Option is treated, in
effect, as a Non-Qualified Option (as hereinafter defined).
Therefore, the excess of the fair market value of the shares of
Common Stock subject to the Incentive Stock Option, determined at
the time of exercise, over the exercise price constitutes
ordinary income for purposes of the alternative minimum tax.
Accordingly, the exercise of an Incentive Stock Option by an
Optionee (depending on his other circumstances) may cause the
Optionee to incur some alternative minimum tax. For purposes of
the alternative minimum tax, the basis of stock acquired through
the exercise of an Incentive Stock Option equals the fair market
value taken into account in determining the amount of ordinary
income recognized for alternative minimum tax purposes. A
special rule applies in the case of a disqualifying disposition
(as described below) of shares acquired by exercise of an
Incentive Stock Option occurring in the same taxable year as the
exercise which, in effect, results in the same tax treatment
under the alternative minimum tax as applicable for ordinary tax
purposes.
Provided that the Incentive Stock Option was exercised
timely (as described above), if the shares of Common Stock
acquired upon exercise of an Incentive Stock Option are not
disposed of (i) within two years after the date of the grant of
the Incentive Stock Option or (ii) within one year after the
exercise of the Incentive Stock Option, then any amount realized
in excess of the Optionee s basis in the shares of Common Stock
is taxed as long-term capital gain at the time of the sale or
other disposition of the shares of Common Stock. The holding
period requirement described in the preceding sentence is not
applicable to Incentive Stock Options exercised after the death
of an Optionee by his estate or a person who acquired the right
to exercise such Incentive Stock Option by reason of the death of
the Optionee. Any loss incurred under such circumstances is
treated as a long-term capital loss. The Company is not entitled
to a tax deduction with respect to the grant or exercise of an
Incentive Stock Option or upon such disposition of the shares
received upon its exercise.
The Optionee s basis (for purposes of determining the amount
of gain or loss upon a disposition that satisfies the holding
period requirements) in shares of Common Stock acquired upon the
exercise of an Incentive Stock Option is equal to the option
price of the shares of Common Stock, in the event that the entire
option price is paid in cash. The IRS has taken the position
that an Optionee s basis and holding period in the shares of
Common Stock acquired upon exercise of an Incentive Stock Option
are determined in a case where the Optionee pays all or a portion
of the option price by delivering to the Company shares of Common
Stock already owned by him is to be determined as follows:
(i) For that number of shares of Common Stock which is
equal to the number of already-owned shares of Common Stock
that are delivered to the Company in part or in full payment
of the option price, the basis (and holding period) is the
same as the basis and holding period of such already-owned
shares; and
(ii) For any shares of Common Stock received in excess
of the number of already-owned shares of Common Stock that
are delivered to the Company in part or in full payment of
the Option price (the Additional Shares ), the basis is
equal to the amount of cash, if any, paid in connection with
the exercise of the Option; and the holding period for the
Additional Shares commences on the date of exercise of the
Incentive Stock Option.
It should also be noted that the delivery of already-owned
shares of Common Stock in part or full payment of the Option
price will constitute a disqualifying disposition of such
already-owned shares of Common Stock if (i) such already-owned
shares of Common Stock were previously acquired by exercise of an
Incentive Stock Option, and (ii) at the time of delivery of such
already-owned shares, the Optionee has not satisfied the
statutory two-year after grant, one-year after exercise holding
period (described above) which must be met in order to receive
the tax benefits of an Incentive Stock Option.
In the event an Optionee sells or otherwise disposes of
shares of Common Stock acquired upon exercise of an Incentive
Stock Option before the expiration of two years after the grant
of the Incentive Stock Option or before the expiration of one
year after the exercise of the Incentive Stock Option (a
disqualifying disposition ), then the lesser of (i) the excess
of the fair market value of the shares of Common Stock at the
time the Incentive Stock Option was exercised over the exercise
price of the shares, or (ii) the amount realized upon such sale
over the Optionee s basis in the shares of Common Stock, is
treated as ordinary income at the time of the sale or other
disposition of the shares of Common Stock. The adjusted cost
basis of the shares in the Optionee s hands at the time of a
disposition by him will consist of the price paid by the Optionee
for the shares, increased by the amount (if any) included in the
Optionee s gross income as ordinary income. Any gain on the sale
or other disposition of the shares which is not treated as
ordinary income (as described in the preceding sentence) is
treated as long-term or short-term capital gain, depending on the
holding period of the shares of Common Stock sold. Such excess
is long-term gain only if the shares of Common Stock were held
for more than one year.
The Company, generally, is only entitled to a tax deduction
equal to the amount of ordinary income, if any, recognized by the
Optionee in cases in which the shares of Common Stock are sold
prior to satisfying the two-year after grant, one-year after
exercise holding period required to receive the tax benefits of
an Incentive Stock Option.
Non-Qualified Stock Options
Non-qualified stock options ( Non-Qualified Stock Options )
granted under the Plan are not intended to qualify for the
favorable Federal income tax treatment accorded Incentive Stock
Options under the Plan or certain other types of stock
acquisition programs. Section 83 of the Code and the Regulations
thereunder govern the taxation of the receipt and exercise of
Non-Qualified Stock Options under the Plan. An Optionee should
not recognize any income for Federal income tax purposes at the
time of the grant of any Non-Qualified Stock Option under the
Plan. However, when the Non-Qualified Stock Option is exercised,
the excess of the fair market value of the shares of Common Stock
acquired pursuant to such exercise, determined at the time of
exercise, over the option price constitutes ordinary income to
the Optionee. The Company would generally be entitled to a
corresponding income tax deduction for the taxable year in which
the Optionee is required to include such ordinary income. The
Company will withhold Federal income, Social Security and Federal
Unemployment taxes on the amount of ordinary income recognized by
the Optionee upon such exercise of a Non-Qualified Stock Option.
Optionees who are subject to the short-swing profits
restrictions of Section 16(b) of the Securities Exchange Act of
1934, as amended, unless they elect within 30 days of exercising
a Non-Qualified Stock Option to be taxed as of the time of such
exercise (on the basis of the fair market value of the stock at
the time of such exercise), are permitted to defer the
calculation and imposition of the tax on the gain realized from
the exercise until the earlier of (i) the expiration of the six
month period under Section 16(b), or (ii) the first day on which
the sale of such stock at a profit will not subject such Optionee
to suit under Section 16(b).
Taxation of Capita1 Gains and Ordinary Income
Under the terms of the Code, the maximum marginal rate of
tax imposed on ordinary income for individuals is 39.6% and the
maximum marginal rate of tax imposed on long-term capital gains
is 28%. In addition to this difference in tax rates, the
distinction between capital gains and losses and ordinary income
is relevant for a number of reasons, including the fact that
capital losses are only deductible against capital gains and a
limited amount ($3,000) of ordinary income.
The general Federal income tax principles discussed above
are highly complex subject to changes which may be brought about
by subsequent legislation or by regulations and administrative
rulings which may be applied on a retroactive basis. Optionees
may also be subject to state and local and/or foreign taxes with
respect to option grants, option exercises and the subsequent
holding and disposition of shares acquired and should refer to
the applicable tax laws of the relevant jurisdictions. Each
Optionee should consult his own tax advisor in connection with
the tax consequences of the grant and exercise of an option and
the subsequent holding and disposition of shares received upon
exercise.
Deductibility of Executive Compensation Under Code Section 162(m)
Section 162(m) of the Code sets limits on the deductibility
of compensation in excess of $1,000,000 paid by publicly held
companies to certain employees (the Million Dollar Cap ). The
Internal Revenue Service (the IRS ) has also issued Treasury
Regulations which provide rules for the application of the
Million Dollar Cap deduction limitations. Compensation which is
treated as qualified performance-based compensation under these
rules is exempt from the limitations of the Million Dollar Cap.
Income recognized as ordinary compensation income on the exercise
of Non-Qualified Stock Options granted under the Plan should be
treated as qualified performance-based compensation for these
purposes provided the Plan meets certain requirements, and the
option grant itself complies with specific rules applicable on a
grant-by-grant basis. The Plan complies with IRS rules
generally applicable to stock option plans under the
performance-based compensation exception to the Million Dollar
Cap. It is the Company s intention to administer the Plan in
accordance with all applicable requirements of the Million Dollar
Cap rules to qualify option grants for the performance-based
compensation exemption, including administration of the Plan by
a committee of two or more outside directors (as that term is
used in the applicable Treasury Regulations) whenever, in the
judgment of the Committee, to do so would be consistent with the
objectives of the Plan.
RESTRICTIONS ON RESALE
Certain officers and directors of the Company may be deemed
to be affiliates of the Company for purposes of the Securities
Act of 1933.
Shares acquired under the Plan by an affiliate of the
Company may only be reoffered or resold pursuant to an effective
registration statement under the Securities Act of 1933 or in
accordance with Rule 144 thereunder. An affiliate may not
reoffer or resell shares by means of this Prospectus.
Under Section 16(b) of the Securities Exchange Act of 1934,
as amended (the 1934 Act ), if a director or an officer (as
defined in Rule 16a-1 under the 1934 Act) of the Company, or a
person who beneficially owns, directly or indirectly, more than
ten percent of the Common Stock of the Company, engages in
purchases and sales of the Company s Common Stock which are not
exempted from the liability provisions of Section 16(b) within a
six-month period, any profit resulting from a matching of such
transactions must be paid to the Company. For purposes of
determining Section 16(b) liability, a non-exempted acquisition
or disposition of an option or other right to acquire Common
Stock constitutes a purchase or sale, as the case may be, of
Common Stock.
The provisions of Section 16(b) are generally known as the
short-swing profit provisions. However, in certain cases
specific rules exempt certain transactions from the short-swing
profit provisions provided applicable conditions set forth in the
rules are complied with. In this regard, grants of Options
pursuant to the Plan are intended to be exempted from the
liability provisions of Section 16(b), but the disposition of
shares acquired upon the exercise of such an Option generally
will not be exempted. Each director and officer of the Company
and each person who beneficially owns, directly or indirectly,
more than ten percent of the Common Stock of the Company, should,
therefore, consider the limitations imposed by Section 16(b)
prior to purchasing or selling any of the Company s Common Stock
or engaging in any other transaction which would result in a
change in his or her beneficial ownership of the Company s Common
Stock.
ADMINISTRATION
The Plan is administered by a Committee, which is appointed
by the Company s Board of Directors and consists of at least two
members of the Board of Directors. To the extent possible, and
to the extent the Board of Directors deems it necessary or
appropriate, each member of the Committee shall be a
Non-Employee Director (as such term is defined in Rule 16b-3
under the Securities Exchange Act of 1934) and an Outside
Director (as such term is defined in Treasury Regulations
Section 1.162-27 promulgated under the Code). The Board may fill
all vacancies on the Committee or add members to the Committee.
Members of the Committee may be removed by the Board at any time
with or without cause. The Committee selects one of its members
as Chairman, and holds meetings at such times and places as it
may determine.
The Committee may act only by majority of its members then
in office; however, the Committee may authorize any one or more
of its members or any officer of the Company to execute and
deliver documents on behalf of the Committee. The Committee is
authorized, subject to the provisions of the Plan, to establish
such rules and regulations as it deems necessary for the proper
administration of the Plan and to make such determinations and
interpretations and to take such action in connection with the
Plan and any Options granted thereunder as it deems necessary or
advisable. The Plan provides that the determinations and
interpretations made by the Committee of any provisions of the
Plan or of any Option are binding and conclusive on all
interested parties. Requests for additional information
concerning the Committee or the Plan may be made to the
individual and in the same manner as requests described under
Reports of the Company .
The present Committee members, each of whom is a director of
the Company, are Michael D. McKee, Chairman, and Arthur H.
Bilger. Additional information concerning the members of the
Committee may be obtained from the Company in the manner
described under Reports of the Company .
REPORTS OF THE COMPANY
The Company s Quarterly and Annual Reports to Stockholders,
proxy soliciting material and other communications distributed to
the Company s stockholders generally will be provided to all
holders of Options granted pursuant to the Plan whether or not
such holders are stockholders of the Company. If a holder of an
Option does not for some reason receive a copy of any of such
reports, material or other communications, he may obtain copies
of the same which the Company will provide promptly without
charge upon written or oral request. Such request should be
directed to Yvette E. Landau, Secretary, Circus Circus
Enterprises, Inc., 2880 Las Vegas Boulevard South, Las Vegas,
Nevada 89109 (702-734-0410).
Optionees will be provided from time to time such reports,
if any, concerning their Options as the Committee deems
appropriate. While the Committee does not have any present
intention of issuing such reports on a regular basis, any
Optionee may obtain information concerning his or her Options by
contacting Yvette E. Landau at the address or telephone number
indicated in the preceding paragraph.
INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference, the following
documents, each of which shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of filing
thereof with the Securities and Exchange Commission:
(a) The Company s Annual Report on Form 10-K for the fiscal
year ended January 31, 1997, filed pursuant to Section
13 (a) of the Securities Exchange Act of 1934 (the
Exchange Act );
(b) The Company s Quarterly Report on Form 10-Q for the
fiscal quarter ended April 30, 1997, filed pursuant to
Section 13(a) of the Exchange Act;
(c) The description of the Company s Common Stock contained
in the Company s Registration Statement on Form 8-A
declared effective by the Securities and Exchange
Commission on October 25, 1983, and any amendments or
reports filed for the purpose of updating such
description;
(d) The description of the Company s Common Stock Purchase
Rights contained in the Company s Registration
Statement on Form 8-A declared effective by the
Securities and Exchange Commission on August 12, 1994,
and any amendments or reports filed for the purpose of
updating such description; and
(e) All documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Exchange Act prior to the filing of a post-effective
amendment which indicates that all securities offered
hereby have been sold or which deregisters all
securities then remaining unsold.
Copies of the documents incorporated by reference herein,
except for the exhibits to such documents (unless such exhibits
are specifically incorporated by reference into the documents
which this Prospectus incorporates), are available to any person
receiving a copy of this Prospectus upon written or oral request.
Such request should be directed to Yvette E. Landau, Secretary,
Circus Circus Enterprises, Inc., 2880 Las Vegas Boulevard South,
Las Vegas, Nevada 89109 (702-734-0410). See Additional
Information.
EXPERTS
The consolidated financial statements and schedules included
or incorporated by reference in the Company s Annual Report on
Form 10-K for the year ended January 31, 1997, incorporated by
reference in this Prospectus and elsewhere in the Registration
Statement, to the extent and for the periods indicated in their
report, have been audited by Arthur Andersen LLP, independent
public accountants, and are incorporated herein by reference in
reliance upon the authority of such firm as experts in giving
said report.
<PAGE>
TABLE OF CONTENTS
Page
ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . .2
DESCRIPTION OF THE PLAN. . . . . . . . . . . . . . . . . . . . . . . . . .3
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
Special Provisions Applicable to Incentive Stock Options. . . . . . .5
Term and Amendment of the Plan. . . . . . . . . . . . . . . . . . . .5
Changes in Capitalization . . . . . . . . . . . . . . . . . . . . . .6
Sources of Stock. . . . . . . . . . . . . . . . . . . . . . . . . . .6
Purchase of Stock Pursuant to the Plan. . . . . . . . . . . . . . . .6
Options Outstanding . . . . . . . . . . . . . . . . . . . . . . . . .7
Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
Non-Transferability . . . . . . . . . . . . . . . . . . . . . . . . .8
Tax Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . .8
Termination of Options. . . . . . . . . . . . . . . . . . . . . . . .8
Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
FEDERAL INCOME TAX CONSEQUENCES . . . . . . . . . . . . . . . 10
Incentive Stock Options . . . . . . . . . . . . . . . . . 10
Non-Qualified Stock Options . . . . . . . . . . . . . . . . . . . . 13
Taxation of Capital Gains and Ordinary Income . . . . . . . . . . . 14
Deductibility of Executive Compensation Under Code
Section 162(m). . . . . . . . . . . . . . . . . . . . . . . . . . . 14
RESTRICTIONS ON RESALE . . . . . . . . . . . . . . . . . . . . . . . . . 15
ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
REPORTS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . 16
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE. . . . . . . . . . . . . 17
EXPERTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
Reference is made to the information appearing under the
heading Incorporation of Certain Documents by Reference in the
Prospectus constituting a part of this Registration Statement,
which information is incorporated herein by this reference.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Section 78.751 of the Nevada Revised Statutes (the Nevada
Law ) permits a corporation to indemnify any of its directors,
officers, employees and agents against costs and expenses arising
from claims, suits and proceedings if such persons acted in good
faith and in a manner reasonably believed to be in or not opposed
to the best interests of the corporation, and, with respect to
any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. Notwithstanding the foregoing,
in an action by or in the right of the corporation, no
indemnification may be made in respect of any claim, issue or
matter, as to which such person is adjudged to be liable to the
corporation unless a court of competent jurisdiction determines
that in view of all the circumstances of the case,
indemnification would be appropriate. The indemnification
provisions of the Nevada Law expressly do not exclude any other
rights a person may have to indemnification under any bylaw,
among other things.
In accordance with Nevada Revised Statutes 78.037, Article
XI of the Company s Restated Articles of Incorporation provides
that no director or officer of the Company shall be personally
liable to the Company or its stockholders for damages for breach
of fiduciary duty as a director or officer, except for (a) acts
or omissions which include intentional misconduct, fraud or a
knowing violation of law, or (b) the payment of dividends in
violation of Nevada Revised Statutes 78.300.
Article X, Section 10.2 of the Company s Restated Bylaws
provides for mandatory indemnification of directors and officers
to the fullest extent now or hereafter permitted by law.
The Company maintains a liability insurance policy under
which officers and directors are generally indemnified against
losses and liability (including costs, expenses, settlements, and
judgments) incurred by them in such capacities, individually or
otherwise, other than specified excluded losses. The insurance
policy will pay on behalf of the Company all covered losses for
which the Company grants indemnification of each officer or
director as permitted by law which the officer or director
becomes legally obligated to pay on account of an indemnifiable
claim. The policy would generally cover, in addition to other
liabilities, liabilities arising under the federal securities
laws; however, the subject of loss may not include any claim or
claims under federal or state law arising out of or relating to
(i) the filing of a registration statement with the Securities
and Exchange Commission or the offer or sale by means of a
prospectus of any security with respect to which a registration
statement has been filed, including, but not limited to, any
claim asserting that such registration statement or prospectus
contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary
to make the statements therein not misleading, (ii) any
underwriting agreement for the offer or sale of any security, or
(iii) any accounting of profits from the purchase or sale of
securities of the Company under Section 16(b) of the Securities
Exchange Act of 1934 or a similar state law.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits.
10 1989 Stock Option Plan, as amended.
23 Consent of Arthur Andersen LLP
Item 9. Undertakinqs.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by Section
l0(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(l)(i) and (a)(l)(ii) do
not apply if the registration statement is on Form S-3 or Form S-
8, and the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the registrant s annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934 (and, where applicable, each filing of an employee benefit
plan s annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnifi-
cation by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-8 and has duly caused this Amendment to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Las
Vegas, State of Nevada, on the 24th day of June, 1997.
CIRCUS CIRCUS ENTERPRISES, INC.
By: CLYDE T. TURNER
CLYDE T. TURNER, Chairman of the
Board and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Clyde T. Turner
and Glenn Schaeffer, and each of them, his true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any
and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to
file the same with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully
to all intents and purposes as he might or could do in person,
thereby ratifying and confirming all that said attorneys-in-fact
and agents or either of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933,
this Amendment has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
Clyde T. Turner Chairman of the Board June 24, 1997
Clyde T. Turner and Chief Executive
Officer (Principal
Executive Officer)
Michael S. Ensign Vice Chairman of the June 24, 1997
Michael S. Ensign Board and Chief
Operating Officer
<PAGE>
Signature Title Date
William A. Richardson Executive Vice June 24, 1997
William A. Richardson President and Director
Glenn Schaeffer President, Chief June 24, 1997
Glenn Schaeffer Financial Officer,
Treasurer and Director
(Principal Financial
Officer)
Les Martin Vice President and June 24, 1997
Les Martin Chief Accounting
Officer(Principal
Accounting Officer)
Richard P. Banis Director June 24, 1997
Richard P. Banis
Director June , 1997
Arthur H. Bilger
Richard A. Etter Director June 24, 1997
Richard A. Etter
Michael D. McKee Director June 24, 1997
Michael D. McKee
Exhibit 10
CIRCUS CIRCUS ENTERPRISES, INC.
1989 STOCK OPTION PLAN
(As Amended and Restated June 24, 1997)
1. PURPOSES OF THE PLAN
The purposes of this 1989 Stock Option Plan (the Plan )
are to enable Circus Circus Enterprises, Inc. (the Company ) and
its Subsidiaries to attract and retain the services of key
employees and persons with managerial, professional or supervisory
responsibilities, including, but not limited to, members of the
Board of Directors, officers of, and consultants to, the Company,
responsible for the past and continued success of the Company, and
to provide them with increased motivation and incentive to exert
their best efforts on behalf of the Company by enlarging their
personal stake in its success.
2. GENERAL PROVISIONS
2.1 Definitions
As used in the Plan:
(a) Board of Directors means the Board of Directors of
the Company.
(b) Code means the Internal Revenue Code of 1986,
including any and all amendments thereto.
(c) "Committee means the committee appointed by the
Board of Directors from time to time to administer
the Plan pursuant to Section 2.2 hereof.
(d) Common Stock means the Common Stock, par value
$.01-2/3 per share, of the Company.
(e) Fair Market Value means, with respect to the date
a given Stock Option is granted or exercised, the
closing price on the applicable date (or if there is
no closing price, then the closing bid price) of the
Common Stock as reported on the New York Stock
Exchange Composite Tape, or if not reported thereon,
then such price as reported in the trading reports
of the principal securities exchange on which the
Common Stock is listed, or if such stock is not
listed on a securities exchange in the United
States, the mean between the dealer closing bid
and ask prices on the over-the-counter market, as
reported by the National Association of Securities
Dealers Automated Quotations Systems (NASDAQ), or
NASDAQ s successor, or if not reported on NASDAQ, on
the basis of such other method as the Committee
shall, in good faith, determine to be reasonable.
(f) Incentive Stock Option means an option granted
under the Plan, which is intended to qualify as an
incentive stock option under Section 422A of the
Code.
(g) Non-Qualified Stock Option means an option granted
under the Plan which is not an Incentive Stock
Option.
(h) Participant means a person to whom a Stock Option
has been granted under the Plan.
(i) Stock Option means an Incentive Stock Option or
Non-Qualified Option granted under the Plan.
(j) Rule 16b-3 means such rule adopted under the
Securities Exchange Act of 1934, as amended, or any
successor rule.
(k) Subsidiary means any corporation (other than the
Company) in an unbroken chain of corporations
beginning with the Company if, at the time of the
granting of the option, each of the corporations
other than the last corporation in the unbroken
chain owns 50% or more of the total voting power of
all classes of stock in one of the other
corporations in such chain.
2.2 Administration of the Plan
(a) The Plan shall be administered by the Committee
which shall at all times consist of two (2) or more
persons, each of whom shall be a member of the Board
of Directors. To the extent possible, and to the
extent the Board of Directors deems it necessary or
appropriate, each member of the Committee shall be a
Non-Employee Director (as such term is defined in
Rule 16b-3) and an Outside Director (as such term
is defined in Treasury Regulations Section 1.162-27
promulgated under the Code). The Board of Directors
may from time to time remove members from, or add
members to, the Committee. Vacancies on the
Committee, howsoever caused, shall be filled by the
Board of Directors. The Committee shall select one
of its members as Chairman, and shall hold meetings
at such times and places as it may determine.
(b) The Committee shall have the full power, subject to
and within the limits of the Plan, to: (i) interpret
and administer the Plan, and Stock Options granted
under it; (ii) make and interpret rules and
regulations for the administration of the Plan and
to make changes in and revoke such rules and
regulations (and, in the exercise of this power,
shall generally determine all questions of policy
and expediency that may arise and may correct any
defect, omission, or inconsistency in the Plan or
any agreement evidencing the grant of any Stock
Option in a manner and to the extent it shall deem
necessary to make the Plan fully effective); (iii)
determine those persons to whom Stock Options shall
be granted and the number of Stock Options to be
granted to any person; (iv) determine the terms of
Stock Options granted under the Plan, consistent
with the provisions of the Plan; and (v) generally,
exercise such powers and perform such acts in
connection with the Plan as are deemed necessary or
expedient to promote the best interests of the
Company. The interpretation and construction by the
Committee of any provisions of the Plan or of any
Stock Option shall be final and conclusive.
(c) The Committee may act only by a majority of its
members then in office; however, the Committee may
authorize any one or more of its members or any
officer of the Company to execute and deliver
documents on behalf of the Committee.
(d) No member of the Committee shall be liable for any
action taken or omitted to be taken or for any
determination made by him or her in good faith
relating to the Plan, and the Company shall
indemnify and hold harmless each member of the
Committee against any cost or expense (including
counsel fees) or liability (including any sum paid
in settlement of a claim with the approval of the
Committee) arising out of any act or omission in
connection with the administration or interpretation
of the Plan, unless arising out of such person s own
fraud or bad faith.
2.3 Effective Date
The Plan shall become effective upon its adoption by the
Board of Directors, and Stock Options may be issued upon
such adoption and from time to time thereafter, subject,
however, to approval of the Plan by the affirmative vote
of the holders of a majority of the shares of the Common
Stock present in person or by proxy and entitled to vote
at an annual meeting of the shareholders of the Company
or at a special meeting of shareholders of the Company
expressly called for such purpose, or any adjournments
thereof, within 12 months after the adoption of the Plan
by the Board of Directors. If the Plan is not approved at
such annual or special meeting or at any adjournments
thereof, this Plan and all Stock Options previously
granted there-under become null and void.
2.4 Duration
If approved by the shareholders of the Company, as
provided in Section 2.3, unless sooner terminated by the
Board of Directors, the Plan shall remain in effect for a
period of ten (10) years following its adoption by the
Board of Directors.
2.5 Shares Subject to the Plan
The maximum number of shares of Common Stock which may be
subject to Stock Options granted under the Plan shall be
1,500,000. The Stock Options shall be subject to
adjustment in accordance with Section 4.1, and shares to
be issued upon exercise of the Stock Options may be
either authorized and unissued shares of Common Stock or
authorized and issued shares of Common Stock purchased or
acquired by the Company for any purpose. If a Stock
Option or portion thereof shall expire or is terminated,
canceled or surrendered for any reason without being
exercised in full, the unpurchased shares of Common Stock
which were subject to such Stock Option or portion
thereof shall be available for future grants of Stock
Options under the Plan. Notwithstanding any provision to
the contrary, the number of shares of Common Stock for
which Stock Options may be granted to any person pursuant
to the Plan during 1997 or during any subsequent calendar
year shall not exceed 100,000, provided, however, that
such number shall be subject to appropriate adjustment in
accordance with Section 4.1.
2.6 Amendments
The Plan may be suspended, terminated or reinstated, in
whole or in part, at any time by the Board of Directors.
The Board of Directors may from time to time make such
amendments to the Plan as it may deem advisable,
including, with respect to Incentive Stock Options,
amendments deemed necessary or desirable to comply with
Section 422A of the Code and any regulations issued
thereunder; provided, however, that, without the approval
of the Company s shareholders, no amendment shall be made
which:
(a) materially increases the maximum number of shares of
Common Stock which may be subject to Stock Options
granted under the Plan (other than as provided in
Section 4.1); or
(b) materially increases the benefits accruing to
Participants under the Plan; or
(c) extends the term of the Plan; or
(d) increases the period during which a Stock Option may
be exercised beyond ten years from the date of
grant; or
(e) materially modifies the requirements as to
eligibility for participation in the Plan; or
(f) will cause options issued under the Plan to fail to
meet the requirements of Rule 16b-3.
Except as otherwise provided herein, termination or amendment
of the Plan shall not, without the consent of the Participant,
affect such Participant s rights under any Stock Option previously
granted to such Participant.
2.7 Participants and Grants
Stock Options may be granted by the Committee to those
persons who the Committee determines have the capacity to
make a substantial contribution to the success of the
Company; provided, however, that, Stock Options may not
be granted to members of the Committee. The Committee may
grant to Participants Stock Options to purchase such
number of shares of Common Stock (subject to the
limitations of Section 2.5) as the Committee may, in its
sole discretion, determine. In granting Stock Options
under the Plan, the Committee, on an individual basis,
may vary the number of Incentive Stock Options or Non-
Qualified Stock Options as between Participants and may
grant Incentive Stock Options and/or Non-Qualified
Options to a Participant in such amounts as the Committee
may determine in its sole discretion.
3. STOCK OPTIONS
3.1 General
All Stock Options granted under the Plan shall be
evidenced by written agreements executed by the Company
and the Participant to whom granted which agreement shall
state the number of shares of Common Stock which may be
purchased upon the exercise thereof and shall contain
such investment representations and other terms and
conditions as the Committee may from time to time
determine, or, in the case of Incentive Stock Options, as
may be required by Section 422A of the Code, or any other
applicable law.
3.2 Price
Subject to the provisions of Section 3.6(d) and Section
4.1, the purchase price per share of Common Stock subject
to a Stock Option shall, in no case, be less than one-
hundred percent (100%) of the Fair Market Value of a
share of Common Stock on the date the Stock Option is
granted.
3.3 Period
The duration or term of each Stock Option granted the
Plan shall be for such period as the Committee shall
determine but in no event more than ten (10) years from
the date of grant thereof.
3.4 Exercise
Subject to Section 4.4, Stock Options may be exercisable
immediately upon granting of the Stock Option or at such
other time or times as the Committee shall specify when
granting the Stock Option. Once exercisable, a Stock
Option shall be exercisable, in whole or in part, by
delivery of a written notice of exercise to the Secretary
of the Company at the principal office of the Company
specifying the number of shares of Common Stock as to
which the Stock Option is then being exercised together
with payment of the full purchase price for the shares
being purchased upon such exercise. Until the shares of
Common Stock as to which a Stock Option is exercised are
issued, the Participant shall have none of the rights of
a shareholder of the Company with respect to such shares.
3.5 Payment
The purchase price for shares of Common Stock as to which
a Stock Option has been exercised and any amount required
to be withheld, as contemplated by Section 4.3, may be
paid:
(a) In United States dollars in cash, or by check, bank
draft or money order payable in United States
dollars to the order of the Company; or
(b) In the discretion of the Committee, by the delivery
by the Participant to the Company of shares of
Common Stock having an aggregate Fair Market Value
on the date of payment equal to the aggregate of the
purchase price of Common Stock as to which the Stock
Option is then being exercised or by the withholding
of shares of Common Stock having such Fair Market
Value upon the exercise of such Stock Option; or
(c) In the discretion of the Committee, by a combination
of both (a) and (b) above.
The Committee may, in its discretion, impose limitations,
conditions and prohibitions on the use by a Participant of shares
of Common Stock to pay the purchase price payable by such
Participant upon the exercise of a Stock Option.
3.6 Special Rules for Incentive Stock Options
Notwithstanding any other provision of the Plan, the
following provisions shall apply to Incentive Stock
Options granted under the Plan:
(a) Incentive Stock Options shall only be granted to
Participants who are employees of the Company or its
Subsidiaries.
(b) To the extent that the aggregate Fair Market Value
of Common Stock with respect to which Incentive
Stock Options are exercisable for the first time by
a Participant during any calendar year under this
Plan and any other Plan of the Company or a
Subsidiary exceeds $100,000, such Stock Options
shall be treated as Non-Qualified Stock Options.
(c) Any Participant who disposes of shares of Common
Stock acquired upon the exercise of an Incentive
Stock Option by sale or exchange either within two
(2) years after the date of the grant of the
Incentive Stock Option under which the shares were
acquired or within one (1) year of the acquisition
of such shares, shall promptly notify the Secretary
of the Company at the principal office of the
Company of such disposition, the amount realized,
the purchase price per share paid upon exercise and
the date of disposition.
(d) No Incentive Stock Option shall be granted to a
Participant who, at the time of the grant, owns
stock representing more than ten percent (10%) of
the total combined voting power of all classes of
stock either of the Company or any parent or Sub-
sidiary of the Company, unless the purchase price of
the shares of Common Stock purchasable upon exercise
of such Incentive Stock Option is at least one-
hundred ten percent (110%) of the Fair Market Value
(at the time the Incentive Stock Option is granted)
of the Common Stock and the Incentive Stock Option
is not exercisable more than five (5) years from the
date it is granted.
3.7 Termination of Employment
(a) In the event that a Participant (i) shall cease to
be employed by the Company or a Subsidiary because
of his discharge for dishonesty, or because he
violated any material provision of any employment or
other agreement between him and the Company or a
Subsidiary, or (ii) shall voluntarily resign or
terminate his employment with the Company or a
Subsidiary under or followed by such circumstances
as would constitute a breach of any material
provision of any employment or other agreement
between him and the Company or a Subsidiary, or
(iii) shall have committed an act of dishonesty not
discovered by the Company or a Subsidiary prior to
the cessation of his employment with the Company or
a Subsidiary, but which would have resulted in his
discharge if discovered prior to such date, or (iv)
shall, either before or after cessation of his
employment with the Company or a Subsidiary, without
the written consent of his employer, use (except for
the benefit of his employer) or disclose to any
other person any confidential information relating
to the continuation or proposed continuation of his
employer s business or any trade secrets of the
Company or a Subsidiary obtained as a result of or
in connection with such employment, or (v) shall,
either before or after the cessation of his
employment with the Company or a Subsidiary, without
the written consent of his employer, directly or
indirectly, give advice to, or serve as an employee,
director, officer, or trustee of, or in any similar
capacity with, or otherwise directly or indirectly
participate in the management, operation, or control
of, or have any direct or indirect financial
interest in, any corporation, partnership, or other
organization which directly or indirectly competes
in any respect with the Company or its Subsidiaries,
then forthwith from the happening of any such event,
any Stock Option then held by such Participant shall
terminate and become void to the extent that it then
remains unexercised. In the event that a Participant
shall cease to be employed by the Company or a
Subsidiary for any reason other than his death or
one or more of the reasons set forth in the
immediately preceding sentence, subject to the
condition that no Stock Option shall be exercisable
after the expiration of ten (10) years from the date
it is granted, or, in the case of a 10% Stockholder,
five (5) years from the date it is granted, such
Participant shall have the right to exercise the
Stock Option at any time within three (3) months
after such termination of employment to the extent
his right to exercise such Stock Option had accrued
pursuant to this Plan at the date of such
termination and had not previously been exercised;
such three-month limit shall be increased to one
year for any Participant who ceases to be employed
by the Company or a Subsidiary because he is
permanently and totally disabled (within the meaning
of Section 22(e)(3) of the Code). Whether authorized
leave of absence or absence for military or
governmental service shall constitute termination of
employment, for purposes of the Plan, shall be
determined by the Committee, which determination
shall be final and conclusive.
(b) If a Participant shall die while in the employ of
the Company or a Subsidiary or within a period of
three months (one year in the case of disability)
after the termination of his employment with the
Company and all Subsidiaries and shall not have
fully exercised any Stock Option, the Stock Option
may be exercised subject to the condition that no
Stock Option shall be exercisable after the
expiration of ten (10) years from the date it is
granted, or, in the case of a 10% Stockholder, five
(5) years from the date it is granted, to the extent
that the Participant s right to exercise such Stock
Option had accrued pursuant to this Plan at the time
of his death and had not previously been exercised,
at any time within one year after the Participant s
death, by the personal representative of the
Participant or by any person or persons who shall
have acquired the Stock Option directly from the
Participant by bequest or inheritance.
4. MISCELLANEOUS PROVISIONS
4.1 Adjustments Upon Changes in Capitalization
In the event of changes to the outstanding shares of
Common Stock of the Company through reorganization,
merger, consolidation, recapitalization,
reclassification, stock split-up, stock dividend, stock
consolidation or otherwise, or in the event of a sale of
all or substantially all of the assets of the Company, an
appropriate and proportionate adjustment shall be made in
the number and kind of shares as to which Stock Options
may be granted. A corresponding adjustment changing the
number or kind of shares and/or the purchase price per
share of unexercised Stock Options or portions thereof
which shall have been granted prior to any such change,
shall likewise be made. Notwithstanding the foregoing, in
the case of a reorganization, merger or consolidation, or
sale of all or substantially all of the assets of the
Company, in lieu of adjustments as aforesaid, the
Committee may in its discretion accelerate the date after
which a Stock Option may or may not be exercised or the
stated expiration date thereof. Adjustments or changes
under this Section shall be made by the Committee, whose
determination as to what adjustments or changes shall be
made, and the extent thereof, shall be final, binding and
conclusive.
4.2 Non-Transferability
No Stock Option shall be transferable except by will or
the laws of descent and distribution, nor shall any Stock
Option be exercisable during the Participant s lifetime
by any person other than the Participant or his guardian
or legal representative.
4.3 Withholding
The Company s obligation under this Plan shall be subject
to applicable federal, state and local tax withholding
requirements. Federal, state and local withholding tax
due at the time of a grant or upon the exercise of any
Stock Option may, in the discretion of the Committee, be
paid in shares of Common Stock already owned by the
Participant or through the withholding of shares
otherwise issuable to such Participant, upon such terms
and conditions as the Committee shall determine. If the
Participant shall fail to pay, or make arrangements
satisfactory to the Committee for the payment, to the
Company of all such federal, state and local taxes
required to be withheld by the Company, then the Company
shall, to the extent permitted by law, have the right to
deduct from any payment of any kind otherwise due to such
Participant an amount equal to any federal, state or
local taxes of any kind required to be withheld by the
Company.
4.4 Compliance with Law and Approval of Regulatory Bodies
No Stock Option shall be exercisable and no shares will
be delivered under the Plan except in compliance with all
applicable Federal and state laws and regulations
including, without limitation, compliance with all
Federal and state securities laws and withholding tax
requirements and with the rules of all domestic stock
exchanges on which the Company s shares may be listed.
Any share certificate issued to evidence shares for which
a Stock Option is exercised may bear legends and
statements the Committee shall deem advisable to assure
compliance with Federal and state laws and regulations.
No Stock Option shall be exercisable and no shares will
be delivered under the Plan, until the Company has
obtained consent or approval from regulatory bodies,
Federal or state, having jurisdiction over such matters
as the Committee may deem advisable. In the case of the
exercise of a Stock Option by a person or estate
acquiring the right to exercise the Stock Option as a
result of the death of the Participant, the Committee may
require reasonable evidence as to the ownership of the
Stock Option and may require consents and releases of
taxing authorities that it may deem advisable.
4.5 No Right to Employment
Neither the adoption of the Plan nor its operation, nor
any document describing or referring to the Plan, or any
part thereof, nor the granting of any Stock Options
hereunder, shall confer upon any Participant under the
Plan any right to continue in the employ of the Company
or any Subsidiary, or shall in any way affect the right
and power of the Company or any Subsidiary to terminate
the employment of any Participant under the Plan at any
time with or without assigning a reason therefor, to the
same extent as might have been done if the Plan had not
been adopted.
4.6 Exclusion from Pension Computations
By acceptance of a grant of a Stock Option under the
Plan, the recipient shall be deemed to agree that any
income realized upon the receipt or exercise thereof or
upon the disposition of the shares received upon exercise
will not be taken into account as base remuneration ,
wages , salary or compensation in determining the
amount of any contribution to or payment or any other
benefit under any pension, retirement, incentive, profit-
sharing or deferred compensation plan of the Company or
any Subsidiary.
4.7 Abandonment of Options
A Participant may at any time abandon a Stock Option
prior to its expiration date. The abandonment shall be
evidenced in writing, in such form as the Committee may
from time to time prescribe. A Participant shall have no
further rights with respect to any Stock Options so
abandoned.
4.8 Interpretation of the Plan
Headings are given to the sections of the Plan solely as
a convenience to facilitate reference, such headings,
numbering and paragraphing shall not in any case be
deemed in any way material or relevant to the
construction of the Plan or any provisions thereof. The
use of the masculine gender shall also include within its
meaning the feminine. The use of the singular shall also
include within its meaning the plural and vice versa.
4.9 Use of Proceeds
Funds received by the Company upon the exercise of Stock
Options granted under the Plan shall be used for the
general corporate purposes of the Company.
4.10 Construction of Plan
The place of administration of the Plan shall be in the
State of Nevada, and the validity, construction,
interpretation, administration and effect of the Plan and
of its rules and regulations, and rights relating to the
Plan, shall be determined solely in accordance with the
laws of the State of Nevada.
<PAGE>
Exhibit 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Form S-8 Registration Statement
of our report dated February 26, 1997 included or incorporated by
reference in Circus Circus Enterprises, Inc. s Annual Report on
Form 10-K for the year ended January 31, 1997 and to all references
to our Firm included in this Registration Statement.
ARTHUR ANDERSEN LLP
Las Vegas, Nevada
June 24, 1997
