As filed with the Securities and Exchange Commission on
June 26, 1997
Registration No. 33-56420
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST EFFECTIVE AMENDMENT NO. 3
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)
AMENDED AND RESTATED 1991 STOCK INCENTIVE 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 -; Share
Value Incentives; and -
Formula Awards to Eligible
Directors
(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 Reports of the Company;
and Employee Plan Annual Incorporation of Certain
Information Documents by Reference
PROSPECTUS
CIRCUS CIRCUS ENTERPRISES, INC.
3,000,000 Shares
Common Stock, $.01-2/3 Par Value
Offered Pursuant to the Amended and Restated 1991 Stock Incentive
Plan
This Prospectus relates to the offering by Circus
Circus Enterprises, Inc. (the Company ) of 3,000,000 shares of
the Company s Common Stock, $.01-2/3 par value ( Common Stock ),
pursuant to the Company s Amended and Restated 1991 Stock
Incentive Plan (the Plan ) which provides for the granting of
awards covering up to 3,000,000 shares of Common Stock subject to
adjustment upon the occurrence of certain events specified in the
Plan, including stock dividends, stock splits and extraordinary
cash dividends. The awards which may be issued pursuant to the
Plan include share-value incentives (consisting of stock options
and awards of restricted stock and performance shares) which may
be granted to Employee Participants (as defined) and stock
options which may be granted as Formula Awards (as defined) to
Eligible Directors (as defined), all as more fully described in
this Prospectus. Although the Company may issue previously
authorized but unissued shares of its Common Stock pursuant to
the Plan, it is the Company s present intention that all shares
issued pursuant to the Plan will be shares of Common Stock held
as treasury shares.
_______________
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 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 ADEQUACY OR
ACCURACY OF THIS PROSPECTUS. 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 with 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 prescribed rates) at the Commission s
Public Reference Section at 450 Fifth Street, N.W., Washington,
D.C. 20549.
The Company is subject to the informational
requirements of the Securities Exchange Act of 1934 and, in
accordance therewith, files reports, proxy statements and other
information with the Commission. Such reports, proxy statements
and other information can be inspected and copied (at prescribed
rates) at the Public Reference Section 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 an aggregate of 3,000,000
shares of Common Stock which may be issued pursuant to the
Company s Amended and Restated l99l Stock Incentive Plan. The
Plan provides for the issuance of up to 2,475,000 shares of the
Company s Common Stock pursuant to stock options and as
restricted stock and performance shares (collectively share-
value incentives ) to officers and other key employees of the
Company and its Affiliates (as defined) with managerial or
supervisory responsibilities whom the committee administering the
Plan (the Committee ) determines from time to time have made a
significant contribution to the Company s past success or are in
a position to influence its continued success ( Employee
Participants ). For purposes of the preceding sentence, the term
Affiliates means those entities 100% owned, directly or
indirectly, by the Company and any other entities more than 50%
owned, directly or indirectly, by the Company which are
designated as Affiliates by the Committee. All references in
this Prospectus to numbers of shares and market and exercise
prices have been adjusted to reflect a three-for-two split of the
Company s Common Stock effective at the close of business on July
9, 1993. The Plan also provides for the issuance of up to an
additional 525,000 shares of the Company s Common Stock upon the
exercise of stock options granted as Formula Awards (as
defined) pursuant to the Plan. The Plan, which was originally
adopted by the Company s Board of Directors (the Board of
Directors ) on April 18, l991, was approved by the Company s
stockholders on June 20, 1991 and became effective on that date.
The Plan was amended by the Board of Directors on April 24, 1992
to provide for the grant of Formula Awards (as defined),
subject to approval of the amendment by the Company s
stockholders which was obtained on June 18, 1992. The Plan is
not subject to the provisions of the Employee Retirement Income
Security Act of 1974 ( ERISA ).
The description of the Plan contained herein does not
purport to be complete, and reference is made to the Plan itself
and to the respective agreements evidencing awards made pursuant
to the Plan for a full statement of the terms and provisions
applicable to such awards.
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 purposes of the Plan are (i) to promote the long
term financial interests and growth of Circus Circus Enterprises,
Inc. (the Company ) by motivating executive personnel by means
of growth-related incentives, providing incentive compensation
opportunities that are competitive with those of other major
corporations and furthering the identity of interests of
participants with those of the stockholders of the Company, and
(ii) to strengthen the Company s ability to attract and retain
the services of experienced and knowledgeable non-employee
directors and by encouraging such directors to acquire an
increased proprietary interest in the Company.
Administration
The Plan is administered by the Committee which,
according to the terms of the Plan, is to consist of two or more
directors of the Company designated by 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
Internal Revenue Code). Except to the extent an Eligible
Director (as defined) is permitted to receive Formula Awards,
members of the Committee are not eligible to participate in the
Plan. Subject to the limitations of the Plan, the Committee has
the sole and complete authority (i) to select Employee
Participants in the Plan, (ii) to make share-value incentive
grants to Employee Participants in such forms and amounts as it
shall determine, (iii) to impose such limitations, restrictions
and conditions upon such share-value incentive grants to Employee
Participants as it shall deem appropriate, (iv) to interpret the
Plan and to adopt, amend and rescind administrative guidelines
and other rules and regulations relating to the Plan, (v) to
correct any defect or omission or to reconcile any inconsistency
in the Plan or in any share-value incentive granted thereunder,
and (vi) to make all other determinations and to take all other
actions necessary or advisable, in its discretion, for the
implementation and administration of the Plan. The Committee may
provide for the issuance of Common Stock to Employee Participants
as a stock grant for no consideration other than services
rendered or, to the extent permitted by applicable State law, to
be rendered. The Committee s determinations on matters within
its authority are conclusive and binding upon the Company and all
other persons. All expenses associated with the Plan are borne
by the Company. The Committee may amend or modify any share-
value incentive grant in any manner to the extent that the
Committee would have had the authority under the Plan to
initially make such grant, but no such amendment or modification
may impair the rights of any Employee Participant under any
share-value incentive grant without the consent of such Employee
Participant. 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 .
Limitation on Aggregate Shares
The number of shares of Common Stock which may be
issued pursuant to the Plan as share-value incentives to Employee
Participants and Formula Awards to Eligible Directors may not
exceed, in the aggregate, 3,000,000 shares. Of such shares, the
number available for issuance pursuant to Formula Awards granted
to Eligible Directors under the Plan is 525,000. To the extent
any share-value incentives granted to Employee Participants or
Formula Awards granted to Eligible Directors expire unexercised
or unpaid or are cancelled, terminated or forfeited in any manner
without the issuance of shares of Common Stock thereunder, such
shares will again be available under the Plan. To the extent a
restricted stock grant or an award of performance shares is
exercised for cash, it will be treated as an issuance of a number
of shares equal to the number of shares upon which the restricted
stock grant or award of performance shares was based so as to
reduce by that amount the number of shares otherwise available
for future issuance as share-value incentives under the Plan.
The shares of Common Stock issued pursuant to the Plan may be
either authorized and unissued shares, treasury shares, or a
combination thereof, as the Committee determines.
The number of shares of Common Stock for which options
may be granted to any person pursuant to the Plan during 1997 or
during any subsequent calendar year shall not exceed 200,000.
Share-Value Incentives
General. The Committee may grant to Employee
Participants (as defined), in accordance with the provisions of
the Plan, stock options, restricted stock and performance shares.
With one exception noted in the next sentence, the term Employee
Participant includes any officer or other key employee of the
Company or an Affiliate (as defined, hereinafter referred to as
an eligible subsidiary ) with managerial or supervisory
responsibilities whom the Committee determines has contributed
significantly to the Company s past success or is in a position
to influence its continued success. However, the term Employee
Participant does not include an individual who at the time that
a share-value incentive is granted under the Plan owns or, after
giving effect to the Common Stock to be issued or referenced
under the share-value incentive and under all other options,
warrants and similar awards held by such individual, would be
deemed to own 10% or more of the total combined voting power or
value of all classes of stock of the Company. Eligible
subsidiaries (i.e., subsidiaries whose employees may be Employee
Participants) include (i) all subsidiaries wholly-owned by the
Company, directly or indirectly, and (ii) any other subsidiaries
more than 50% owned by the Company, directly or indirectly, which
are designated by the Committee as eligible subsidiaries.
Options. Options granted to an Employee Participant
under the Plan may be incentive stock options within the meaning
of Section 422 of the Internal Revenue Code of 1986, as amended,
and any successor statute (the Code ), or in such other form,
consistent with the Plan, as the Committee may determine. The
option price per share of Common Stock for an option granted to
an Employee Participant must be fixed by the Committee at not
less than 100% of the fair market value of a share of Common
Stock on the date of grant. For purposes of options or other
awards to Employee Participants, and for purposes of the
discussion under Tax Withholding , below, the term the fair
market value of the Common Stock means the last reported sale
price of the Common Stock on the New York Stock Exchange
Composite Tape on the date fair market value is to be determined
and, in absence of any sale on such day, fair market value as the
Committee, in good faith, determines. Options granted to an
Employee Participant will be exercisable at such time or times as
the Committee determines at or subsequent to grant. Options
granted to an Employee Participant will be exercisable in whole
or in part by written notice to the Company (to the attention of
the Company s Corporate Secretary), signed by the Employee
Participant exercising the option, stating the number of shares
of Common Stock with respect to which the option is being
exercised and accompanied by payment in full of the option price.
Payment of the option price for an option granted to an Employee
Participant may be made, at the discretion of the optionee, and
to the extent permitted by the Committee, (A) in cash (including
check, bank draft, or money order), (B) in Common Stock (valued
at the fair market value thereof on the date of exercise), (C)
by a combination of cash and Common Stock or (D) with any other
consideration deemed acceptable by the Committee. The date both
such notice and payment are received by the office of the
Corporate Secretary of the Company will be the date of exercise
for the option as to the number of shares specified.
Incentive stock options may only be granted to Employee
Participants who are employees of the Company or an eligible
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
Employee Participant 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 Employee 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 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 Employee 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 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.
Restricted Stock. The Committee may transfer to any
Employee Participant as restricted stock shares of Common Stock,
subject to the conditions described below and such other terms
and conditions (including, without limitation, performance goals
similar to those for Performance Shares) as the Committee may
prescribe. Each certificate evidencing restricted stock will be
registered in the name of the Employee Participant to whom the
award is being made and, together with a stock power endorsed in
blank by such Employee Participant, will be deposited with the
Company. Pursuant to the Plan, there will be established for
each restricted stock grant to an Employee Participant one or
more restriction periods of such length as shall be determined by
the Committee, provided, however, that no restriction period
shall continue for more than 10 years from the date of the grant.
Shares of restricted stock may not be sold, assigned,
transferred, pledged or otherwise encumbered during the
applicable restriction period. Except for such restrictions on
transfer and such other restrictions as the Committee may impose
with respect to a particular award, the Employee Participant will
have, with respect to such restricted stock, all the rights of a
holder of Common Stock. The Committee, in its sole discretion,
may permit or require the payment of cash dividends or restricted
stock to be deferred and, if the Committee so determines, require
that such dividends be reinvested in additional restricted stock
or otherwise invested. At the expiration of each restriction
period applicable to restricted stock, the Company will deliver
to the Employee Participant to whom the award was granted (or the
Employee Participant s legal representative or designated
beneficiary) certificates representing the shares with respect to
which the applicable restrictions and conditions have been
satisfied. Except as provided by the Committee at the time of
grant or otherwise, upon termination of employment of an Employee
Participant for any reason during a restriction period applicable
to restricted stock awarded to such Employee Participant, all
shares still subject to restriction shall be forfeited by the
Employee Participant.
Performance Shares. Performance shares, measured in
whole or in part by the value of shares of Common Stock, the
performance of the participant, the performance of the Company,
its subsidiaries or any separate business units or properties
thereof, or any combination thereof, may be granted to Employee
Participants under the Plan. Such share-value incentives may be
payable in Common Stock, cash or both, and shall be subject to
such restrictions and conditions, as the Committee shall
determine, in its sole discretion, one or more performance
periods and performance goals to be achieved during the
applicable performance periods. No performance period shall
exceed 10 years from the date of the grant. A performance shares
grant to an Employee Participant may be made subject to such
later revisions as the Committee shall deem appropriate to
reflect significant unforeseen events such as changes in laws,
regulations or accounting practices, or unusual or nonrecurring
items or occurrences. The Committee shall determine the extent
to which performance goals have been attained or a degree of
achievement between maximum and minimum levels in order to
evaluate the level of payment to be made, if any. No share-value
incentive granted to an Employee Participant under the Plan shall
be exercisable beyond, and no conditions or performance goals
shall be susceptible of satisfaction beyond a period of 10 years
after the date of the grant thereof.
Agreements. Each share-value incentive granted to an
Employee Participant under the Plan shall be evidenced by an
agreement in such form and containing such terms and conditions
(not inconsistent with the Plan) as the Committee shall determine
in its sole discretion.
Non-Transferability. No share-value incentive granted
to an Employee Participant under the Plan, and no interest
therein, shall be transferable by the Employee Participant
otherwise than by will or the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by
the Code or Title I of the Employee Retirement Income Security
Act, or the rules thereunder (a QDRO ). All share-value
incentive grants to an Employee Participant shall be exercisable
or received during the Employee Participant s lifetime only by
the Employee Participant or pursuant to a QDRO. Any purported
transfer contrary to this provision will be null and void and
without effect.
Tax Withholding. Under the terms of the Plan, the
Committee has the power to withhold, or require an Employee
Participant to remit to the Company, an amount sufficient to
satisfy any withholding or other tax due with respect to any
amount payable and/or shares issuable under the Plan, and the
Committee may defer such payment or issuance unless indemnified
to its satisfaction. Subject to the consent of the Committee, an
Employee Participant may make an irrevocable election to have
shares of Common Stock otherwise issuable under a share-value
incentive grant withheld, tender back to the Company shares of
Common Stock received pursuant to a share-value incentive grant
or deliver to the Company previously acquired shares of Common
Stock having a fair market value sufficient to satisfy all or
part of the participant s estimated tax obligations associated
with the transaction. Such election must be made by an Employee
Participant prior to the date on which the relevant tax
obligation arises. The Committee may disapprove of any election
and may limit, suspend or terminate the right of an Employee
Participant to make such elections.
Rights of Participants. The Plan does not limit in any
way the right of the Company or any subsidiary to terminate an
Employee Participant s employment at any time, nor does it confer
upon any Employee Participant any right to continue in the employ
of the Company or any subsidiary for any period of time or to
continue to receive his or her present or any other rate of
compensation. The Plan does not confer on any employee a right
to be selected as an Employee Participant, or, having been so
selected, to be selected again as an Employee Participant.
Misconduct. In the event that an Employee Participant
(i) ceases to be employed by the Company or a subsidiary because
of his discharge for dishonesty, or because he violates any
material provision of any employment or other agreement between
him and the Company or a subsidiary of the Company, or (ii)
voluntarily resigns or terminates 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 any 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) either before or after cessation of his employment
with the Company or a subsidiary, without the written consent of
the Company or a subsidiary, uses (except for the benefit of the
Company or a subsidiary) or discloses to any other person any
confidential information relating to the continuation or proposed
continuation of the business or any trade secrets of the Company
or a subsidiary obtained as a result of or in connection with
such employment, or (v) either before or after the cessation of
his employment with the Company or a subsidiary, without the
written consent of the Company or a subsidiary, directly or
indirectly, gives advice to, or serves as an employee, director,
officer, or trustee of, or in any similar capacity with, or
otherwise directly or indirectly participates in the management,
operation, or control of, or has 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, or (vi) ceases to be employed by the
Company or a subsidiary because of his inability to continue as
an employee under any law or governmental regulation, including
any Nevada gaming law or regulation, or (vii) voluntarily resigns
or terminates his employment with the Company or a subsidiary
under or followed by such circumstances as would have rendered
him unable to have continued as an employee under any law or
governmental regulation, including any Nevada gaming law or
regulation, then forthwith from the happening of any such event,
any share-value incentive grant then held by such Employee
Participant shall, under the terms of the Plan, terminate and
become void to the extent that, in the case of a stock option, it
then remains unexercised and, in the case of any other share-
value incentive grant, any condition or performance goal under it
then has not been met or satisfied. At the sole discretion of
the Committee, additional forfeiture provisions may be included
within the terms of any share-value incentive grant to an
Employee Participant.
Formula Awards to Eligible Directors
The Plan provides for the grant of Formula Awards to
Eligible Directors (as defined) in accordance with the terms of
the Plan. As defined in the Plan, the term Eligible Director
means a member of the Board of Directors who is not otherwise an
employee of the Company or any subsidiary of the Company. Each
Formula Award granted under the Plan is to be evidenced by an
agreement (a Formula Award Agreement ) duly executed on behalf
of the Company and by the Eligible Director to whom such Formula
Award is granted and dated as of the applicable date of grant.
Each Formula Award Agreement must comply with and is subject to
the terms and conditions of the Plan. Any Formula Award
Agreement may contain such terms, provisions and conditions not
inconsistent with the Plan as may be determined by the Committee.
All Formula Awards granted under the Plan will be non-statutory
options not intended to qualify under Section 422 of the Code.
Each Formula Award will be either an Initial Grant or an Annual
Grant.
Initial Grants. Subject to the terms of the Plan, an
option to purchase 10,000 shares of Common Stock will be granted
automatically to each Eligible Director immediately following the
annual meeting of the Company s stockholders at which such
Director is first elected or immediately following the first
annual meeting of the Company s stockholders after such Eligible
Director is first elected or appointed by the Board of Directors
to be a Director of the Company, whichever is applicable (each,
an Initial Grant ). Pursuant to the terms of the Plan, if an
Eligible Director who previously received an Initial Grant
terminates service as a Director of the Company and is
subsequently elected or appointed to the Board of Directors, such
Director will not be eligible to receive a second Initial Grant,
but will be eligible to receive only Annual Grants (as defined).
Annual Grants. Subject to the terms of the Plan, an
option to purchase 10,000 shares of Common Stock is granted
automatically each year, immediately following the annual meeting
of the Company s stockholders to each director of the Company who
is an Eligible Director at such time and who is not entitled to
receive an Initial Grant immediately following such annual
meeting (each, an Annual Grant ).
Formula Award Exercise Price. The exercise price per
share for an Initial Grant or an Annual Grant is established by
the terms of the Plan as the average of the Fair Market Value
(as hereinafter defined) for the fifth (5th) through the ninth
(9th) business days (which, for this purpose means those days on
which the New York Stock Exchange is open for trading) following
the date of grant (i.e., the date of the annual meeting of the
Company s stockholders giving rise to the award). For purposes
of the preceding sentence, and when otherwise used with respect
to a Formula Award, the term Fair Market Value means the mean
of the high and low per share trading prices for the Common Stock
as reported in The Wall Street Journal for New York Stock
Exchange Composite Transactions.
Vesting and Exercisability. Except as otherwise
provided in the Plan, a Formula Award vests and becomes non-
forfeitable when, and only if, the optionee continues to serve as
a member of the Company s Board of Directors until the first
annual meeting of the Company s stockholders held following the
year in which the award was granted. Except as otherwise
provided in the Plan, a Formula Award thereafter becomes
exercisable according to the following schedule:
Portion of Formula
Period of Continuous Service Award that is
as a Director of the Company Exercisable
From the first Annual Meeting of 40%
Stockholders subsequent to the grant to
the second Annual Meeting of
Stockholders subsequent to the grant
From the second Annual Meeting of 70%
Stockholders subsequent to the grant to
the third Annual Meeting of Stockholders
subsequent to the grant
From the third Annual Meeting of 100%
Stockholders subsequent to the grant to
the expiration of the term of the
Formula Award
Except as otherwise provided, any vested Formula Award,
to the extent the same is exercisable in accordance with the
schedule above, may be exercised in whole or in part at any time
or from time to time until the expiration or termination of its
term by giving written notice, signed by the person exercising
the Formula Award, to the Company (to the attention of the
Company s Corporate Secretary) stating the number of shares of
Common Stock with respect to which the Formula Award is being
exercised, accompanied by payment in full of the option exercise
price for the number of shares of Common Stock to be purchased.
The date both such notice and payment are received by the office
of the Company s Corporate Secretary is deemed to be the date of
exercise of the Formula Award as to such number of shares.
Notwithstanding any provision to the contrary, no Formula Award
may at any time be exercised with respect to a fractional share.
Payment of the exercise price for a Formula Award may
be in cash or by bank-certified, cashier s, or personal check, or
to the extent permitted by the Committee, payment may be in whole
or in part by
(i) transfer to the Company of shares of the Common
Stock having a Fair Market Value on the date of exercise equal to
the exercise price, or
(ii) delivery of instructions to the Company to
withhold from the shares of Common Stock that would otherwise be
issued on the exercise that number of such shares having a Fair
Market Value equal to the exercise price.
If the Fair Market Value of the number of whole shares
of Common Stock transferred or the number of whole shares of
Common Stock withheld is less than the total exercise price, the
shortfall must be paid in cash.
The Term of a Formula Award. Each Formula Award will
expire ten (10) years from its date of grant (i.e., the date of
the annual meeting of the Company s stockholders which gives rise
to the award), but shall be subject to earlier termination as
follows:
(i) In the event of the termination of a Formula Award
holder s service as a Director of the Company, other than by
reason of retirement, total and permanent disability, or death,
the then-outstanding Formula Awards of such holder (whether or
not then vested and whether or not then exercisable) shall
automatically expire on (and may not be exercised on) the
effective date of such termination. For purposes of the
preceding sentence and as used in clause (ii) below, the phrase
by reason of retirement means (a) mandatory retirement pursuant
to the policy of the Board of Directors or (b) termination of
service at a time when the holder would be entitled to a
retirement benefit under the Circus Circus Employees Profit
Sharing and Investment Plan, as then in effect, if the holder
were an employee of the Company.
(ii) In the event of the termination of a Formula
Award holder s service as a Director of the Company by reason of
retirement or total and permanent disability, the then-
outstanding Formula Awards of such holder that have vested
pursuant to the Plan (including, without limitation, any Formula
Award or portion thereof which vests in accordance with the Plan
on the date of termination) shall become exercisable, to the full
extent of the number of shares of Common Stock remaining covered
by such Formula Awards, regardless of whether such Formula Awards
were previously exercisable, and each such Formula Award shall
expire one year after the date of such termination or on its
stated grant expiration date, whichever is earlier.
(iii) In the event of the death of a Formula Award
holder while such holder is a Director of the Company, the then-
outstanding Formula Awards of such holder that have vested
pursuant to the Plan (including, without limitation, any Formula
Award or portion thereof which vests in accordance with the Plan
on the date of death) shall become exercisable, to the full
extent of the number of shares of Common Stock remaining covered
by such Formula Awards, regardless of whether such Formula Awards
were previously exercisable, and each such Formula Award shall
expire one year after the date of death of such optionee or on
its stated grant expiration date, whichever is earlier.
Exercise of a deceased holder s Formula Awards that are
still exercisable shall be by the estate of such holder or by the
person or persons to whom the holder s rights have passed by will
or the laws of descent and distribution.
Prohibitions Against Transferability. The right to
exercise a Formula Award granted under the Plan shall, during the
lifetime of the Eligible Director to whom such Formula Award was
granted, be exercisable only by such recipient or pursuant to a
qualified domestic relations order as defined by the Code or
Title I of the Employee Retirement Income Security Act, or the
rules thereunder (a QDRO ) and shall not be assignable or
transferable by such recipient other than by will or the laws of
descent and distribution or a QDRO. Any purported transfer
contrary to this provision will be null and void and without
effect.
Limitation of Rights. Neither the recipient of a
Formula Award nor the recipient s successor or successors in
interest shall have any rights as a stockholder of the Company
with respect to any shares of Common Stock subject to such
Formula Award until the date of issuance of a stock certificate
for such shares of Common Stock. Neither the Plan, nor the
granting of a Formula Award, nor any other action taken pursuant
to the Plan shall constitute or be evidence of any agreement or
understanding, express or implied, that an Eligible Director has
a right to continue as a Director for any period of time or at
any particular rate of compensation.
Capital Adjustments. The number and class of shares
with respect to which a Formula Award may be granted to an
Eligible Director under the Plan, the number and class of shares
subject to each outstanding Formula Award, and the exercise price
per share specified in each such Formula Award shall be
proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from a split-up
or consolidation of shares or any like capital adjustment or the
payment of any stock dividend, or other increase or decrease in
the number of shares effected without receipt of consideration by
the Company. For purposes of the preceding sentence, the Company
will be deemed to have received consideration for any shares
issued pursuant to any employee benefit plan meeting the
requirements of Rule 16b-3, including the Plan.
Limit on Awards to Eligible Directors. Notwithstanding
any provision of the Plan to the contrary, an Eligible Director
will not be entitled to receive or participate in any award under
the Plan other than Formula Awards which are granted to such
Eligible Director pursuant to the Plan. Under the terms of the
Plan, no Formula Award may be granted on a date when the number
of shares of Common Stock authorized for issuance pursuant to the
Plan and then available for issuance pursuant to new Formula
Awards is less than the aggregate number of such shares which
would be issuable pursuant to Formula Awards otherwise required
to be granted on such date, assuming the full vesting and
exercise of such Formula Awards. If Formula Awards are not
granted in any year as a result of the limitation described in
the preceding sentence, no additional Formula Awards will
thereafter be granted pursuant to the Plan.
Awards Outstanding
As of the close of business on May 30, 1997, there were
issued and outstanding options to purchase 129,000 shares of
Common Stock granted as Formula Awards and options to purchase an
additional 2,253,100 shares granted to Employee Participants
pursuant to the Plan. The options granted as Formula Awards
become exercisable according to the schedule described under
Formula Awards to Eligible Directors -- Vesting and
Exercisability . The Formula Awards outstanding at May 30, 1997
are exercisable at prices ranging from $23.08 to $39.34 per share
and have expiration dates ranging from June 18, 2002 to June 22,
2005. The other options outstanding under the Plan at such date
have exercise prices ranging from $21.25 to $34.00 per share and
expiration dates ranging from December 29, 2002 to December 17,
2006. As of the close of business on May 30, 1997, 181,800
shares of Common Stock had been purchased pursuant to the Plan
(including 18,000 shares purchased pursuant to Formula Awards),
and options to purchase an additional 436,100 shares (including
378,000 shares reserved for Formula Awards) were available for
issuance pursuant to the Plan.
Term of the Plan
Unless extended by the stockholders of the Company or
earlier terminated by the Board of Directors, the Plan will
expire on June 19, 2001 and, thereafter no awards may be made
pursuant to the Plan. However, the Plan will continue after such
date to govern all awards granted before that date until the
exercise, expiration or cancellation of such awards.
Rights as Stockholder
An Employee Participant under the Plan will have no
right as a stockholder of the Company with respect to shares
which are the subject of share-value incentives granted under the
Plan, and an Eligible Director will have no right as a
stockholder of the Company with respect to shares which are the
subject of Formula Awards granted under the Plan, unless and
until certificates for such shares are issued to the Employee
Participant or Eligible Director, as the case may be. Common
Stock issued to an Employee Participant pursuant to a share-value
incentive grant will nevertheless be subject to such limitations
and restrictions as are included in the agreement with respect to
such grant.
Adjustments Upon Certain Changes
In the event of a merger, consolidation,
reorganization, recapitalization, spinoff, stock dividend or
stock split, or combination or other increase or reduction in the
number of issued shares of Common Stock, or extraordinary cash
dividend or any other similar event, the Board of Directors or
the Committee may, in order to prevent the dilution or
enlargement of rights under share-value incentive grants or
Formula Awards, make such adjustments in the number and type of
shares authorized by the Plan, the number and type of shares
covered by, or with respect to which payments are measured under,
outstanding share-value incentive grants and the exercise prices
specified therein as may be determined to be appropriate and
equitable.
Beneficiary Designation
Subject to the limitations on transfer described in
this Prospectus, each Employee Participant and Eligible Director
may name, from time to time, beneficiaries (who may be named
contingently or successively) to whom benefits under the Plan are
to be paid in the event of such Employee Participant s or
Eligible Director s death before they receive any or all of such
benefits. Each designation will revoke all prior designations by
the same Employee Participant or Eligible Director, shall be in a
form prescribed by the Committee, and will be effective only when
filed by the Employee Participant or Eligible Director in writing
with the Committee during the Employee Participant s or Eligible
Director s lifetime. In the absence of any such designation,
vested benefits remaining unpaid at the Employee Participant s or
Eligible Director s death will be paid to the Employee
Participant s or Eligible Director s estate.
Amendment, Suspension and Termination of Plan
The Board of Directors may amend, terminate or suspend
the Plan at any time, in its sole and absolute discretion;
provided, however, that if required to qualify the Plan under
Rule 16b-3 under the Securities Exchange Act of 1934, no
amendment shall be made more than once every six (6) months that
would change the amount, price or timing of Formula Awards (or
any other provision of the Plan the amendment of which would
cause the Plan to fail to qualify under Rule 16b-3), other than
to comport with changes in the Internal Revenue Code of 1986, as
amended, the Employee Retirement Income Security Act, or the
rules and regulations promulgated thereunder; and provided,
further, that no amendment may be made without the approval of
the Company s stockholders that would (i) materially increase the
number of shares of Common Stock that may be issued under the
Plan, or (ii) otherwise materially increase the benefits accruing
to participants under the Plan. No amendment, suspension or
termination of the Plan may impair the rights of Employee
Participants under outstanding share-value incentive grants or
Eligible Directors under Formula Awards without the consent of
the Employee Participants and/or Eligible Directors affected
thereby or make any change that would disqualify the Plan, or any
other plan of the Company intended to be so qualified, from the
exemption provided by Rule 16b-3.
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 (other than choice of law provisions) of the State of
Nevada.
FEDERAL INCOME TAX CONSEQUENCES
Incentive Stock Options
Incentive stock options granted to Employee
Participants 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 ( Incentive Stock Options ). 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, options granted to an optionee who
ceases to be employed by the Company or a subsidiary for any one
or more of the reasons set forth under the heading Description
of the Plan - Share-Value Incentives - Misconduct , will
terminate and become void at the time such employment terminates.
Subject to the preceding sentence, the period during which
options granted to an Employee Participant may be exercised will
be determined by the Committee. 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 permits the Committee to impose
with respect to each option (including any Incentive Stock
Option) granted to an Employee Participant a maximum period
during which the option may be exercised by the optionee s estate
or a person who acquires the right to exercise such option by
reason of the death of the optionee, or, in the Committee s
discretion, to prohibit such option from being exercised after
the optionee s death.
To the extent that the aggregate fair market value
(determined at the time the option is granted) of the shares with
respect to which options which would, but for this sentence, be
Incentive Stock Options are exercisable for the first time by an
optionee during any calendar year under the Plan and under any
other plans of the Company (and any parent or subsidiary
corporation of the Company) exceeds $100,000, the options related
to such excess will be 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, generally, 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. 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 tax basis (for purposes of determining
the amount of gain or loss upon a disposition that satisfies the
holding period requirements described above) in shares of Common
Stock acquired upon the exercise of an Incentive Stock Option is
equal to the exercise price of the shares of Common Stock, in the
event that the entire exercise price is paid in cash. 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, the IRS has held that the optionee s basis and holding
period in the shares of Common Stock acquired upon exercise of an
Incentive Stock Option are 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
exercise price, the basis and holding period are 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
exercise 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 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 had been 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 qualify
for 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 as a result of such
disposition. 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 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 which must be met in order to qualify for
the tax benefits of an Incentive Stock Option.
Non-Qualified Stock Options
Non-qualified stock options ( Non-Qualified Stock
Options ) granted under the Plan (including those granted as
Formula Awards) 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
Unemployment taxes on the amount of ordinary income recognized by
an Employee Participant upon the exercise of a Non-Qualified
Stock Option.
Optionees who are subject to the short-swing profits
rules of Section 16(b) of the Securities Exchange Act of 1934, as
amended ( Section 16(b) ), relating to the sale of property at a
profit within six months after the purchase of the property,
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 such six-month period, 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).
Restricted Stock and Performance Shares
Restricted stock issued under the Plan will ordinarily
be subject to forfeiture, if the Employee Participant to whom the
award is made does not continue to be employed by the Company
during certain stipulated periods or satisfy any other conditions
prescribed by the Committee. Grants of restricted stock under
the Plan will be subject to the provisions of Section 83 of the
Code. As a result, an Employee Participant will, generally,
recognize ordinary income with respect to restricted stock in the
year or years in which such stock ceases to be subject to
forfeiture. The amount of ordinary income recognized will be
equal to the fair market value of the restricted stock on the
date it is no longer subject to forfeiture.
Pursuant to Section 83(b) of the Code, an Employee
Participant who receives restricted stock which is subject to
forfeiture may elect, within 30 days of the issuance of such
stock, to include in his or her taxable income for the year of
issuance an amount equal to the fair market value of such
restricted stock at the date of such issuance. If an Employee
Participant makes this election, no additional ordinary income is
required to be recognized at the time the risk of forfeiture for
such restricted stock lapses. However, in the event that such
Employee Participant actually forfeits the stock to the Company,
such Employee Participant may not deduct the amount previously
included in income pursuant to the election. Any dividends paid
to an Employee Participant on restricted stock prior to the lapse
of the risk of forfeiture will be treated as ordinary
compensation income to the Employee Participant in whose name
such stock was issued.
Generally, an Employee Participant who is awarded
performance shares will recognize ordinary income with respect to
the performance shares in the year in which the Committee
determines that the applicable performance criteria are
satisfied. The amount of ordinary income recognized, generally,
will be equal to the fair market value of the performance shares
on the date the performance criteria are satisfied.
The Company will generally be entitled to a deduction
with respect to restricted stock or performance shares in the
year in which ordinary income is recognized by the Employee
Participant. Such deduction will be equal to the amount of
ordinary income recognized by the Employee Participant with
respect to such restricted stock or performance shares. The
Company will withhold Federal income, Social Security and
Unemployment taxes on the amount of ordinary income recognized by
an Employee Participant with respect to restricted stock or
performance shares.
Notwithstanding the foregoing rules regarding the
timing of the recognition of income by an Employee Participant in
connection with the issuance or award of restricted stock or
performance shares, rules allowing a potential deferral in such
recognition as a result of the applicability of Section 16(b)
similar to those described above with respect to Non-Qualified
Stock Options are applicable to restricted stock and performance
shares.
Taxation of Capital 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 and 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. Employee Participants and Eligible Directors may also be
subject to state and local taxes with respect to awards received
pursuant to the Plan, including the holding and disposition of
Common Stock acquired pursuant to the Plan and should refer to
the applicable tax laws of the relevant jurisdictions. Each
person participating in the Plan as an Employee Participant or an
Eligible Director should consult his own tax advisor in
connection with the tax consequences of the receipt of an award,
the receipt of any rights thereunder, and the holding and
disposition of shares received pursuant thereto.
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 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. Unlike the grants of options, any grants of restricted
stock awards or performance shares under the Plan will not
qualify as performance-based compensation for these purposes
and will be included in the remuneration that is taken into
account in applying the Million Dollar Cap limitations.
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 stock 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 own, 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.
REPORTS OF THE COMPANY
The Company s Quarterly and Annual Reports to
Stockholders, proxy soliciting material and other communications
distributed to the Company s stockholders generally will be
provided to all Participants whether or not they are stockholders
of the Company. If a Participant does not for some reason
receive a copy of any of such reports, material or other
communications, he or she 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).
Participants 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 Participant 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 1934 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 1934 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 1934 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.
TABLE OF CONTENTS
Page
ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . 2
DESCRIPTION OF THE PLAN. . . . . . . . . . . . . . . . 3
General . . . . . . . . . . . . . . . . . . . . . 3
Purpose . . . . . . . . . . . . . . . . . . . . . 4
Administration. . . . . . . . . . . . . . . . . . 4
Limitation on Aggregate Shares. . . . . . . . . . 5
Share-Value Incentives. . . . . . . . . . . . . . 5
Formula Awards to Eligible Directors. . . . . . . 10
Awards Outstanding. . . . . . . . . . . . . . . . 15
Term of the Plan. . . . . . . . . . . . . . . . . 15
Rights as Stockholder . . . . . . . . . . . . . . 15
Adjustments Upon Certain Changes. . . . . . . . . 16
Beneficiary Designation . . . . . . . . . . . . . 16
Amendment, Suspension and Termination of Plan . . 16
Governing Law . . . . . . . . . . . . . . . . . . 17
FEDERAL INCOME TAX CONSEQUENCES. . . . . . . . . . . . 17
Incentive Stock Options . . . . . . . . . . . . . 17
Non-Qualified Stock Options . . . . . . . . . . . 20
Restricted Stock and Performance Shares . . . . . 21
Taxation of Capital Gains and Ordinary Income . . 22
Deductibility of Executive Compensation Under Code
Section 162(m). . . . . . . . . . . . . . . . . . 23
RESTRICTIONS ON RESALE . . . . . . . . . . . . . . . . 23
REPORTS OF THE COMPANY . . . . . . . . . . . . . . . . 24
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE . . 25
EXPERTS. . . . . . . . . . . . . . . . . . . . . . . . 25
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 Amended and Restated 1991 Stock Incentive Plan.
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
indemnification 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
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 Financical 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.
AMENDED AND RESTATED 1991 STOCK INCENTIVE PLAN
(As Amended and Restated June 24,1997)
1. Purposes. The purposes of the Circus Circus
Enterprises, Inc. Amended and Restated 1991 Stock Incentive Plan
(the Plan ) are (i) to promote the long term financial interests
and growth of Circus Circus Enterprises, Inc. (the Company ) by
motivating executive personnel by means of growth-related
incentives, providing incentive compensation opportunities that are
competitive with those of other major corporations and furthering
the identity of interests of participants with those of the
stockholders of the Company, and (ii) to strengthen the Company s
ability to attract and retain the services of experienced and
knowledgeable non-employee directors and by encouraging such
directors to acquire an increased proprietary interest in the
Company.
2. Definitions. The following definitions are
applicable to the Plan:
Affiliate means any entity 100 percent owned,
directly or indirectly, by the Company and any other
entity more than 50 percent of which is owned, directly
or indirectly, by the Company and which is so designated
by the Committee.
Code means the Internal Revenue Code of 1986, as
amended, and any successor statute.
Committee means a committee of two or more
directors of the Company as shall be designated by the
Board of Directors of the Company from time to time. 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.
Common Stock means the Common Stock, $.01-2/3 par
value per share, of the Company or such other securities
as may be substituted therefor pursuant to paragraph
7(f).
The fair market value of the Common Stock shall
(except as otherwise provided in paragraph 6(d)) mean the
last reported sale price of the Common Stock on the New
York Stock Exchange Composite Tape on the day fair market
value is to be determined and, in absence of any sale on
such day, fair market value as the Committee shall, in
good faith, determine.
Eligible Director means a member of the Company s
Board of Directors who is not otherwise an employee of
the Company or any subsidiary of the Company.
Employee Participant means any officer or other
key employee of the Company or an Affiliate with
managerial or supervisory responsibilities whom the
Committee determines has contributed significantly to the
Company s past success or is in a position to influence
its continued success who is selected by the Committee
(other than an employee of the Company who at the time
that any share-value incentive is granted under the Plan
owns or, after giving effect to the Common Stock to be
issued or referenced under the share-value incentive and
under all other options, warrants and similar awards with
respect to the Company held by such employee, is deemed
to own 10% or more of the total combined voting power or
value of all classes of stock of the Company).
Formula Award means an Initial Grant (as
defined) made to an Eligible Director pursuant to
paragraph 6(b) or an Annual Grant (as defined) made to
an Eligible Director pursuant to paragraph 6(c).
Rule 16b-3 means such rule adopted under the
Securities Exchange Act of 1934, as amended, or any
successor rule.
3. Administration. The Plan shall be administered by
the Committee. Subject to the limitations of the Plan, the
Committee shall have the sole and complete authority: (i) to select
Employee Participants in the Plan, (ii) to make share-value
incentive grants to Employee Participants in such forms and amounts
as it shall determine, (iii) to impose such limitations,
restrictions and conditions upon such share-value incentive grants
to Employee Participants as it shall deem appropriate, (iv) to
interpret the Plan and to adopt, amend and rescind administrative
guidelines and other rules and regulations relating to the Plan,
(v) to correct any defect or omission or to reconcile any
inconsistency in the Plan or in any share-value incentive granted
hereunder, and (vi) to make all other determinations and to take
all other actions necessary or advisable, in its discretion, for
the implementation and administration of the Plan. The Committee
may provide for the issuance of Common Stock to Employee
Participants as a stock grant for no consideration other than
services rendered or, to the extent permitted by applicable State
law, to be rendered. The Committee s determinations on matters
within its authority shall be conclusive and binding upon the
Company and all other persons. All expenses associated with the
Plan shall be borne by the Company, subject to such allocation to
its Affiliates and operating units as it deems appropriate. The
Committee may amend or modify any share-value incentive grant to an
Employee Participant in any manner to the extent that the Committee
would have had the authority under the Plan to initially make such
share-value incentive grant, but no such amendment or modification
shall impair the rights of any Employee Participant under any
share-value incentive grant without the consent of such Employee
Participant.
4. Limitation on Aggregate Shares. The number of shares
of Common Stock with respect to which share-value incentives may be
granted to Employee Participants and Formula Awards may be made to
Eligible Directors under the Plan and which may be issued upon the
exercise or payment thereof shall not exceed, in the aggregate,
3,000,000 shares, and the number of such shares which shall be
available for issuance pursuant to Formula Awards made to Eligible
Directors under the Plan shall be 525,000; provided, however, that
to the extent any share-value incentives granted to Employee
Participants or Formula Awards made to Eligible Directors expire
unexercised or unpaid or are canceled, terminated or forfeited in
any manner without the issuance of shares of Common Stock
thereunder, such shares shall again be available under the Plan. To
the extent a restricted stock grant or performance shares grant to
an Employee Participant is exercised for cash, it shall be treated
as an issuance of a number of shares equal to the number of shares
upon which the restricted stock grant or performance shares grant
was based so as to reduce shares otherwise available for the future
issuance under the Plan. The 3,000,000 shares of Common Stock which
may be the subject of awards pursuant to the Plan may be either
authorized and unissued shares, treasury shares, or a combination
thereof, as the Committee shall determine.
5. Share-Value Incentives. The Committee may grant to
Employee Participants, in accordance with this paragraph 5 and
other provisions of the Plan, stock options, restricted stock and
performance shares.
(a) Options.
(i) Options granted to an Employee Participant
under the Plan may be incentive stock options within the
meaning of Section 422 of the Code or any successor
provisions, or in such other form, consistent with the
Plan, as the Committee may determine.
(ii) The option price per share of Common Stock for
an option granted to an Employee Participant shall be
fixed by the Committee at not less than 100% of the fair
market value of a share of Common Stock on the date of
grant.
(iii) Options granted to an Employee Participant
shall be exercisable at such time or times as the
Committee shall determine at or subsequent to grant.
(iv) Options granted to an Employee Participant
shall be exercised in whole or in part by written notice
to the Company (to the attention of the Company s
Corporate Secretary), signed by the Employee Participant
exercising the option, stating the number of shares of
Common Stock with respect to which the option is being
exercised and accompanied by payment in full of the
option price. Payment of the option price for an option
granted to an Employee Participant may be made, at the
discretion of the optionee, and to the extent permitted
by the Committee, (A) in cash (including check, bank
draft, or money order), (B) in Common Stock (valued at
the fair market value thereof on the date of exercise),
(C) by a combination of cash and Common Stock or (D) with
any other consideration deemed acceptable by the
Committee. The date both such notice and payment are
received by the office of the Corporate Secretary of the
Company shall be the date of exercise of the option as to
the number of shares specified.
(v) Notwithstanding any provision to the contrary,
the number of shares of Common Stock for which options
may be granted to any person pursuant to the Plan during
1997 or during any subsequent calendar year shall not
exceed 200,000, provided, however, that such number shall
be subject to appropriate adjustment in accordance with
paragraph 7(f).
(b) Restricted Stock.
(i) The Committee may transfer to any Employee
Participant shares of Common Stock, subject to this
paragraph 5(b) and such other terms and conditions
(including, without limitation, performance goals similar
to those described in paragraph 5(c)) as the Committee
may prescribe (such shares being called restricted
stock ). Each certificate for restricted stock shall be
registered in the name of the Employee Participant and
deposited, together with a stock power endorsed in blank,
with the Company.
(ii) There shall be established for each restricted
stock grant to an Employee Participant one or more
restriction periods of such length as shall be determined
by the Committee. No restriction period shall exceed 10
years from the date of the grant. Shares of restricted
stock may not be sold, assigned, transferred, pledged or
otherwise encumbered, except as hereinafter provided,
during the applicable restriction period. Except for such
restrictions on transfer and such other restrictions as
the Committee may impose, the Employee Participant shall
have all the rights of a holder of Common Stock as to
such restricted stock. The Committee, in its sole
discretion, may permit or require the payment of cash
dividends to be deferred and, if the Committee so
determines, reinvested in additional restricted stock or
otherwise invested. At the expiration of each restriction
period, the Company shall redeliver to the Employee
Participant (or the Employee Participant s legal
representative or designated beneficiary) certificates
deposited pursuant to this paragraph representing the
shares with respect to which the applicable restrictions
and conditions have been satisfied.
(iii) Except as provided by the Committee at the
time of grant or otherwise, upon termination of
employment of an Employee Participant for any reason
during a restriction period applicable to restricted
stock of such Employee Participant, all shares still
subject to restriction shall be forfeited by the Employee
Participant.
(c) Performance Shares. Performance shares, measured
in whole or in part by the value of shares of Common Stock, the
performance of the participant, the performance of the Company, its
subsidiaries or any separate business units or properties thereof,
or any combination thereof, may be granted to Employee Participants
under the Plan. Such share-value incentives may be payable in
Common Stock, cash or both, and shall be subject to such
restrictions and conditions, as the Committee shall determine. At
the time of a performance shares grant to an Employee Participant,
the Committee shall determine, in its sole discretion, one or more
performance periods and performance goals to be achieved during the
applicable performance periods. No performance period shall exceed
10 years from the date of the grant. A performance shares grant to
an Employee Participant may be made subject to such later revisions
as the Committee shall deem appropriate to reflect significant
unforeseen events such as changes in laws, regulations or
accounting practices, or unusual or nonrecurring items or
occurrences. The Committee shall determine the extent to which
performance goals have been attained or a degree of achievement
between maximum and minimum levels in order to evaluate the level
of payment to be made, if any.
(d) Time Limit. No share-value incentive granted to an
Employee Participant under the Plan shall be subject to exercise
beyond and no conditions or performance goals shall be susceptible
of satisfaction beyond a period of 10 years after the date of the
grant thereof.
6. Formula Awards to Eligible Directors.
(a) General. Each Formula Award granted under the Plan
shall be evidenced by an agreement (an Agreement ) duly executed
on behalf of the Company and by the Eligible Director to whom such
Formula Award is granted and dated as of the applicable date of
grant. Each Agreement shall be signed on behalf of the Company by
an officer or officers delegated such authority by the Committee
using either manual or facsimile signature. Each Agreement shall
comply with and be subject to the terms and conditions of the Plan.
Any Agreement may contain such other terms, provisions and
conditions not inconsistent with the Plan or this paragraph 6 as
may be determined by the Committee. All Formula Awards granted
under the Plan shall be non-statutory options not intended to
qualify under Section 422 of the Code.
(b) Initial Grants. Subject to the limitation in
paragraph 6(n), an option to purchase 7,500 shares of Common Stock
pursuant to clause (i) of this paragraph 6(b) or 10,000 shares of
Common Stock pursuant to clause (ii) of this paragraph 6(b), as the
case may be (as adjusted in each case pursuant to paragraph 6(1))
(and in the case of each grant pursuant to clause (i) of this
paragraph 6(b), multiplied by the number of consecutive annual
meetings of the Company s stockholders, including the annual
meeting at which stockholders approve an amendment to the Plan
providing for the grant of Formula Awards, at which the Eligible
Director in question was elected to serve as a Director of the
Company and/or after which he continued to be a Director of the
Company) shall be granted to:
(i) each member of the Company s Board of Directors
(a Director ) who is an Eligible Director immediately
following the annual meeting of the Company s
stockholders at which stockholders approve an amendment
to the Plan providing for the grant of Formula Awards,
and
(ii) each other Eligible Director immediately
following the annual meeting of the Company s
stockholders at which such Director is first elected or
immediately following the first annual meeting of the
Company s stockholders after such Eligible Director is
first elected or appointed by the Company s Board of
Directors to be a Director, whichever is applicable
(each, an Initial Grant ); provided, however, that if an
Eligible Director who previously received an Initial
Grant pursuant to this paragraph 6(b) terminates service
as a Director and is subsequently elected or appointed to
the Company s Board of Directors, such Director shall not
be eligible to receive a second Initial Grant pursuant to
this paragraph 6(b), but shall be eligible to receive
only Annual Grants (as defined) pursuant to paragraph
6(c).
(c) Annual Grants. Subject to the limitation in
paragraph 6(n), an option to purchase 10,000 shares of Common Stock
(as adjusted pursuant to paragraph 6(1)) shall be granted
automatically each year, immediately following the annual meeting
of the Company s stockholders, to each Director who is an Eligible
Director at such time and who is not entitled to receive an Initial
Grant pursuant to paragraph 6(b) immediately following such annual
meeting (each, an Annual Grant ).
(d) Formula Award Exercise Price. The exercise price per
share for an Initial Grant or an Annual Grant shall be the average
of the Fair Market Values (as hereinafter defined) for the fifth
(5th) through the ninth (9th) business days (which, for purposes of
this paragraph 6(d) shall mean those days on which the New York
Stock Exchange is open for trading) following the date of grant.
For purposes of the preceding sentence, Fair Market Value equals
the mean of the high and low per share trading prices for the
Common Stock as reported in The Wall Street Journal for New York
Stock Exchange Composite Transactions.
(e) Vesting and Exercisability. Except as otherwise
provided in paragraph 6(h), a Formula Award shall vest and become
non-forfeitable when, and only if, the optionee continues to serve
as a Director until the first annual meeting of the Company s
stockholders held following the year in which the option was
granted. Except as otherwise provided in paragraph 6(h), a Formula
Award shall thereafter become exercisable according to the
following schedule:
Period of Optionee s Continuous Portion of Formula
Service as a Director of the Award that is
Company Exercisable
From the First Annual Meeting of
Stockholders subsequent to the grant to
the second Annual Meeting of Stockholders
subsequent to the grant . . . . . . . . . . 40%
From the second Annual Meeting of Stockholders
subsequent to the grant to the third
Annual Meeting of Stockholders subsequent to
the grant . . . . . . . . . . . . . . . . . 70%
From the third Annual Meeting of Stockholders
subsequent to the grant to the expiration
of the term of the Formula Award. . . . . . 100%
(f) Time and Manner of Exercise. Except as otherwise
provided in this paragraph 6(f), any vested Formula Award, to the
extent the same is exercisable in accordance with paragraph 6(e),
is exercisable in whole or in part at any time or from time to time
until the expiration or termination of its term in accordance with
paragraph 6(h) by giving written notice, signed by the person
exercising the Formula Award, to the Company (to the attention of
the Company s Corporate Secretary) stating the number of shares of
Common Stock with respect to which the Formula Award is being
exercised, accompanied by payment in full of the option exercise
price for the number of shares of Common Stock to be purchased. The
date both such notice and payment are received by the office of the
Secretary of the Company shall be the date of exercise of the
Formula Award as to such number of shares. Notwithstanding any
provision to the contrary, no Formula Award may at any time be
exercised with respect to a fractional share.
(g) Payment of Exercise Price. Payment of the exercise
price for a Formula Award may be in cash or by bank-certified,
cashier s, or personal check or, to the extent permitted by the
Committee, payment may be in whole or in part by
(i) transfer to the Company of shares of the Common
Stock having a Fair Market Value (as defined in paragraph
6(d)) on the date of exercise equal to the exercise
price, or
(ii) delivery of instructions to the Company to
withhold from the shares of Common Stock that would
otherwise be issued on the exercise that number of such
shares having a Fair Market Value (as defined in
paragraph 6(d)) equal to the exercise price.
If the Fair Market Value (as defined in paragraph 6(d))
of the number of whole shares of Common Stock transferred or the
number of whole shares of Common Stock withheld is less than the
total exercise price, the shortfall must be paid in cash.
(h) Term of Formula Awards. Each Formula Award shall
expire ten (10) years from its date of grant, but shall be subject
to earlier termination as follows:
(i) In the event of the termination of a Formula
Award holder s service as a Director, other than by
reason of retirement, total and permanent disability, or
death, the then-outstanding Formula Awards of such holder
(whether or not then vested and whether or not then
exercisable) shall automatically expire on (and may not
be exercised on) the effective date of such termination.
For purposes of this paragraph 6(h), the phrase by
reason of retirement means (a) mandatory retirement
pursuant to Board policy or (b) termination of service at
a time when the holder would be entitled to a retirement
benefit under the Circus Circus Employees Profit Sharing
and Investment Plan, as then in effect, if the holder
were an employee of the Company.
(ii) In the event of the termination of a Formula
Award holder s service as a Director by reason of
retirement or total and permanent disability, the then-
outstanding Formula Awards of such holder that have
vested pursuant to paragraph 6(e) (including, without
limitation, any Formula Awards or portions thereof which
vest in accordance with paragraph 6(e) on the date of
termination) shall become exercisable, to the full extent
of the number of shares of Common Stock remaining covered
by such Formula Awards, regardless of whether such
Formula Awards were previously exercisable, and each such
Formula Award shall expire one year after the date of
such termination or on the stated grant expiration date,
whichever is earlier.
(iii) In the event of the death of a Formula
Award holder while such holder is a Director, the then
outstanding Formula Awards of such holder that have
vested pursuant to paragraph 6(e) (including, without
limitation, any Formula Awards or portions thereof which
vest in accordance with paragraph 6(e) on the date of
death) shall become exercisable, to the full extent of
the number of shares of Common Stock remaining covered by
such Formula Awards, regardless of whether such Formula
Awards were previously exercisable, and each such Formula
Award shall expire one year after the date of death of
such optionee or on the stated grant expiration date,
whichever is earlier.
Exercise of a deceased holder s Formula Awards that are
still exercisable shall be by the estate of such holder or by the
person or persons to whom the holder s rights have passed by will
or the laws of descent and distribution.
(i) Transferability. The right to exercise a Formula
Award granted under the Plan shall, during the lifetime of the
Eligible Director to whom such Formula Award was granted, be
exercisable only by such recipient or pursuant to a qualified
domestic relations order as defined by the Code or Title I of the
Employee Retirement Income Security Act, or the rules thereunder (a
QDRO ) and shall not be assignable or transferable by such
recipient other than by will or the laws of descent and
distribution or a QDRO. Any purported transfer contrary to this
provision will be null and void and without effect.
(j) Limitation of Rights. Neither the recipient of a
Formula Award under the Plan nor the recipient s successor or
successors in interest shall have any rights as a stockholder of
the Company with respect to any shares of Common Stock subject to
a Formula Award granted to such person until the date of issuance
of a stock certificate for such shares of Common Stock.
(k) Limitation as to Directorship. Neither the Plan, nor
the granting of a Formula Award, nor any other action taken
pursuant to the Plan shall constitute or be evidence of any
agreement or understanding, express or implied, that an Eligible
Director has a right to continue as a Director for any period of
time or at any particular rate of compensation.
(1) Capital Adjustments. The number and class of shares
with respect to which a Formula Award may be granted to an Eligible
Director under the Plan, the number and class of shares subject to
each outstanding Formula Award, and the exercise price per share
specified in each such Formula Award shall be proportionately
adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a split-up or consolidation
of shares or any like capital adjustment or the payment of any
stock dividend, or other increase or decrease in the number of such
shares effected without receipt of consideration by the Company.
For purposes of the preceding sentence, the Company shall be deemed
to have received consideration for any shares issued pursuant to
this or any other employee benefit plan meeting the requirements of
Rule 16b-3.
(m) Limit on Awards to Eligible Directors.
Notwithstanding any provision of the Plan to the contrary, an
Eligible Director shall not be entitled to receive or participate
in any award under the Plan other than Formula Awards which are
granted to such Eligible Director pursuant to paragraphs 6(b) and
6(c) and meet all of the requirements of paragraph 6 applicable
thereto.
(n) Termination of Formula Awards. Notwithstanding any
provision to the contrary, no Formula Award shall be granted
pursuant to paragraph 6(b) or 6(c) on a date when the number of
shares of Common Stock authorized for issuance pursuant to the Plan
and then available for issuance pursuant to new Formula Awards is
less than the aggregate number of such shares which would be
issuable pursuant to Formula Awards otherwise required to be
granted on such date, assuming the full vesting and exercise of
such Formula Awards. In the event Formula Awards are not granted as
a result of the application of this paragraph 6(n), no Formula
Awards shall thereafter be granted pursuant to the Plan.
(o) Conflicting Provisions. In the event of any conflict
between a provision of this paragraph 6 and a provision in any
other paragraph of the Plan with respect to Formula Awards, such
provision of this paragraph 6 shall be deemed to control.
7. Miscellaneous Provisions.
(a) Effective Date and Term. The Plan is effective as
of the date it is adopted by the holders of at least a majority of
the outstanding shares of the Company s Common Stock present in
person or by proxy and entitled to vote at the Company s 1991
Annual Meeting of Stockholders. Unless extended by the stockholders
of the Company and subject to paragraph 7(k), this Plan shall
expire upon the expiration of a ten-year period commencing on the
effective date of the Plan, however, the Plan shall continue
thereafter to govern all awards granted before that date until the
exercise, expiration or cancellation of such awards.
(b) Rights as Stockholder. An Employee Participant under
the Plan shall have no right as a holder of the Company s Common
Stock with respect to share-value incentives granted hereunder, and
an Eligible Director shall have no right as a holder of the
Company s Common Stock with respect to Formula Awards granted
hereunder, unless and until certificates for shares of the
Company s Common Stock are issued to the Employee Participant or
Eligible Director, as the case may be. Common Stock issued to an
Employee Participant pursuant to a share-value incentive grant
shall nevertheless be subject to such limitations and restrictions
contained in the agreement with respect to the grant.
(c) Funding of the Plan. The Plan shall be unfunded. The
Company shall not be required to establish any special or separate
fund or to make any other segregation of assets to assure the
payment of any share value incentive grant or Formula Award under
the Plan.
(d) Agreements. Each share-value incentive granted to
an Employee Participant under the Plan shall be evidenced by an
agreement in such form and containing such terms and conditions
(not inconsistent with the Plan) as the Committee shall determine
in its sole discretion.
(e) Non-Transferability. No share-value incentive grant
to an Employee Participant under the Plan, and no interest therein,
shall be transferable by the Employee Participant otherwise than by
will or the laws of descent and distribution or pursuant to a QDRO.
All share-value incentive grants to an Employee Participant shall
be exercisable or received during the Employee Participant s
lifetime only by the Employee Participant or pursuant to a QDRO.
Any purported transfer contrary to this provision will be null and
void and without effect.
(f) Adjustments Upon Certain Changes. In the event of
a merger, consolidation, reorganization, recapitalization, spinoff,
stock dividend or stock split, or combination or other increase or
reduction in the number of issued shares of Common Stock, or
extraordinary cash dividend or any other similar event, the Board
of Directors or the Committee may, in order to prevent the dilution
or enlargement of rights under share-value incentive grants or
Formula Awards, make such adjustments in the number and type of
shares authorized by the Plan, the number and type of shares
covered by, or with respect to which payments are measured under,
outstanding share-value incentive grants and the exercise prices
specified therein as may be determined to be appropriate and
equitable.
(g) Tax Withholding. The Committee shall have the power
to withhold, or require an Employee Participant to remit to the
Company, an amount sufficient to satisfy any withholding or other
tax due with respect to any amount payable and/or shares issuable
under the Plan, and the Committee may defer such payment or
issuance unless indemnified to its satisfaction. Subject to the
consent of the Committee, an Employee Participant may make an
irrevocable election to have shares of Common Stock otherwise
issuable under a share-value incentive grant withheld, tender back
to the Company shares of Common Stock received pursuant to a share-
value incentive grant or deliver to the Company previously acquired
shares of Common Stock having a fair market value sufficient to
satisfy all or part of the participant s estimated tax obligations
associated with the transaction. Such election must be made by an
Employee Participant prior to the date on which the relevant tax
obligation arises. The Committee may disapprove of any election and
may limit, suspend or terminate the right of an Employee
Participant to make such elections.
(h) Listing and Legal Compliance. The Committee may
suspend the exercise or payment of any share value incentive grant
or Formula Award so long as it determines that securities exchange
listing, or any registration, approval or other action under any
gaming or securities laws or regulations, is required in connection
therewith and has not been completed on terms acceptable to the
Committee. The Committee shall have the right to condition any such
issuance or transfer upon receipt by the Company of written
undertakings to comply with such restrictions on subsequent
disposition of such shares as the Committee or the Company shall
reasonably deem necessary or advisable as a result of any
applicable law, regulation or official interpretations thereof, and
certificates representing such shares may be legended to reflect
any such restrictions or may be made subject to a stop transfer
restriction with the Company s transfer agent.
(i) Beneficiary Designation. Subject to paragraphs 6(i)
and 7(e), each Employee Participant and Eligible Director may name,
from time to time, beneficiaries (who may be named contingently or
successively) to whom benefits under the Plan are to be paid in the
event of such Employee Participant s or Eligible Director s death
before they receive any or all such benefits. Each designation will
revoke all prior designations by the same Employee Participant or
Eligible Director, shall be in a form prescribed by the Committee,
and will be effective only when filed by the Employee Participant
or Eligible Director in writing with the Committee during the
Employee Participant s or Eligible Director s lifetime. In the
absence of any such designation, vested benefits remaining unpaid
at the Employee Participant s or Eligible Director s death shall be
paid to the Employee Participant s or Eligible Director s estate.
(j) Rights of Participants. Nothing in the Plan shall
interfere with or limit in any way the right of the Company or any
subsidiary to terminate any Employee Participant s employment at
any time, nor confer upon any Employee Participant any right to
continue in the employ of the Company or any subsidiary for any
period of time or to continue his or her present or any other rate
of compensation. No employee shall have a right to be selected as
an Employee Participant, or, having been so selected, to be
selected again as an Employee Participant, except as may be
provided in any written agreement between the Company and such
employee.
(k) Amendment, Suspension and Termination of Plan. The
Board of Directors may amend, terminate or suspend the Plan at any
time, in its sole and absolute discretion; provided, however, that
if required to qualify the Plan under Rule 16b-3, no amendment
shall be made more than once every six (6) months that would change
the amount, price or timing of Formula Awards (or any other
provision of the Plan the amendment of which would cause the Plan
to fail to qualify under Rule 16b-3), other than to comport with
changes in the Internal Revenue Code of 1986, as amended, the
Employee Retirement Income Security Act, or the rules and
regulations promulgated thereunder; and provided, further, that no
amendment shall be made without the approval of the Company s
stockholders that would
(i) materially increase the number of shares of
Common Stock that may be issued under the Plan, or
(ii) otherwise materially increase the benefits
accruing to participants under the Plan.
No amendment, suspension or termination of the Plan shall
impair the rights of Employee Participants under outstanding share-
value incentive grants or Eligible Directors under Formula Awards
without the consent of the Employee Participants and/or Eligible
Directors affected thereby or make any change that would disqualify
the Plan, or any other plan of the Company intended to be so
qualified, from the exemption provided by Rule 16b-3.
(1) Misconduct. In the event that an Employee
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 the
Company or a subsidiary, use (except for the benefit of the Company
or a subsidiary) or disclose to any other person any confidential
information relating to the continuation or proposed continuation
of the 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
the Company or a subsidiary, 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, or
(vi) shall cease to be employed by the Company or a subsidiary
because of his inability to continue as an employee under any law
or governmental regulation, including any Nevada gaming law or
regulation, or (vii) shall voluntarily resign or terminate his
employment with the Company or a subsidiary under or followed by
such circumstances as would have rendered him unable to have
continued as an employee under any law or governmental regulation,
including any Nevada gaming law or regulation, then forthwith from
the happening of any such event, any share-value incentive grant
then held by such Employee Participant shall terminate and become
void to the extent that, in the case of a stock option, it then
remains unexercised and, in the case of any other share-value
incentive grant, any condition or performance goal under it then
has not been met or satisfied. Additional forfeiture provisions may
be included within the terms of any share-value incentive grant to
an Employee Participant as may be determined by the Committee in
its discretion.
(m) Governing Law. The validity and construction of the
Plan, its rules and regulations and any agreements entered into
thereunder shall be governed by the laws of the State of Nevada
(but not including choice of law rules thereof).
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 reports 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
