<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 20, 1995
REGISTRATION NO. 33-60085
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------------------
AMENDMENT NO. 1 TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
PLAYERS INTERNATIONAL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
NEVADA 95-41745832
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
</TABLE>
------------------------
3900 PARADISE ROAD
SUITE 135
LAS VEGAS, NEVADA 89109
(702) 691-3300
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
ADDITIONAL REGISTRANTS
ARE SET FORTH ON THE FOLLOWING PAGES
------------------------
PETER J. ARANOW
EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND SECRETARY
3900 PARADISE ROAD
SUITE 135
LAS VEGAS, NEVADA 89109
(702) 691-3300
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
Copies to:
STEPHEN M. GOODMAN, ESQ.
MORGAN, LEWIS & BOCKIUS
2000 ONE LOGAN SQUARE
PHILADELPHIA, PENNSYLVANIA 19103-6993
(215) 963-5000
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this
registration statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. INFORMATION CONTAINED HEREIN IS
SUBJECT TO COMPLETION OR AMENDMENT.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
ADDITIONAL REGISTRANTS
(GUARANTORS OF 10 7/8% SENIOR NOTES)
PLAYERS LAKE CHARLES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
Louisiana 7933 72-1233908
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER)
</TABLE>
800 Bilbo Street
Lake Charles, Louisiana 70601
(318) 437-1560
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
PLAYERS RIVERBOAT MANAGEMENT, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
Nevada 7933 88-0332373
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER)
</TABLE>
3900 Paradise Road, Suite 135
Las Vegas, Nevada 89109
(702) 691-3300
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
PLAYERS RIVERBOAT, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
Nevada 7933 88-0332372
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER)
</TABLE>
3900 Paradise Road, Suite 135
Las Vegas, Nevada 89109
(702) 691-3300
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
PLAYERS RIVERBOAT, LLC
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
A Louisiana Limited Liability Company 7933 72-1297055
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER)
</TABLE>
800 Bilbo Street
Lake Charles, Louisiana 70601
(318) 437-1560
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
SHOWBOAT STAR PARTNERSHIP
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
A Louisiana General Partnership 7933 72-1246016
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER)
</TABLE>
800 Bilbo Street
Lake Charles, Louisiana 70601
(318) 437-1560
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
<PAGE>
PLAYERS NEVADA, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
Nevada 7933 88-0318879
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER)
</TABLE>
3900 Paradise Road, Suite 135
Las Vegas, Nevada 89109
(702) 691-3300
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
PLAYERS MESQUITE GOLF CLUB, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
Nevada 7933 72-1230796
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER)
</TABLE>
3900 Paradise Road, Suite 135
Las Vegas, Nevada 89109
(702) 691-3300
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
PLAYERS MESQUITE LAND, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
Nevada 7933 88-0335901
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER)
</TABLE>
3900 Paradise Road, Suite 135
Las Vegas, Nevada 89109
(702) 691-3300
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
PLAYERS INDIANA, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
Indiana 7933 35-1916353
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER)
</TABLE>
3900 Paradise Road, Suite 135
Las Vegas, Nevada 89109
(702) 691-3300
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
PLAYERS MICHIGAN CITY, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
Indiana 7933 35-1909688
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER)
</TABLE>
3900 Paradise Road, Suite 135
Las Vegas, Nevada 89109
(702) 691-3300
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
<PAGE>
PLAYERS MICHIGAN CITY MANAGEMENT, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
Indiana 7933 61-1283930
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER)
</TABLE>
3900 Paradise Road, Suite 135
Las Vegas, Nevada 89109
(702) 691-3300
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
PLAYERS BLUEGRASS DOWNS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
Kentucky 7933 61-1250331
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER)
</TABLE>
150 Downs Drive
Paducah, Kentucky 42001
(502) 444-7117
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
RIVER BOTTOM, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
Missouri 7933 43-1708876
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER)
</TABLE>
3900 Paradise Road, Suite 135
Las Vegas, Nevada 89109
(702) 691-3300
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
PLAYERS MARYLAND HEIGHTS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
Missouri 7933 43-1662850
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER)
</TABLE>
3900 Paradise Road, Suite 135
Las Vegas, Nevada 89109
(702) 691-3300
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
SOUTHERN ILLINOIS RIVERBOAT/CASINO CRUISES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
Illinois 7933 37-1272361
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER)
</TABLE>
109 West 5th Street, 2nd Floor
Metropolis, Illinois 62960
(618) 524-2628
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
<PAGE>
SUBJECT TO COMPLETION, DATED JULY __, 1995
OFFER TO EXCHANGE
ALL OUTSTANDING
10 7/8% SENIOR NOTES DUE 2005
($150,000,000 PRINCIPAL AMOUNT OUTSTANDING)
FOR 10 7/8% SENIOR NOTES DUE 2005
The Exchange Offer and withdrawal rights will expire at 5:00 p.m., New York
City time, on ____________, 1995 (as such date may be extended, the 'Expiration
Date').
Players International, Inc. (the 'Company') hereby offers (the 'Exchange
Offer'), upon the terms and subject to the conditions set forth in this
Prospectus and the accompanying letter of transmittal (the 'Letter of
Transmittal'), to exchange $1,000 in principal amount of its 10 7/8 % Senior
Notes due 2005 (the 'New Notes') for each $1,000 in principal amount of its
outstanding 10 7/8 % Senior Notes due 2005 (the 'Old Notes') (the Old Notes and
the New Notes are collectively referred to herein as the 'Notes') held by
Eligible Holders of which an aggregate principal amount of $150,000,000 is
outstanding. See 'The Exchange Offer.' For purposes of the Exchange Offer,
'Eligible Holder' shall mean the registered owner of any Old Notes that remain
Transfer Restricted Securities as reflected on the records of First Fidelity
Bank, National Association, as registrar for the Old Notes (in such capacity,
the 'Registrar'), or any person whose Old Notes are held of record by the
depository of the Old Notes as of the record date for the Exchange Offer (the
'Record Date'). For purposes of the Exchange Offer, 'Transfer Restricted
Securities' means each Old Note until the earliest to occur of (i) the date on
which such Old Note has been exchanged for a New Note in the Exchange Offer,
(ii) the date on which such Old Note has been effectively registered under the
Securities Act of 1933, as amended (the 'Securities Act'), and disposed of in
accordance with a shelf registration statement, or (iii) the date on which such
Old Note is distributed to the public pursuant to Rule 144 under the Securities
Act or is saleable pursuant to Rule 144(k) under the Securities Act.
The Company will accept for exchange any and all Old Notes that are validly
tendered prior to 5:00 p.m., New York City time, on the Expiration Date. Tenders
of Old Notes may be withdrawn at any time prior to 5:00 p.m., New York City
time, on the Expiration Date. The Exchange Offer is not conditioned upon any
minimum principal amount of the Old Notes being tendered for exchange. However,
the Exchange Offer is subject to certain customary conditions, which may be
waived by the Company, and to the terms and provisions of the Exchange and
Registration Rights Agreement dated as of April 17, 1995 (the 'Registration
Rights Agreement') among the Company, certain subsidiaries of the Company that
have agreed to guarantee the Notes (collectively, the 'Guarantors') and
Donaldson, Lufkin & Jenrette Securities Corporation and Salomon Brothers Inc
(the 'Initial Purchasers'). The Old Notes may be tendered only in multiples of
$1,000. See 'The Exchange Offer.'
The Old Notes were issued in a transaction (the 'Offering') pursuant to
which the Company issued an aggregate of $150 million principal amount of the
Old Notes. The Old Notes were sold by the Company to the Initial Purchasers on
April 17, 1995 (the 'Closing Date') pursuant to a Purchase Agreement, dated
April 10, 1995 (the 'Purchase Agreement') among the Company, the Guarantors and
the Initial Purchasers. The Initial Purchasers subsequently resold the Old Notes
in reliance on Rule 144A and certain other exemptions under the Securities Act.
The Company and the Initial Purchasers also entered into the Registration Rights
Agreement, pursuant to which the Company granted certain registration rights for
the benefit of the holders of the Old Notes. The Exchange Offer is intended to
satisfy certain of the Company's obligations under the Registration Rights
Agreement with respect to the Old Notes. See 'The Exchange Offer--Purpose and
Effect.'
The Old Notes were, and the New Notes will be, issued under the Indenture,
dated as of April 10, 1995 (the 'Indenture'), among the Company, the Guarantors
and First Fidelity Bank, National Association as trustee (in such capacity, the
'Trustee'). The form and terms of the New Notes will be identical in all
material respects to the form and terms of the Old Notes, except that (i) the
New Notes have been registered under the Securities Act and, therefore, will not
bear legends restricting the transfer thereof, (ii) holders of New Notes will
not be entitled to the liquidated damages of $.10 per week per $1,000 principal
amount of the Old Notes otherwise payable under the terms of the Registration
Rights Agreement in respect of Old Notes constituting Transfer Restricted
Securities held by such holders during any period in which a Registration
Default (as defined) is continuing (the 'Liquidated Damages') and (iii) holders
of New Notes will not be, and upon the consummation of the Exchange Offer,
Eligible Holders of Old Notes will no longer be, entitled to certain rights
under the Registration Rights Agreement intended for the holders of unregistered
securities; provided, however, that an Eligible Holder of Old Notes who
reasonably determines and notifies the Company within 20 business days of the
consummation of the Exchange Offer that (a) such Eligible Holder is prohibited
by applicable law or Securities and Exchange Commission policy from
participating in the Exchange Offer, or (b) that such Eligible Holder may not
resell the New Notes acquired by it in the Exchange Offer to the public without
delivering a prospectus and that this Prospectus is not appropriate or available
for such resales by such Eligible Holder, or (c) that such Eligible Holder is a
broker-dealer registered under the Exchange Act and holds the Old Notes acquired
directly from the Company or one of its affiliates, subject to reasonable
verification by the Company, shall have the right to require the Company to file
a shelf registration statement pursuant to Rule 415 under the Securities Act
solely for the benefit of such Eligible Holder of Old Notes and will be entitled
to receive Liquidated Damages following the occurrence of defined events of
default in connection with the filing of such shelf registration statement. The
Exchange Offer shall be deemed consummated upon the occurrence of the delivery
by the Company to the Registrar under the Indenture of New Notes in the same
aggregate principal amount as the aggregate principal amount of Old Notes that
were tendered by holders thereof pursuant to the Exchange Offer. See 'The
Exchange Offer--Termination of Certain Rights' and '--Procedures for Tendering
Old Notes' and 'Description of New Notes.'
(continued on next page)
------------------------------
SEE 'RISK FACTORS' ON PAGES 14-20 HEREIN FOR A DISCUSSION OF CERTAIN RISKS THAT
SHOULD BE CONSIDERED BY ELIGIBLE HOLDERS IN EVALUATING THE
EXCHANGE OFFER.
------------------------------
THE 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 LOUISIANA RIVERBOAT GAMING COMMISSION, THE RIVERBOAT GAMING
ENFORCEMENT DIVISION OF THE LOUISIANA STATE POLICE, THE ILLINOIS GAMING BOARD,
THE NEVADA GAMING CONTROL BOARD, THE NEVADA GAMING COMMISSION NOR ANY
OTHER GAMING AUTHORITY HAS PASSED UPON THE ADEQUACY OR ACCURACY OF THIS
PROSPECTUS OR THE INVESTMENT MERITS OF
THE SECURITIES OFFERED HEREBY.
------------------------------
The date of this Prospectus is July _, 1995
<PAGE>
The New Notes will bear interest at a rate equal to 10 7/8 % per annum from
and including their date of issuance. Interest on the New Notes is payable
semiannually on April 15 and October 15 of each year (each, an 'Interest Payment
Date'). Eligible Holders whose Old Notes are accepted for exchange will have the
right to receive interest accrued thereon from the date of their original
issuance or the last Interest Payment Date, as applicable to, but not including,
the date of issuance of the New Notes, such interest to be payable with the
first interest payment on the New Notes. Interest on the Old Notes accepted for
exchange will cease to accrue on the day prior to the issuance of the New Notes.
The New Notes will mature on April 15, 2005. See 'Description of New Notes--
General.'
The New Notes will not be redeemable, in whole or in part, prior to April
15, 2000. Thereafter, the New Notes will be redeemable at the redemption prices
set forth herein, plus interest accrued thereon to the redemption date. Upon the
occurrence of a Change of Control (as defined), each holder of New Notes will
have the right to require the Company to purchase all or a portion of such
holder's New Notes at 101% of the principal amount thereof, plus interest
accrued thereon to the purchase.
The New Notes will be senior unsecured obligations of the Company that rank
pari passu in right of payment with all present and future debt of the Company,
other than future debt that is expressly subordinated to the New Notes. The
payment of the principal of, premium, if any, and interest on the New Notes will
be unconditionally guaranteed on a senior unsecured basis by the Guarantors. The
Indenture permits the Company and the Guarantors to incur additional
indebtedness, subject to certain limitations. See 'Description of New Notes.'
See also 'Management's Discussion and Analysis of Financial Condition and
Results of Operations-- Liquidity and Capital Resources.' As of March 31, 1995,
the Company and the Guarantors had an aggregate of $17.1 million of indebtedness
outstanding on a consolidated basis exclusive of the Old Notes. The New Notes
may become effectively subordinate to secured debt of the Company and secured
debt and other obligations of the Guarantors. See 'Risk Factors--Holding Company
Structure and Ability to Service Debt; Effective Subordination' and
'--Fraudulent Transfer Considerations.'
Based on an interpretation by the staff of the Securities and Exchange
Commission (the 'Commission') set forth in no-action letters issued to third
parties, the Company believes that the New Notes issued pursuant to the Exchange
Offer to an Eligible Holder in exchange for Old Notes may be offered for resale,
resold and otherwise transferred by such Eligible Holder (other than a broker-
dealer who purchased Old Notes directly from the Company for resale pursuant to
Rule 144A under the Securities Act or any other available exemption under the
Securities Act without compliance with the registration and prospectus delivery
provisions of the Securities Act, provided that the Eligible Holder is not an
affiliate of the Company, is acquiring the New Notes in the ordinary course of
business and is not participating, and has no arrangement or understanding with
any person to participate, in the distribution of the New Notes. Eligible
Holders wishing to accept the Exchange Offer must represent to the Company, as
required by the Registration Rights Agreement, that such conditions have been
met. Each broker-dealer that receives New Notes for its own account pursuant to
the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such New Notes. See 'The Exchange Offer--Resales
of the New Notes.' This Prospectus, as it may be amended or supplemented from
time to time, may be used by a broker-dealer in connection with resales of New
Notes received in exchange for Old Notes where such Old Notes were acquired by
such broker-dealer as a result of market-making or other trading activities.
As of June 28, 1995, Cede & Co. ('Cede'), as nominee for The Depository
Trust Company, New York, New York ('DTC'), was the sole registered holder of the
Old Notes and held the Old Notes for 22 of its participants. The Company
believes that no such participant is an affiliate (as such term is defined in
Rule 405 under the Securities Act) of the Company. There has previously been,
only a limited secondary market and no public market for the Old Notes. The Old
Notes are eligible for trading in the Private Offering, Resales and Trading
through Automatic Linkages ('PORTAL') market. In addition, the Initial
Purchasers have advised the Company that they currently intend to make a market
in the New Notes; however, neither is obligated to do so and any market making
activities may be discontinued by either of the Initial Purchasers at any time.
Therefore, there can be no assurance that an active market for the New Notes
will develop. If such a trading market develops for the New Notes, future
trading prices will depend on many factors, including, among other things,
prevailing interest rates, the Company's results of operations and the market
for similar securities. Depending on such factors, the New Notes may trade at a
discount from their face value. See 'Risk Factors--Lack of Public Market.'
The Company will not receive any proceeds from this Exchange Offer, but,
pursuant to the Registration Rights Agreement, the Company will bear certain
registration expenses. No underwriter is being utilized in connection with the
Exchange Offer.
THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL THE COMPANY ACCEPT
SURRENDERS FOR EXCHANGE FROM, HOLDERS OF OLD NOTES IN ANY JURISDICTION IN WHICH
THE EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE
SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTION. IN ADDITION, HOLDERS OF THE
NEW NOTES FOLLOWING THE EXCHANGE OFFER SHALL BE PROHIBITED FROM SELLING THE NEW
NOTES TO NON-INSTITUTIONAL BUYERS IN THE STATES OF ALABAMA, CALIFORNIA AND
WISCONSIN IN THE ABSENCE OF REGISTRATION OF THE NEW NOTES AND THE GUARANTEES (OR
A VALID EXEMPTION THEREFROM) UNDER THE SECURITIES LAWS OF SUCH STATES.
The Old Notes were issued originally in global form (the 'Global Old
Notes'). The Global Old Note was deposited with, or on behalf of, DTC, as the
initial depository with respect to the Old Notes (in such capacity, the
'Depository'). The Global Old Note is registered in the name of Cede, as nominee
of DTC, and beneficial interests in the Global Old Note are shown on, and
transfers thereof are effected only through, records maintained by the
Depository and its participants. The use of the Global Old Note to represent
certain of the Old Notes permits the Depository's participants, and anyone
holding a beneficial interest in an Old Note registered in the name of such a
participant, to transfer interests in the Old Notes electronically in accordance
with the Depository's established procedures without the need to transfer a
physical certificate. Except as provided below, the New Notes will also be
issued initially as a note in global form (the 'Global New Note', and together
with the Global Old Note, the 'Global Notes') and deposited with, or on behalf
of, the Depository. Notwithstanding the foregoing, holders of Old Notes that
were held, at any time, by a person that is not a qualified institutional buyer
under Rule 144A, (a 'Qualified Institutional Buyer'), and any Eligible Holder
that is not a Qualified Institutional Buyer that exchanges Old Notes in the
Exchange Offer, will receive the New Notes in certificated form and is not, and
will not be, able to trade such securities through the Depository unless the New
Notes are resold to a Qualified Institutional Buyer. After the initial issuance
of the Global New Note, New Notes in certificated form will be issued in
exchange for a holder's proportionate interest in the Global New Note only as
set forth in the Indenture.
2
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Available Information........................... 3
Summary......................................... 4
Risk Factors.................................... 14
The Exchange Offer.............................. 21
Capitalization.................................. 28
Selected Consolidated Financial Data............ 29
Management's Discussion and Analysis
of Financial Condition and
Results of Operations......................... 30
PAGE
---
Business........................................ 35
Regulatory Matters.............................. 46
Management...................................... 58
Description New Notes........................... 60
Incorporation of Certain Documents By
Reference..................................... 84
Legal Matters................................... 84
Experts......................................... 84
Index to Financial Statements................... F-1
</TABLE>
AVAILABLE INFORMATION
The Company has filed a registration statement on Form S-4 (together with
any amendments thereto, the 'Registration Statement') with the Commission under
the Securities Act with respect to the New Notes. This Prospectus, which
constitutes a part of the Registration Statement, omits certain information
contained in the Registration Statement and reference is made to the
Registration Statement and the exhibits and schedules thereto for further
information with respect to the Company and the New Notes offered hereby. This
Prospectus contains summaries of the material terms and provisions of certain
documents and in each instance reference is made to the copy of such document
filed as an exhibit to the Registration Statement. Each such summary is
qualified in its entirety by such reference.
The Company is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the 'Exchange Act'), and in accordance
therewith, is required to file reports and other information with the
Commission. In addition, upon registration of the guarantees of the Notes in
connection with the Exchange Offer, each subsidiary of the Company that is a
Guarantor will also be subject to the reporting requirements of the Exchange Act
so long as the guarantee of the Guarantor remains outstanding. Upon
effectiveness of the Registration Statement, the Guarantors will be subject to
the reporting requirements of the Exchange Act and the interpretations issued
thereunder by the Commission staff.
ALL DOCUMENTS FILED BY THE COMPANY AND ITS GUARANTORS PURSUANT TO SECTION
13(A), 13(C), 14 OR 15(D) OF THE EXCHANGE ACT SUBSEQUENT TO THE DATE OF THIS
PROSPECTUS AND PRIOR TO THE TERMINATION OF THE EXCHANGE OFFER TO WHICH THIS
PROSPECTUS RELATES SHALL BE DEEMED TO BE INCORPORATED BY REFERENCE HEREIN AND TO
BE A PART HEREOF FROM THE DATE OF THE FILING OF SUCH REPORTS AND DOCUMENTS. THE
COMPANY WILL PROVIDE A COPY OF ANY AND ALL OF SUCH DOCUMENTS (EXCLUSIVE OF
EXHIBITS UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE
THEREIN) WITHOUT CHARGE TO EACH PERSON TO WHOM A COPY OF THIS PROSPECTUS IS
DELIVERED, UPON WRITTEN OR ORAL REQUEST TO PETER J. ARANOW, EXECUTIVE VICE
PRESIDENT AND CHIEF FINANCIAL OFFICER, 3900 PARADISE ROAD, SUITE 135, LAS VEGAS,
NEVADA 89109, (702) 691-3300.
The Registration Statement (including the exhibits and schedules thereto)
and the periodic reports and other information filed by the Company and the
Guarantors with the Commission may be inspected without charge at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the regional offices of the
Commission located at 7 World Trade Center, 13th Floor, New York, New York
10048, and Suite 1400, Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511. Copies of such materials may be obtained from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and its public reference facilities in New York, New
York and Chicago, Illinois, at prescribed rates. The Common Stock of the Company
is traded under the symbol 'PLAY' on the Nasdaq National Market. Proxy
statements, reports and other information filed by the Company and the
Guarantors with the Commission and other information can be inspected at the
offices of the National Association of Securities Dealers, Inc., Report Section,
17835 K Street N.W., Washington, D.C. 20006.
3
<PAGE>
PLAYERS INTERNATIONAL, INC.
CROSS-REFERENCE TABLE
PURSUANT TO RULE 404(A) AND ITEM 501(B) OF REGULATION S-K
<TABLE>
<CAPTION>
ITEM NO. FORM S-4 CAPTION PROSPECTUS CAPTION
<S> <C> <C>
Item 1 Forepart of the Registration Statement and Outside Front Cover
Page of Prospectus.............................................. Outside Front Cover Page of
Prospectus
Item 2 Inside Front and Outside Back Cover Pages of Prospectus......... Inside Front and Outside Back Cover
Pages of Prospectus
Item 3 Risk Factors, Ratio of Earnings to Fixed Charges and Other
Information..................................................... Summary; Risk Factors; Selected
Consolidated Financial Data
Item 4 Terms of the Transaction........................................ Summary; The Exchange Offer;
Description of New Notes
Item 5 Pro Forma Financial Information................................. Not Applicable
Item 6 Material Contacts with the Company Being Acquired............... Not Applicable
Item 7 Additional Information Required for Reoffering by Persons and
Parties Deemed to be Underwriters............................... Not Applicable
Item 8 Interests of Named Experts and Counsel.......................... Legal Matters; Experts
Item 9 Disclosure of Commission Position on Indemnification for
Securities Acts Liabilities..................................... Management
Item 10 Information with Respect to S-3 Registrants..................... Summary; Risk Factors;
Capitalization; Management's
Discussion and Analysis of Financial
Condition and Results of Operations;
Business; Regulatory Matters
Item 11 Incorporation of Certain Information by
Reference....................................................... Incorporation of Certain Documents by
Reference
Item 12 Information with Respect to S-2 or S-3
Registrants..................................................... Not Applicable
Item 13 Incorporation of Certain Information by
Reference....................................................... Incorporation of Certain Documents by
Reference
Item 14 Information with Respect to Registrants Other than S-3 or S-2
Registrants..................................................... Not Applicable
Item 15 Information with Respect to S-3 Companies....................... Not Applicable
Item 16 Information with Respect to S-2 or S-3
Companies....................................................... Not Applicable
Item 17 Information with Respect to Companies Other than S-3 or S-2
Companies....................................................... Not Applicable
Item 18 Information if Proxies, Consents or Authorizations are to be
Solicited....................................................... Not Applicable
Item 19 Information if Proxies, Consents or Authorizations are not to be
Solicited or in an Exchange Offer............................... Management; Incorporation of Certain
Documents by Reference
</TABLE>
<PAGE>
SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements (including notes thereto) appearing
elsewhere in this Prospectus. Capitalized terms that are not defined herein
relating to the Exchange Offer and the terms of the Notes are defined elsewhere
in this Prospectus under the captions 'The Exchange Offer' and 'Description of
New Notes--Certain Definitions', respectively. Throughout this Prospectus,
except where the context otherwise requires, references to the term 'Players' or
the 'Company' refer collectively to Players International, Inc. and its
subsidiaries.
THE COMPANY
Players International, Inc. is a multi-jurisdictional gaming company which
owns and operates the Players Riverboat Casino in Metropolis, Illinois (the
'Metropolis Complex'), two riverboat casinos in Lake Charles, Louisiana, the
Players Riverboat Casino (the 'Players Lake Charles Riverboat') and the Players
Lake Charles Star Riverboat (the 'Lake Charles Star Riverboat') and the Players
Island Resort o Casino o Spa (the 'Players Island Resort') in Mesquite, Nevada.
The Metropolis Complex, which is the only riverboat operating in Southern
Illinois and is one of only ten statutorily authorized Illinois licensees,
commenced operations in February 1993 and has successfully marketed to patrons
of its target markets in Illinois, Indiana, Kentucky, Missouri and Tennessee.
The Players Lake Charles Riverboat, which serves the large Houston gaming market
and is one of the highest revenue producing riverboat casinos in the United
States, commenced operations in December 1993. The Lake Charles Star Riverboat
commenced operations in April 1995. The Players Island Resort features a
fully-contained island resort environment and opened on June 29, 1995 as the
Company's first land based casino complex. For the twelve months ended March 31,
1995, the Company generated net revenues of $223.7 million and Adjusted EBITDA
(as defined in Note 4, page 13) of $80.6 million.
The Company's business strategy, which has been successfully implemented at
its existing operations, emphasizes providing customers with a high quality
entertainment experience, with particular emphasis on customer service. The
Company targets sites that are conveniently located near frequently traveled
interstate highways, and which have easy access and ample parking, in order to
attract local patronage and repeat visitors. The Company's strategy in
developing and constructing facilities is to create a destination complex which
provides a total entertainment experience rather than merely casino gaming.
The Company's marketing strategy focuses on middle-income customers who
live within a 200 mile radius of each of the Company's facilities. The Company
implements this strategy through the use of database marketing, on-site
marketing and bus programs. Through its proprietary database of gaming
enthusiasts, the Company targets gaming customers through frequent mailings
promoting visits to its casino facilities. In addition, the Company employs
on-site marketing techniques including the use of player tracking systems, slot
clubs and preferred player hosts to identify and service patrons. To attract
additional patronage during non-peak hours, the Company utilizes bus tours which
are organized through the Company's direct relationship with tour operators.
The Company employs a disciplined development philosophy consisting of the
following principal components: (i) a thorough analysis of demographic,
regulatory, competitive and other factors to identify niche markets or markets
where the Company believes it will have a dominant position; (ii) the
maintenance of adequate financial resources to enable the Company to respond
quickly to development opportunities in existing and new jurisdictions; (iii)
the investment of significant capital and other resources only after a
determination has been made that a project is attractive; and (iv) the
development of themed projects with a high entertainment component that can be
completed in a desirable time frame.
In addition to the recent opening of the Players Island Resort, the Company
plans to expand existing operations as well as to develop and construct new
casino entertainment facilities. The Company's approximately $110 million
multi-phase expansion of its successful Lake Charles operation, which has
operated at or near capacity on weekends and holidays, includes the purchase of
the Showboat Star Casino riverboat, which in April of 1995 opened in Lake
Charles as the Lake Charles Star Riverboat and planned facility enhancements and
improvements. The Company is party to an agreement pursuant to which it expects
to purchase shortly the Players Hotel and related property currently under lease
in Lake Charles. Following such purchase, the Company
4
<PAGE>
expects to reconstruct or substantially improve and expand the hotel and
construct an entertainment barge and a multi-story parking garage.
The Company has entered into a letter of intent to form a joint venture
with Harrah's Entertainment, Inc. ('Harrah's') to co-develop a $200 million four
riverboat casino entertainment complex in Maryland Heights, Missouri (the
'Maryland Heights Project'), which will contain a total of approximately 120,000
square feet of gaming space. The Company and Harrah's individually have been
endorsed by the City of Maryland Heights for separate riverboat projects. The
development and operation of the Maryland Heights Project are conditioned upon
the negotiation and execution of definitive agreements between the Company and
Harrah's. The Company and Harrah's expect to begin construction with an opening
targeted for the Summer of 1996, subject to the receipt of all necessary gaming
and other approvals for the joint development project.
OPERATING CASINOS
Metropolis, Illinois
The Company's Metropolis casino commenced operations February 23, 1993 and
is currently the only riverboat casino in Southern Illinois. The Metropolis
riverboat is a four deck, air conditioned replica of a turn of the century
side-wheeler riverboat. The Metropolis Complex includes a docking site known as
'Merv Griffin's Landing,' which features a bar and grill, buffets, a deli,
meeting rooms and a gift shop. Additionally, the Company has a minority interest
in a 120-room hotel near the docking site which opened in March 1994. To date,
the Metropolis operation's closest gaming competitor operates in Caruthersville,
Missouri, which is approximately 120 miles from Metropolis. The Company expects
competing riverboat casinos to open in the next 12 months in Southern Indiana.
In order to maintain its market position in light of potential increased
competition, the Company intends to invest $10 to $15 million for additional
amenities, attractions, riverfront parking and administrative office space. As
part of this program, the Company intends to integrate in the Metropolis Complex
the Company's island resort theme which is featured at the Players Island Resort
and to expand its food and entertainment facilities at the Metropolis Complex.
Lake Charles, Louisiana; Complex Expansion
The Players Lake Charles Riverboat, which was the second to open in the
state of Louisiana, commenced operations on Lake Charles in Southwestern
Louisiana on December 8, 1993. The Company's current Lake Charles facility
features a small pavilion where entertainment and special promotional events are
presented, a ticketing and boarding area, retail space, bars, two full service
restaurants and additional snack facilities.
In order to offer the equivalent of dockside gaming, expand capacity and
strengthen the Company's market position in Lake Charles, the Company in January
1995 initiated a program to spend approximately $110 million in Lake Charles for
the Lake Charles Star Riverboat and additional infrastructure expansion and
improvements (collectively, the 'Lake Charles Complex Expansion').
The Company began the Lake Charles Complex Expansion by acquiring for
approximately $52 million all partnership interests (the 'Interests') in
Showboat Star Partnership (the 'Partnership'), a Louisiana general partnership
that owns a fully equipped Las Vegas style riverboat casino which had operated
for the past one and one-half years on Lake Pontchartrain, Louisiana. In April
1995, the Company opened the Lake Charles Star Riverboat. With two Lake Charles
riverboats operating on staggered cruise schedules, the Company offers the
equivalent of dockside gaming.
As part of the Lake Charles Complex Expansion, approximately $58 million in
additional expansion projects and improvements are budgeted for the development
of a 50,000 square foot themed entertainment center featuring new restaurants, a
sports bar and lounge and banquet facilities; the reconstruction or substantial
improvement and expansion of hotel space; the construction of a new docking
facility and a covered parking facility; public purpose/city infrastructure
contributions; the integration of the Company's island resort theme at the Lake
Charles facility; and additional amenities.
5
<PAGE>
The Lake Charles casino's primary market area includes such population
centers as Houston, Beaumont, Galveston, Orange and Port Arthur, Texas. The Lake
Charles casino draws over half of its patrons from Texas, due in large part to
the current absence of legalized casino gaming in Texas.
Mesquite, Nevada
As part of a strategy to diversify revenue sources, the Company opened on
June 29, 1995 the Players Island Resort, its first land-based casino
entertainment facility, in Mesquite, Nevada. The Players Island Resort features
an island resort theme and is located approximately 70 miles by car from Las
Vegas on Interstate 15 between Las Vegas and Salt Lake City, where an estimated
12,000 cars pass daily. The Players Island Resort is being marketed as a
destination resort for the residents of the Las Vegas area and Southern Nevada,
as well as for tourists from California, Arizona and nearby Utah.
The initial phase of the Players Island Resort project was developed on 45
acres at an estimated cost of $75-80 million and includes a 40,000 square foot
casino; a 500-room hotel with a health spa and swimming pool with waterfalls;
lighted tennis courts; a children's arcade; four detached three-bedroom villas;
and a 50-unit recreational vehicle facility. The resort features four
restaurants, an estimated 400-seat showroom and 10,000 square feet of
banquet/meeting rooms. The resort complex, which has been master-planned to
accommodate further expansion of the casino, hotel and banquet/meeting space,
features a fully-contained island resort environment. The Company has leased
additional land near the Players Island Resort for the development of an 18-hole
golf course during fiscal 1996. The Company estimates that it will incur $6-9
million in expenditures for the golf course development
PROJECTS UNDER DEVELOPMENT
Maryland Heights, Missouri
The Company entered into a letter of intent with Harrah's on March 3, 1995
to form a joint venture to co-develop the Maryland Heights Project. The Company
and Harrah's will each own and operate two separate riverboat casinos pursuant
to separate gaming licenses but will share equally in the costs of the
development of, as well as any profit or loss associated with, an estimated
300,000 square foot shoreside facility. Although the two riverboat casinos are
expected to be similar in exterior theme and decor, each operator will
individually manage and market its own gaming operations with separate staffing.
In addition to the construction of two riverboats, the shoreside facility is
anticipated to include a hotel facility to be managed by Harrah's, extensive
covered parking and a 95,000 square foot entertainment building. The
entertainment facility will contain upscale restaurants, a buffet, bars, an
entertainment lounge with nightly live music, a preferred players lounge and
gift shops. The Company and Harrah's also are evaluating the development of an
outdoor mall containing themed restaurants and boutique shops similar to the
higher end Las Vegas casinos.
Situated close to Interstate 70 in Maryland Heights, the casino
entertainment complex will be strategically located to attract patrons from a
local population base of approximately 2.3 million in the greater St. Louis
metropolitan region. The site will feature easy accessibility, a high level of
drive-by traffic and close proximity to Interstate 70 and Lambert International
Airport, and will be strategically located near the Riverport amphitheater,
which attracts 500,000 visitors per year. The development and operation of the
Maryland Heights Project are conditioned upon the negotiation and execution of
definitive agreements between the Company and Harrah's. Subject to the receipt
of all necessary gaming and other approvals, the Company has targeted the
opening of the Maryland Heights Project for the Summer of 1996.
6
<PAGE>
SUMMARY OPERATING AND DEVELOPMENT DATA
<TABLE>
<CAPTION>
EXISTING OPERATIONS PROJECTS UNDER DEVELOPMENT
------------------------------------------------------- -----------------------------
PLAYERS LAKE CHARLES PLAYERS LAKE CHARLES MARYLAND
METROPOLIS LAKE CHARLES STAR ISLAND SHORESIDE HEIGHTS
COMPLEX RIVERBOAT RIVERBOAT RESORT EXPANSION PROJECT
------------ ------------- ------------- ----------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Remaining
expansion,
development and
opening
costs........... $ 15 million(1) -- -- $45 million(1) $58 million(1) $100 million(1)
Approximate
Gaming Area
(Square
Feet) .......... 20,000 27,500 21,730 40,000 -- 60,000(2)
Approximate
number of
slots .......... 675 869 778 850 -- 1,500(2)
Approximate
number of
tables.......... 43 69 45 27 -- 60(2)
Approximate
number of gaming
positions....... 1,011 1,400 1,135 1,062 -- 1,860(2)
Hotel rooms..... 120(3) 130(4)(5) 130(4)(5) 500 275(6) 300(7)
Approximate
parking
capacity........ 1,000 1,500(5) 1,500(5) 1,667 2,500(6) 4,500(7)
</TABLE>
- ------------------
(1) Reflects currently estimated maximum expansion, development and opening
costs incurred or to be incurred after March 31, 1995.
(2) For Players' riverboat casino only.
(3) Operated by a joint venture in which the Company owns a 12.5% equity
interest.
(4) The hotel is not currently owned by the Company but is under contract to be
purchased by the Company. See 'Business -- Properties -- Lake Charles,
Louisiana.'
(5) Reflects total hotel rooms and parking currently available to patrons of the
Players Lake Charles Riverboat and Lake Charles Star Riverboat at the
Company's Lake Charles complex.
(6) Reflects hotel capacity after reconstruction or substantial improvement and
expansion of hotel space and expanded total parking capacity after
construction of parking garage, both of which the Company will own and
operate.
(7) To be operated by a joint venture in which the Company will own a 50% equity
interest.
7
<PAGE>
ISSUANCE OF THE OLD NOTES
The outstanding 10 7/8% Senior Notes due 2005 (the 'Old Notes') were
sold by the Company to Donaldson, Lufkin & Jenrette Securities Corporation
and Salomon Brothers Inc (the 'Initial Purchasers'), on April 17, 1995 (the
'Closing Date') pursuant to a Purchase Agreement, dated April 10, 1995 (the
'Purchase Agreement'), among the Company, certain subsidiaries of the
Company that agreed to guarantee the Notes and the Initial Purchasers. The
Initial Purchasers subsequently resold the Old Notes in reliance on Rule
144A under the Securities Act and other available exemptions under the
Securities Act. The Company and the Initial Purchasers also entered into
the Exchange and Registration Rights Agreement, dated as of April 17, 1995
(the 'Registration Rights Agreement'), among the Company, certain
subsidiaries of the Company that agreed to guarantee the Notes and the
Initial Purchasers, pursuant to which the Company granted certain
registration rights for the benefit of the holders of the Old Notes. The
Exchange Offer is intended to satisfy certain of the Company's obligations
under the Registration Rights Agreement with respect to the Old Notes. See
'--The Exchange Offer' and 'The Exchange Offer--Purpose and Effect.'
THE EXCHANGE OFFER
<TABLE>
<S> <C>
The Exchange Offer........... The Company is offering upon the terms and subject
to the conditions set forth herein and in the
accompanying letter of transmittal (the 'Letter of
Transmittal'), to exchange $1,000 in principal
amount of its 10 7/8% Senior Notes due 2005 (the
'New Notes', with the Old Notes and the New Notes
collectively referred to herein as the 'Notes')
for each $1,000 in principal amount of the
outstanding Old Notes (the 'Exchange Offer'). As
of the date of this Prospectus, $150 million in
aggregate principal amount of the Old Notes is
outstanding, the maximum amount authorized by the
Indenture for all Notes. As of June 28, 1995,
there was one registered holder of the Old Notes,
Cede & Co. ('Cede'), which held the Old Notes for
22 of its participants. See 'The Exchange
Offer--Terms of the Exchange Offer.'
Expiration Date.............. 5:00 p.m., New York City time, on ______, 1995 as
the same may be extended. See 'The Exchange
Offer--Expiration Date; Extensions; Amendments.'
Conditions of the Exchange
Offer...................... The Exchange Offer is not conditioned upon any
minimum principal amount of Old Notes being
tendered for exchange. However, the Exchange Offer
is subject to certain customary conditions,
including (i) no legal or governmental action is
pending or threatened with respect to the Exchange
Offer which, in the judgment of the Company, would
make it inadvisable to proceed with the Exchange
Offer, (ii) no statute, rule or regulation with
respect to the Exchange Offer has been enacted
which, in the judgment of the Company, would make
it inadvisable to proceed with the Exchange Offer,
(iii) no banking moratorium or similar event or
international calamity involving the United States
has occurred, and (iv) no governmental approval
deemed necessary by the Company to the Exchange
Offer has been denied. The Company expects that
the foregoing conditions will be satisfied. All
such conditions may be waived by the Company. See
'The Exchange Offer--Conditions of the Exchange
Offer.'
Termination of Certain
Rights..................... Pursuant to the Registration Rights Agreement and
the Old Notes, Eligible Holders of Old Notes (i)
have rights to receive the Liquidated Damages and
(ii) have certain rights intended for the
</TABLE>
8
<PAGE>
<TABLE>
<S> <C>
holders of unregistered securities. 'Eligible
Holder' means the registered owner of any Old
Notes that remain Transfer Restricted Securities
as reflected on the records of First Fidelity
Bank, National Association, as registrar for the
Old Notes (in such capacity, the 'Registrar'), or
any person whose Old Notes are held of record by
the Depository (as defined) as of the Record Date
(as defined). 'Liquidated Damages' means damages
of $0.10 per week per $1,000 principal amount of
Old Notes constituting Tranfer Restricted
Securities during the period in which a
Registration Default is continuing pursuant to the
terms of the Registration Rights Agreement.
'Transfer Restricted Securities' means each Old
Note until the earliest to occur of (i) the date
on which such Old Note has been exchanged for a
New Note in the Exchange Offer, (ii) the date on
which such Old Note has been effectively
registered under the Securities Act of 1933, as
amended (the 'Securities Act'), and disposed of in
accordance with a shelf registration statement, or
(iii) the date on which such Old Note is
distributed to the public pursuant to Rule 144
under the Securities Act or is saleable pursuant
to Rule 144(k) under the Securities Act. Holders
of New Notes generally will not be and, upon
consummation of the Exchange Offer, Eligible
Holders of Old Notes will no longer be, entitled
to (i) the right to receive the Liquidated Damages
or (ii) certain other rights under the
Registration Rights Agreement intended for holders
of unregistered securities except in the case of
an Eligible Holder of Old Notes who timely
notifies the Company concerning applicable
prohibitions against participation in the Exchange
Offer or certain additional compliance or
registration obligations under the Securities Act.
See 'The Exchange Offer--Termination of Certain
Rights' and '--Procedures for Tendering Old
Notes.'
Accrued Interest on the Old
Notes...................... The New Notes will bear interest at a rate equal
to 10 7/8% per annum from and including their date
of issuance. Eligible Holders whose Old Notes are
accepted for exchange will have the right to
receive interest accrued thereon from the date of
their original issuance or the last Interest
Payment Date, as applicable, to, but not
including, the date of issuance of the New Notes,
such interest to be payable with the first
interest payment on the New Notes. Interest on the
Old Notes accepted for exchange, which accrued at
the rate of 10 7/8% per annum, will cease to
accrue on, the day prior to the issuance of the
New Notes.
Procedures for Tendering Old
Notes...................... Unless a tender of Old Notes is effected pursuant
to the procedures for book-entry transfer as
provided herein, each Eligible Holder desiring to
accept the Exchange Offer must complete and sign
the Letter of Transmittal, have the signature
thereon guaranteed if received by the Letter of
Transmittal, and mail or deliver the Letter of
Transmittal, together with the Old Notes or a
Notice of Guaranteed Delivery and any other
required documents (such as evidence of authority
to act, if the Letter of Transmittal is signed by
someone acting in a fiduciary or representative
capacity), to the Exchange Agent (as defined) at
the address set forth on the back cover page of
this Prospectus prior to 5:00 p.m., New York City
time, on the Expiration Date. Any Beneficial Owner
(as defined) of the Old Notes whose Old Notes are
registered in the name of a
</TABLE>
9
<PAGE>
<TABLE>
<S> <C>
nominee, such as a broker, dealer, commercial bank
or trust company and who wishes to tender Old
Notes in the Exchange Offer, should instruct such
entity or person to promptly tender on such
Beneficial Owner's behalf. See 'The Exchange
Offer-- Procedures for Tendering Old Notes.'
Guaranteed Delivery
Procedures................. Eligible Holders of Old Notes who wish to tender
their Old Notes and (i) whose Old Notes are not
immediately available or (ii) who cannot deliver
their Old Notes or any other documents required by
the Letter of Transmittal to the Exchange Agent
prior to the Expiration Date (or complete the
procedure for book-entry transfer on a timely
basis), may tender their Old Notes according to
the guaranteed delivery procedures set forth in
the Letter of Transmittal. See 'The Exchange
Offer--Guaranteed Delivery Procedures.'
Acceptance of Old Notes and
Delivery of New Notes...... Upon satisfaction or waiver of all conditions of
the Exchange Offer, the Company will accept any
and all Old Notes that are properly tendered in
the Exchange Offer prior to 5:00 p.m., New York
City time, on the Expiration Date. The New Notes
issued pursuant to the Exchange Offer will be
delivered promptly after acceptance of the Old
Notes. See 'The Exchange Offer-- Acceptance of Old
Notes for Exchange; Delivery of New Notes.'
Withdrawal Rights............ Tenders of Old Notes may be withdrawn at any time
prior to 5:00 p.m., New York City time, on the
Expiration Date. See 'The Exchange
Offer--Withdrawal Rights.'
The Exchange Agent........... First Fidelity Bank, National Association is the
exchange agent (in such capacity, the 'Exchange
Agent'). The address and telephone number of the
Exchange Agent are set forth in 'The Exchange
Offer--The Exchange Agent; Assistance.'
Fees and Expenses............ All expenses incident to the Company's
consummation of the Exchange Offer and compliance
with the Registration Rights Agreement will be
borne by the Company or the Guarantors. The
Company will also pay certain transfer taxes
applicable to the Exchange Offer. See 'The
Exchange Offer--Fees and Expenses.'
Resales of the New Notes..... Based on an interpretation by the staff of the
Commission set forth in no-action letters issued
to third parties, the Company believes that New
Notes issued pursuant to the Exchange Offer to an
Eligible Holder in exchange for Old Notes may be
offered for resale, resold and otherwise
transferred by such Eligible Holder (other than
(i) a broker-dealer who purchased Old Notes
directly from the Company for resale pursuant to
Rule 144A under the Securities Act or any other
available exemption under the Securities Act, or
(ii) a person that is an affiliate of the Company
within the meaning of Rule 405 under the
Securities Act), without compliance with the
registration and prospectus delivery provisions of
the Securities Act, provided that the Eligible
Holder is acquiring the New Notes in the ordinary
course of business and is not participating, and
has no arrangement or understanding with any
person to participate, in a distribution of the
New Notes. Each broker-dealer that receives New
Notes for its own account in exchange for Old
Notes, where such Old Notes were acquired by
</TABLE>
10
<PAGE>
<TABLE>
<S> <C>
such broker as a result of market-making or other
trading activities, must acknowledge that it will
deliver a prospectus in connection with any resale
of such New Notes. See 'The Exchange Offer--
Resales of the New Notes' and 'Plan of
Distribution.'
</TABLE>
DESCRIPTION OF NEW NOTES
The form and terms of the New Notes will be identical in all material
respects to the form and terms of the Old Notes, except that (i) the New Notes
have been registered under the Securities Act and, therefore, will not bear
legends restricting the transfer thereof, (ii) holders of the New Notes will not
be entitled to Liquidated Damages and (iii) holders of the New Notes will not
be, and upon consummation of the Exchange Offer, Eligible Holders of the Old
Notes will no longer be, entitled to certain rights under the Registration
Rights Agreement intended for the holders of unregistered securities, except in
certain limited circumstances. See 'Exchange Offer--Termination of Certain
Rights.' The Exchange Offer shall be deemed consummated upon the occurrence of
the delivery by the Company to the Registrar under the Indenture of New Notes in
the same aggregate principal amount as the aggregate principal amount of Old
Notes that were tendered by holders thereof pursuant to the Exchange Offer. See
'The Exchange Offer--Termination of Certain Rights' and '--Procedures for
Tendering Old Note;' and 'Description of New Notes.'
<TABLE>
<S> <C>
Maturity Date................ April 15, 2005.
Interest..................... 10 7/8% payable in cash semi-annually in arrears,
calculated on the basis of a 360-day year
consisting of twelve 30-day months.
Interest Payment Dates....... April 15 and October 15, commencing October 15,
1995.
Guarantees................... The New Notes will be guaranteed unconditionally
as to principal, premium, if any, and interest, on
a senior unsecured basis (the 'Guarantees'),
jointly and severally, by the Guarantors.
Ranking...................... The New Notes will be senior unsecured obligations
of the Company and will rank pari passu in right
of payment with all existing and future senior
Indebtedness of the Company and senior to all
future Subordinated Indebtedness of the Company.
The Guarantees will be senior unsecured general
obligations of the Guarantors and will rank pari
passu with all existing and future senior
Indebtedness of the Guarantors and senior to all
future Subordinated Indebtedness of the
Guarantors. However, to the extent that any
Indebtedness of the Company or the Guarantors is
secured by liens on any assets of the Company or
the Guarantors, as will be the case with respect
to Indebtedness under the Bank Facility, the
holders of such Indebtedness will have a prior
claim to such assets and will effectively be
senior to the New Notes.
Change of Control............ Upon the occurrence of a Change of Control, the
Company will be required to make an offer to
repurchase the New Notes at a price equal to 101%
of the principal amount thereof, together with
accrued and unpaid interest, if any, to the date
of repurchase.
Optional Redemption.......... The New Notes will not be redeemable, in whole or
in part, prior to April 15, 2000. Thereafter, the
New Notes will be redeemable from time to time at
the Company's option, in whole or in part, at a
premium over the principal amount thereof,
declining ratably to par, together with accrued
interest to the date of redemption.
</TABLE>
11
<PAGE>
<TABLE>
<S> <C>
Regulatory Redemption........ The New Notes are subject to mandatory disposition
and redemption requirements following certain
determinations under the gaming laws and
regulations of the states in which the Company
conducts gaming operations or following certain
determinations by the Board of Directors of the
Company that a person's status as a holder of the
New Notes (a 'Holder') could adversely affect the
Company's gaming operations.
Other Mandatory Redemption... None.
Certain Covenants............ The Indenture will contain certain covenants that,
among other things, limit the Company's ability to
incur other Indebtedness, issue Disqualified
Capital Stock, engage in transactions with
Affiliates, incur liens, make certain Restricted
Payments, make certain asset sales and permit
certain restrictions on the ability of its
Subsidiaries to make distributions.
Transfer Restrictions;
Absence of a Public Market
for the New Notes.......... The New Notes are a new issue of securities with
no established market. Accordingly, there can be
no assurance as to the development or liquidity of
any market for the New Notes. The Initial
Purchasers have advised the Company that they
currently intend to make a market in the New
Notes. However, neither Initial Purchaser is
obligated to do so, and any market making with
respect to the New Notes may be discontinued at
any time without notice. The Company does not
intend to apply for listing of the New Notes on a
securities exchange.
</TABLE>
12
<PAGE>
SUMMARY HISTORICAL CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT RATIOS AND WIN DATA)
The following Summary Historical Consolidated Financial Data of the Company
are derived from the Company's Historical Consolidated Financial Statements and
should be read in conjunction with 'Selected Consolidated Financial Data,'
'Management's Discussion and Analysis of Financial Condition and Results of
Operations' and the Company's Historical Consolidated Financial Statements and
the notes thereto appearing elsewhere in this Prospectus. Operating results
presented below for Lake Charles reflects only the results from the Players Lake
Charles Riverboat.
<TABLE>
<CAPTION>
YEAR
YEAR ENDED
ENDED MARCH
MARCH 31, 31,
--------- -------
1994(1) 1995(1)
--------- -------
<S> <C> <C>
INCOME STATEMENT DATA:
Casino revenues.............. $ 95,873 $210,942
Total revenues............... 107,082 223,695
Income from continuing
operations before other
income (expense) and
provision for income
taxes...................... 26,888 70,549
Net income................... 20,952 (2) 45,755
Ratio of earnings to fixed
charges(3)................. 32:1 107:1
OTHER DATA:
Adjusted EBITDA(4)........... $ 37,659 (5) $80,580
Pro forma gross interest
expense(6)................. 17,200 17,007
Ratio of Adjusted EBITDA to
pro forma gross interest
expense(4)(6).............. 2.2x 4.7x
METROPOLIS OPERATING RESULTS:
Casino revenues.............. $ 65,136 $74,857
Daily win/slot machine....... 182 203
Daily win/table game......... 1,674 1,749
LAKE CHARLES OPERATING RESULTS:
Casino revenues.............. $ 30,737 $136,085
Daily win/slot machine....... 194 276
Daily win/table game......... 2,458 2,475
</TABLE>
<TABLE>
<CAPTION>
AS OF MARCH 31, 1995
-------------------------
AS ADJUSTED FOR
ACTUAL THE OFFERING
-------- ---------------
<S> <C> <C>
BALANCE SHEET DATA:
Cash, cash equivalents and marketable securities... $ 50,332 $ 195,332
Total assets....................................... 223,790 368,790
Long-term debt, including current maturities....... 8,907 158,907
Total stockholders' equity......................... 176,143 176,143
</TABLE>
- ------------------
(1) Information for the fiscal year ended March 31, 1994 includes 12 months and
three months and 24 days of results for the Metropolis Complex and Players
Lake Charles Riverboat, respectively. Information for the fiscal year ended
March 31, 1995 includes twelve full months of results for each of the
Metropolis Complex and the Players Lake Charles Riverboat.
(2) Includes cumulative effect of a change in accounting principle of $3.5
million.
(3) For purposes of determining the ratio of earnings to fixed charges, earnings
are defined as income from continuing operations before provision for income
taxes, plus fixed charges. Fixed charges consist of interest expense on all
indebtedness and the portion of operating lease rental expenses that is
representative of the interest factor. The Company previously was engaged in
a line of business that was discontinued in May 1993 and, as a result, the
ratio of earnings to fixed charges is not presented for the periods prior to
fiscal year 1994. See 'Management's Discussion and Analysis of Financial
Condition and Results of Operations--General.'
(4) Represents earnings from continuing operations before interest expense,
provision for income taxes, depreciation and amortization, pre-opening
expenses, one-time non-cash compensation expenses during fiscal 1994 and
other income (expense) ('Adjusted EBITDA'). Adjusted EBITDA is not intended
to represent cash flows for the period, nor has it been presented as an
alternative to income from continuing operations as an indicator of
operating performance and should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with generally
accepted accounting principles. EBITDA-based information is presented solely
as supplemental disclosure because EBITDA is frequently used to analyze
companies on the basis of operating performance, leverage and liquidity.
(5) Adjusted EBITDA calculation excludes $2,868 for the year ended March 31,
1994 related to one-time non-cash compensation expenses for the grant of
stock options to non-employee directors and the grant of stock to certain
officers in connection with the execution of employment agreements.
(6) Pro forma gross interest expense reflects interest expense on the Notes and
other outstanding indebtedness, without reflecting interest income on
historical cash, cash equivalents and marketable securities and assumes no
return upon the investment of proceeds following the issuance of the Old
Notes. The pro forma calculations have been computed assuming the Notes were
outstanding for the entire period presented.
13
<PAGE>
RISK FACTORS
In addition to the other information contained in this Prospectus, holders
of Notes should consider carefully the following risk factors affecting the
business of the Company.
INVESTMENT AND EXPANSION
The net proceeds of the Old Note offering (the 'Offering') will be invested
in several major projects currently under development by the Company, including
(i) the purchase and opening at Lake Charles, Louisiana of the Lake Charles Star
Riverboat, the purchase (and subsequent reconstruction or substantial
improvement and expansion) of the Players Hotel and additional expansion
projects and improvements at the Lake Charles complex, (ii) the completion of a
new land-based casino and related resort facilities at Mesquite, Nevada, (iii)
the development of a new riverboat casino and related facilities in Maryland
Heights, Missouri and (iv) additional amenities, attractions and riverfront
parking at the Metropolis Complex. Major construction projects entail
significant risks, including shortages of materials or skilled labor,
engineering, environmental or regulatory problems, work stoppages, weather
interferences and unanticipated cost increases. Construction, equipment and
stoppage problems or difficulties in obtaining any of the required permits or
authorizations from regulatory authorities could increase the completion costs
or prohibit construction of any of the facilities contemplated. See
'--Government Regulation and Regulatory Approvals.' In addition, no assurances
can be given that the openings will occur on schedule or that anticipated
construction costs will not be exceeded.
In addition, the Company has had no experience in developing a land-based
casino, such as Players Island Resort, or in commencing operations at a casino
in direct competition with existing casinos, such as will be the case at the
Players Island Resort and at the Maryland Heights Project. Moreover, the Company
has limited experience in the design, development and operation of non-gaming
entertainment facilities. The Company also expects that in the future it will be
necessary for its complexes to offer more amenities in order to attract a
suitable level of patronage as well as to acquire necessary gaming licenses.
There can be no assurance that the entertainment facilities will operate
profitably. Furthermore, in light of the increased competitive conditions and
expense associated with obtaining and developing new gaming sites, including the
projects presently under development, there can be no assurance that, as the
Company expands its gaming operations, it will be able to generate a comparable
percentage increase in gaming win or continue to generate operating income
relative to total revenues at levels comparable to or greater than the fiscal
1995 levels.
INCREASED COMPETITION
To date, the Company's casinos have concentrated their marketing efforts on
patrons within a reasonable driving distance from the casinos. A patron's choice
between competing casinos operating in the same primary market area may be
affected significantly by the relative proximity to the patron of the casinos or
other forms of gaming or other casino facilities. These other forms of gaming
include bingo and pull tab games, card clubs, parimutuel betting on horse racing
and dog racing, state-sponsored lotteries and video lottery, video bingo and
video poker terminals. The Company expects that it will experience significant
competition as the emerging casino industry matures.
The Company's riverboat operation in Metropolis currently experiences
limited direct competition in its primary market area. Currently, the closest
legalized gaming facility is located in Caruthersville, Missouri, approximately
120 miles from Metropolis. The Caruthersville facility opened in April 1995.
Other competition comes from Illinois-based riverboats located approximately 160
miles away to the northwest in the greater St. Louis metropolitan area. Indiana
has approved one riverboat in Evansville, which is approximately 110 miles
northeast of Metropolis and is expected to be the closest Indiana riverboat to
compete with the Metropolis Complex. This boat is expected to open in the fourth
quarter of 1995. Another Missouri city in which a proposed future gaming
facility is under consideration is Cape Girardeau, which is approximately 70
miles from Metropolis. The timing of the opening and licensing of the Cape
Girardeau project cannot be determined.
The closest competitor of the Company's Lake Charles operation is the Grand
Casino Coushatta, which commenced operations on January 16, 1995 ('Coushatta')
and is located approximately 45 minutes away by car. Coushatta offers 45,000
square feet of gaming space, over 1,250 slot machines and 50 table games.
Coushatta is a land-based gaming facility that is located northeast of Lake
Charles, Louisiana on State Highway 165. A casino operated on Indian land, like
Coushatta, has certain operating advantages that are not available to
14
<PAGE>
the Company, such as exemptions from taxes and cruising requirements. Coushatta
announced plans to expand in August 1995 by increasing gaming space by 26,000
square feet and adding 750 slot machines and 15 table games. The Company may
face further competition from a joint venture of Crown Casinos, Inc., and Casino
America, Inc., which proposes to open and operate a riverboat casino in the
Summer of 1995 in Westlake, Louisiana, approximately one mile from the Company's
Lake Charles facility. Eastbound travelers from Texas and Western Louisiana on
Interstate 10 would be able to access the Crown facility prior to reaching the
Players facility. The Company competes to a lesser degree with riverboat
operators in Baton Rouge, approximately 125 miles east of Lake Charles, the New
Orleans area, which is over 200 miles east of Lake Charles, and the
Shreveport/Bossier City area, approximately 180 miles north of Lake Charles.
Furthermore, the Louisiana Riverboat Gaming Commission has the authority to
determine the locations of riverboat casinos. No assurance can be given that a
riverboat casino operator will not seek or receive permission to locate in, or
near, the Lake Charles area. A land-based casino opened, in a temporary
location, in New Orleans in May 1995 and such temporary facility and the
land-based permanent facility, which is under construction in New Orleans and
will replace the temporary facility, may produce additional competition.
The primary market area for the Lake Charles riverboat includes the Houston
metropolitan area, other population centers west of the casino such as Beaumont,
Galveston, Orange and Port Arthur, Texas and population centers east of the
casino such as Lafayette and Baton Rouge, Louisiana. Since the Players Lake
Charles Riverboat began operating on December 8, 1993, more than half of its
patrons have come from Texas, with a significant portion coming from the
metropolitan Houston area. Although casino gaming is not currently permitted in
Texas, and the Attorney General of Texas has issued an opinion that gaming in
Texas would require an amendment to the State's Constitution, the Texas
legislature has considered various proposals to authorize casino gaming and two
bills related to gaming were presented in the most recent legislative session
that concluded on May 29, 1995. See 'Business--Lake Charles Operations' and
'Regulatory Matters--Proposed Texas Gaming Legislation.' Additional bills may be
introduced from time to time whenever the legislature is in session. Since the
Texas legislature (which meets every two years in odd-numbered years) did not
pass legislation to amend the Texas State Constitution during the 1995 regular
session, such legislation will have to await the next regular session in 1997,
or a special session of the legislature. Special sessions can only be called by
the Governor for matters that were pending in the regular legislative session.
Governor George Bush has taken a public position against legalized casino
gaming. A constitutional amendment requires a two-thirds vote of those present
and voting in each house of the Texas state legislature and approval by the
electorate at a referendum. If casinos commence operations in Texas in or near
the Company's primary market area, they would be expected to adversely affect
the Company's Lake Charles casino operations. Federal law permits gaming on
cruise ships in international waters under certain circumstances. One such
cruise ship operated out of Galveston, Texas until October of 1994. No
assurances can be given that similar cruise ships will not seek to operate out
of Texas or Louisiana.
The Company believes that the operating revenues and profits generated to
date in its Metropolis and Lake Charles operations are attributable in part to
the limited direct competition that these casinos have experienced historically.
As noted above, the competition in these markets is expected to increase
significantly, which may adversely affect the Company's operating results at
these casinos. The Company also anticipates that its projects under development
in Mesquite, Nevada and Maryland Heights, Missouri will compete with other
nearby gaming establishments. See 'Business--Competition.'
Louisiana and Illinois statutes limit the number of riverboat casino
licenses that may be granted in such states, but the number of authorized
licenses may be increased by future legislation. Under Nevada and Missouri law,
the number of authorized gaming licenses is not limited.
HOLDING COMPANY STRUCTURE AND ABILITY TO SERVICE DEBT; EFFECTIVE SUBORDINATION
The Company is a holding company whose operations are conducted through
subsidiaries. The Company, therefore, will be dependent on the earnings and cash
flow of its subsidiaries to meet its debt obligations, including its obligations
with respect to the Notes. The ability of certain subsidiaries of the Company to
make payments to the Company is governed by the gaming laws of certain
jurisdictions, which place limits on the amount of funds which may be
transferred to the Company and may require prior or subsequent approval for any
15
<PAGE>
such payments. See 'Regulatory Matters.' Accordingly, there can be no assurance
that the subsidiaries will be able to, or will be permitted to, pay to the
Company amounts necessary to service the Notes.
The Guarantees of the Notes may provide a basis for a direct claim against
the Guarantors; however, it is possible that the Guarantees may not be
enforceable. See '--Fraudulent Transfer Considerations' and '-- Government
Regulation and Regulatory Approvals.' If the Guarantees are not enforceable, the
Notes will effectively be subordinate to all Indebtedness, trade payables and
other liabilities of the Guarantors. On March 31, 1995, the Initial Guarantors
had aggregate trade payables of $2.0 million and $8.9 million in Indebtedness.
Obligations under the Company's $120 million bank facility, which is
currently being negotiated (the 'Bank Facility'), will be secured by liens on
certain assets of the Company. See 'Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital Resources.'
Subject to compliance with certain tests in the Indenture that limit the
aggregate amount of senior Indebtedness that may be incurred by the Company, the
Company is entitled to increase the amounts available for borrowings and
outstanding Indebtedness under the Bank Facility above the initial proposed
availability of $120 million, up to the aggregate amount that is so permitted,
from time to time, under such tests. In such event, such additional Indebtedness
would likely be secured by liens on certain or all of the Company's and its
Subsidiaries' assets at such time. Upon any distribution of the assets of the
Company or the Guarantors upon liquidation, reorganization or insolvency,
secured creditors of the Company or the Guarantors would be entitled to payment
in full out of the assets securing such Indebtedness prior to payment to the
Holders of the Notes, and the rights of the Holders of the Notes are therefore
effectively subordinate to the rights of such creditors. If secured creditors
were to foreclose on the collateral securing such Indebtedness, it is possible
that insufficient assets would remain after satisfaction of such Indebtedness to
satisfy fully the claims of the Holders of the Notes.
GOVERNMENT REGULATION AND REGULATORY APPROVALS
The Company currently holds gaming licenses for the operation of casinos in
Louisiana, Illinois and Nevada as well as a casino service industry license in
New Jersey and a thoroughbred racetrack license in Kentucky. In addition, the
Company has applied for licenses to operate casinos in Missouri and Indiana.
The Company is subject to the laws of each state in which it conducts
business and to Federal law. In addition to being subject to laws applicable to
businesses generally, the Company is subject to regulations that apply
specifically to the gaming industry. All laws are subject to change and
different interpretations, especially laws regulating the gaming industry, where
in many cases the laws and the regulatory agencies that apply them are new.
Changes in laws or their interpretation may result in the imposition of more
stringent, burdensome or expensive requirements or the outright prohibition of
gaming. For example, legislation is pending in Louisiana which would restrict or
prohibit riverboat gaming and legislation is pending in Illinois which would
authorize additional casino gaming. The Company is required to pay gaming fees
and taxes in jurisdictions in which it operates and in which projects are under
development. Such fees and taxes are subject to change over which the Company
has no control. See 'Regulatory Matters.'
The Company must obtain a gaming license for each location at which it
operates a casino. Generally, such licenses are for a fixed term and are subject
to renewal periodically. The Company and each of its officers, directors,
managers and principal stockholders are subject to strict scrutiny and approval
by the gaming regulatory bodies of each jurisdiction in which the Company
conducts or seeks to conduct gaming operations. The issuance of a gaming license
is considered a privilege, not a right, and gaming licenses are subject to
suspension, limitation or revocation if detailed regulatory requirements are not
met. In addition to licenses from the state gaming regulatory agencies, casino
operations also typically require various local governmental approvals and
riverboats need Federal and state environmental approvals and approvals relating
to operations in navigable waters. See 'Regulatory Matters.'
The Missouri Gaming Act does not limit statewide the number of licenses
that may be granted and permits more than one person to be licensed for
operation in any city. Under the Missouri Gaming Act, the number and location of
licensed gaming facilities are determined by the Missouri Gaming Commission,
which has not indicated what number of gaming licenses may be granted statewide
or whether it will limit the number or location of gaming facilities on a
statewide, regional or local basis. See 'Regulatory Matters.' The development
and operation of the Maryland Heights Project requires the receipt of regulatory
approvals from Missouri gaming
16
<PAGE>
and other authorities. On May 24, 1995, the Company's amended application for a
gaming license at the Maryland Heights Project was filed with the Missouri
Gaming Commission. The Missouri Gaming Commission is considering licensing
applications for review in selected pools of three and has chosen the
applications of the Company and Harrah's for consideration in the next such
pool. Such applications are currently under investigation, but no assurances can
be given when the Missouri Gaming Commission or any other governmental agency
will act on the applications, whether all approvals will be obtained or whether
any unusually burdensome restrictions may be imposed on the Company or Harrah's
in order to obtain such approvals. The Company and Harrah's are currently
parties to a non-binding letter of intent regarding the development and
operation of the Maryland Heights Project. The development and operation of the
Maryland Heights Project are conditioned upon the negotiation and execution of
definitive agreements between the Company and Harrah's.
The Company's license to operate its riverboat casino at the Metropolis
Complex and the Players Lake Charles Riverboat expire in February 1996 and
December 1998, respectively. The license to operate the Players Star Riverboat
will expire in August 1998. The casino license that was issued on June 21, 1995
to Players Nevada, Inc. ('Players Nevada') to operate the Players Island Resort
does not have a set expiration date, but it is subject to suspension, limitation
or revocation in certain circumstances. The Company also holds a license
expiring January 1996 from Kentucky authorizing it to operate a thoroughbred
racetrack. The loss or suspension of the Illinois, Louisiana, or Nevada
licenses, or the failure to obtain any license from a state in which the Company
plans to operate a casino in the future, including Missouri, or the failure to
obtain the renewal of any license would have a material adverse effect on the
Company's business. In some circumstances, the loss of a license from one
jurisdiction may trigger the loss of a license in another jurisdiction. See
'Regulatory Matters.'
In addition, Guarantees required to be executed in the future by other
Subsidiaries may also be subject to review and approval or disapproval by Gaming
Authorities in applicable jurisdictions, either in connection with such
Subsidiary's application for a gaming license, or as a separate approval item.
No assurances can be given that approval of such Guarantees will be obtained, or
that the existence of such Guarantees will not hinder, delay or prevent
licensure of such other Subsidiaries. If the Company elects not to deliver a
Guarantee from a given Subsidiary, it would be required to designate such
Subsidiary as an Unrestricted Subsidiary. See 'Description of New Notes--Certain
Definitions.'
Certain aspects of the Bank Facility will be subject to required disclosure
to, approval of or disapproval by the respective gaming authorities in the
states in which the Company conducts or proposes to conduct gaming operations.
The Bank Facility may be reviewed as part of the Company's application for a
gaming license in a jurisdiction, or if previously licensed, as a separate
review item. The disclosure, review and approval requirements for the Bank
Facility in Illinois, Louisiana, Nevada and Missouri are substantially similar
to the disclosure, review and approval requirements applicable to the Notes and
the Guarantees except that additional disclosure, review and/or approval
requirements may apply with respect to the security for the Bank Facility to be
provided by the Company and its subsidiaries. The Bank Facility has been
approved by the Gaming Authorities in Illinois and Nevada. No assurance can be
given that the Bank Facility and the proposed security for the Bank Facility
will receive all required approvals, that such approvals will be received on a
timely basis or that the failure to obtain all required approvals will not
adversely impact the Bank Facility or the Company's ability to make borrowings
thereunder. See 'Regulatory Matters--Louisiana Gaming Regulation,' and
'--Missouri Gaming Regulation.'
Prior to the Company's acquisition of the Interests and relocation of the
Lake Charles Star Riverboat to Lake Charles, the Partnership, while under
control of its prior owners, was the subject of an investigation by the Office
of the District Attorney for Orleans Parish, Louisiana, for failure to cruise
regularly, as required by Louisiana law. Although the Company believes that
prosecution for the Partnership's past failure to cruise while operating on Lake
Pontchartrain is unlikely, no assurances can be given that such prosecution will
not be instituted, or that the Partnership's past failure to cruise would not
constitute a violation of Louisiana law.
LOSS OF RIVERBOAT OR DOCKSIDE FACILITY FROM SERVICE
A riverboat may be lost from service due to many factors, including a
natural disaster. Although the Company maintains insurance it considers adequate
for hull and content damage and liability and business interruption insurance in
the event both the Lake Charles Star Riverboat and Players Lake Charles
Riverboat are not in operation, the Company does not carry comprehensive
business interruption insurance. U.S. Coast Guard
17
<PAGE>
regulations require that hulls of vessels of the type being operated by the
Company be inspected every five years at a U.S. Coast Guard approved dry docking
facility, which will cause a temporary loss of service. A flood, hurricane or
other severe weather condition or low water conditions also could damage or
preclude excursions by a cruising riverboat or could cause the Company to lose
the use of a riverboat or dockside facility for an extended period, which could
have a material adverse effect on operations. When excursions by a cruising
riverboat are either legally or physically impossible, various state laws and
regulations may restrict or prohibit the Company from conducting dockside gaming
as an alternative.
The Ohio River occasionally overflows its banks at Metropolis, Illinois,
most often during late winter and early spring. Such flooding may cover a
portion of the Company's existing parking area closest to its landing, but is
not expected to impact the additional riverfront parking that is currently
planned for construction. In designing its riverboat landing, the Company
considered typical flood levels and believes that its existing parking
arrangements provide adequate available parking within reasonable walking
distance of its landing during typical flooding periods. If flooding is
especially severe, it may be impractical for passengers to board the riverboat
at its normal dock site. In such circumstances, the Company may seek permission
from the Illinois Gaming Board to dock at an alternate landing it has found,
where access is not expected to be restricted by flooding. However, no assurance
can be given that the Illinois Gaming Board would grant permission to dock at
the alternate landing or that an alternate landing acceptable to the Illinois
Gaming Board could be found. Any use of an alternate landing because of flooding
may result in some loss of service and other adverse effects on operations. See
'Regulatory Matters--Illinois Gaming Regulation.'
The Company believes that flooding does not present a significant risk to
its operations in Lake Charles, Louisiana. Flooding may, however, pose a risk to
Company operations at Maryland Heights, Missouri and future water-based gaming
sites.
ILLINOIS DOCKSIDE GAMING
Although the Illinois Riverboat Gambling Act provides that no gambling may
be conducted while a riverboat is docked, Illinois Gaming Board Rule, Section
3000.510, currently permits dockside gaming if the captain of the riverboat
reasonably determines that cruising is unsafe due to inclement weather,
mechanical or structural problems, or river icing. From the commencement of the
Company's Illinois operations in February 1993 through February 28, 1995,
dockside gaming occurred under Illinois Gaming Board Rules, Section 3000.510,
approximately 34% of the time. Recent pronouncements by the Illinois Gaming
Board indicate that the explanations for failure to cruise pursuant to Illinois
Gaming Board Rule, Section 3000.510 will be scrutinized and that any abuse of
the rule will result in disciplinary actions, which may include, among other
things, any of the following: cancellation of future cruises, penalties, fines,
suspension and/or revocation of license. In addition, since commencement of the
Metropolis operations in February 1993, pursuant to Illinois Gaming Board Rule,
Section 3000.500, dockside gaming operations have occurred during the 30 minute
time periods at the beginning and end of a cruise while passengers are embarking
and disembarking. Any change in the membership of the Illinois Gaming Board may
result in a complete prohibition of dockside gaming, The inability to conduct
dockside gaming would result in a material adverse effect on the Metropolis
operation.
Furthermore, the Company's Illinois riverboat cruises on the Ohio River,
which is partially in the Commonwealth of Kentucky. Kentucky does not permit
riverboat gaming. In extreme low-water conditions, the Company's Metropolis
riverboat may not be able to safely cruise the Ohio River without crossing into
Kentucky territory for part of the cruise. In such circumstances, either the
riverboat must cease operations, restrict the distance the riverboat cruises or
conduct dockside gaming. No assurances can be given that the Company would be
able to obtain approval from the Illinois Gaming Board to shorten the riverboat
gaming cruise or conduct dockside gaming. See 'Regulatory Matters--Illinois
Gaming Regulation.'
INFLUENCE BY PRINCIPAL STOCKHOLDERS
The directors and officers of the Company and their respective affiliates
and relatives are among the largest stockholders of the Company. As a result,
they have the power to control or influence control of the Company.
As of June 30, 1995, Edward Fishman, the Chairman and Chief Executive
Officer of the Company, and David Fishman, the Vice Chairman of the Company,
respectively, beneficially owned 1,349,959 and 601,672 shares of common stock of
the Company ('Common Stock') and had the right to acquire 600,000 and 825,000
18
<PAGE>
additional shares of Common Stock through the exercise of options, of which
30,000 and 255,000 options were currently exercisable as of such date or within
60 days thereafter. Edward and David Fishman are brothers and, assuming the
complete exercise of all of their outstanding options, would own, in the
aggregate, 3,376,632 or 10.8% of the outstanding Common Stock.
As of June 30, 1995, The Griffin Group, Inc., a Connecticut corporation
('The Griffin Group'), and its affiliates beneficially owned 3,338,250 shares of
Common Stock and had the right to acquire 2,178,750 additional shares of Common
Stock through the exercise of warrants and options, of which 1,597,500 shares
may be acquired upon exercise presently or within 60 days of such date. Assuming
the complete exercise of all such warrants and options, The Griffin Group and
its affiliates would beneficially own 5,517,000 shares, or 17.3% of the
Company's outstanding Common Stock. Mr. Thomas E. Gallagher, President of The
Griffin Group, is a director of the Company and the beneficial owner of certain
of the securities described above.
Merv Griffin, the Company's public representative for its riverboat
casinos, participates actively in the Company's efforts to acquire new sites and
licenses, advises the Company on entertainment strategy and assists in
promotion. His name and likeness are utilized by the Company under a license
which provides for certain promotional activities to be performed by Mr. Griffin
on behalf of the Company. The Company's rights to Mr. Griffin's services are
exclusive in the riverboat and dockside casino industry, except that Mr. Griffin
has the right to represent casinos of Resorts International Inc. ('Resorts').
Resorts currently has only a land-based casino in Atlantic City, New Jersey, but
may be examining the possibility of developing riverboat casinos and other land-
based casinos. See 'Business--License with Merv Griffin and The Griffin Group.'
The Company has initiated negotiations with The Griffin Group to retain Mr.
Griffin's services as the Company's public representative for the Players Island
Resort, although no assurance can be given that the Company will be successful
in retaining such services. Mr. Griffin is Chairman of the Board and a
significant stockholder of Resorts. Additionally, Thomas E. Gallagher, a
director of the Company, is President, Chief Executive Officer and a director of
Resorts.
FRAUDULENT TRANSFER CONSIDERATIONS
The obligation of each of the Guarantors of the Notes may be subject to
review under state or federal fraudulent transfer laws. Under such laws, if a
court in a lawsuit by an unpaid creditor or representative of creditors of a
subsidiary, such as a trustee in bankruptcy or such Guarantor as
debtor-in-possession, were to find that at the time such obligation was
incurred, such Guarantor, among other things, (a) did not receive fair
consideration or reasonably equivalent value therefor and (b) either (i) was
insolvent, (ii) was rendered insolvent, (iii) was engaged in a business or
transaction for which its remaining unencumbered assets constituted unreasonably
small capital or (iv) intended to incur or believed that it would incur debts
beyond its ability to pay such debts as they matured, such court could avoid
such Guarantor's obligation and direct the return of any payments made under the
Guarantee to such Guarantor or to a fund for the benefit of its creditors.
Moreover, regardless of the factors identified in the foregoing clauses (i)
through (iv), such court could avoid such obligation and direct such repayment,
if it found that the obligation was incurred with intent to hinder, delay or
defraud such Guarantor's creditors. In any such event, the holders of the Notes
would have to seek repayment from other Guarantors whose guarantee obligations
had not been avoided.
The measure of insolvency for purposes of the foregoing will vary depending
upon the law of the jurisdiction being applied. Generally, however, an entity
would be considered insolvent if the sums of its debts is greater than all of
its property at a fair valuation or if the present fair saleable value of its
assets is less than the amount that will be required to pay its probable
liability on its existing debts as they become absolute and matured.
REGULATORY REDEMPTION
If the ownership of any of the Notes by any person or entity will preclude,
interfere with, threaten or delay the issuance, maintenance, existence or
reinstatement of any gaming or liquor license, permit or approval, or result in
the imposition of burdensome terms or conditions on such license, permit or
approval, as determined by any Governmental Authority or the Board of Directors
of the Company, such Holder shall be required to dispose of such Notes within a
specified time and, if the Holder of the Notes fails to dispose of them within
such time, the Company shall have the right to redeem the Notes at a price,
without accrued interest, if any, equal to the lowest
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of the Holder's cost, the principal amount of such Notes or the average of the
current market prices of such Notes. See 'Description of New Notes--Regulatory
Redemption.'
LACK OF PUBLIC MARKET
The New Notes are a new issue of securities, have no established trading
market and may not be widely distributed. The Company does not intend to apply
to list the New Notes on any stock exchange. The Initial Purchasers have
informed the Company that they intend to make a market in the New Notes as
permitted by applicable laws and regulations; however, the Initial Purchasers
are not obligated to do so and may discontinue such market making activities at
any time without notice to the holders of the New Notes. Accordingly, there can
be no assurance that a trading market for the New Notes will develop or be
maintained. Moreover, if a market for the New Notes does develop, the price of
the New Notes could fluctuate and liquidity may be limited. If a market for the
New Notes does not develop, holders may not be able to resell the New Notes for
an extended period of time, if at all. If a trading market develops for the New
Notes, future trading prices of such securities will depend on many factors,
including, among other things, prevailing interest rates, the Company's results
of operations and the market for similar securities.
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THE EXCHANGE OFFER
PURPOSE AND EFFECT
The Old Notes were sold by the Company to the Initial Purchasers on April
17, 1995, pursuant to the Purchase Agreement. The Initial Purchasers
subsequently resold the Old Notes in reliance on Rule 144A under the Securities
Act. The Company and the Initial Purchasers also entered into the Registration
Rights Agreement, pursuant to which the Company agreed, with respect to the Old
Notes and subject to the Company's determination that the Exchange Offer is
permitted under applicable law, to (i) cause to be filed, on or prior to June 1,
1995, a registration statement with the Commission under the Securities Act
concerning the Exchange Offer, (ii) use all reasonable efforts (a) to cause such
registration statement to be declared effective by the Commission as soon as
practicable and (b) to cause the Exchange Offer to remain open for a period of
not less than twenty (20) business days. This Exchange Offer is intended to
satisfy the Company's exchange offer obligations under the Registration Rights
Agreement.
TERMS OF THE EXCHANGE OFFER
The Company hereby offers, upon the terms and subject to the conditions set
forth herein and in the accompanying Letter of Transmittal, to exchange $1,000
in principal amount of the New Notes for each $1,000 in principal amount of the
outstanding Old Notes. The Company will accept for exchange any and all Old
Notes that are validly tendered on or prior to 5:00 p.m., New York City time, on
the Expiration Date. Tenders of the Old Notes may be withdrawn at any time prior
to 5:00 p.m., New York City time, on the Expiration Date. The Exchange Offer is
not conditioned upon any minimum principal amount of Old Notes being tendered
for exchange. However, the Exchange Offer is subject to certain customary
conditions which may be waived by the Company, and to the terms and provisions
of the Registration Rights Agreement. See 'Conditions of the Exchange Offer.'
Old Notes may be tendered only in multiples of $1,000. Subject to the
foregoing, Eligible Holders may tender less than the aggregate principal amount
represented by the Old Notes held by them, provided that they appropriately
indicate this fact on the Letter of Transmittal accompanying the tendered Old
Notes (or so indicate pursuant to the procedures for book-entry transfer.).
As of the date of this Prospectus, $150 million in aggregate principal
amount of the Old Notes were outstanding, the maximum amount authorized by the
Indenture for all Notes. As of June 28, 1995, there was one registered holder of
the Old Notes, Cede, which held the Old Notes for 22 of its participants. Solely
for reasons of administration (and for no other purpose), the Company has fixed
the close of business on July ______, 1995, as the record date (the 'Record
Date') for purposes of determining the persons to whom this Prospectus and the
Letter of Transmittal will be mailed initially. Only an Eligible Holder of the
Old Notes (or such Eligible Holder's legal representative or attorney-in-fact)
may participate in the Exchange Offer. There will be no fixed record date for
determining Eligible Holders of the Old Notes entitled to participate in the
Exchange Offer. The Company believes that, as of the date of this Prospectus, no
such Eligible Holder is an affiliate (as defined in Rule 405 under the
Securities Act) of the Company.
The Company shall be deemed to have accepted validly tendered Old Notes
when, as and if the Company has given oral or written notice thereof to the
Exchange Agent. The Exchange Agent will act as agent for the tendering Eligible
Holders of Old Notes and for the purposes of receiving the New Notes from the
Company.
If any tendered Old Notes are not accepted for exchange because of an
invalid tender, the occurrence of certain other events set forth herein or
otherwise, certificates for any such unaccepted Old Notes will be returned,
without expense, to the tendering Eligible Holder thereof as promptly as
practicable after the Expiration Date.
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The Expiration Date shall be _____________ , 1995 at 5:00 p.m., New York
City time, unless the Company, in its sole discretion, extends the Exchange
Offer, in which case the Expiration Date shall be the latest date and time to
which the Exchange Offer is extended.
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In order to extend the Exchange Offer, the Company will notify the Exchange
Agent of any extension by oral or written notice and will make a public
announcement thereof, each prior to 10:00 a.m., New York City time, on the next
business day after the previously scheduled Expiration Date.
The Company reserves the right, in its sole discretion, (i) to delay
accepting any Old Notes, (ii) to extend the Exchange Offer, (iii) if any of the
conditions set forth below under 'Conditions of the Exchange Offer' shall not
have been satisfied, to terminate the Exchange Offer, by giving oral or written
notice of such delay, extension, or termination to the Exchange Agent, and (iv)
to amend the terms of the Exchange Offer in any manner. If the Exchange Offer is
amended in a manner determined by the Company to constitute a material change,
the Company will promptly disclose such amendments by means of a prospectus
supplement that will be distributed to the registered holders of the Old Notes.
CONDITIONS OF THE EXCHANGE OFFER
The Exchange Offer is not conditioned upon any minimum principal amount of
the Old Notes being tendered for exchange. However, notwithstanding any other
provisions of the Exchange Offer, the Company shall not be required to accept
for exchange, or to issue the New Notes in exchange for, any Old Notes, if any
of the following events shall occur, which occurrence, in the sole judgment of
the Company and regardless of the circumstances (including any action by the
Company) giving rise to any such events, makes it inadvisable to proceed with
the Exchange Offer:
(i) there shall be threatened, instituted or pending any action or
proceeding before, or any injunction, order or decree shall have been
issued by, any court or governmental agency or other governmental
regulatory or administrative agency or commission (a) seeking to restrain
or prohibit the making or consummation of the Exchange Offer or any other
transaction contemplated by the Exchange Offer, or assessing or seeking any
damages as a result thereof or (b) resulting in a material delay in the
ability of the Company to accept for exchange or exchange some or all of
the Old Notes pursuant to the Exchange Offer or which, in the judgment of
the Company, might result in the holders of the New Notes having
obligations with respect to resales and transfers of New Notes that are
greater than those described in 'The Exchange Offer--Resales of the New
Notes' or which would otherwise in the judgment of the Company make it
inadvisable to proceed with the Exchange Offer; provided, however, that the
Company will use reasonable efforts to modify or amend the Exchange Offer
or to take such other reasonable steps in order to effectuate the Exchange
Offer;
(ii) any statute, rule, regulation, order or injunction shall be
sought, proposed, introduced, enacted, promulgated or deemed applicable to
the Exchange Offer or any of the transactions contemplated by the Exchange
Offer by any domestic or foreign government or governmental authority, or
any action shall have been taken, proposed or threatened by any domestic or
foreign government or governmental authority that. in the judgment of the
Company, might directly or indirectly result in any of the consequences
referred to in clauses (i)(a) or (i)(b) above or which, in the judgment of
the Company, might result in the holders of the New Notes having
obligations with respect to resales and transfers of New Notes that are
greater than those described in 'Resales of the New Notes' or which would
otherwise in the judgment of the Company make it inadvisable to proceed
with the Exchange Offer; provided, however, that the Company will use
reasonable efforts to modify or amend the Exchange Offer or to take such
other reasonable steps in order to effectuate the Exchange Offer;
(iii) there shall have occurred (a) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States or any limitation by any governmental agency or authority which
adversely affects the extension of credit or (b) a commencement of wars,
armed hostilities or other similar international calamity directly or
indirectly involving the United States, or, in the event any of the
foregoing exist at the time of the commencement of the Exchange Offer, a
material acceleration or worsening thereof;
(iv) any governmental approval has not been obtained, which approval
the Company shall, in its sole discretion, deem necessary for the
consummation of the Exchange Offer as contemplated hereby.
If the Company determines in its sole discretion that any of the conditions
set forth above are not satisfied, the Company may (i) refuse to accept any Old
Notes and return all tendered Old Notes to the tendering holders,
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(ii) extend the Exchange Offer and retain all Old Notes tendered prior to the
Expiration Date, subject however, to the rights of Eligible Holders to withdraw
such Old Notes as described in '--Withdrawal Rights,' or (iii) waive such
unsatisfied conditions with respect to the Exchange Offer and accept all validly
tendered Old Notes which have not been withdrawn. If such waiver constitutes a
material change to the Exchange Offer, the Company will promptly disclose such
waiver by means of a public announcement and a prospectus supplement that will
be distributed to the registered holders.
The Company expects that the foregoing conditions will be satisfied. The
foregoing conditions are for the sole benefit of the Company and may be waived
by the Company in whole or in part at any time and from time to time in its sole
discretion. The failure by the Company at any time to exercise any of the
foregoing rights shall not be deemed a waiver of such rights and each such right
shall be deemed an ongoing right which may be asserted at any time and from time
to time. Any determination by the Company concerning the events described above
will be final and binding upon all parties.
TERMINATION OF CERTAIN RIGHTS
The Registration Rights Agreement provides that, subject to certain
expectations, in the event of a Registration Default (as defined below),
Eligible Holders of Old Notes are entitled to receive Liquidated Damages of $.10
per week per $1,000 principal amount of Old Notes held by such holders. A
'Registration Default' with respect to the Exchange Offer shall occur if: (i)
the registration statement concerning the exchange offer (the 'Registration
Statement') has not been filed with the Commission on or prior to June 1, 1995;
or (ii) the Exchange Offer is not consummated by October 14, 1995; or (iii) the
Registration Statement or shelf registration statement required by the
Registration Rights Agreement is filed and declared effective but shall
thereafter cease to be effective without being succeeded within 30 days by an
additional registration statement filed and declared effective under the
Securities Act. Holders of New Notes will not be and, upon consummation of the
Exchange Offer, Eligible Holders of Old Notes will no longer be, entitled to (i)
the right to receive the Liquidated Damages or (ii) certain other rights under
the Registration Rights Agreement intended for holders of Transfer Restricted
Securities; provided, however, that an Eligible Holder of Old Notes who
reasonably determines and notifies the Company within 20 business days of the
consummation of the Exchange Offer that (i) such Eligible Holder is prohibited
by applicable law or Commission policy from participating in the Exchange Offer,
or (ii) that such Eligible Holder may not resell the New Notes acquired by it in
the Exchange Offer to the public without delivering a prospectus and that this
Prospectus is not appropriate or available for such resales by such Eligible
Holder, or (iii) that such Eligible Holder is a broker-dealer registered under
the Exchange Act and holds the Old Notes acquired directly from the Company or
one of its affiliates, subject to reasonable verification by the Company, will
retain the right to require the Company to file a shelf registration statement
pursuant to Rule 415 under the Securities Act solely for the benefit of such
Eligible Holder of Old Notes and will be entitled to receive the Liquidated
Damages following the occurrence of defined events of default in connection with
the filing of such shelf registration statement. The Exchange Offer shall be
deemed consummated upon the occurrence of the delivery by the Company to the
Registrar under the Indenture of New Notes in the same aggregate principal
amount as the aggregate principal amount of Old Notes that were tendered by
holders thereof pursuant to the Exchange Offer.
ACCRUED INTEREST ON THE OLD NOTES
The New Notes will bear interest at a rate equal to 10 7/8% per annum from
and including their date of issuance. Eligible Holders whose Old Notes are
accepted for exchange will have the right to receive interest accrued thereon
from the date of their original issuance or the last Interest Payment Date, as
applicable, to, but not including, the date of issuance of the New Notes, such
interest to be payable with the first interest payment on the New Notes.
Interest on the Old Notes accepted for exchange, which interest accrued at the
rate of 10 7/8% per annum, will cease to accrue on the day prior to the issuance
of the New Notes. See 'Description of New Notes-- Principal, Maturity and
Interest.'
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PROCEDURES FOR TENDERING OLD NOTES
The tender of an Eligible Holder's Old Notes as set forth below and the
acceptance thereof by the Company will constitute a binding agreement between
the tendering Eligible Holder and the Company upon the terms and subject to the
conditions set forth in this Prospectus and in the accompanying Letter of
Transmittal. Except as set forth below, an Eligible Holder who wishes to tender
Old Notes for exchange pursuant to the Exchange Offer must transmit such Old
Notes, together with a properly completed and duly executed Letter of
Transmittal, including all other documents required by such Letter of
Transmittal, to the Exchange Agent at the address set forth on the back cover
page of this Prospectus prior to 5:00 p.m., New York City time, on the
Expiration Date. THE METHOD OF DELIVERY OF OLD NOTES, LETTERS OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE ELIGIBLE HOLDER.
IF SUCH DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL, PROPERLY
INSURED, WITH RETURN RECEIPT REQUESTED, BE USED. INSTEAD OF DELIVERY BY MAIL, IT
IS RECOMMENDED THAT THE ELIGIBLE HOLDER USE AN OVERNIGHT OR HAND DELIVERY
SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY
DELIVERY.
Any financial institution that is a participant in DTC's Book-Entry
Transfer Facility system may make book-entry delivery of the Old Notes by
causing DTC to transfer such Old Notes into the Exchange Agent's account in
accordance with DTC's procedures for such transfer. In connection with a
book-entry transfer, a Letter of Transmittal need not be transmitted to the
Exchange Agent, provided that the book-entry transfer procedure must be complied
with prior to 5:00 p.m., New York City time, on the Expiration Date.
Each signature on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed unless the Old Notes surrendered for exchange
pursuant hereto are tendered (i) by a registered holder of the Old Notes who has
not completed either the box entitled 'Special Exchange Instructions' or the box
entitled 'Special Delivery Instructions' in the Letter of Transmittal, or (ii)
by an Eligible Institution (as defined). In the event that a signature on a
Letter of Transmittal or a notice of withdrawal, as the case may be, is required
to be guaranteed, such guarantee must be by a firm which is a member of a
registered national securities exchange or the National Association of
Securities Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States or otherwise be an 'eligible guarantor
institution' within the meaning of Rule 17Ad-15 under the Exchange Act
(collectively, 'Eligible Institutions'). If the Letter of Transmittal is signed
by a person other than the registered holder of the Old Notes, the Old Notes
surrendered for exchange must either (i) be endorsed by the registered holder,
with the signature thereon guaranteed by an Eligible Institution, or (ii) be
accompanied by a bond power, in satisfactory form as determined by the Company
in its sole discretion, duly executed by the registered holder, with the
signature thereon guaranteed by an Eligible Institution. The term 'registered
holder' as used herein with respect to the Old Notes means any person in whose
name the Old Notes are registered on the books of the Registrar.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance and withdrawal of Old Notes tendered for exchange will be
determined by the Company in its sole discretion, which determination shall be
final and binding. The Company reserves the absolute right to reject any and all
Old Notes not properly tendered and to reject any Old Notes the Company's
acceptance of which might, in the judgment of the Company or its counsel, be
unlawful. The Company also reserves the absolute right to waive any defects or
irregularities or conditions of the Exchange Offer as to particular Old Notes
either before or after the Expiration Date (including the right to waive the
ineligibility of any holder who seeks to tender Old Notes in the Exchange
Offer). The interpretation of the terms and Conditions of the Exchange Offer
(including the Letter of Transmittal and the instructions thereto) by the
Company shall be final and binding on all parties. Unless waived, any defects or
irregularities in connection with tenders of Old Notes for exchange must be
cured within such period of time as the Company shall determine. The Company
will use reasonable efforts to give notification of defects or irregularities
with respect to tenders of Old Notes for exchange but shall not incur any
liability for failure to give such notification. Tenders of the Old Notes will
not be deemed to have been made until such irregularities have been cured or
waived.
If any Letter of Transmittal, endorsement, bond power, power of attorney or
any other document required by the Letter of Transmittal is signed by a trustee,
executor, administrator, guardian, attorney-in-fact, officer of a
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corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and, unless waived by the Company,
proper evidence satisfactory to the Company, in its sole discretion, of such
person's authority to so act must be submitted.
Any beneficial owner of the Old Notes (a 'Beneficial Owner') whose Old
Notes are registered in the name of a broker, dealer, commercial bank, trust
company or other nominee and who wishes to tender Old Notes in the Exchange
Offer should contact such registered holder promptly and instruct such
registered holder to tender on such Beneficial Owner's behalf. If such
Beneficial Owner wishes to tender directly, such Beneficial Owner must, prior to
completing and executing the Letter of Transmittal and tendering Old Notes, make
appropriate arrangements to register ownership of the Old Notes in such
Beneficial Owner's name. Beneficial Owners should be aware that the transfer of
registered ownership may take considerable time.
By tendering, each registered holder will represent the to the Company
that, among other things (i) the New Notes to be acquired in connection with the
Exchange Offer by the Eligible Holder and each Beneficial Owner of the Old Notes
are being acquired by the Eligible Holder and each Beneficial Owner in the
ordinary course of business of the Eligible Holder and each Beneficial Owner,
(ii) the Eligible Holder and each Beneficial Owner are not participating, do not
intend to participate, and have no arrangement or understanding with any person
to participate, in the distribution of the New Notes, (iii) the Eligible Holder
and each Beneficial Owner acknowledge and agree that any person participating in
the Exchange Offer for the purpose of distributing the New Notes must comply
with the registration and prospectus delivery requirements of the Securities Act
in connection with a secondary resale transaction of the New Notes acquired by
such person and cannot rely on the position of the staff of the Commission set
forth in no-action letters that are discussed herein under 'Resales of New
Notes,' (iv) that if the Eligible Holder is a broker-dealer that acquired Old
Notes as a result of market-making or other trading activities, it will deliver
a prospectus in connection with any resale of New Notes acquired in the Exchange
Offer, (v) the Eligible Holder and each Beneficial Owner understand that a
secondary resale transaction described in clause (iii) above should be covered
by an effective registration statement containing the selling security holder
information required by Item 507 of Regulation S-K of the Commission, and (vi)
neither the Eligible Holder nor any Beneficial Owner is an 'affiliate,' as
defined under Rule 405 of the Securities Act, of the Company except as otherwise
disclosed to the Company in writing. In connection with a book-entry transfer,
each participant will confirm that it makes the representations and warranties
contained in the Letter of Transmittal.
GUARANTEED DELIVERY PROCEDURES
Eligible Holders who wish to tender their Old Notes and (i) whose Old Notes
are not immediately available or (ii) who cannot deliver their Old Notes or any
other documents required by the Letter of Transmittal to the Exchange Agent
prior to the Expiration Date (or complete the procedure for book-entry transfer
on a timely basis), may tender their Old Notes according to the guaranteed
delivery procedures set forth in the Letter of Transmittal. Pursuant to such
procedures: (i) such tender must be made by or through an Eligible Institution
and a Notice of Guaranteed Delivery (as defined in the Letter of Transmittal)
must be signed by such Eligible Holder, (ii) on or prior to the Expiration Date,
the Exchange Agent must have received from the Eligible Holder and the Eligible
Institution a properly completed and duly executed Notice of Guaranteed Delivery
(by facsimile transmission, mail or hand delivery) setting forth the name and
address of the Eligible Holder, the certificate number or numbers of the
tendered Old Notes, and the principal amount of tendered Old Notes, stating that
the tender is being made thereby and guaranteeing that, within four (4) business
days after the date of delivery of the Notice of Guaranteed Delivery, the
tendered Old Notes, a duly executed Letter of Transmittal and any other required
documents will be deposited by the Eligible Institution with the Exchange Agent,
and (iii) such properly completed and executed documents required by the Letter
of Transmittal and the tendered Old Notes in proper form for transfer (or
confirmation of a book-entry transfer of such Old Notes into the Exchange
Agent's account at DTC) must be received by the Exchange Agent within four (4)
business days after the Expiration Date. Any Eligible Holder who wishes to
tender Old Notes pursuant to the guaranteed delivery procedures described above
must ensure that the Exchange Agent receives the Notice of Guaranteed Delivery
and Letter of Transmittal relating to such Old Notes prior to 5:00 p.m., New
York City time, on the Expiration Date.
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ACCEPTANCE OF OLD NOTES FOR EXCHANGE; DELIVERY OF NEW NOTES
Upon satisfaction or waiver of all the conditions to the Exchange Offer,
the Company will accept any and all Old Notes that are properly tendered in the
Exchange Offer prior to 5:00 p.m., New York City time, on the Expiration Date.
The New Notes issued pursuant to the Exchange Offer will be delivered promptly
after acceptance of the Old Notes. For purposes of the Exchange Offer, the
Company shall be deemed to have accepted validly tendered Old Notes, when, as,
and if the Company has given oral or written notice thereof to the Exchange
Agent.
In all cases, issuances of New Notes for Old Notes that are accepted for
exchange pursuant to the Exchange Offer will be made only after timely receipt
by the Exchange Agent of such Old Notes, a properly completed and duly executed
Letter of Transmittal and all other required documents (or of confirmation of a
book-entry transfer of such Old Notes into the Exchange Agent's account at DTC);
provided, however, that the Company reserves the absolute right to waive any
defects or irregularities in the tender or conditions of the Exchange Offer. If
any tendered Old Notes are not accepted for any reason, such unaccepted Old
Notes will be returned without expense to the tendering Eligible Holder thereof
as promptly as practicable after the expiration or termination of the Exchange
Offer.
WITHDRAWAL RIGHTS
Tenders of the Old Notes may be withdrawn by delivery of a written notice
to the Exchange Agent, at its address set forth on the back cover page of this
Prospectus, at any time prior to 5:00 p.m., New York City time, on the
Expiration Date. Any such notice of withdrawal must (i) specify the name of the
person having deposited the Old Notes to be withdrawn (the 'Depositor'), (ii)
identify the Old Notes to be withdrawn (including the certificate number or
numbers and principal amount of such Old Notes, as applicable), (iii) be signed
by the Eligible Holder in the same manner as the original signature on the
Letter of Transmittal by which such Old Notes were tendered (including any
required signature guarantees) or be accompanied by a bond power in the name of
the person withdrawing the tender, in satisfactory form as determined by the
Company in its sole discretion, duly executed by the registered holder, with the
signature thereon guaranteed by an Eligible Institution together with the other
documents required upon transfer by the Indenture, and (iv) specify the name in
which such Old Notes are to be re-registered, if different from the Depositor,
pursuant to such documents of transfer. All questions as to the validity, form
and eligibility (including time of receipt) of such notices will be determined
by the Company, in its sole discretion. The Old Notes so withdrawn will be
deemed not to have been validly tendered for exchange for purposes of the
Exchange Offer. Any Old Notes which have been tendered for exchange but which
are withdrawn will be returned to the Eligible Holder thereof without cost to
such Eligible Holder as soon as practicable after withdrawal. Properly withdrawn
Old Notes may be retendered by following one of the procedures described under
'The Exchange Offer--Procedures for Tendering Old Notes' at any time on or prior
to the Expiration Date.
THE EXCHANGE AGENT; ASSISTANCE
First Fidelity Bank, National Association is the Exchange Agent. All
tendered Old Notes, executed Letters of Transmittal and other related documents
should be directed to the Exchange Agent. Questions and requests for assistance
and requests for additional copies of the Prospectus, the Letter of Transmittal
and other related documents should be addressed to the Exchange Agent as
follows:
By Hand, Registered or Certified Mail or Overnight Courier:
First Fidelity Bank, National Association
123 South Broad Street, 12th Floor
Philadelphia, Pennsylvania 19109
By Facsimile:
(215) 985-7290
Attention: John H. Clapham
Confirm by Telephone (215) 985-7157
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FEES AND EXPENSES
All expenses incident to the Company's consummation of the Exchange Offer
and compliance with the Registration Rights Agreement will be borne by the
Company or the Guarantors, including without limitation: (i) all registration
and filing fees and expenses (including filings made with the National
Association of Securities Dealers, Inc., (including, if applicable, the fees and
expenses of any 'qualified independent underwriter' and its counsel, as may be
required by the rules and regulations of the National Association of Securities
Dealers, Inc.)), (ii) all fees and expenses of compliance with federal
securities or state or other jurisdictions, Blue Sky or securities laws, (iii)
all expenses of printing (including printing certificates for the New Notes and
prospectuses), messenger and delivery services and telephone, (iv) all fees and
disbursements of counsel for the Company and the Guarantors and the fees of one
counsel for the Initial Purchasers with respect to the Registration Statement
and any shelf registration statement, (v) all application and filing fees in the
event the Notes are listed on a national securities exchange or automated
quotation system, and (vi) all fees and disbursements of independent certified
public accountants of the Company and the Guarantors (including the expenses of
any special audit and comfort letters required by or incident to such
performance).
The Company will, in any event, bear its and the Guarantors' internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expense of
any annual audit, and the fees and expenses of any person, including special
experts, retained by the Company.
The Company has not retained any dealer-manager in connection with the
Exchange Offer and will not make any payments to brokers, dealers or others
soliciting acceptance of the Exchange Offer. The Company, however, will pay the
Exchange Agent reasonable and customary fees for its services and will reimburse
it for its reasonable out-of-pocket expenses in connection therewith.
The Company will pay all transfer taxes, if any, applicable to the exchange
of Old Notes pursuant to the Exchange Offer. If, however, a transfer tax is
imposed for any reason other than the exchange of Old Notes pursuant to the
Exchange Offer, then the amount of any such transfer taxes (whether imposed on
the registered holder or any other persons) will be payable by the tendering
holder. If satisfactory evidence of payment of such taxes or exemption is not
submitted with the Letter of Transmittal, the amount of such transfer taxes will
be billed directly to such tendering holder.
ACCOUNTING TREATMENT
The New Notes will be recorded at the same carrying value as the Old Notes,
as reflected in the Company's accounting records on the date of the exchange.
Accordingly, no gain or loss will be recognized by the Company for accounting
purposes. The expenses of the Exchange Offer will be amortized over the term of
the New Notes.
RESALES OF THE NEW NOTES
Based on an interpretation by the staff of the Commission set forth in
no-action letters issued to third parties, the Company believes that the New
Notes issued pursuant to the Exchange Offer to an Eligible Holder in exchange
for Old Notes may be offered for resale, resold and otherwise transferred by
such Eligible Holder (other than (i) a broker-dealer who purchased Old Notes
directly from the Company for resale pursuant to Rule 144A under the Securities
Act or any other available exemption under the Securities Act, or (ii) a person
that is an affiliate of the Company within the meaning of Rule 405 under the
Securities Act) without compliance with the registration and prospectus delivery
provisions of the Securities Act, provided that the Eligible Holder is acquiring
the New Notes in the ordinary course of business and is not participating, and
has no arrangement or understanding with any person to participate, in the
distribution of the New Notes. However, if any Eligible Holder acquires New
Notes in the Exchange Offer for the purpose of distributing or participating in
a distribution of the New Notes, such Eligible Holder cannot rely on the
position of the staff of the Commission enunciated in Morgan Stanley & Co.,
Incorporated (available June 5, 1991) and Exxon Capital Holdings Corporation
(available April 13, 1989), or interpreted in the Commission's letter to
Shearman and Sterling (available July 2, 1993), or similar no-action or
interpretive letters and must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with a secondary
resale transaction, unless an exemption from reason is otherwise available. Each
broker-dealer that receives New Notes for its own amount in exchange for
27
<PAGE>
Old Notes, where such Old Notes were acquired by such broker-dealer as a result
of market-making or other trading activities, must acknowledge that it will
deliver a prospectus in connection with any resale of such New Notes. See 'Plan
of Distribution.'
CAPITALIZATION
The following table sets forth the cash position and capitalization of the
Company at March 31, 1995 as adjusted to reflect the Company's issuance of the
Old Notes.
<TABLE>
<CAPTION>
MARCH 31, 1995
--------------
AS ADJUSTED
FOR THE
OFFERING
--------------
(IN THOUSANDS)
<S> <C>
Cash, cash equivalents and marketable securities(1)............................................... $ 195,332
--------------
--------------
Long-term debt, including current portion:
Existing debt................................................................................... $ 8,907
Old Notes(1).................................................................................... 150,000
--------------
Total long-term debt, including current portion................................................. 158,907
--------------
Stockholders' equity:
Preferred Stock: no par value; 10,000,000 shares authorized; no Preferred Shares issued and
outstanding at March 31, 1995................................................................ --
Common Stock: $0.005 par value; 90,000,000 shares authorized; 29,672,400 shares issued and
outstanding at March 31, 1995 (2)............................................................ 148
Unrealized loss on marketable securities.......................................................... (451)
Additional paid-in capital........................................................................ 121,712
Retained earnings................................................................................. 54,734
--------------
Total stockholders' equity................................................................... 176,143
--------------
Total capitalization......................................................................... $ 335,050
--------------
--------------
</TABLE>
- ------------------
(1) Reflects the effects of the receipt of proceeds from the issuance of Old
Notes, which occurred on April 17, 1995.
(2) Reflects the effects of a three-for-two Common Stock split, which was paid
on May 19, 1995 to holders of record of Common Stock at the close of
business on May 8, 1995.
28
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The selected consolidated financial data presented below as of March 31,
1995 has been derived from the Company's consolidated financial statements,
which have been audited by Ernst & Young LLP, independent auditors. The selected
consolidated financial data presented below as of March 31, 1993 and 1994 have
been derived from the Company's consolidated financial statements, which have
been audited by Arthur Andersen LLP, independent public accountants. The
consolidated balance sheets as of March 31, 1994 and 1995 and the related
consolidated statements of operations, stockholders' equity and cash flows for
each of the years in the three-year period ended March 31, 1995 and the reports
thereon are included elsewhere in this Prospectus. The data presented below
should be read in conjunction with 'Management's Discussion and Analysis of
Financial Condition and Results of Operations,' the Historical Consolidated
Financial Statements and the notes thereto and other financial information
appearing elsewhere in this Prospectus.
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
----------------------------------------------
1993 1994 1995
-------------- -------------- --------------
(IN THOUSANDS)
<S> <C> <C> <C>
STATEMENTS OF OPERATIONS DATA:
Revenues:
Casino........................................................ $ 4,606 $ 95,873 $ 210,942
Food and beverage............................................. 546 5,314 7,406
Other......................................................... 577 5,895 5,347
-------------- -------------- --------------
Total revenues.............................................. 5,729 107,082 223,695
-------------- -------------- --------------
Costs and Expenses:
Casino........................................................ 2,177 35,145 74,839
Food and beverage............................................. 505 5,094 6,799
Other gaming related and general costs........................ 1,712 23,680 48,050
Corporate administrative expenses............................. -- 2,675 7,276
Pre-opening and gaming development costs...................... 4,995 7,026 9,117
Depreciation and amortization................................. 180 3,706 7,065
Option and stock compensation expense......................... -- 2,868 --
Total costs and expenses.................................... 9,569 80,194 153,146
-------------- -------------- --------------
Income (loss) from continuing operations before other income
(expense) and provision for income taxes...................... (3,840) 26,888 70,549
-------------- -------------- --------------
Other Income (Expense):
Interest income............................................... 6 1,623 3,340
Other income, net............................................. -- 83 275
Interest expense.............................................. (274) (887) (694)
-------------- -------------- --------------
(268) 819 2,921
-------------- -------------- --------------
Income (loss) from continuing operations before provision for
income taxes.................................................. (4,108) 27,707 73,470
Provision for income taxes...................................... 34 10,255 27,715
-------------- -------------- --------------
Income (loss) from continuing operations........................ (4,142) 17,452 45,755
-------------- -------------- --------------
Loss associated with discontinued operations.................... (7,031) -- --
Cumulative effect of change in accounting principle............. -- 3,500 --
-------------- -------------- --------------
Net income (loss)............................................... $ (11,173) $ 20,952 $ 45,755
-------------- -------------- --------------
-------------- -------------- --------------
</TABLE>
<TABLE>
<CAPTION>
AS OF MARCH 31, 1995
-------------------------
AS ADJUSTED
AS OF AS OF FOR
MARCH 31, 1993 MARCH 31, 1994 ACTUAL THE OFFERING
-------------- -------------- --------- --------------
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash, cash equivalents and marketable securities... $ 8,791 $ 77,546 $ 50,332 $ 195,332
Total assets....................................... 26,542 138,565 223,790 368,790
Long-term debt, including current portion.......... 17,648 5,865 8,907 158,907
Total stockholders' equity (deficit)............... (86) 115,844 176,143 176,143
</TABLE>
29
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
GENERAL
The Company owns and operates one riverboat casino in Metropolis, Illinois,
which commenced operations on February 23, 1993, two riverboat casinos in Lake
Charles, Louisiana, the Players Riverboat Casino, which commenced operations on
December 8, 1993, and the Lake Charles Star Riverboat, which commenced
operations on April 27, 1995, and the Players Island Resort, a land based casino
complex which opened on June 29, 1995 in Mesquite, Nevada. The Company also
operates a horse racetrack in Paducah, Kentucky. The Company's expansion plans
include the Lake Charles Complex Expansion, which began with the opening of the
Lake Charles Star Riverboat, and the Maryland Heights Project, which has a
targeted Summer 1996 opening, subject to receipt of all necessary approvals. The
Company has plans to continue the development and operation of additional casino
complexes. See 'Business--Projects Under Development' and '--Development
Opportunities.'
In May 1993, the Board of Directors of the Company approved a plan that
discontinued the marketing of various services and products relating to the
gaming, travel and entertainment industries. The discontinued businesses include
Players Club and its related travel services, Players World Travel, the 900 Game
Show Network ('900 Network') and International Gaming Promotions, which promoted
and marketed tournaments at gaming destinations. As a result, the Company has
restated, effective as of May 1993, the financial statements previously reported
to reclassify the classification of all prior operations, except for those
relating to casino operations and its Kentucky racetrack, as discontinued
operations. Accordingly, a reserve for loss on disposition of discontinued
operations was established to offset any potential losses from these activities.
Management considers the reserve to be adequate in amount. (See Note 2 of the
Notes to Consolidated Financial Statements.)
LIQUIDITY AND CAPITAL RESOURCES
For the twelve months ended March 31, 1995, the Company generated $52.1
million in cash from its operating activities as compared to $23.9 million for
the same period of the prior year. The operation of two riverboat facilities for
the entire twelve months ended March 31, 1995 as compared to one facility for
the majority of the prior year period accounted for the increase in cash
generated by operating activities. As of March 31, 1995, the Company had $50.3
million in cash and cash equivalents and marketable investment grade debt
securities as compared to $77.5 million as of March 31, 1994. The decrease in
cash and cash equivalents and marketable investment grade debt securities
reflects the $50 million of cash used in investing activities during fiscal 1995
consisting primarily of $33 million in construction and land costs attributable
to Players Island Resort, $42 million for the purchase of the Interests, and net
proceeds of $36.5 million from the purchases and sales of marketable securities.
The Company is pursuing the development or acquisition of additional gaming
and entertainment facilities which will require extensive amounts of capital.
Based on the projects currently under development, the Company estimates that it
could spend approximately $250 million over the next twelve months. The Company
expects to fund these expenditures with (i) cash on hand, (ii) net proceeds from
the Offering, (iii) cash flow from operations and, if needed, (iv) drawings
available under the Bank Facility currently being negotiated.
In June 1994, the Company acquired land to construct and operate a new
casino resort in Mesquite, Nevada in exchange for cash, Common Stock, warrants
to purchase Common Stock and a promissory note. See
'Business--Properties--Mesquite, Nevada.' On June 29, 1995, the Players Island
Resort opened at an estimated cost of $75-80 million, $43.7 million of which was
invested through March 31, 1995. The Company has leased additional land near the
Players Island Resort for the development of an 18-hole golf course during
fiscal 1996. The Company estimates that it will incur $6-9 million in additional
expenditures for the golf course development.
In addition to the $52 million for the Interests (consisting of $42 million
paid on March 31, 1995 and $10 million paid on April 7, 1995), the Company
expects to incur approximately $58 million in additional expenditures during
1996 to expand its Lake Charles facility.
The Company entered into a letter of intent with Harrah's on March 3, 1995
to co-develop a $200 million riverboat casino entertainment complex in Maryland
Heights, Missouri. The joint venture contemplates that each
30
<PAGE>
partner will own and operate two riverboat casinos pursuant to separate gaming
licenses but will share equally in the costs of development of, as well as any
profit or loss associated with the operation of the shoreside facility. The
Company's share of the Maryland Heights Project will require an approximately
$100 million investment, including the building of the Company's riverboat
casinos, investment in independently owned facilities and investment in the
joint venture that will develop the entertainment complex, parking facility and
docking area. Assuming completion of this project in the Summer of 1996, the
Company anticipates investing approximately $40 million in its riverboat casinos
and other independently owned facilities and investing approximately $60 million
in the joint venture.
In order to maintain its market position, the Company intends to invest $10
to $15 million for additional amenities, attractions, riverfront parking and
administrative office space at the Metropolis Complex. As part of this program,
the Company intends to integrate in the Metropolis Complex the Company's island
resort theme which is featured at the Players Island Resort. It is anticipated
that the amenities and attractions will be completed by the Fall of 1996.
The Company has obtained from two major banks a commitment letter for the
Bank Facility, a six-year $120 million facility which will be available for
general corporate purposes. The information set forth in the Prospectus relating
to the Bank Facility does not purport to be complete and is qualified in its
entirety by reference to the documents to be entered into in connection
therewith. Certain aspects of the Bank Facility are subject to required gaming
regulatory approval. See 'Regulatory Matters--Certain Required Approvals
Associated with the Bank Facility.' The Bank Facility will be a revolving line
of credit for the first two years after its closing (the 'Bank Closing'). Unless
extended, the Bank Facility will convert to a reducing revolver two years after
the Bank Closing. Upon conversion, availability under the Bank Facility will
decline to zero in eight equal, semi-annual amounts. Obligations outstanding
under the Bank Facility will be secured by a first priority lien on all real and
personal property related to gaming operations conducted at the Company's
Mesquite, Metropolis and Lake Charles operations, including, without limitation,
all vessels, barges, leasehold interests, gaming equipment and fixtures. The
Bank Facility will also contain a negative pledge of all assets of the Company
and its subsidiaries. The Bank Facility will be guaranteed by the Company's
existing subsidiaries and any subsidiary organized or acquired during the term
of the Bank Facility which has a book value or fair market value in excess of $1
million (the 'Bank Guarantors'). The Company also will pledge the stock of each
of the Bank Guarantors.
The Bank Facility will require the ongoing satisfaction of certain
financial performance criteria, including a minimum fixed charge coverage ratio,
minimum EBITDA, minimum consolidated tangible net worth and maximum total
indebtedness, and will contain restrictions on new investments or capital
expenditures in excess of $75 million. Certain covenants that are presently
contemplated for the Bank Facility would limit the Company's incurrence of
indebtedness. After giving effect to the Offering, Company indebtedness at March
31, 1995 and the operation of such covenants, approximately $44.0 million would
be available for borrowing under the Bank Facility. The Bank Facility will also
contain covenants and provisions limiting acquisitions, mergers, stock
repurchases, affiliate transactions and asset sales and dispositions, including
(i) a prohibition on outside dividends, distributions, loans or advances by the
Company and the Bank Guarantors, (ii) limitations on repurchases of the
Company's Common Stock, and (iii) limitations on secured indebtedness. The Bank
Facility will be available for general purposes, including development
activities. The consummation of the Bank Facility is subject to the negotiation
of definitive loan documentation, receipt of gaming regulatory approvals and
other customary conditions.
On April 17, 1995, the Company completed the Offering and issued the Old
Notes ($150 million of 10 7/8% Senior Notes due April 15, 2005), which are
substantially identical to the New Notes. See 'Description of New Notes.'
31
<PAGE>
RESULTS OF OPERATIONS
The following sets forth certain historical information on the consolidated
operations of the Company for the years ended March 31, 1993, 1994 and 1995.
SELECTED OPERATIONAL DATA
(IN THOUSANDS, EXCEPT FOR EARNINGS PER SHARE AND WIN DATA)
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED
MARCH 31,
---------------------------------
1993 1994 1995
--------- ---------- ----------
<S> <C> <C> <C>
Casino revenues............................................................... $ 4,606 $ 95,873 $ 210,942
Total revenues................................................................ $ 5,729 $ 107,082 $ 223,695
Total operating expenses...................................................... $ 9,569 $ 80,194 $ 153,146
Income (loss) from continuing operations before other income (expense) and
provision for income tax.................................................... $ (3,840) $ 26,888 $ 70,549
Net income (loss)............................................................. $ (11,173) $ 20,952 $ 45,755
Earnings (loss) per common share assuming full dilution....................... $ (.86) $ .72 $ 1.45
Metropolis Operating Results:
Casino revenues............................................................. $ 4,606 $ 65,136 $ 74,857
Average daily win/slot machine.............................................. $ 110 $ 182 $ 203
Average daily win/table game................................................ $ 1,696 $ 1,674 $ 1,749
Lake Charles Operating Results:
Casino revenues............................................................. $ -- $ 30,737 $ 136,085
Average daily win/slot machine.............................................. $ -- $ 194 $ 276
Average daily win/table game................................................ $ -- $ 2,458 $ 2,475
</TABLE>
PERIOD TO PERIOD COMPARISONS
The table of Selected Operating Data above generally reflects the Company's
opening of its initial riverboat casino in February 1993 and its second
riverboat casino in December 1993. The increases from period to period in
revenues, expenses and net income generally coincide with the opening of the
casino facilities. Following are detailed comparisons of operating results for
the periods presented.
Comparison of Fiscal 1995 to Fiscal 1994
The Company's total revenues for fiscal 1995 increased by 109% to $223.7
million when compared to total revenues of $107.1 million for fiscal 1994. This
increase was due primarily to the Players Lake Charles Riverboat, which opened
on December 8, 1993 and was in operation for all of fiscal 1995 as compared to
less than four months of operation during fiscal 1994. Casino revenues for the
Metropolis riverboat improved to $74.9 million for fiscal 1994 as compared to
$65.2 million for the prior fiscal year. The 15% year over year improvement in
casino revenues can be attributed to the maturation of the Company's marketing
program and an increasing customer base. The improvement in casino revenues in
fiscal 1995 more than offset an expected decline in admission revenues. The
Players Lake Charles Riverboat generated casino revenues of $136.1 million as
compared to $30.7 million in revenues for its first 114 days of operation, which
ended March 31, 1994.
For fiscal 1995, total operating costs increased 91% to $153.1 million as
compared to $80.2 million for the prior fiscal year. Increases in total
operating costs reflect the operation of two riverboat facilities for all of
fiscal 1995, as compared to the operation of only the Metropolis facility for
the majority of fiscal 1994.
Corporate administrative expenses for fiscal 1995 increased to $7.3 million
as compared to $2.7 million for the prior fiscal year. The increase of $4.6
million was primarily related to staff expansion, the reassignment of personnel
who were previously employed by the operating properties, and additional
administrative activities associated with the operation of two riverboat
facilities as compared to one facility for most of the prior year period.
The Company recorded pre-opening and gaming development costs of $9.1
million for fiscal 1995 as compared to $7.0 million for the prior fiscal year.
Pre-opening expenses for fiscal 1995 were $3.0 million for Players Island Resort
and the Lake Charles Star Riverboat, while the prior fiscal year included the
majority of the
32
<PAGE>
Lake Charles pre-opening costs of $4.2 million. Development costs totaled $6.1
million for fiscal 1995 as compared to $2.8 million for fiscal 1994 reflecting
the Company's development activities in new and emerging jurisdictions. The
increase is primarily the result of the Company's pursuit of gaming
opportunities in Evansville, Indiana and Maryland Heights, Missouri.
Income from continuing operations before other income and provision for
income taxes increased to $70.5 million for fiscal 1995 as compared to $26.9
million for the prior fiscal year. Income from continuing operations before
other income and provisions for income taxes as a percentage of total revenues
increased from 25.1% for fiscal 1994 to 31.5% for fiscal 1995. These increases
are directly attributable to the operation of the Players Lake Charles Riverboat
for the entire 12 months of fiscal 1995.
The Company's effective net tax rate, including both state and Federal
taxes, increased to 38% for fiscal 1995 as compared to an effective net tax rate
of 37% for fiscal 1994.
Consolidated net income for fiscal 1995 was $45.8 million, or $1.47 per
share ($1.45 per share fully diluted) as compared to $21.0 million, or $.73 per
share ($.72 per share fully diluted) for fiscal 1994.
Comparison of Fiscal 1994 to Fiscal 1993
The Company's total revenues for fiscal 1994 increased to $107.1 million as
compared to $5.7 million for fiscal 1994. This increase reflects 12 months of
operation for the Metropolis Riverboat and the opening of the Players Lake
Charles Riverboat in December 1993 as compared to 37 days of operation for the
Metropolis Riverboat during fiscal 1993. The Metropolis Riverboat recorded
casino revenues of $65.1 million during fiscal 1994 as compared to $4.6 million
during its initial period of operation in fiscal 1993. The Players Lake Charles
Riverboat generated $30.7 million of casino revenues from its opening on
December 8, 1993 through the end of fiscal 1994.
For fiscal 1994, total operating costs were $80.2 million as compared to
$9.6 million for the prior fiscal year. Again, the increases in operating costs
from year to year reflects the full year of operation for the Company's
Metropolis Complex and the opening of its Players Lake Charles Riverboat in
fiscal 1994 as compared to its limited operation in fiscal 1993.
Corporate administrative expenses for fiscal 1994 were $2.7 million and
include the costs of establishing the Company's corporate office in Lake
Charles, Louisiana and related staff expansion to support the development of its
gaming and entertainment operations.
The Company recorded pre-opening and gaming development costs of $7.0
million for fiscal 1994 as compared to $5.0 million for the prior fiscal year.
Pre-opening expenses for fiscal 1994 were $4.2 million and related to the
Players Lake Charles Riverboat, while the prior fiscal year included pre-opening
costs of $5.0 million that related to the opening of the Company's Metropolis
Complex and initial costs associated with the Players Lake Charles Riverboat.
Development costs were $2.8 million for fiscal 1994 reflecting the Company's
development activities in new and emerging jurisdictions principally Evansville,
Indiana and Maryland Heights, Missouri.
Income from continuing operations before other income and provisions for
income taxes increased to $26.9 million for fiscal 1994 as compared to a loss of
$3.8 million for fiscal 1993. The results for fiscal 1993 reflect only 39 days
of operations for the Metropolis Complex as compared to a full 12 months of
operation for the Metropolis Complex along with the opening of the Players Lake
Charles Riverboat in December 1993.
For fiscal 1994, the Company's effective net tax rate covering both state
and Federal taxes was 37%, or $10.3 million as compared to $34,000 for fiscal
1993, which represents a provision for state income taxes only. For Federal tax
purposes, the Company had net operating loss carryforwards of approximately $6.8
million at the close of fiscal 1993.
Consolidated net income for fiscal 1994 was $21.0 million, or $.73 per
share ($.72 per share fully diluted) as compared to a loss of $11.2 million, or
$.86 per share, of which $4.1 million ($.32 per share) related to continuing
operations and $7.0 million ($.54 per share) related to discontinued operations.
33
<PAGE>
UNAUDITED QUARTERLY RESULTS; SEASONALITY
Set forth below are selected statements of operations data for the last
nine fiscal quarters, which represent all of the periods during which the
Company conducted gaming operations. In management's opinion, the results
depicted below have been prepared on the same basis as the audited financial
statements contained herein and include all adjustments, consisting of normal
recurring adjustments, necessary for a fair presentation of the information for
the periods presented when read in conjunction with the Historical Consolidated
Financial Statements and notes thereto contained elsewhere herein. Results of
operations are somewhat seasonal in nature with relatively greater revenues and
net income earned in the second and third quarters of each fiscal year as
compared to the first and fourth quarters of each fiscal year. Results of
operations for any fiscal quarter are not necessarily indicative of results for
any future period.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
THREE MONTHS ENDED
-------------------------------------------------------------------------------------------------------------------
MAR. 31,(1) JUNE 30, SEP. 30, DEC. 31, MAR. 31, JUNE 30, SEP. 30, DEC. 31, MAR. 31,
1993 1993 1993 1993 1994 1994 1994 1994 1995
----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
(IN THOUSANDS)
Net gaming
revenue:
Lake
Charles,
Louisiana.. (2) (2) (2) $ 5,115(2) $ 25,622 $ 27,418 $ 35,262 $ 37,262 $ 36,143
Metropolis,
Illinois.. $ 4,608 $ 15,709 $ 18,208 $ 15,880 $ 15,339 $ 17,279 $ 19,827 $ 18,184 $ 19,567
Total
Revenues.. $ 5,729 $ 18,310 $ 20,255 $ 23,271 $ 45,246 $ 48,326 $ 58,858 $ 58,665 $ 57,846
Adjusted
EBITDA(3).. $ 1,335 $ 7,172 $ 7,552 $ 7,426 $ 15,509 $ 17,509 $ 22,829 $ 19,713 $ 20,529
Income
(loss)
from
operations
before
other
income
(expense)
and
provision
for
income
taxes... $ (3,430) $ 5,256 $ 5,175 $ 3,522 $ 12,935 $ 15,745 $ 20,907 $ 17,190 $ 16,707
Net
income.. $ (3,732) $ 6,397 $ 3,965 $ 2,503 $ 8,087 $ 10,441 $ 13,310 $ 11,575 $ 10,429
</TABLE>
(1) Includes the first 36 days of results for the Metropolis operation and
excludes results from discontinued operations.
(2) The Players Lake Charles Riverboat did not commence operations until
December 8, 1993.
(3) For an explanation of Adjusted EBITDA, see Note 4 to 'Summary Historical
Consolidated Financial Data.'
34
<PAGE>
BUSINESS
GENERAL
Players International, Inc. is a multi-jurisdictional gaming company which
owns and operates the Metropolis Complex in Metropolis, Illinois, two riverboat
casinos in Lake Charles, Louisiana, the Players Lake Charles Riverboat and the
Lake Charles Star Riverboat and the Players Island Resort in Mesquite, Nevada.
The Metropolis Complex, which is the only riverboat operating in Southern
Illinois and is one of only ten statutorily authorized Illinois licensees,
commenced operations in February 1993 and has successfully marketed to patrons
of its target markets in Illinois, Indiana, Kentucky, Missouri and Tennessee.
The Players Lake Charles Riverboat, which serves the large Houston gaming market
and is one of the highest revenue producing riverboat casinos in the United
States, commenced operations in December 1993. The Lake Charles Star Riverboat
commenced operations in April 1995. The Players Island Resort features a
fully-contained island resort environment and opened on June 29, 1995 as the
Company's first land based casino complex. For the twelve months ended March 31,
1995, the Company generated net revenues of $223.7 million and Adjusted EBITDA
of $80.6 million.
The Company plans to expand existing operations as well as to develop and
construct new casino entertainment facilities. The Company's approximately $110
million multi-phase expansion of its successful Lake Charles operation, which
has operated at or near capacity on weekends and holidays, includes the purchase
of the Showboat Star Casino riverboat, which in April 1995 opened in Lake
Charles as the Lake Charles Star Riverboat and planned facility enhancements and
improvements. The Company is party to an agreement pursuant to which it expects
to purchase shortly the Players Hotel and related property currently under lease
in Lake Charles. Following such purchase, the Company expects to reconstruct or
substantially improve and expand the hotel and construct an entertainment barge
and a multi-story parking garage. These efforts are being undertaken in order to
offer the equivalent of dockside gaming, expand capacity and strengthen the
Company's market position in Lake Charles in response to and in anticipation of
competition in this market.
The Company has entered into a letter of intent to form a joint venture
with Harrah's to co-develop a $200 million four riverboat casino entertainment
complex in Maryland Heights, Missouri, which will contain a total of 120,000
square feet of gaming space. The Company and Harrah's individually have been
endorsed by the City of Maryland Heights for separate riverboat projects. The
Company and Harrah's expect to begin construction with an opening targeted for
the Summer of 1996, subject to the receipt of all necessary gaming and other
approvals for the joint development project. The Company also plans a $10 to $15
million improvement program for its Metropolis Complex, including integration of
the Company's island resort theme featured at the Players Island Resort, as well
as the expansion of food and entertainment facilities and riverfront parking at
the Metropolis Complex.
The Company's principal executive office is located at 3900 Paradise Road,
Suite 135, Las Vegas, Nevada 89109 (Telephone: 702-691-3300).
BUSINESS STRATEGY
The Company's business strategy, which has been successfully implemented at
its existing operations, emphasizes providing customers with a high quality
entertainment experience, with particular emphasis on customer service. The
Company targets sites that are conveniently located near frequently traveled
interstate highways, and which have easy access and ample parking, in order to
attract local patronage and repeat visitors. The Company's strategy in
developing and constructing facilities is to create a destination complex which
provides a total entertainment experience rather than merely casino gaming.
The Company employs a disciplined development philosophy consisting of the
following principal components: (i) a thorough analysis of demographic,
regulatory, competitive and other factors to identify niche markets or markets
where the Company believes it will have a dominant position; (ii) the
maintenance of adequate financial resources to enable the Company to respond
quickly to development opportunities in existing and new jurisdictions; (iii)
the investment of significant capital and other resources only after a
determination has been made that a project is attractive and (iv) the
development of themed projects with a high entertainment component that can be
completed in a desirable time frame.
35
<PAGE>
MARKETING
The Company's marketing strategy at its existing facilities focuses on
middle-income customers who live within a 200 mile radius of each of the
Company's facilities. The Company implements this strategy through the use of
database marketing, on-site marketing and bus programs. Through its proprietary
database of gaming enthusiasts, the Company targets gaming customers through
frequent mailings promoting visits to its casino facilities. In addition, the
Company employs on-site marketing techniques including the use of player
tracking systems, slot clubs and preferred player hosts to identify and service
patrons. To attract additional patronage during non-peak hours, the Company
utilizes bus tours which are organized through the Company's direct relationship
with tour operators.
METROPOLIS OPERATIONS
The Company's Metropolis Complex, which has been operational since February
23, 1993, is the only riverboat operating in Southern Illinois and has one of a
current maximum of ten statutorily authorized gaming licenses in the state. The
Metropolis riverboat is a four deck, air conditioned replica of a turn of the
century side-wheeler riverboat. The fully-equipped Las Vegas style casino
features over 20,000 square feet of gaming space, with 675 slot machines and 43
table games, for a total of approximately 1,011 of the 1,200 gaming positions
authorized by statute. The Metropolis Complex also includes a docking site known
as 'Merv Griffin's Landing,' which features a bar and grill, a restaurant,
meeting rooms and a gift shop. As part of its plan to offer non-gaming amenities
in Metropolis, the Company acquired a 12 1/2% limited partnership interest in a
joint venture that built a 120-room hotel adjacent to its Metropolis dock site.
The hotel was opened in March 1994. The Company is entitled to a discounted rate
for rooms used for casino guests and employees. The Company also leases, under a
ten year agreement, a 350-seat cabaret style theater adjacent to the hotel,
which is not in active daily operation but is available for use in special
events and promotions. The rental payment for this lease is $3,000 per month.
To date, the Metropolis operation's closest gaming competitor operates in
Caruthersville, Missouri, which is approximately 120 miles from Metropolis. The
Company expects competing riverboat casinos to open in the next 12 months at one
location in Southern Indiana. In order to maintain its market position in light
of potential increased competition, the Company intends to invest up to $10 to
$15 million for additional amenities, attractions, riverfront parking and
administrative office space. As part of this program, the Company intends to
integrate in the Metropolis Complex the Company's island resort theme which is
featured at the Players Island Resort, and to expand its food and entertainment
facilities at the Metropolis Complex.
The docking site at Metropolis, named 'Merv Griffin's Landing,' consists of
three permanently moored barges and related structures. One barge, with a total
area of approximately 15,000 square feet on three levels, houses Merv Griffin's
Bar and Grill and the Celebrity Buffet restaurant, as well as meeting rooms. The
dining facilities have the capacity to seat 600 people. The second barge is
approximately 12,000 square feet in size and contains the ticketing area, a gift
shop, waiting areas and restrooms. A special VIP lounge was added recently to
this barge. A third barge is approximately 15,000 square feet and is used as a
queuing area for patrons prior to boarding the riverboat casino. A deli and bar
have been added on this barge for patron convenience. The docking site is
approximately three miles from U.S. Interstate 24, a major highway through
Illinois, Kentucky and Tennessee. The landing is within easy walking distance to
over 1,000 free automobile and bus parking spaces provided by the Company.
Although Illinois law requires persons who enter the casino to be at least 21
years of age, the restaurants and gift shop are open to everyone.
Metropolis, Illinois is near the Southern tip of Illinois on the Ohio River
across from Paducah, Kentucky, approximately 40 miles from the junction of the
Ohio and Mississippi Rivers. Metropolis, with an approximate population of
7,000, is approximately 150 miles northwest of Nashville, 160 miles southeast of
St. Louis and 160 miles northeast of Memphis. The primary market area targeted
by the Company for its Metropolis riverboat includes Bowling Green, Louisville
and Owensboro, Kentucky; Cape Girardeau, Missouri; Clarksville, Hopkinsville and
Nashville, Tennessee; Evansville, Indiana; and two military bases in Kentucky,
Fort Campbell and Fort Knox. Regional attractions in the area include Fort
Massac State Park, Shawnee National Forest, Cave-In-Rock State Park, Land
Between the Lakes, and Crab Orchard and Rend Lakes.
The Metropolis riverboat departs from its landing for eight cruises daily,
commencing at 9:00 a.m., with an additional midnight cruise on Friday and
Saturday. This schedule may be varied, based on experience and
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seasonal factors. The Company adds a midweek midnight cruise during the summer.
There is an admission charge, which ranges from $2 to $5 per cruise. Once
passengers board, they are permitted to game during the half hour prior to the
time the riverboat departs. After the excursion, passengers are permitted to
game for another half hour before new passengers board, for a total of two hours
of gaming per cruise. The Company may permit passengers to remain on board for
additional cruises on a complimentary basis. In addition, Illinois permits
dockside gaming if the riverboat captain reasonably determines that it is unsafe
to cruise due to inclement weather, mechanical or structural problems or river
icing, although there is a possibility that such authorization may be withdrawn.
See 'Risk Factors-- Illinois Dockside Gaming' and 'Regulatory Matters--Illinois
Gaming Regulation.' During dockside gaming, the Metropolis riverboat operates on
its normal schedule and passengers may leave the vessel at any time but may
board only during the half hour prior to the regularly scheduled start of the
cruise.
The number of passengers per cruise typically varies, with a higher number
on the weekends than in mid-week. Passenger counts are higher during warmer
weather (from late spring through early fall) than during colder winter months.
The Company anticipates that this trend will continue in the future. The
configuration of the Metropolis riverboat, like the configuration of the Players
Lake Charles Riverboat, is designed to accommodate a maximum number of
passengers comfortably during peak times, recognizing that there may be excess
capacity for the number of passengers during most off-peak cruises. The
Company's goal is to maximize overall gaming win and profit with a relatively
large and well-equipped boat, while providing a pleasurable gaming experience,
and not necessarily to maximize win per slot, win per table or win per square
foot of casino space. Since inception, the Metropolis riverboat typically has
operated at close to full capacity on Friday and Saturday evening cruises and
holidays, with excess capacity on cruises at other times.
LAKE CHARLES OPERATIONS
The Players Lake Charles Riverboat, which was the second to open in the
state of Louisiana, commenced operations on Lake Charles in Southwestern
Louisiana on December 8, 1993. The Players Lake Charles Riverboat, a
fully-equipped Las Vegas style casino, has approximately 27,500 square feet of
gaming space with 869 slot machines and 69 table games, for a total of
approximately 1,400 gaming positions and offers gaming on four air-conditioned
decks.
In order to offer the equivalent of dockside gaming, expand capacity and
strengthen the Company's market position in Lake Charles, the Company in January
1995 initiated the $110 million Lake Charles Complex Expansion. The Company
began the Lake Charles Complex Expansion by acquiring for approximately $52
million all Interests in the Partnership that owns a fully equipped Las Vegas
style riverboat casino which had operated for the past one and one-half years on
Lake Pontchartrain, Louisiana. The Company now holds two of the 15 statutorily
authorized riverboat gaming licenses in Louisiana.
In April 1995, the Company opened the Lake Charles Star Riverboat, which
has 21,730 square feet of gaming space on three air-conditioned decks with 778
slot machines and 45 table games for a total of 1,135 gaming positions. Both the
Players Lake Charles Riverboat and the Lake Charles Star Riverboat are approved
to operate eight three-hour cruises seven days a week. The Lake Charles Star
Riverboat currently operates eight three-hour cruises daily, commencing at 9:00
a.m. The Players Lake Charles Riverboat currently operates five three-hour
cruises Sunday through Thursday and eight three-hour cruises Friday and
Saturday. Cruises on the Players Lake Charles Riverboat commence at 10:30 a.m.
With the two Lake Charles riverboats operating on the above staggered cruise
schedules, the Company offers the equivalent of dockside gaming at all times
except 1:30 a.m. through 10:30 a.m. Sunday through Thursday.
As part of the Lake Charles Complex Expansion, approximately $58 million in
additional expansion projects and improvements are budgeted for the development
of a 50,000 square foot themed entertainment center featuring new restaurants, a
sports bar and lounge and banquet facilities; the reconstruction or substantial
improvement and expansion of hotel space; the construction of a new docking
facility and covered parking facilities; public purpose/city infrastructure
contributions; the integration of the Company's island resort theme at the Lake
Charles facility; and additional amenities.
There is an admission charge of $2.00 per cruise on the Players Lake
Charles Riverboat and Lake Charles Star Riverboat, although promotional
discounts are given. The Company pays a $2.50 per passenger admission
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tax to the City of Lake Charles. Once passengers board, they are permitted to
game prior to the riverboat's departure. Passengers are permitted to continue to
game until they disembark. At its discretion, the Company may permit passengers
to remain on board for additional cruises. Louisiana permits dockside gaming if
the riverboat captain reasonably determines that it is unsafe to cruise due to
dangerous weather or water conditions.
The Players Lake Charles Riverboat and Lake Charles Star Riverboat depart
from a docking site adjacent to the Players Hotel, which includes dockside and
support facilities. The Company currently leases the ground floor of the hotel
and adjacent parking areas for the hotel and casino guests. The Company has
completely renovated and expanded the hotel's ground floor into a pavilion that
houses the primary areas for ticketing, waiting, entertainment and retail space,
four bars and additional snack facilities. The space also includes two full
service restaurants, Merv's Bar & Grill and the Celebrity Buffet and Restaurant,
which can seat 125 and 250 people, respectively. Following the closing under an
agreement pursuant to which the Company is a party, the Company will own the
real property on which the Lake Charles landing area and complex, including the
hotel and parking area currently under lease, are situated, except for certain
rights on parcels which will continue to be leased from the State of Louisiana.
See '--Properties; Lake Charles, Louisiana'.
The Company maintains a permanently docked barge of approximately 10,000
square feet, containing a 3,000 square foot VIP waiting lounge, which allows
special access and priority boarding. The barge also provides areas for employee
needs, offices and mechanical rooms. Passengers enter the Players Lake Charles
Riverboat directly from a barge facility which is connected to the Players Hotel
by a covered walkway. The landing is within easy walking distance of 800
automobile parking spaces (of which 250 spaces are valet parking) and another
700 parking spaces are accessible to the landing by shuttlebus.
The City of Lake Charles and the surrounding area have a population of
160,000 within a 25 mile radius. The City of Lake Charles is an active community
with a cultural heritage and community resources including the symphony, ballet
and numerous art galleries and museums. The area is also host to seasonal
festivals and special events that highlight Cajun food and music, historic
crafts and water sports. Lake Charles hosts the annual 'Contraband Days,' the
biggest promotional event in Lake Charles, spanning over two weeks and
attracting approximately 200,000 visitors to the City. Lake Charles' Contraband
Days is the second largest festival in Louisiana after New Orleans' Mardi Gras
Festival. In addition, the City of Lake Charles has a civic center that offers a
2,000 seat theater and a 50,000 square foot exhibition hall, used for
conventions, sporting events and entertainment. Lake Charles, which exceeds four
square miles, serves as a recreational area for boating and fishing.
The Lake Charles casino's primary market area includes such population
centers as Houston, Beaumont, Galveston, Orange and Port Arthur, Texas and
Lafayette and Baton Rouge, Louisiana. U.S. Interstate 10 connects Houston,
Beaumont and Lake Charles and is adjacent to the Company's dock site. Since
opening, the Company estimates that the Lake Charles casino has drawn over half
of its patrons from Texas, mainly from the greater Houston area, due in large
part to the current absence of legalized casino gaming in Texas. While, to date,
the Company has experienced only limited gaming competition, the Company
anticipates significant new and additional gaming competition in the Lake
Charles market. See 'Risk Factors--Increased Competition' and '--Competition.'
MESQUITE OPERATIONS
As part of a strategy to diversify revenue sources, the Company opened on
June 29, 1995 the Players Island Resort, its first land-based casino
entertainment facility, in Mesquite, Nevada. The Players Island Resort features
an island resort theme and is located approximately 70 miles by car from Las
Vegas on Interstate 15 between Las Vegas and Salt Lake City, where an estimated
12,000 cars pass daily. The Players Island Resort is being marketed as a
destination resort for the residents of the Las Vegas area and Southern Nevada,
as well as for tourists from California, Arizona and nearby Utah.
The initial phase of the Players Island Resort project was developed on 45
acres, at an estimated cost of $75-80 million and includes a 40,000 square foot
casino; a 500-room hotel with a health spa and swimming pool with waterfalls;
lighted tennis courts; a children's arcade; four detached three-bedroom villas;
and a 50-unit recreational vehicle facility. The resort features four
restaurants, an estimated 400-seat showroom and 10,000
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square feet of banquet/meeting rooms. The resort complex, which has been
master-planned to accommodate further expansion of the casino, hotel and
banquet/meeting space, features a fully-contained island resort environment. The
Company has leased additional land near the Players Island Resort for the
development of an 18-hole golf course during fiscal 1996. The Company estimates
that it will incur $6-9 million in additional expenditures for the golf course
development.
DEVELOPMENT OPPORTUNITIES
Maryland Heights, Missouri
The Company entered into a letter of intent with Harrah's on March 3, 1995
(the 'Harrah's Letter of Intent') to form a joint venture to co-develop a $200
million riverboat casino entertainment complex in Maryland Heights, Missouri,
which will contain a total of 120,000 square feet of gaming space. The Company
and Harrah's would each own and operate two separate riverboat casinos pursuant
to separate gaming licenses but would share in the costs of the development of,
as well as any profit or loss associated with, an estimated 300,000 square foot
shoreside facility. Although the four riverboat casinos are expected to be
similar in exterior theme and decor, each operator would individually manage and
market its own gaming operations with separate staffing. The Company and
Harrah's individually have been endorsed by the City of Maryland Heights for
separate riverboat casino projects and have licensing applications under
consideration by the Missouri Gaming Commission. See 'Risk Factors--Government
Regulation and Regulatory Approvals' and 'Regulatory Matters.' The development
and operation of the Maryland Heights Project are conditioned upon the
negotiation and execution of definitive agreements between the Company and
Harrah's.
In addition to the construction of four riverboats, the shoreside facility
is anticipated to include a hotel facility to be managed by Harrah's, extensive
covered parking and a 95,000 square foot entertainment building. The
entertainment facility is expected to contain upscale restaurants, a buffet,
bars, an entertainment lounge with live music nightly, a preferred players
lounge and gift shops. The Company and Harrah's also are evaluating the
development of an outdoor mall containing themed restaurants and boutique shops
similar to the higher end Las Vegas casinos. Under the Harrah's Letter of Intent
(i) Harrah's and the Company would share each other's development costs
(excluding the costs specified in clause (iii) below, the costs of riverboats to
be separately owned and operated and the costs associated with interior fit-up
of separately controlled space); (ii) Harrah's would have the right to purchase
the Company's interest in the joint venture upon any 'change of ownership' of
Players, on terms subject to negotiation between the parties; and (iii) as
between Harrah's and the Company, the owner of the property ultimately chosen
for development would receive percentage rent from the other joint venture
party, based on net gaming revenues. See '--Properties; Maryland Heights,
Missouri.'
Situated close to Interstate 70 in Maryland Heights, the casino
entertainment complex will be strategically located to attract patrons from a
local population base of approximately 2.3 million in the greater St. Louis
metropolitan region. The site will feature easy accessibility, a high level of
drive-by traffic and close proximity to Interstate 70 and Lambert International
Airport, and will be strategically located near the Riverport amphitheater,
which attracts 500,000 visitors per year. The Company and Harrah's expect to
begin construction with an opening targeted for the Summer of 1996, subject to
the negotiation and execution of definitive agreements for the project and the
receipt of all necessary gaming and other approvals.
Although riverboat gaming is currently offered in the metropolitan St.
Louis region, certain patrons of the Metropolis Complex travel approximately
three hours from St. Louis to Metropolis. In recognition of these valued
customers, the Company intends to introduce cross-marketing programs to St.
Louis area residents for the Metropolis and the proposed Maryland Heights
riverboats to increase repeat patronage at the Company's casino entertainment
facilities.
Other Potential Projects
The Company currently is in the early stages of evaluating a number of
other potential opportunities to develop riverboat, dockside or land-based
gaming facilities in jurisdictions that currently permit gaming as well as in
jurisdictions that have not yet legalized gaming.
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COMPETITION
The casino gaming industry includes casinos which are either land-based in
jurisdictions such as Nevada and New Jersey, dockside casinos, riverboat casinos
and land-based casinos on Indian reservations. The gaming industry is highly
competitive and is composed of a large number of companies, many of which have
significantly greater resources than the Company. Numerous states have legalized
gaming and several other states are considering the legalization of gaming in
designated areas. As a result of the proliferation of gaming in new
jurisdictional areas as well as the proliferation of Indian gaming on tribal
land, the Company's operations could be adversely affected in instances where
such other gaming operations are conducted close to the Company's operations.
See 'Risk Factors--Increased Competition.'
The Company's Metropolis Complex currently faces indirect competition from
riverboats in certain parts of Missouri and to a much lesser extent from
dockside casinos in Tunica, Mississippi. In addition, the Company believes that
by the Summer of 1995, the Metropolis Complex will be subject to competition
from a riverboat operation in Evansville, Indiana, which is located
approximately 110 miles from Metropolis. Gaming has also been authorized in
Missouri, and the closest Missouri cities in which proposed future gaming
facilities are under consideration are Cape Girardeau and Caruthersville, which
are approximately 70 and 120 miles, respectively, from Metropolis. The
Caruthersville project opened in April 1995. The timing of the opening and
licensing of the Cape Girardeau project cannot be determined. In order to
maintain its market position, the Company has budgeted additional amenities and
attractions for the Metropolis Complex. See 'Management's Discussion and
Analysis of Financial Condition and Results of Operations.'
The Company's Lake Charles operation faces direct competition from the
land-based Coushatta facility in Kinder, Louisiana. The Coushatta facility,
which opened in January of 1995, is a Las Vegas style casino that offers 45,000
square feet of gaming space, with 1,250 slot machines and 50 table games. In its
first week of operation, the Coushatta facility generated revenues of
approximately $3.6 million. Coushatta has announced that it has experienced
higher than expected revenues since opening and plans to expand in August 1995
by increasing gaming space by 26,000 square feet and adding 750 slot machines
and 15 table games. In addition to the Coushatta facility, the Company will also
face direct competition from a joint venture of Crown Casinos, Inc., and Casino
America, Inc., which proposes to open and operate a riverboat in the Summer of
1995 in Westlake, Louisiana approximately one mile from the Company's facility.
Eastbound travelers from Texas and Western Louisiana on Interstate 10 would be
able to access the Crown facility prior to reaching the Players facility. The
Company's Lake Charles operations compete to a lesser degree with riverboat
operators in Baton Rouge, approximately 125 miles east of Lake Charles, the New
Orleans area, which is over 200 miles east of Lake Charles, and the
Shreveport/Bossier City area, which is approximately 180 miles north of Lake
Charles. A land-based casino in New Orleans may produce additional competition.
See 'Risk Factors -- Increased Competition.'
The Players Island Resort in Mesquite, Nevada will compete directly with
two existing properties: the Oasis and the Virgin River, both of which are
located in Mesquite. The larger of the two facilities, the Oasis, has been in
operation for approximately 11 years, and the Virgin River has been in operation
for approximately three years. These two facilities draw a majority of their
patronage from travelers on Interstate 15, the local population base and the
residents of nearby border towns between Utah and Nevada. The Company will
compete directly with these existing properties as well as attempt to expand the
Mesquite market by targeting Las Vegas residents and tour and travel patrons who
otherwise are visiting Las Vegas.
The Company's planned project in Maryland Heights, Missouri will compete
directly with President Riverboats in downtown St. Louis, Alton Belle in Alton,
Illinois, Casino Queen in East St. Louis and St. Charles Station in St. Charles,
Missouri, proposed riverboat casinos in Kimmswick, Missouri and St. Charles
County, Missouri and, potentially, additional riverboats in the St. Louis
metropolitan area.
EMPLOYEES
At March 31, 1995, the Company had 2,261 employees, including approximately
1,357 and 786 employed in riverboat operations (including land-based activities)
in Lake Charles and Metropolis, respectively, 45 employed at Players Bluegrass
Downs, 32 employed at Players Island Resort and 41 employed in the Company's
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executive office. As of July 13, 1995, the Company employed 954 people at
Players Island Resort. The Company believes its relations with its employees are
generally good.
On June 28, 1995, the United Food and Commercial Workers Union, Local 881,
filed a petition with the St. Louis Regional Office of the National Labor
Relations Board (the 'NLRB') requesting the NLRB to conduct an election to
ascertain whether approximately one-half of the employees at the Metropolis
Complex wished to be represented by the union. That election has been scheduled
for August 18, 1995. Since the outcome of such election is unknown, the Company
is currently unable to assess the potential consequences such activity may have
on its Metropolis operations.
PROPERTIES
Metropolis, Illinois: The Company leases its docking facilities in
Metropolis, which cover 1,810 linear feet of riverfront, from the City of
Metropolis pursuant to a 20-year lease with a 20-year renewal option at an
annual rent of approximately $7,000. The Company also owns several parcels of
land in Metropolis, some with buildings, aggregating approximately eight acres,
and it leases an additional two acres. The owned or leased area is used
primarily for free customer parking or as office space. Some of the land is
being held for development, and some of the current parking area may be
developed, in which event the Company believes suitable replacement parking
space could be obtained.
The Ohio River occasionally overflows its banks at Metropolis, most often
during late winter and early spring. Such flooding may cover a portion of the
Company's closest parking location, although the Company believes that it will
still have adequate available parking within reasonable walking distance of its
landing during typical flooding periods. Although the Ohio River did not
overflow its banks at Metropolis during the flooding that occurred during the
Summer of 1993, there can be no assurance that it will not do so in the future.
If flooding is especially severe, it may be impractical for passengers to board
the riverboat at its normal dock site. The Company has developed an emergency
plan that would permit gaming activities to continue in such circumstances. Any
use of an alternate landing because of flooding may result in some loss of
service. See 'Risk Factors--Loss of Riverboat or Dockside Facility from
Service.'
Lake Charles, Louisiana: On January 25, 1995, the Company entered into a
preliminary agreement (the 'Beeber Agreement') with The Beeber Corporation
('Beeber') to purchase Players Hotel and approximately 15 acres of real estate
comprising the landside facility for the Players Lake Charles Riverboat and the
Lake Charles Star Riverboat (collectively, the 'Property'). Under this
arrangement, the Company has agreed to pay a total purchase price of $6.7
million for the Property consisting of (i) $5.5 million in cash, Common Stock
based upon the per share closing price of Common Stock on January 25, 1995
($12.17 per share, post-split adjusted) or a combination of cash and Common
Stock to be determined by Beeber on or prior to July 25, 1995 and (ii) the
Company's assumption of Beeber indebtedness secured by the Property in an amount
not to exceed $1.25 million. In the event Beeber chooses to receive any portion
of the purchase price in Common Stock, Beeber shall have the right for up to 36
months after the date of closing under the Beeber Agreement to require the
Company to repurchase the Common Stock at a price equal to the closing price of
the Common Stock on January 25, 1995 ($12.17 per share, post-split adjusted). In
addition, Beeber has been granted certain piggyback registration rights to
register the resale of Common Stock received as part of the purchase price. As
additional consideration, the Company is required to continue making certain
payments under a lease agreement dated May 19, 1993 between the Company and
Beeber, as amended (the 'Lake Charles Lease'). Currently, the Company is
obligated to pay $2.50 per passenger for the first 800,000 passengers per year
and $3.00 for each passenger in excess of 800,000 per year subject to certain
exceptions for passengers who remain on board for more than one cruise and
passengers who are given complimentary admissions, subject to certain limits
('Continuing Lease Payments'). Either party may terminate the Beeber Agreement,
under certain circumstances, if a definitive purchase agreement has not been
executed by July 21, 1995.
The Company has obtained a commitment for a title insurance policy with
respect to the Property. Such policy contains an exception with respect to a
strip of lakefront land adjacent to and abutting the Property, which was
previously under water, and may be subject, under certain circumstances, to a
claim of ownership by the State of Louisiana by virtue of certain riparian
claims (the 'Lakefront Strip'). The Company has entered into a long-term lease
with the State of Louisiana for the Lakefront Strip in order to obtain whatever
rights the State of
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Louisiana may have in or to the Lakefront Strip and is negotiating another
long-term lease with the State of Louisiana for certain waterbottoms (i.e.,
riparian rights) adjoining the Lakefront Strip (the 'Waterbottoms Lease'). The
Company has obtained written notification from the State of Louisiana concerning
the State's affirmative intention to enter into the Waterbottoms Lease with the
Company, and the Company has had preliminary discussions with the State of
Louisiana concerning the terms of the Waterbottoms Lease. As a result, the
Company does not anticipate any difficulty in executing the Waterbottoms Lease
or any material annual payments in connection therewith.
Pending closing under the Beeber Agreement, the Company's use of the
property is subject to the Lake Charles Lease, which relates to the portions of
the Players Hotel the Company currently uses and expires in December 2003. The
Company has the right to extend the term of the lease for up to 20 additional
years by the exercise of four consecutive five year options. The Company also
has the right to terminate the lease five years after its commencement. The
annual rent is the greater of (i) an amount equal to the Continuing Lease
Payment or (ii) a minimum rent for each of the 30 years, which varies from a low
of $650,000 annually for the first five years of the lease to a high of $750,000
annually for the 26th through 30th years of the lease, assuming that the Company
exercises its options to extend the lease.
The Company's purchase of the Property, and the Continuing Lease Payments,
are the subjects of litigation (the 'Jebaco Litigation') recently filed by
Jebaco, Inc., a corporation which by agreement with Beeber shares in the rent
payable under the Lake Charles Lease ('Jebaco'). See '--Legal
Proceedings--Jebaco Litigation'. The Jebaco Litigation involves a dispute
concerning, among other things, the amount, manner of payment and manner of
computation of the Continuing Lease Payments and whether the Continuing Lease
Payments calculation must include gaming passengers on the Lake Charles Star
Riverboat. The Company is currently in negotiations with Jebaco and Beeber to
settle all issues involved in the Jebaco Litigation, but intends to proceed with
its purchase of the Property notwithstanding the Jebaco Litigation or such
negotiations. Based upon the outcome of the Jebaco Litigation or the settlement
negotiations, the Company may be required to make Continuing Lease Payments
based on gaming passengers on both the Players Lake Charles Riverboat and the
Lake Charles Star Riverboat. The Company does not believe that inclusion of all
such passengers in computation of the Continuing Lease Payments, as described
above, will have a material adverse effect on the Company or its business.
Mesquite, Nevada: The Company owns the 45 acre parcel of real property
that currently constitutes the Players Island Resort. An additional 17 acres of
adjoining property has been acquired for expansion purposes, subject to the
rights of third parties to develop or participate with the Company in a
development, as described below. In addition, the Company has leased 190 acres
of land to develop an 18-hole golf course near the Players Island Resort.
In June 1994, the Company acquired a 45-acre site in Mesquite, Nevada from
Gem Gaming, Inc. ('Gem Gaming'). The site is located just off Interstate 15 near
the Nevada-Utah border, approximately 70 miles northeast of Las Vegas. The
Company also acquired an option to purchase all or part of an adjacent 90-acre
parcel (the '90 Acre Mesquite Option'). As total consideration, the Company paid
approximately $12.5 million to Gem Gaming, comprised of $5 million in cash,
approximately $4.2 million in Company Common Stock and a $3.2 million note,
which was repaid on June 29, 1995. The Company also granted Gem Gaming a five
year warrant to purchase up to 150,000 shares of the Company's Common Stock at
an exercise price of $15.80 per share. The Company has closed an agreement to
(i) exercise the 90 Acre Mesquite Option in part to acquire 17 acres of the 23
acre portion of the subject property that is zoned for casino development (the
'17 Acre Parcel') for approximately $2.6 million, (ii) terminate the option for
the remaining 73 acres of the subject property (the '73 Acre Parcel'),
consisting of 67 acres that are not zoned for casino development and six acres
that are zoned for casino development, (iii) subject the 73 Acre Parcel to a
ten-year restriction against casino development or use and (iv) grant rights to
the owner of the 73 Acre Parcel to, under certain circumstances, (A) participate
(for up to a 40% equity interest) in a joint venture with the Company or its
affiliates in any development of the 17 Acre Parcel by the Company or its
affiliates, (B) acquire the 17 Acre Parcel for an amount equal to the Company's
original purchase price, plus interest on such price at a rate of 8% per annum,
if the Company, or its affiliates, fails to commence the development of such
property within five years of the date of purchase (in which event the 17 Acre
Parcel would be subject to a five-year restriction against casino-related
development or use), and (C) so long as the Company has not yet commenced
development of the 17 Acre Parcel, to require the Company to contribute the 17
Acre Parcel and participate as a joint venture party in the development of the
entire 90 acre
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property by the owner of the 73 Acre Parcel, subject to the Company's reasonable
consent, and with percentage interests based on fair market valuation of the
relative contributions to the joint venture.
The Company has also leased additional land adjacent to the Players Island
Resort, together with irrigation water rights for such land, for the development
during fiscal 1996 of an 18-hole golf course, upon which the landlord has
retained rights to develop a golf community housing development. The lease of
the golf course property and related irrigation rights provides for a term of 99
years at a starting annual rent of $216,000, subject to increase every five
years based on the consumer price index. During fiscal 1996, the Company intends
to invest approximately $6-9 million in leasehold improvements related to the
development of the golf course.
Maryland Heights, Missouri: The Company and Harrah's are evaluating two
sites for purposes of developing the Maryland Heights Project, one site which
Harrah's owns (the 'Harrah's Site') and a separate site in which the Company has
certain real property interests (described below). The two sites are not
contiguous. Therefore, if the Maryland Heights Project is developed, only one of
the sites will be utilized.
The Company has acquired options, for which it paid cash of approximately
$1,400,000, to lease and/or purchase and develop two parcels of real estate (the
'Players Option Parcels') aggregating 218 acres located on the Missouri River in
Maryland Heights, Missouri. On March 15, 1995, the Company exercised its option
to lease one of the Players Option Parcels consisting of approximately 132 acres
(the '132 Acre Parcel') at an exercise price of $780,000. By doing so, the
Company became the tenant under an existing lease for the 132 Acre Parcel which
provides, among other things, for maximum annual basic rent of $250,000, maximum
annual percentage rent of $100,000, a 15-year term with four ten-year renewal
options, and an option to purchase the 132 Acre Parcel (the '132 Acre Purchase
Option') for a purchase price of $2,500,000 if exercised during the first lease
year, or $3,000,000 if exercised during the second lease year. On March 17,
1995, the Company exercised the 132 Acre Purchase Option and thereby acquired
title to such property.
While no definitive agreement has been reached, the Company presently
expects that it and Harrah's will develop the Maryland Heights Project at the
Harrah's Site. In such event, the Harrah's Letter of Intent contemplates that
Players would make annual lease payments to Harrah's concerning the Harrah's
Site equal to 2% of the first $50 million of net gaming revenue, as defined by
the Missouri regulatory authorities, at the Company's Maryland Heights riverboat
(the 'Missouri Net Gaming Revenue'); 3% of the Missouri Net Gaming Revenue
between $50 and $100 million; and 4% of the Missouri Net Gaming Revenue in
excess of $100 million.
Bluegrass Downs, Kentucky: In November 1993, the Company acquired
Bluegrass Downs racetrack (currently known as Players Bluegrass Downs), located
in Paducah, Kentucky, in anticipation that the Kentucky legislature would enact
legislation to authorize casino-type gaming, such as slot machines and table
games, at licensed racetracks. If any legislation is adopted permitting
additional forms of gaming at racetracks, the Company currently plans to develop
its track into a facility that would offer all permitted forms of gaming. There
can be no assurance that such legislation will be adopted. The racetrack is
approximately ten miles from the Company's Metropolis docking site. The next
closest Kentucky racetrack to Metropolis is Ellis Park, which is approximately
100 miles from each of Paducah and Metropolis. Bluegrass Downs is on a 70 acre
tract that includes a 5/8 mile oval racetrack; an enclosed 17,000 square foot
clubhouse housing dining, wagering facilities and administrative areas; barns
and related buildings that can accommodate 725 horses; and a parking area for
more than 1,400 cars.
Evansville, Indiana: The Company has entered into agreements with private
parties that give it options to acquire sites in Evansville, Indiana. Evansville
is near the Southwest corner of Indiana on the Ohio River. One license was
approved for issuance to a third party for a riverboat based in Evansville.
Although more than one license is permitted by statute to be awarded for
Evansville, it is unlikely that the Company will pursue such a license, if it
should ever become available. The Evansville real estate options expire at the
end of July 1995.
LICENSE WITH MERV GRIFFIN AND THE GRIFFIN GROUP
The Company is a party to a license (the 'Griffin License') with The
Griffin Group, which is a company controlled by Mr. Merv Griffin and a major
stockholder of the Company, under which Mr. Griffin acts as the public
representative for all of the Company's riverboat and dockside casinos. In
addition, Mr. Griffin provides other services, principally of a promotional
nature. This relationship with Mr. Griffin is designed to develop, on
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the Company's behalf, a high profile in new markets and access to national
media. The Company features Mr. Griffin in print, radio and television
advertisements. The Company's right to Mr. Griffin's services are exclusive in
the riverboat and dockside casino industry, except that Mr. Griffin has the
right to represent casinos of Resorts. Resorts currently has only one land-based
casino in Atlantic City, New Jersey but may be examining the possibility of
developing riverboat and other land-based casinos. In consideration of Mr.
Griffin's services under the Griffin License, the Company, in 1992, issued to
The Griffin Group a warrant to purchase 1.4 million shares of Common Stock an
exercise price of $4.00 per share. The warrant currently is outstanding and has
not been exercised. In addition, the Griffin License requires the Company to pay
annual fees to The Griffin Group for each riverboat casino complex equal to the
greater of (i) $50,000 or (ii) an amount based upon a percentage of the
respective casino's earnings per fiscal year before depreciation, interest and
taxes ('EBDIT') for the year.
The Griffin License has an initial four-year term expiring December 31,
1996; provided, however, the fee payable under clauses (i) or (ii) is not
payable with respect to the Metropolis Complex and the Players Lake Charles
Riverboat through December 31, 1996. The EBDIT fee payable to The Griffin Group
is payable in the following cumulative amounts: to the extent that EBDIT per
complex is $15 million or less, the payment is two-thirds of 1% of EBDIT
(against which any minimum $50,000 payment for the particular riverboat will be
credited); to the extent that EBDIT per complex is more than $15 million but not
more than $30 million, the additional payment is 1% of EBDIT in excess of $15
million; and to the extent that EBDIT per complex is more than $30 million, the
additional payments will be 1 1/2% of EBDIT in excess of $30 million. The
Griffin Group also is entitled to reimbursement of certain expenses and
indemnification against certain claims. Mr. Griffin will be entitled to
additional compensation, as negotiated in good faith, if he hosts, produces or
performs in any shows at a Company casino. The Company has the right to renew
the Griffin License indefinitely from year-to-year thereafter.
The Company has initiated discussions with The Griffin Group concerning the
extension of the Griffin License to the Company's development projects and to
the Lake Charles Star Riverboat and the Players Island Resort.
LEGAL PROCEEDINGS
Ornstein and Mississippi Gold, Inc. Litigation
On June 7, 1994, Marvin Ornstein and Mississippi Gold, Inc. ('MGI') filed a
lawsuit in the United States District Court for the Southern District of
Illinois against the Company, PCI, Inc. (a subsidiary of the Company), Morton
Friedman, individually and as Chairman-Director of the Illinois Gaming Board,
the Illinois Gaming Board and the Illinois State Police. The complaint alleges
that the Company and PCI, Inc. defamed Mr. Ornstein and MGI as a result of the
publication of certain statements made by the Illinois Gaming Board in 1990
concerning the licensability of Mr. Ornstein. The complaint further alleges that
the defendants conspired to prohibit Mr. Ornstein and MGI from being licensed
for riverboat gaming in Illinois. The complaint requests an unspecified amount
for compensatory damages and punitive damages and seeks recovery of attorneys'
fees and costs. Previous litigation between the Company and Mr. Ornstein and MGI
in New Jersey state court, involving substantially similar factual matters, was
settled by the Company's payment of $10,000 to Mr. Ornstein and MGI.
Poulos and Ahern Litigation
The Company, certain suppliers and distributors of video poker and
electronic slot machines and over forty other casino operators have been named
as defendants in a class action suit filed April 26, 1994 in the United States
District Court, Middle District of Florida, by William Ahern and William H.
Poulos. The plaintiffs allege common law fraud and deceit, mail fraud, wire
fraud and Racketeer Influenced and Corrupt Organizations Act violations in the
marketing and operation of video poker games and electronic slot machines. The
suit seeks unspecified damages and recovery of attorneys' fees and costs. On
December 9, 1994, an Order was entered by the District Court in Florida
transferring the consolidated action to the United States District Court for the
District of Nevada. Motions for class certification and motions to dismiss are
pending. Although discovery is in the
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preliminary stages, the Company believes that the claims are wholly without
merit and does not expect that the lawsuit will have a material adverse effect
on the Company's financial position or results of operations.
Jebaco Litigation
On May 12, 1995, Jebaco filed suit in Louisiana State Court for, among
other things: injunctive relief to prevent the Company's purchase of the
Property from Beeber; judicial dissolution of the Company's original acquisition
(from Jebaco) of the Company's option to enter into the Lake Charles Lease; a
judicial determination of the amount, manner of computation and manner of
payment of the Continuing Lease Payments; an accounting; and monetary damages.
See '--Properties--Lake Charles, Louisiana'. Although a temporary restraining
order was originally issued against the Company's purchase of the Property, the
Lousiana State Court on May 24, 1995 dissolved the temporary restraining order
and refused to issue a preliminary injunction, thereby permitting the purchase
of the Property to proceed. The Company believes that this litigation represents
a dispute primarily between Jebaco and Beeber. The Company is prepared to
compute and pay the Continuing Lease Payments in the manner required under all
applicable agreements, as determined by the Court, and does not anticipate that
such required payments would have a material adverse effect on the Company or
its business. The Company, Beeber and Jebaco are engaged in settlement
negotiations to resolve all issues raised in such litigation.
Settlement of Missouri Litigation
Players, Land Property Associates, Inc. ('LPA') and Roy W. Fischer, Jr.
('Fischer') entered into a Settlement Agreement and Release dated as of June 30,
1995 (the 'Settlement Agreement'). Pursuant to the Settlement Agreement: (i)
Players paid Fischer and LPA $30,000, (ii) three lawsuits between the parties,
as well as two additional lawsuits by Fischer against the Missouri Gaming
Commission were dismissed with prejudice, (iii) Fischer and LPA released all
claims against Players, The Promus Companies, Incorporated ('Promus') and
related persons (including Harrah's), (iv) Players and Promus released all
claims against Fischer, LPA and related persons, (v) all agreements between the
parties (with the exception of one lease which expired July 2, 1995) were
terminated by mutual agreement, (vi) Fischer agreed that he would not take any
'public' action during the next five years that would interfere with either the
Maryland Heights Project or any other Players' gaming project in the State of
Missouri, and (vii) Fischer agreed that he would not be involved during the next
five years with any other gaming facility located in the City of Maryland
Heights, Missouri.
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REGULATORY MATTERS
The Company is subject to state and Federal laws which regulate businesses
generally and the gaming business specifically. Below is a brief description of
some of the more significant regulation to which the Company is subject. All
laws are subject to change and different interpretations. This is especially
true with respect to current laws regulating the gaming industry, since in many
cases these laws and the regulatory agencies that apply them are new. Changes in
laws or their interpretation may result in the imposition of more stringent,
burdensome, or expensive requirements, or the outright prohibition of an
activity.
ILLINOIS GAMING REGULATION
The Riverboat Gambling Act of Illinois (the 'Illinois Riverboat Act')
currently authorizes a five-member Illinois Gaming Board to issue up to ten
riverboat gaming licenses. The Illinois Gaming Board issued an owner's license
to a wholly-owned subsidiary of the Company, for its Metropolis operations in
February 1993. This license is subject to renewal, unless revoked, in February
1996 and annually thereafter. As of the date of this Prospectus, the Illinois
Gaming Board has granted licenses to nine other riverboat owners, some with
multiple boats, with dock sites based in Alton, Aurora, East Peoria, East St.
Louis, Elgin, Rock Island, Joliet (two licensees have a dock site based in
Joliet) and East Dubuque.
Each owner's license granted entitles the licensee to own and operate up to
two riverboats (with a combined maximum of 1,200 gaming participants) and
equipment thereon from a specified dock site. The duration of the license
initially runs for a period of three years. Thereafter, the license is subject
to renewal on an annual basis upon, among other things, a determination by the
Illinois Gaming Board that the licensee continues to meet all of the
requirements of the Illinois Riverboat Act and the Illinois Gaming Board's
Rules. All licensees have a continuing duty to maintain suitability for
licensure. There can be no assurance that the Company's license will be renewed,
although the Company is not aware of any reason why it would not be. A license
does not create a property right, but is a revocable privilege granted by the
State of Illinois contingent upon continuing suitability for licensure. The
licensee bears the burden of rebutting by clear and convincing evidence any
charges raised by the Illinois Gaming Board.
The Illinois Riverboat Act grants the Illinois Gaming Board extensive
jurisdiction, specific powers and duties for the purposes of administering,
regulating and enforcing the system of riverboat gaming. Any riverboat operation
not conducted in compliance with the Illinois Riverboat Act may constitute an
illegal gaming place and consequently may be subject to criminal penalties,
including possible seizure, confiscation and destruction of illegal gaming
devices and seizure and sale of riverboats and dock facilities. The Illinois
Riverboat Act also provides for civil penalties, equal to the amount of gross
receipts derived from wagering on the gaming, whether unauthorized or
authorized, conducted on the date of any violation. The Illinois Gaming Board
may revoke or suspend licenses as the Board may see fit and in compliance with
applicable laws of the State of Illinois regarding administrative procedures and
may suspend an owner's license, without notice or hearing, upon a determination
that the safety or health of patrons or employees is jeopardized by continuing a
riverboat's operation. The suspension may remain in effect until the Illinois
Gaming Board determines that the cause for suspension has been abated and it may
revoke the owner's license upon a determination that the owner has not made
satisfactory progress toward abating the hazard.
A holder of an owner's license is required to obtain all licenses from the
Illinois Gaming Board necessary for the operation of a riverboat, including a
liquor license and a license to prepare and serve food and all other necessary
licenses. All sales, use, occupation and excise taxes which apply to food and
beverages apply to sales aboard riverboats.
All riverboats must be accessible to disabled persons, must be either a
replica of a 19th century Illinois riverboat or be of a casino cruise ship
design, and must comply with applicable Federal and state laws, including U.S.
Coast Guard regulations.
A person employed at a riverboat gaming operation must hold an occupation
license from the Illinois Gaming Board which permits the holder to perform only
activities included within such holder's level of occupation license or any
lower level of occupation license. The Illinois Gaming Board also requires that
officers, directors and other key persons of a gaming operation be licensed. In
addition, a riverboat licensee can
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purchase or lease gaming equipment or supplies only from a supplier who has been
issued a supplier's license by the Illinois Gaming Board.
As a condition to maintaining an owner's license, the licensee must, among
other things, submit detailed financial information and other information to the
Illinois Gaming Board including an annual audit by an independent certified
public accountant, selected by the Administrator of the Illinois Gaming Board,
of the financial transactions and conditions of the total operations of a holder
of an owner's license including the condition of the licensee and its internal
control system. The holder of an owner's license must prepare and send to the
Administrator and the independent certified public accountant selected by the
Administrator a written response to issues raised by such accountant's reports
on (i) the procedures required to be performed by such accountant on a quarterly
basis with respect to certain aspects of the licensee's operations and (ii) the
annual audit referred to in the previous sentence. Among other continuing
obligations, the holder of an owner's license has a duty to promptly disclose
any material changes in the information it provides to the Illinois Gaming
Board. The holder of an owner's license must report promptly to the
Administrator of the Illinois Gaming Board any facts which the holder has
reasonable grounds to believe indicate a violation of law (other than minor
traffic violations) or Illinois Gaming Board Rule or a holder's internal
controls committed by suppliers or licensed employees including, without
limitation the performance of licensed activities different than those permitted
under their license. The duty to disclose to the Illinois Gaming Board changes
in information continues throughout the period of licensure. A duty exists to
promptly disclose the identity of a compensated agent acting on behalf of the
holder of an owner's license with regard to action by the Illinois Gaming Board.
A holder of an owner's license is subject to the imposition of fines,
suspension or revocation of its license for any act or failure to act on the
part of the licensee or its agents or employees that is injurious to the public
health, safety, morals, good order or general welfare of the people of the State
of Illinois or that would discredit or tend to discredit the Illinois gaming
industry or the State of Illinois, including, without limitation, (i) failing to
comply with or make provision for compliance with applicable legal requirements
including the Illinois Riverboat Act, the rules promulgated thereunder or any
other applicable Federal, state or local law or regulation or order or failure
by the holder of an owner's license to comply with or make provisions for
complying with the holder's internal controls; (ii) failing to comply with any
rule, order or ruling of the Illinois Gaming Board or its agents pertaining to
gaming; (iii) receiving goods or services from a person or business entity which
does not hold any required supplier's license; (iv) being suspended or ruled
ineligible for a gaming license or having a gaming license revoked or suspended
in any state or gaming jurisdiction; (v) associating with, either socially or in
business affairs, or employing persons of notorious or unsavory reputation or
who have extensive police records or who have failed to cooperate with any
officially constituted investigatory or administrative body if public confidence
and trust in gaming would thereby be adversely affected; and (vi) employing in
any Illinois riverboat's gaming operations any person known to have been found
guilty of cheating or using any improper device in connection with any game.
Minimum and maximum wagers on games are not established by regulation but
are left to the discretion of the licensee; however, wagering may not be
conducted with money or other negotiable currency. Riverboat cruises are limited
to a duration of four hours, and pursuant to the language of the Illinois
Riverboat Act, no gaming may be conducted while the riverboat is docked.
Illinois Gaming Board Rule, Section 3000.500, currently permits gaming during
the 30-minute time periods at the beginning and end of a cruise while the
passengers are embarking and disembarking (total gaming time per cruise is
limited to four hours, however, including the pre- and post-docking periods). In
addition, pursuant to Illinois Gaming Board Rule, Section 3000.510, dockside
gaming is permitted if the captain of the riverboat reasonably determines that
it is unsafe to cruise due to inclement weather, mechanical or structural
problems or river icing. Recent pronouncements by the Illinois Gaming Board
indicate that the explanations for failure to cruise pursuant to Illinois Gaming
Board Rule, Section 3000.510 will be scrutinized and that any abuse of the rule
will result in disciplinary actions, which may include, among other things, any
of the following: cancellation of future cruises, penalties, fines and
suspensions or revocation of license. In such event, the riverboat must be
cleared at least once every four hours, at which time a new gaming session may
commence; patrons may leave the vessel at any time but may only board the vessel
during the first 30 minutes of the gaming session. No person under the age of 21
is permitted to wager, and wagers may only be taken from a person present on a
licensed riverboat. With respect to electronic gaming devices, the payout
percentage may not be less than 80% nor more than 100%.
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The Illinois Riverboat Act imposes a 20% wagering tax on adjusted gross
receipts from gaming. The tax imposed is to be paid by the licensed owner to the
Illinois Gaming Board on the day after the gaming day when the wagers were made.
The Illinois legislation also requires that licensees pay a $2.00 admission tax
for each person admitted to a gaming cruise.
An ownership interest in a business entity (other than a publicly traded
corporation) which has an interest in a holder of an owner's license may only be
transferred or pledged as collateral with leave of the Illinois Gaming Board.
Any person or entity who or which, individually or in association with others,
acquires directly or indirectly, beneficial ownership of more than 5% of any
class of voting securities or non-voting securities convertible into voting
securities of a publicly traded corporation which holds an ownership interest or
a beneficial interest in the holder of an owner's license is required to file a
Personal Disclosure Form 1. (The Illinois Gaming Board, however, takes the
position that it can require any individual or entity seeking a transfer of an
ownership interest in an owner's license to file a personal disclosure Form 1.)
The Personal Disclosure Form 1 forms the basis of investigation by the Illinois
Gaming Board to determine suitability of the person or entity seeking transfer
of an ownership interest. If the Illinois Gaming Board denies an application for
such a transfer, commencing as of the date the Illinois Gaming Board issues a
notice that it denies such application, it will be unlawful for such applicant
to receive any dividends or interest on his shares, to exercise, directly or
indirectly, any right conferred by such shares, or to receive any remuneration
from any person or entity holding any license under the Illinois Riverboat Act
for services rendered. If the Illinois Gaming Board denies an application for
such a transfer and if no hearing is requested or if the Illinois Gaming Board
issues a final order of disqualification, the holder of an owner's license shall
purchase all of the disqualified person's or entity's shares at the lesser of
either the market price or the purchase price for such shares.
A holder of an owner's license can only make distributions to stockholders
to the extent such distributions would not impair the financial viability of the
gaming operation. Factors to be considered should include but not be limited to
the following: (i) working capital requirements, (ii) debt service requirements,
(iii) repairs and maintenance requirements and (iv) capital expenditure
requirements.
Holders of an owner's license must immediately inform the Illinois Gaming
Board and obtain formal approval from the Illinois Gaming Board whenever a
change is proposed in the following areas: key persons; type of entity; equity
and debt capitalization of entity; investors and/or debt holders; sources of
funds; applicant's economic development plan; riverboat capacity or significant
design change; gaming positions; anticipated economic impact; or pro forma
budgets and financial statements.
The Company is subject to certain risks associated with the promulgation of
new or revised rules that could adversely affect the Company's operations. The
Illinois Riverboat Act may be amended, and new or revised rules may be
promulgated, changing the number of available licenses or gaming locations in
Illinois, or otherwise changing Illinois gaming regulations. Although no new or
revised rules have been promulgated in the last 20 months, no assurance can be
given that no such rules would be promulgated, and the Company has no control
over such developments. In addition, uncertainty exists from time to time
regarding the Illinois gaming regulatory environment due to the limited
experience in interpreting the Illinois Riverboat Act and the rules promulgated
thereunder. For example, changes in membership of the Illinois Gaming Board
resulted in a vote being taken to prohibit any dockside gambling which was
narrowly defeated by a vote of three to two. Due to the relative novelty of this
regulatory environment, there can be no assurance that adverse regulatory
developments will not occur in the future or that adverse interpretations of
rules will not be issued.
LOUISIANA GAMING REGULATION
In July 1991, the Louisiana legislature adopted legislation permitting
certain types of gaming activity on certain rivers and waterways in Louisiana.
The legislation granted authority to supervise riverboat gaming activities to
the Louisiana Riverboat Gaming Commission and the Riverboat Gaming Enforcement
Division of the Louisiana State Police (the 'Louisiana Enforcement Division').
The Louisiana Riverboat Gaming Commission is authorized to hear and determine
all appeals relative to the granting, suspension, revocation, condition or
renewal of all licenses, permits and applications. In addition, the Louisiana
Riverboat Gaming Commission must establish regulations concerning authorized
routes, duration of excursions, minimum levels of insurance, construction of
riverboats and periodic inspections. The Louisiana Enforcement Division is
authorized
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to investigate applicants and issue licenses, investigate violations of the
statute and conduct continuing reviews of gaming activities.
The statute authorizes issuance of up to 15 licenses to conduct gaming
activities on a riverboat of new construction in accordance with applicable law.
However, no more than six licenses may be granted to riverboats operating from
any one parish.
In issuing a license, the Louisiana Enforcement Division must find that the
applicant is a person of good character, honesty and integrity and a person
whose prior activities, criminal record, if any, reputation, habits, and
associations do not pose a threat to the public interest of the State of
Louisiana or to the effective regulation and control of gaming, or create or
enhance the dangers of unsuitable, unfair or illegal practices, methods and
activities in the conduct of gaming or the carrying on of business and financial
arrangements in connection therewith. The Louisiana Enforcement Division will
not grant a license unless it finds that: (i) the applicant is capable of
conducting gaming operations, which means that the applicant can demonstrate the
capability, either through training, education, business experience, or a
combination of the above, to operate a gaming casino; (ii) the proposed
financing of the riverboat and the gaming operations is adequate for the nature
of the proposed operation and from a source suitable and acceptable to the
Louisiana Enforcement Division; (iii) the applicant demonstrates a proven
ability to operate a vessel of comparable size, capacity and complexity to a
riverboat so as to ensure the safety of its passengers; (iv) the applicant
submits a detailed plan of design of the riverboat in its application for a
license; (v) the applicant designates the docking facilities to be used by the
riverboat; (vi) the applicant shows adequate financial ability to construct and
maintain a riverboat; and (vii) the applicant has a good faith plan to recruit,
train and upgrade minorities in all employment classifications.
Certain persons affiliated with a riverboat gaming licensee, including
directors and officers of the licensee, directors and officers of any holding
company of the licensee involved in gaming operations, persons holding five
percent or greater interests in the licensee, and persons exercising influence
over a licensee ('Affiliated Gaming Persons'), are subject to the application
and suitability requirements of the Louisiana gaming law.
The Louisiana gaming law specifies certain restrictions and conditions
relating to the operation of riverboat gaming, including the following: (i)
gaming is not permitted while a riverboat is docked, other than the forty-five
minutes between excursions, and during times when dangerous weather or water
conditions exist; (ii) each round-trip riverboat cruise may not be less than
three nor more than eight hours in duration, subject to specified exceptions;
(iii) agents of the Louisiana Enforcement Division are permitted on board at any
time during gaming operations; (iv) gaming devices, equipment and supplies may
only be purchased or leased from permitted suppliers; (v) gaming may only take
place in the designated gaming area while the riverboat is upon a designated
river or waterway; (vi) gaming equipment may not be possessed, maintained or
exhibited by any person on a riverboat except in the specifically designated
gaming area, or a secure area used for inspection, repair or storage of such
equipment; (vii) wagers may be received only from a person present on a licensed
riverboat; (viii) persons under 21 are not permitted in designated gaming areas;
(ix) except for slot machine play, wagers may be made only with tokens, chips or
electronic cards purchased from the licensee aboard a riverboat; (x) licensees
may only use docking facilities and routes for which they are licensed and may
only board and discharge passengers at the riverboat's licensed berth; (xi)
licensees must have adequate protection and indemnity insurance; (xii) licensees
must have all necessary Federal and state licenses, certificates and other
regulatory approvals prior to operating a riverboat; and (xiii) gaming may only
be conducted in accordance with the terms of the license and the rules and
regulations adopted by the Louisiana Enforcement Division.
An initial license to conduct riverboat gaming operations is valid for a
term of five years. The Company was issued an initial operator's license by the
Louisiana Enforcement Division on December 6, 1993. The Louisiana gaming law
provides that a renewal application for the period succeeding the initial five
year term of the operator's license must be made to the Louisiana Enforcement
Division. The application for renewal consists of a statement under oath of any
and all changes in information, including financial information, provided in the
previous application.
The transfer of a license or permit or an interest in a license or permit
is prohibited. The sale, purchase, assignment, transfer, pledge or other
hypothecation, lease, disposition or acquisition (a 'Transfer') by any person of
securities which represent 5% or more of the total outstanding shares issued by
a corporation that holds a license is subject to Louisiana Enforcement Division
disapproval. A security issued by a corporation that holds a license must
generally disclose these restrictions. Prior Louisiana Enforcement Division
approval is required for
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the Transfer of any ownership interest of 5% or more in any non-corporate
licensee or for the Transfer of any 'economic interest' of 5% or more in any
licensee or Affiliated Gaming Person. An 'economic interest' is defined for
purposes of a Transfer as any interest whereby a person receives or is entitled
to receive, by agreement or otherwise, a profit, gain, thing of value, loan,
credit, security interest, ownership interest or other economic benefit.
A licensee must notify the Louisiana Enforcement Division of any
withdrawals of capital, loans, advances or distributions in excess of 5% of
retained earnings for a corporate licensee, or of capital accounts for a
partnership or limited liability company licensee, upon completion of any such
transaction. No prior approval of any such withdrawal, loan, advance or
distribution is required, but any such transaction is ineffective if disapproved
by the Louisiana Enforcement Division within 120 days after the required
notification. In addition, the Louisiana Enforcement Division may issue an
emergency order for not more than 10 days prohibiting payment of profits, income
or accruals by, or investments in, a licensee.
Riverboat gaming licensees and their Affiliated Gaming Persons are required
to notify the Louisiana Enforcement Division within thirty days after the
receipt by any such persons of any loans or extensions of credit. The Louisiana
Enforcement Division is required to investigate the reported loan or extension
of credit, and to either approve or disapprove the transaction. If disapproved,
the loan or extension of credit must be rescinded by the licensee or Affiliated
Gaming Person. The Company is an Affiliated Gaming Person of its Louisiana
subsidiary that is the licensee of the Players Lake Charles Riverboat and the
Players Star Riverboat. On March 23, 1995, the Company received from the
Louisiana Enforcement Division approval of the sale and issuance of the Notes,
the execution and delivery of a Guarantee by the Company's Louisiana
subsidiaries, and the making and repayment of loans from the Company to its
Louisiana subsidiaries, in amounts up to the amount of the Offering. Any other
advances by the Company to its Louisiana subsidiaries in the form of loans or
other intercompany indebtedness are subject to the disapproval power of the
Louisiana Enforcement Division.
Fees for conducting gaming activities on a riverboat include (i) $50,000
per riverboat for the first year of operation and $100,000 per year per
riverboat thereafter plus (ii) 18 1/2% of net gaming proceeds.
In 1995, Louisiana enacted legislation authorizing the governing authority
of Calcasieu Parish to levy an additional admission fee of fifty cents per
passenger, the proceeds of which will be used primarily to fund education in the
parish. This increase is applicable to the Company's two Lake Charles
riverboats.
In July 1991, Louisiana also authorized operation of VLTs at various types
of facilities in the state, including bars, truckstops, racetracks and off-track
betting parlors.
Proposals to amend or supplement Louisiana's riverboat gaming statute are
frequently introduced in the Louisiana state legislature. No assurances can be
given that changes in Louisiana gaming law will not occur, or that such changes
will not have an adverse impact on the Company's business in Louisiana.
NEVADA GAMING REGULATION
The ownership and operation of casino gaming facilities in Nevada are
subject to: (i) the Nevada Gaming Control Act and the regulations promulgated
thereunder (collectively, the 'Nevada Act'); and (ii) various local ordinances
and regulations. Gaming operations in Nevada are subject to the licensing and
regulatory control of the Nevada Gaming Commission ('Nevada Commission'), the
Nevada State Gaming Control Board ('Nevada Board') and various other county and
city regulatory agencies, including the City of Mesquite, collectively referred
to as the 'Nevada Gaming Authorities.'
The laws, regulations and supervisory procedures of the Nevada Gaming
Authorities are based upon declarations of public policy which are concerned
with, among other things: (i) the prevention of unsavory or unsuitable persons
from having a direct or indirect involvement with gaming at any time or in any
capacity; (ii) the establishment and maintenance of responsible accounting
practices and procedures; (iii) the maintenance of effective controls over the
financial practices of licensees, including the establishment of minimum
procedures for internal fiscal affairs and the safeguarding of assets and
revenues, providing reliable record keeping and requiring the filing of periodic
reports with the Nevada Gaming Authorities; (iv) the prevention of cheating and
fraudulent practices; and (v) providing a source of state and local revenues
through taxation and licensing fees. Change in such laws, regulations and
procedures could have an adverse effect on the Company's gaming operations.
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The Company is registered with the Nevada Commission as a publicly traded
corporation (a 'Registered Corporation') and has been found suitable to own the
stock of Players Nevada. Players Nevada is licensed by the Nevada Gaming
Authorities to conduct nonrestricted gaming operations at the Players Island
Resort and is a corporate licensee ('Corporate Licensee') under the terms of the
Nevada Act. No person may become a stockholder of, or receive any percentage of
profits from, a Corporate Licensee without first obtaining licenses and
approvals from the Nevada Gaming Authorities.
The Nevada Gaming Authorities may investigate any individual who has a
material relationship to, or material involvement with, the Company or Players
Nevada in order to determine whether such individual is suitable or should be
licensed as a business associate of a Corporate Licensee. Officers, directors
and certain key employees of Players Nevada are required to file applications
with the Nevada Gaming Authorities and have been required to be licensed or
found suitable by the Nevada Gaming Authorities. Officers, directors and key
employees of the Company who are actively and directly involved in the
activities of the Corporate Licensee may be required to be licensed or found
suitable by the Nevada Gaming Authorities. The Nevada Gaming Authorities may
deny an application for licensing for any cause which they deem reasonable. A
finding of suitability is comparable to licensing, and both require submission
of detailed personal and financial information followed by a thorough
investigation. The applicant for licensing or a finding of suitability must pay
all the costs of the investigation. Changes in licensed positions must be
reported to the Nevada Gaming Authorities and in addition to their authority to
deny an application for a finding of suitability or licensure, the Nevada Gaming
Authorities have jurisdiction to disapprove a change in a corporate position.
If the Nevada Gaming Authorities were to find an officer, director or key
employee unsuitable for licensing or unsuitable to continue having a
relationship with the Company or Players Nevada, the companies involved would
have to sever all relationships with such person. In addition, the Nevada
Commission may require the Company or Players Nevada to terminate the employment
of any person who refuses to file appropriate applications. Determinations of
suitability or of questions pertaining to licensing are not subject to judicial
review in Nevada.
The Company and Players Nevada are required to submit detailed financial
and operating reports to the Nevada Commission. Substantially all material
loans, leases, sales of securities and similar financing transactions by Players
Nevada will be required to be reported to or approved by the Nevada Commission.
If it were determined that the Nevada Act was violated by Players Nevada,
the gaming licenses it holds could be limited, conditioned, suspended or
revoked, subject to compliance with certain statutory and regulatory procedures.
In addition, the Company, Players Nevada and the persons involved could be
subject to substantial fines for each separate violation of the Nevada Act at
the discretion of the Nevada Commission. Further, a supervisor could be
appointed by the Nevada Commission to operate the Players Island Resort and,
under certain circumstances, earnings generated during the supervisor's
appointment (except for reasonable rental value of the casino) could be
forfeited to the State of Nevada. Limitation, conditioning or suspension of the
licenses of Players Nevada could (and revocation of any license of Players
Nevada would) materially adversely affect the Company.
Any beneficial holder of a Registered Corporation's voting securities,
regardless of the number of shares owned, may be required to file an
application, be investigated, and have his suitability as a beneficial holder of
the Registered Corporation's voting securities determined if the Nevada
Commission has reason to believe that such ownership would otherwise be
inconsistent with the declared policies of the State of Nevada. The applicant
must pay all costs of investigation incurred by the Nevada Gaming Authorities in
conducting any such investigation.
The Nevada Act requires any person who acquires more than 5% of a
Registered Corporation's voting securities to report the acquisition to the
Nevada Commission. The Nevada Act requires that beneficial owners of more than
10% of a Registered Corporation's voting securities apply to the Nevada
Commission for a finding of suitability within thirty days after the Chairman of
the Nevada Board mails the written notice requiring such filing. Under certain
circumstances, an 'institutional investor,' as defined in the Nevada Act, which
acquires more than 10%, but not more than 15%, of a Registered Corporation's
voting securities may apply to the Nevada Commission for a waiver of such
finding of suitability if such institutional investor holds the voting
securities for investment purposes only. An institutional investor shall not be
deemed to hold voting securities for investment
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purposes unless the voting securities were acquired and are held in the ordinary
course of business as an institutional investor and not for the purpose of
causing, directly or indirectly, the election of a majority of the members of
the board of directors of the Registered Corporation, any change in the
Registered Corporation's corporate charter, bylaws, management, policies or
operations of the Registered Corporation, or any of its gaming affiliates, or
any other action which the Nevada Commission finds to be inconsistent with
holding the Registered Corporation's voting securities for investment purposes
only. Activities which are not deemed to be inconsistent with holding voting
securities for investment purposes only include: (i) voting on all matters voted
on by stockholders; (ii) making financial and other inquiries of management of
the type normally made by securities analysts for informational purposes and not
to cause a change in its management, policies or operations; and (iii) such
other activities as the Nevada Commission may determine to be consistent with
such investment intent. If the beneficial holder of voting securities who must
be found suitable is a corporation, partnership or trust, it must submit
detailed business and financial information including a list of beneficial
owners. The applicant is required to pay all costs of investigation.
Any person who fails or refuses to apply for a finding of suitability or a
license within thirty days after being ordered to do so by the Nevada Commission
or the Chairman of the Nevada Board, may be found unsuitable. The same
restrictions apply to a record owner if the record owner, after request, fails
to identify the beneficial owner. Any stockholder found unsuitable and who
holds, directly or indirectly, any beneficial ownership of the voting securities
of the Company beyond such period of time as may be prescribed by the Nevada
Commission may be guilty of a criminal offense. The Company is subject to
disciplinary action if, after it receives notice that a person is unsuitable to
be a stockholder or to have any other relationship with the Company or Players
Nevada, it (i) pays that person any dividend or interest upon voting securities
of the Company, (ii) allows that person to exercise, directly or indirectly, any
voting right conferred through securities held by that person, (iii) pays
remuneration in any form to that person for services rendered or otherwise, or
(iv) fails to pursue all lawful efforts to require such unsuitable person to
relinquish his voting securities including, if necessary, the immediate purchase
of said voting securities for cash at fair market value.
The Nevada Commission may, in its discretion, require the holder of any
debt security of a Registered Corporation, such as the holders of the Notes, to
file applications, be investigated and be found suitable to own the debt
security of a Registered Corporation. If the Nevada Commission determines that a
person is unsuitable to own such security, then pursuant to the Nevada Act, the
Registered Corporation can be sanctioned, including the loss of its approvals,
if without the prior approval of the Nevada Commission, it: (i) pays the
unsuitable person any dividend, interest, or any distribution whatsoever; (ii)
recognizes any voting right by such unsuitable person in connection with such
securities; (iii) pays the unsuitable person remuneration in any form; or (iv)
makes any payment to the unsuitable person by pay of principal, redemption,
conversion, exchange, liquidation, or similar transaction.
The Company is required to maintain a current stock ledger in Nevada which
may be examined by the Nevada Gaming Authorities at any time. If any securities
are held in trust by an agent or by a nominee, the record holder may be required
to disclose the identity of the beneficial owner of the Nevada Gaming
Authorities. A failure to make such disclosure may be grounds for finding the
record holder unsuitable. The Company is also required to render maximum
assistance in determining the identity of the beneficial owner. The Company is
also required to render maximum assistance to the Nevada Board, upon its
request, to determine the identities of any of its securityholders. The Nevada
Commission has the power to require the stock certificates of the Company to
bear a legend indicating that the securities are subject to the Nevada Act.
However, to date, the Nevada Commission has not imposed such a requirement on
the Company.
The Company may not make a public offering of its securities without the
prior approval of the Nevada Commission if the securities or proceeds therefrom
are intended to be used to construct, acquire or finance gaming facilities in
Nevada, or to retire or extend obligations incurred for such purposes. The
exchange of the Old Notes for the New Notes (the 'Exchange') qualifies as a
public offering (as such term is defined in the Nevada Act). On June 21, 1995,
the Nevada Commission approved the Exchange and in connection therewith, also
approved (i) the Players Nevada Guarantee of the Notes, (ii) the hypothecation
of the assets of Players Nevada as security for the New Notes and (iii) the
placement of restrictions upon, and the agreement not to encumber, the equity
securities of Players Nevada. Approval of a public offering does not constitute
a finding,
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recommendation or approval by the Nevada Commission or the Nevada Board as to
the accuracy or adequacy of the Prospectus or the investment merits of the
securities offered. Any representation to the contrary is unlawful.
Changes in the control of a Registered Corporation through merger,
consolidation, stock or asset acquisitions, management or consulting agreements,
or any act or conduct by a person whereby he obtains control, may not occur
without the prior approval of the Nevada Commission. Entities seeking to acquire
control of a Registered Corporation must satisfy the Nevada Board and Nevada
Commission in a variety of stringent standards prior to assuming control of such
Registered Corporation. The Nevada Commission may also require controlling
stockholders, officers, directors and other persons having a material
relationship or involvement with the entity proposing to acquire control, to be
investigated and licensed as part of the approval process relating to the
transaction.
The Nevada legislature has declared that some corporate acquisitions
opposed by management, repurchases of voting securities and corporate defense
tactics affecting Nevada corporate gaming licensees, and Registered Corporations
that are affiliated with those operations, may be injurious to stable and
productive corporate gaming. The Nevada Commission has established a regulatory
scheme to ameliorate the potentially adverse effects of these business practices
upon Nevada's gaming industry and to further Nevada's policy to: (i) assure the
financial stability of corporate gaming licensees and their affiliates; (ii)
preserve the beneficial aspects of conducting business in the corporate form;
and (iii) promote a neutral environment for the orderly governance of corporate
affairs. Approvals are, in certain circumstances, required from the Nevada
Commission before the Registered Corporation can make exceptional repurchases of
voting securities above the current market price thereof and before a corporate
acquisition opposed by management can be consummated. The Nevada Act also
requires prior approval of a plan of recapitalization proposed by the Registered
Corporation's stockholders for the purposes of acquiring control of the
Registered Corporation.
License fees and taxes, computed in various ways depending on the type of
gaming or activity involved, are payable to the state of Nevada and to the
counties and cities in which the Corporate Licensee's operations are conducted.
Depending upon the particular fee or tax involved, these fees and taxes are
payable either monthly, quarterly or annually and are based upon either: (i) a
percentage of the gross revenues received up to a maximum of 6.25%; (ii) the
number of gaming devices operated; or (iii) the number of table games operated.
A casino entertainment tax is also paid by casino operations where entertainment
is furnished in connection with the selling of food or refreshments.
Any person who is licensed, required to be licensed, registered, required
to be registered, or is under common control with such persons (collectively,
'Licensees'), and who proposes to become involved in a gaming venture outside of
Nevada, is required to deposit with the Nevada Board, and thereafter maintain, a
revolving fund in the amount of $10,000 to pay the expenses of investigation by
the Nevada Board of their participation in such foreign gaming. The revolving
fund is subject to increase or decrease in the discretion of the Nevada
Commission. Thereafter, Licensees are required to comply with certain reporting
requirements imposed by the Nevada Act. Licensees are also subject to
disciplinary action by the Nevada Commission if they knowingly violate any laws
of the foreign jurisdiction pertaining to the foreign gaming operation, fail to
conduct the foreign gaming operation in accordance with the standards of honesty
and integrity required of Nevada gaming operations, engage in activities that
are harmful to the state of Nevada or its ability to collect gaming taxes and
fees, or employ a person in the foreign operation who has been denied a license
or finding of suitability in Nevada on the ground of personal unsuitability.
MISSOURI GAMING REGULATION
In November 1992, the voters of Missouri approved a referendum authorizing
riverboat gaming in Missouri. In 1993, the Missouri Legislature enacted
legislation which substantially revised the referendum legislation regarding
riverboat gaming and its regulation (the 'Missouri Gaming Act'). The Missouri
Gaming Act established the Missouri Gaming Commission, which has broad
jurisdiction over and supervisory powers concerning gaming operations conducted
under the Missouri Gaming Act. Following a challenge to legislation authorizing
riverboat casino gaming, a January 1994 Missouri Supreme Court ruling created
uncertainties regarding the extent to which casino gaming is constitutional in
Missouri. In February 1994, the Missouri legislature passed legislation which
would permit the voters to amend the State Constitution to permit legislation
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reauthorizing riverboat casino gaming consistent with the State Constitution.
The vote on the proposed State Constitutional amendment was held in April 1994
to permit games of chance on riverboat casinos. In the April 1994 vote, the
State Constitutional amendment was narrowly defeated. As a result of the
Missouri legislature's actions in February 1994, several municipalities in
Missouri which had previously approved local ordinances permitting gaming,
including the City of Maryland Heights resubmitted the local gaming activities
ordinances to the voters in April 1994 as well. The Maryland Heights ordinance
was approved by municipal voters in the April 1994 vote. Subsequently, at the
statewide general election held November 8, 1994, a second proposal to amend the
Missouri Constitution to permit games of chance on riverboats and floating
facilities on the Missouri and Mississippi Rivers was adopted. As a result
thereof, effective December 8, 1994, reel slot machines and other games of
chance were authorized for use in Missouri casinos.
Under the Missouri Gaming Act, gaming is permitted in Missouri only on the
Missouri and Mississippi Rivers. The Missouri Gaming Act calls for licensure of
owners (Class A license), operators (Class B license), suppliers and
gaming-related occupations. There is no statewide numerical limit to the number
of licenses which may be granted. As a result of the Missouri legislature's May
1994 amendments to the Missouri Gaming Act, prior uncertainty regarding whether
any city or county outside of the two major metropolitan areas of Missouri (St.
Louis/St. Louis County and the Kansas City metropolitan area) may be granted
more than one license has been removed. Under the May 1994 amendments to the
Missouri Gaming Act, any city or county may be granted more than one license if
the 'home dock' city or county has authorized more than one excursion gaming
boat. However, within all cities and counties in Missouri the Missouri Gaming
Commission has the ultimate responsibility for setting the number, location and
type of licensed boats. As noted above, excursion gaming boats also must be
authorized by the local home dock city or county.
On May 24, 1995, the Company's amended application for a gaming license at
the Maryland Heights Project was filed with the Missouri Gaming Commission. The
Missouri Gaming Commission is considering licensing applications for review in
selected pools of three and has chosen the Company's and Harrah's applications
for consideration in the next such pool. Such applications are currently under
investigation, but no assurances can be given when the Missouri Gaming
Commission or any other governmental agency will act on the applications,
whether all approvals will be obtained or whether any unusually burdensome
restrictions may be imposed on the Company or Harrah's in order to obtain such
approvals. As of the date of this Prospectus, six gaming licenses have been
issued by the Missouri Gaming Commission, two for the metropolitan St. Louis
area in the eastern part of the state, two for the Kansas City area
(approximately 250 miles west of St. Louis), one for St. Joseph, in the
northwestern part of Missouri, and one for Caruthersville, in the southeastern
part of Missouri. The two licenses in the St. Louis area are based in the City
of St. Louis, approximately 20 miles east of the Company's proposed development
in Maryland Heights, and in St. Charles, across the Missouri River from the
Company's proposed Maryland Heights development. If the Harrah's parcel is
ultimately developed for the Maryland Heights Project, such project would be one
mile across the river from the site of the competing St. Charles licensee. See
'Business -- Properties -- Maryland Heights, Missouri.' The City of Maryland
Heights previously passed ordinances permitting two riverboat casinos to be
based within its city limits and giving preliminary local approval to the
proposed projects of both the Company and Promus. The Missouri Gaming Act does
not limit the statewide number of licenses that may be granted. Under the
Missouri Gaming Act, as amended by the Missouri Legislature in May 1994 and as
signed into law by the Missouri Governor shortly thereafter (the 'Amended
Missouri Gaming Act'), multiple riverboat casinos can be licensed for operation
in Maryland Heights. No assurance can be given that the Missouri Gaming
Commission will not limit the number of licenses granted to Maryland Heights, to
the St. Louis metropolitan area in which Maryland Heights is located, or on a
statewide basis.
The Missouri Gaming Act provides a maximum loss limit of $500 per
individual player per gaming excursion. Gaming excursions are required by
regulation to be no less than two hours and no more than four hours in duration.
Excursion gaming boats are required to cruise, unless the Missouri Gaming
Commission determines under applicable criteria to permit gaming at a
continuously docked boat. Such criteria include, among other items, danger to
the boat's passengers because of the location of the dock or excursion cruising
conditions, disruption of interstate commerce, violation of another state's laws
or Federal law, or possible interference with railway or barge transportation.
The U.S. Coast Guard has previously advised the Missouri Gaming Commission
that circumstances generally prevailing on the Missouri River, on which the
Company's excursion gaming boat facility will be
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located if its application is granted, militate against cruising riverboats.
While the Coast Guard has refused to instruct the Missouri Gaming Commission
that all Missouri River operations be continuously docked riverboats, the U.S.
Coast Guard has made clear its need to be advised of all plans to deal with risk
factors from riverboat cruising operations. The U.S. Coast Guard, through the
U.S. Army Corps of Engineers permit process, can veto a cruising riverboat
gaming project for failing to meet its safety requirements. Additionally,
Missouri Gaming Commission regulations provide for dockside operation even for a
cruising riverboat under circumstances of inclement weather, mechanical
difficulty or declaration by the U.S. Army Corps of Engineers that navigation on
the Missouri River is unsafe. Traditionally, between the months of December and
April the U.S. Army Corps of Engineers has 'closed' the Missouri River by
failing to warrant the navigational channel due to low water levels. The
Missouri Gaming Commission has indicated that dockside operation is expected
during this period.
Licensees must establish financial responsibility sufficient to meet
adequately the requirements of the proposed enterprise. Additionally, the
Missouri Gaming Commission's regulations require that if the Company's
application is granted, the Company's licensed subsidiary would be prohibited
from allowing withdrawals of capital by, or making loans, advances, or
distributions of any type of assets to, its owner(s), in excess of 5% of such
entity's accumulated earnings without Missouri Gaming Commission approval.
The Missouri Gaming Act also requires that the excursion gaming boat
resemble historic Missouri riverboats, encourages use of Missouri resources,
goods and services in the operation of the boat, and requires that the boat
provide for nongaming areas, food service and a Missouri theme gift shop. Use of
the space on any vessel and operating criteria are determined in accordance with
rules and regulations of the U.S. Coast Guard. There is no size limit on
Missouri gaming boats and no minimum or maximum space prescribed for gaming
areas.
The Missouri Gaming Act directly subjects the gaming enterprises to various
Missouri taxes. An admission fee of $2.00 per ticket per excursion must be paid
to the Missouri Gaming Commission. Licensees may charge any admission fee above
the $2.00 amount that they desire. Gaming enterprises in Missouri are also
subject to an 'adjusted gross receipts tax' equal to 20 percent of the gross
receipts from licensed gaming games and devices less winnings paid to wagerers.
Owners/operators are subject to all other income taxes, sales taxes, earnings
taxes, use taxes, property taxes or any other tax or fee levied by local, state
or Federal governments.
Transfer of a Class A or Class B gaming license (the type of licenses
applied for in connection with the Maryland Heights application) is not
permitted without approval of the Missouri Gaming Commission, nor may such
interests be pledged as collateral to other than a regulated bank or savings and
loan association without the approval of the Missouri Gaming Commission. No
transfer of an interest of 5% or greater, directly or indirectly, in a publicly
traded company holding a Class A or Class B license shall occur without the
Missouri Gaming Commission's approval. Additionally, the Missouri Gaming
Commission may require a licensee to maintain cash or cash equivalents, in an
amount sufficient to protect patrons against defaults in gaming debts owed by
the licensee.
Application fees are based upon costs of investigation and approval of
licenses. The minimum nonrefundable application fee is $50,000. The initial
owner's Class A license granted and the first subsequent license renewal of an
excursion gaming boat operator is for a period of one year. Thereafter, license
renewal periods are every two years. The annual fee for licensure is $25,000.
KENTUCKY GAMING REGULATION
The Company presently owns and operates Players Bluegrass Downs, a
thoroughbred race track located in Paducah, Kentucky. Pursuant to the Kentucky
statutes governing horseracing, the Kentucky Racing Commission (the 'Racing
Commission') has plenary power to promulgate administrative regulations
prescribing conditions under which all legitimate horse racing and wagering
thereon is conducted. The Racing Commission issues race track licenses on an
annual basis and awards racing dates subsequent to an annual application
required to be filed with the Racing Commission. The Racing Commission may
revoke or suspend a license if the Racing Commission has reason to believe that
any provision of the Kentucky statutes, administrative regulations, or
conditions established by the Racing Commission, has not been satisfied.
PROPOSED TEXAS GAMING LEGISLATION
Since the Players Lake Charles Riverboat began operating on December 8,
1993, more than half of its patrons have come from Texas, with a significant
portion coming from the metropolitan Houston area. Although casino gaming is not
currently permitted in Texas, and the Attorney General of Texas has issued an
opinion that
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gaming in Texas would require an amendment to the State's Constitution, the
Texas legislature has considered various proposals to authorize casino gaming
and two bills related to gaming were presented in the most recent legislative
session that concluded on May 29, 1995. See 'Business--Lake Charles Operations.'
Additional bills may be introduced from time to time whenever the legislature is
in session. Since the Texas legislature (which meets every two years in
odd-numbered years) did not pass legislation to amend the Texas State
Constitution during the 1995 regular session, such legislation will have to
await the next regular session in 1997, or a special session of the legislature.
Special sessions can only be called by the Governor for matters that were
pending in the regular legislative session. Governor George Bush has taken a
public position against legalized casino gaming. A constitutional amendment
requires a two-thirds vote of those present and voting in each house of the
Texas state legislature and approval by the electorate at a referendum.
CERTAIN REQUIRED APPROVALS ASSOCIATED WITH THE BANK FACILITY
Certain aspects of the Bank Facility will be subject to required disclosure
to, approval of or disapproval by the respective Gaming Authorities in the
states in which the Company conducts or proposes to conduct gaming operations.
The Bank Facility may be reviewed as part of the Company's application for a
gaming license in a jurisdiction, or if previously licensed, as a separate
review item. The disclosure, review and approval requirements for the Bank
Facility in Illinois, Louisiana, Nevada and Missouri are substantially similar
to the disclosure, review and approval requirements applicable to the Notes and
the Guarantees except that additional disclosure, review and/or approval
requirements may apply with respect to the security for the Bank Facility to be
provided by the Company and its subsidiaries. The Bank Facility has been
approved by the Gaming Authorities in Illinois and Nevada. No assurance can be
given that the Bank Facility and the proposed security for the Bank Facility
will receive all required approvals, that such approvals will be received on a
timely basis or that the failure to obtain all required approvals will not
adversely impact the Bank Facility or the Company's ability to make borrowings
thereunder. See '--Louisiana Gaming Regulation,' and '--Missouri Gaming
Regulation.'
U.S. COAST GUARD
Each cruising riverboat also is regulated by the U.S. Coast Guard, whose
regulations affect boat design and stipulate on-board facilities, equipment and
personnel (including requirements that each vessel be operated by a minimum
complement of licensed personnel) in addition to restricting the number of
persons who can be aboard the boat at any one time. All vessels operated by the
Company must hold a Certificate of Inspection. Loss of the Certificate of
Inspection of a vessel would preclude its use as an operating riverboat. The
vessel must be drydocked periodically for inspection of the hull, which will
result in a loss of service that can have an adverse effect on the Company. For
vessels of the Company's type, the inspection cycle is every five years. Less
stringent rules apply to permanently moored vessels such as the dockside barges
used by the Company. The Company believes that these regulations, and the
requirements of operating and managing cruising gaming vessels generally, make
it more difficult to conduct riverboat gaming than to operate land-based
casinos.
All shipboard employees of the Company employed on U.S. Coast Guard
regulated vessels, even those who have nothing to do with the actual operation
of the vessel, such as dealers, cocktail hostesses and security personnel, may
be subject to the Jones Act which, among other things, exempts those employees
from state limits on workers' compensation awards. The Company believes that it
has adequate insurance to cover employee claims.
SHIPPING ACT OF 1916
In order for the Company's vessels to have United States flag registry, the
Company must maintain 'United States citizenship' as defined in the Shipping Act
of 1916, as amended (the 'Shipping Act'), and other applicable statutes. A
corporation operating any vessel in the coastwise trade, such as the Company, is
not considered a United States citizen unless, among other things, United States
citizens own 75% of its outstanding capital stock.
REQUIRED DIVESTITURE OF COMMON STOCK
As noted above, there are various state and Federal regulations on the
ownership of the Company's Common Stock. The Company's Articles of Incorporation
and By-laws provide that if any governmental commission, regulatory authority,
entity, agency or instrumentality (collectively, an 'Authority') having
jurisdiction over the Company or any affiliate of the Company or that has
granted a license, certificate of authority, franchise or similar approval
(collectively, a 'License') to the Company or any affiliate of the Company
orders or requires any stockholder to divest any or all of the shares owned by
such stockholder (a 'Divestiture Order') and the stockholder fails to do so by
the date required by the Divestiture Order (unless
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the Divestiture Order is stayed), the Company will have the right to acquire the
shares from the stockholder that the stockholder failed to divest as required by
such Divestiture Order. If, after reasonable notice and an opportunity for
affected parties to be heard, any Authority determines that continued ownership
of the Company's Common Stock by any stockholder shall be grounds for the
revocation, cancellation, non-renewal, restriction or withholding of any License
granted to or applied for by the Company or any affiliate of the Company, such
stockholder shall divest the shares that provide the basis for such
determination, and if such stockholder fails to divest shares within 10 days
after the date the Authority's determination becomes effective (unless the
determination is stayed), the Company shall have the right to acquire such
shares from the stockholder. If the Company determines that persons who are not
citizens of the United States as determined under the Shipping Act or other
applicable statutes (the 'Foreign Citizens') own more than 25% of the Company's
outstanding Common Stock, the Company may require the Foreign Citizen(s) who
most recently acquired the shares that bring total Foreign Citizen ownership to
more than 25% of the outstanding Common Stock (the 'Excess Shares') to divest
the Excess Shares to persons who are United States citizens. If the Foreign
Citizen(s) so directed fail to divest the Excess Shares to United States
citizens within 30 days after the date on which the Company gives a written
notice to the Foreign Citizen(s) to divest the Excess Shares, the Company shall
have the right to acquire the shares that the Foreign Citizen failed to divest
as required by the Company's notice.
Whenever the Company has the right to acquire shares from a stockholder
pursuant to the provisions described in the preceding paragraph, the Company
will pay the stockholder $.10 per share or such higher price as may be required
by applicable legal requirements. Some state gaming regulations require a
purchase price equal to the fair market value of the shares under certain
circumstances described above. If there is no other applicable legal
requirement, any amount payable to the stockholder in excess of $.10 per share
will be paid in five equal annual installments with interest at the lower of the
prime rate or the LIBOR rate, as published from time to time in the Wall Street
Journal.
When any Divestiture Order is entered or when the Company tenders the
consideration for which it may acquire shares, as described above, the shares in
question shall no longer be entitled to any voting, dividend or other rights
until such time as they have been appropriately divested. The foregoing
provisions of the Company's Articles of Incorporation and By-laws relating to
required divestiture are in addition to, and not in replacement of, any
applicable legal requirements.
The provisions of the Articles of Incorporation and By-laws described above
are uncommon and no controlling precedent has been found to determine how they
would be enforced or whether they are enforceable.
The terms of the Notes feature certain analogous provisions which could
give rise to the obligation of the holder to sell such Notes or the right of the
Company to repurchase the Notes at a price equal to the lowest of the holder's
cost, the principal amount or then current market prices. See 'Description of
New Notes--Regulatory Redemption.'
PAID ADVERTISING AND MARKETING
The Federal Communications Commission ('FCC') prohibits broadcasters from
accepting advertising that actively promotes gaming, although the FCC does not
ban all advertising for casinos. Federal regulation also restricts the
circulation of certain materials related to gaming through the United States
mail.
DISCOURAGEMENT OF SHARE ACCUMULATIONS
Various state limits requiring approvals of shareholdings over certain
thresholds may discourage accumulations over such limits and therefore may
discourage changes in control of the Company. The Federal laws referred to above
may also discourage ownership by stockholders who are not United States
citizens.
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MANAGEMENT
The Company's directors and executive officers are as follows:
<TABLE>
<CAPTION>
DIRECTOR PRESENT POSITION
NAME AGE SINCE WITH THE COMPANY
- --------------------------- ----------- ----------- ------------------------------------------------------------
<S> <C> <C> <C>
Edward Fishman............. 52 1985 Chairman of the Board of Directors and Chief Executive
Officer
David Fishman.............. 47 1985 Vice Chairman of the Board of Directors
Howard Goldberg............ 49 1986 President, Chief Operating Officer and Director
Thomas E. Gallagher........ 50 1992 Director
Marshall S. Geller......... 56 1989 Director
Lee Seidler................ 60 1987 Director
Steven P. Perskie.......... 50 1994 Executive Vice President, General Counsel and Director
Peter J. Aranow............ 49 -- Executive Vice President, Chief Financial Officer and
Secretary
</TABLE>
Edward Fishman has served as Chairman of the Board and Chief Executive
Officer of the Company since 1985 and as President during May 1993. In addition,
he has 16 years of marketing experience in the casino industry, and he has
served as a marketing consultant to Resorts International Casino/Hotel in
Atlantic City and Harrah's East Hotel/Casino.
David Fishman has served as the Company's Vice Chairman of the Board since
1985 and he served as Secretary from 1985 until May 1993. His principal
activities relate to overall supervision of individual casino development and
operations. Since inception, he has also served as President of the Company's
subsidiaries that conduct the Metropolis and Lake Charles operations,
respectively, and he is responsible for the development of such riverboat
operations.
Howard Goldberg became President of the Company in May 1993 and Chief
Operating Officer shortly thereafter. Mr. Goldberg's duties are principally
related to long-range development and strategic planning. Prior to joining the
Company, he was the managing shareholder practicing law in the Atlantic City,
New Jersey law firm of Horn, Goldberg, Gorny, Daniels, Plackter & Weiss, which
is outside general counsel to the Company and has represented the Company since
its inception. Since the advent of casino gaming in Atlantic City, Mr. Goldberg
specialized in representing casinos in New Jersey and other jurisdictions for
development and regulatory matters. He remains associated with the law firm, but
he does not currently engage in any firm-related activities other than on an
occasional and incidental basis. The amount of the payments due to him from the
firm are not affected by fees paid by the Company to the firm.
Thomas E. Gallagher has been President and Chief Executive Officer of The
Griffin Group since April 1, 1992. For the preceding 15 years, he was a partner
of the law firm of Gibson, Dunn & Crutcher. Since November 1993, he has served
as a director, and since May 1995, he has served as President and Chief
Executive Officer of Resorts International Inc.
Marshall S. Geller has been the Senior Managing Partner and founder of
Golenberg & Geller, Inc., a merchant banking investment company. He served as
the Company's interim President from November 1992 through April 1993. Mr.
Geller served as Vice Chairman of Gruntal & Co., Inc., an investment banking
firm, from 1988 to 1990. From 1967 until 1988, he was a Senior Managing Director
of Bear, Stearns & Co., Inc., an investment banking firm ('Bear Stearns'). He is
currently interim Co-Chairman of Hexcel Corporation and a director of Value
Vision International, Inc.
Lee Seidler is a private investor. He is affiliated with Bear Stearns as
Managing Director Emeritus. From 1981 to 1989, he was a Senior Managing Director
of Bear Stearns. He is a director of Synthetic Industries, Inc., The Shubert
Organization, Inc. and The Shubert Foundation.
Steven P. Perskie joined the Company's Board of Directors and became a Vice
President and its General Counsel in May 1994 and became Executive Vice
President on March 13, 1995. His responsibilities include the
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development of opportunities for the Company in new and emerging gaming
jurisdictions and strategic planning. From 1990 to May 1994, he served as
Chairman of the New Jersey Casino Control Commission (the 'NJCCC'). During his
tenure as Chairman of the NJCCC, Mr. Perskie oversaw the restructuring of the
composition and focus of the NJCCC. Prior to joining the NJCCC, he served from
January to October 1990 as Chief of Staff to Governor Jim Florio of the State of
New Jersey. From October 1989 to January 1990, he was the Director of Transition
for Governor-Elect Florio. For several years prior to October 1989, he was a
presiding judge in the Superior Court of the State of New Jersey. He also served
for eleven years through 1982 in the New Jersey Legislature, first as a member
of the General Assembly and then as a member of the Senate. As a state
legislator, he was the author and principal sponsor of the New Jersey Casino
Control Act in 1977.
Peter J. Aranow joined the Company as an Executive Vice President in May
1993, and he became the Company's Chief Financial Officer and Secretary shortly
thereafter. From 1977 to May 1993, he was employed in the Investment Banking
Department of Bear Stearns in progressively more responsible positions,
including Senior Managing Director. During his tenure with Bear Stearns, one of
Mr. Aranow's specialties was the gaming industry.
Edward and David Fishman are brothers. Howard Goldberg and Lee Seidler are
brothers-in-law.
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DESCRIPTION OF NEW NOTES
The New Notes will be issued pursuant to an Indenture (the 'Indenture')
among the Company, the Guarantors and First Fidelity Bank, National Association
(the 'Trustee'). Except as otherwise indicated below, the following summary
applies to both the Old Notes and the New Notes. As used herein, the term
'Notes' shall mean the Old Notes and the New Notes, unless otherwise indicated.
The terms of the Notes include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (the 'Trust Indenture Act'). The Notes are subject to all such terms,
and holders of the Notes are referred to the Indenture and the Trust Indenture
Act for a statement thereof.
The form and terms of the New Notes are substantially identical to the form
and terms of the Old Notes, except that the New Notes (i) will be registered
under the Securities Act of 1933, as amended, (ii) will not provide for payment
of penalty interest as Liquidated Damages, which terminate upon consummation of
the Exchange Offer, and (iii) will not bear any legends restricting transfer
thereof. The New Notes will be issued solely in exchange for an equal principal
amount of Old Notes. As of the date hereof, $150 million aggregate principal
amount of Old Notes is outstanding. See 'The Exchange Offer.'
The following summary of certain provisions of the Indenture does not
purport to be complete and is subject to the provisions of the Indenture and the
Notes, including the definitions therein of certain terms used below. A copy of
the Indenture has been filed with the Commission as an exhibit to the
Registration Statement of which this Prospectus is a part. Capitalized terms
used in this section and not otherwise defined below have the respective
meanings assigned to them in the Indenture.
Definitions relating to certain terms are set forth under '--Certain
Definitions' and throughout this description. Capitalized terms used herein
without definition have the meanings ascribed to them in the Indenture. Wherever
particular provisions of the Indenture are referred to in this summary, such
provisions are incorporated by reference as a part of the statements made and
such statements are qualified in their entirety by such reference.
GENERAL
The New Notes will be senior unsecured obligations of the Company, limited
in aggregate principal amount to $150 million, and will rank pari passu in right
of payment with all present and future senior Indebtedness of the Company and
senior to all future Subordinated Indebtedness of the Company. The New Notes
will be jointly and severally guaranteed on a senior unsecured basis by the
Initial Guarantors and all future Subsidiaries of the Company. Upon receipt of
all necessary regulatory approvals and development of the Maryland Heights
Project, the New Notes will also be guaranteed on the same basis by the Maryland
Heights Operating Subsidiary and the Maryland Heights Investment Subsidiary but
not the Maryland Heights Joint Venture Entity. The New Notes and the Guarantees
will effectively be subordinated in right of payment to all secured Indebtedness
of the Company and the Guarantors, such as the Indebtedness under the Credit
Agreement, to the extent of the value of the assets securing such Indebtedness.
The term 'Subsidiaries' does not include Unrestricted Subsidiaries.
The New Notes will be issued only in fully registered form, without
coupons, in denominations of $1,000 and integral multiples thereof. Initially,
the New Notes will be issued in global form. See '--Book-Entry; Delivery and
Form.'
The New Notes will mature on April 15, 2005. The New Notes will bear
interest at 10 7/8% per annum from and including the date of issuance or from
the most recent Interest Payment Date for which interest has been paid or
provided for, payable semi-annually on April 15 and October 15 of each year to
the persons in whose names such New Notes are registered at the close of
business on the April 1 or October 1 immediately preceding such Interest Payment
Date. Interest will be calculated on the basis of a 360-day year consisting of
twelve 30-day months.
Principal of, premium, if any, and interest on the New Notes will be
payable, and the Notes may be presented for registration of transfer or
exchange, at the office or agency of the Company maintained for such purpose,
which office or agency shall be maintained in the Borough of Manhattan, The City
of New York. At the option of the Company, payment of interest may be made by
check mailed to the Holders of the New Notes at the addresses set forth upon the
registry books of the Company. No service charge will be made for any
registration of transfer or exchange of Notes, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. Until otherwise designated by the Company, the
Company's office or agency will be the corporate trust office of the Trustee.
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<PAGE>
OPTIONAL REDEMPTION
The New Notes will be redeemable at the option of the Company, in whole or
in part, at any time on or after April 15, 2000 upon not less than 30 nor more
than 60 days' notice to each Holder of the New Notes, at the following
redemption prices (expressed as percentages of the principal amount) if redeemed
during the 12-month period commencing April 15 of the years indicated below, in
each case together with accrued interest thereon to the redemption date:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
- -------------------------------------------------------------- -----------
<S> <C>
2000.......................................................... 104.078%
2001.......................................................... 102.719%
2002.......................................................... 101.359%
2003 and thereafter........................................... 100.000%
</TABLE>
The New Notes will not be subject to redemption pursuant to any mandatory
sinking fund.
Notice of any redemption will be sent by first-class mail at least 30 days
and not more than 60 days prior to the date fixed for redemption, to the Holder
of each New Note to be redeemed at such Holder's last address as then shown upon
the registry books. The notice of redemption must state the date fixed for
redemption, the redemption price and the amount of accrued but unpaid interest
to be paid. Any notice that relates to a New Note to be redeemed in part only
must state the portion of the principal amount equal to the unredeemed portion
thereof and must state that on and after the date fixed for redemption, upon
surrender of such New Note, a new New Note or New Notes in principal amount
equal to the unredeemed portion thereof will be issued. On and after the date
fixed for redemption, interest will cease to accrue on the New Notes or portions
thereof called for redemption so long as the Company has deposited with the
Paying Agent funds in satisfaction of the redemption price pursuant to the
Indenture.
REGULATORY REDEMPTION
The Indenture will provide that if the ownership of any of the New Notes by
any person or entity will preclude, interfere with, threaten or delay the
issuance, maintenance, existence or reinstatement of any gaming or liquor
license, permit or approval, or result in the imposition of burdensome terms or
conditions on such license, permit or approval, as determined by any
Governmental Authority or the Board of Directors of the Company, the Holder
shall be obligated to dispose of such Holder's New Notes (in which event the
Company shall have no obligation to pay any interest to such Holder), and, if
such New Notes are not so disposed of within the required period, the Company
shall have the right to redeem such Holder's New Notes at a redemption price
equal to the lowest of (i) the price at which such Holder or beneficial owner
acquired such New Notes, without accrued interest, if any, (ii) the principal
amount of such New Notes, without accrued interest, if any, and (iii) the
Current Market Price of such New Notes on such redemption date, without accrued
interest, if any. The Indenture will provide that any Holder or beneficial owner
of a New Note required to qualify or be found suitable under applicable Gaming
Laws must pay all investigative fees and costs of the Gaming Authorities in
connection with such application therefor.
CERTAIN COVENANTS
Repurchase of New Notes at the Option of the Holder Upon a Change of Control
In the event that a Change of Control (as defined below) has occurred, each
Holder of New Notes will have the right, at such Holder's option, pursuant to an
irrevocable and unconditional offer by the Company (the 'Change of Control
Offer'), to require the Company to repurchase all or any part of such Holder's
New Notes on the date that is no later than 30 Business Days after the
occurrence of such Change of Control, at a cash price (the 'Change of Control
Offer Price') equal to 101% of the principal amount thereof, together with
accrued interest to the purchase date. The Change of Control Offer shall remain
open for 20 Business Days following its commencement and no longer, except to
the extent that a longer period is required by applicable law (the 'Change of
Control Offer Period'). Upon expiration of the Change of Control Offer Period,
the Company shall purchase all New Notes tendered in response to the Change of
Control Offer.
Except as described above with respect to a Change of Control, the
Indenture does not contain provisions that permit the Holders of the New Notes
to require the Company to repurchase or redeem the New Notes in the event of a
takeover, recapitalization or similar restructuring.
As used herein, a 'Change of Control' means (i) any merger or consolidation
of the Company with or into any person or any sale, transfer or other
conveyance, whether direct or indirect, of all or substantially all of the
assets of the Company, on a consolidated basis, in one transaction or a series
of related transactions, if, immediately after giving effect to such transaction
or transactions, any 'person' or 'group' (as such terms are used for purposes of
Sections 13(d) and 14(d) of the Exchange Act, whether or not applicable) is or
becomes the
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Beneficial Owner, directly or indirectly, of more than 40% of the total voting
power in the aggregate normally entitled to vote in the election of directors,
managers or trustees, as applicable, of the transferee or surviving entity, (ii)
the time that the Company first determines or reasonably should have known that
any 'person' or 'group' (as such terms are used for purposes of Sections 13(d)
and 14(d) of the Exchange Act, whether or not applicable) is or becomes the
Beneficial Owner, directly or indirectly, of more than 40% of the total voting
power in the aggregate of all classes of Capital Stock then outstanding of the
Company normally entitled to vote in the election of directors, or (iii) during
any period of 12 consecutive months after the Issue Date, individuals who at the
beginning of any such 12-month period constituted the Board of Directors of the
Company (together with any new directors whose election by such Board or whose
nomination for election by the shareholders of the Company was approved by a
vote of a majority of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved), cease for any reason to constitute a
majority of the Board of Directors of the Company then in office; provided,
however, that a 'Change of Control' shall not be deemed to occur under clauses
(i) or (ii) above if the 'person' referred to in either such clause is an
Excluded Person, or the 'group' referred to in either such clause consists
exclusively of two or more 'Excluded Persons' who engages or engage in any
transaction or series of transactions or announces or announce any intention to
effect any transaction or series of transactions referred to in clauses (i) or
(ii), unless (y) such transaction or series of transactions is subject to Rule
13e-3 under the Exchange Act, or any similar or successor rule, and (z)
immediately prior to and during the 180-day period following (1) such
transaction or series of related transactions referred to in clause (i), or (2)
the time that the Company first determines or reasonably should have known that
any such Excluded Person or any such 'group' consisting exclusively of two or
more Excluded Persons, is or becomes the Beneficial Owner, directly or
indirectly, of more than 40% of such total voting power, as referred to in
clause (ii), the New Notes are or become rated, in the case of either clause (1)
or (2), 'B+' or below by Standard & Poor's Corporation and 'B1' or below by
Moody's Investors Service, or if either such service or both such services shall
no longer make a rating of the New Notes publicly available, another nationally
recognized securities agency or agencies, as the case may be, selected by the
Company, which shall be substituted for Standard & Poor's Corporation or Moody's
Investors Service or both, as the case may be; provided, further, that the
180-day period referred to in clause (z) shall be extended for so long as the
rating of the New Notes is under publicly announced consideration for possible
downgrade by any such rating agency. On or before the Change of Control Purchase
Date, the Company will (i) accept for payment New Notes or portions thereof
properly tendered pursuant to the Change of Control Offer, (ii) deposit with the
Paying Agent U. S. Legal Tender or Cash Equivalents sufficient to pay the Change
of Control Offer Price (together with accrued and unpaid interest) of all New
Notes so tendered and (iii) deliver to the Trustee New Notes so accepted
together with an Officers' Certificate listing the New Notes or portions thereof
being purchased by the Company. The Paying Agent will promptly mail to the
Holders of New Notes so accepted payment in an amount equal to the Change of
Control Offer Price (together with accrued and unpaid interest), and the Trustee
will promptly authenticate and mail or deliver to such Holders a new New Note
equal in principal amount to any unpurchased portion of the New Note
surrendered. Any New Notes not so accepted will be promptly mailed or delivered
by the Company to the Holder thereof. The Company will publicly announce the
results of the Change of Control Offer on or as soon as practicable after the
Change of Control Offer Period expires.
The Change of Control purchase feature of the New Notes may make more
difficult or discourage a takeover of the Company, and, thus, the removal of
incumbent management. The Change of Control purchase feature resulted from
negotiations between the Company and the Initial Purchasers.
The phrase 'all or substantially all' of the assets of the Company as used
in the Indenture has no clearly established meaning under New York law (which
governs the Indenture), has been the subject of limited judicial interpretation
in few jurisdictions and will be interpreted based upon the particular facts and
circumstances. As a result, there may be a degree of uncertainty in ascertaining
whether a sale or transfer of 'all or substantially all' of the assets of the
Company has occurred and therefore whether a Change of Control has occurred. Any
Change of Control Offer will be made in compliance with all applicable laws,
rules and regulations, including, if applicable, Regulation 14E under the
Exchange Act and the rules thereunder and all other applicable Federal and state
securities laws.
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<PAGE>
The repurchase by the Company of the New Notes upon a Change of Control
could violate and result in a default under the Credit Agreement or other
Indebtedness of the Company or its Subsidiaries, even if a Change of Control, in
and of itself, would not cause a default. Any such default would likely give the
lenders under the Credit Agreement the right to proceed against any collateral
securing the Indebtedness thereunder. In any event, such lenders would likely
have the right to seek repayment of such Indebtedness at least on a pari passu
basis with the New Notes. There can be no assurance that the Company will have
sufficient financial resources to effect a repurchase pursuant to a Change of
Control Offer.
Limitation on Sale of Assets and Subsidiary Stock; Event of Loss
The Indenture will provide that, other than upon an Event of Loss, neither
the Company nor any of its Subsidiaries will, in one or a series of related
transactions, convey, sell, transfer, assign or otherwise dispose of, directly
or indirectly, any of its property, business or assets, including, without
limitation, upon any sale or other transfer or issuance of any Capital Stock of
any Subsidiary or any sale and leaseback transaction, whether by the Company or
any such Subsidiary, or through the issuance, sale or transfer of Capital Stock
by a Subsidiary (an 'Asset Sale'), with an aggregate fair market value in excess
of $7.5 million unless (1) within 310 days after the date of such Asset Sale,
the Asset Sale Offer Amount (as defined below), or so much thereof as is
required pursuant to the provisions described below, is applied to the
repurchase of the New Notes with U.S. Legal Tender pursuant to an irrevocable,
unconditional offer (an 'Asset Sale Offer') to repurchase New Notes at a
purchase price (the 'Asset Sale Offer Price') of 100% of principal amount,
together with accrued interest to the date of payment, (2) at least 80% of the
consideration for such conveyance, sale, transfer or other disposition or
issuance (other than assumption of trade indebtedness) consists of U.S. Legal
Tender or Cash Equivalents; provided, however, that for purposes of this clause
(2), the assumption of Indebtedness of the Company or a Subsidiary that is pari
passu with the New Notes shall be deemed to be Cash Equivalents if the Company,
such Subsidiary and all other Subsidiaries of the Company, to the extent any of
the foregoing are liable with respect to such Indebtedness, are expressly
released from all liability for such Indebtedness by the holder thereof in
connection with such Asset Sale, and any securities or notes received by the
Company or such Subsidiary from such transferee that are converted by the
Company or such Subsidiary into U.S. Legal Tender or Cash Equivalents within 10
Business Days of the date of such Asset Sale shall be deemed to be Cash
Equivalents, (3) no Default or Event of Default shall have occurred and be
continuing at the time of, or would occur after giving effect, on a pro forma
basis, to, such Asset Sale and (4) the Board of Directors of the Company
determines in good faith that the Company or such Subsidiary, as applicable,
receives not less than fair market value for such Asset Sale. The 'Asset Sale
Offer Amount' shall mean, with respect to any Asset Sale, the product of (A) (1)
the Net Cash Proceeds of such Asset Sale, minus (2) the sum of the amounts that,
within 270 days of such Asset Sale, are (i) invested in assets or property that
is part of a Related Business of the Company or one of its Subsidiaries, (ii)
used to retire Indebtedness outstanding under the Credit Agreement if,
concurrently therewith, the amount of such Indebtedness permitted pursuant to
paragraph (f) of the covenant '--Limitation on Incurrence of Additional
Indebtedness and Disqualified Capital Stock' is permanently reduced by the
amount so retired (and any related revolving or multiple advance arrangement is
permanently reduced by a corresponding amount), or (iii) used to retire
Indebtedness secured by the assets sold (if required by its terms as a result of
the applicable Asset Sale) and any related revolving or multiple advance
arrangement is permanently reduced by a corresponding amount, and pay related
fees and reasonable expenses, multiplied by (B) a fraction, the numerator of
which is the aggregate principal amount of the New Notes outstanding on the date
of such Asset Sale and the denominator of which is the sum of (1) the aggregate
principal amount of the New Notes outstanding on the date of such Asset Sale,
plus (2) the aggregate principal amount of any other Indebtedness of the Company
or its Subsidiaries existing on the date of such Asset Sale that (w) is not
retired under clause (A) (2) (ii) or (iii) of this sentence, (x) is pari passu
with the New Notes, (y) is not assumed by the transferee in such Asset Sale with
a concurrent release in full of the Company and its Subsidiaries therefrom, and
(z) pursuant to the instruments relating thereto, is required to be repaid with
the proceeds of such Asset Sale. The Indenture will provide that an Asset Sale
Offer may be deferred until the accumulated Asset Sale Offer Amounts from Asset
Sales exceed $10.0 million. The Company will be required to keep each Asset Sale
Offer open for 20 Business Days following its commencement and no longer, except
to the extent that a longer period is required by applicable law (the 'Asset
Sale Offer Period'). Upon expiration of the Asset Sale Offer Period, the Company
shall apply the Asset Sale Offer Amount, plus an amount equal to accrued
interest, to the purchase of all New Notes properly tendered (on a pro rata
basis if the Asset Sale Offer Amount is insufficient to purchase all New Notes
so tendered) at the Asset Sale Offer Price or, if New
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<PAGE>
Notes are tendered in an amount less than the Asset Sale Offer Amount, to the
purchase of all New Notes tendered.
Notwithstanding the foregoing provisions of the prior paragraph:
(i) the Company and its Subsidiaries may in the ordinary course of
business, convey, sell, lease, transfer, assign or otherwise dispose of
assets acquired and held for resale in the ordinary course of business;
(ii) the Company and its Subsidiaries may convey, sell, lease,
transfer or otherwise dispose of assets pursuant to and in accordance with
the provisions of the covenant '--Limitation on Mergers, Consolidations and
Sales of Assets;'
(iii) the Company and its Subsidiaries may sell or dispose of damaged,
worn out or other obsolete property in the ordinary course of business so
long as such property is no longer necessary for the proper conduct of the
business of the Company or such Subsidiary, as applicable; and
(iv) the Company and its Subsidiaries may convey, sell, transfer,
assign or otherwise dispose of assets to the Company or any of its
wholly-owned Subsidiaries.
The Indenture will also provide that upon an Event of Loss incurred by the
Company or any of its Subsidiaries resulting in Net Cash Proceeds of more than
$7.5 million, the Company shall make an offer, within 310 days after such Event
of Loss, to purchase (an 'Event of Loss Offer') for U.S. Legal Tender at a
purchase price (the 'Event of Loss Offer Price') of 100% of principal amount
(together with accrued interest to the date of payment) that principal amount of
New Notes equal to the 'Event of Loss Offer Amount' (as defined below). The
'Event of Loss Offer Amount' shall mean, with respect to any Event of Loss, the
product of (A)(1) the Net Cash Proceeds of such Event of Loss, minus (2) the sum
of the amounts that, within 270 days after such Event of Loss, are (i) invested
in assets or property that is part of a Related Business of the Company or one
of its Subsidiaries, (ii) used to retire Indebtedness outstanding under the
Credit Agreement if, concurrently therewith, the amount of such Indebtedness
permitted pursuant to paragraph (f) of the covenant '--Limitation on Incurrence
of Additional Indebtedness and Disqualified Capital Stock' is permanently
reduced by the amount so retired, (and any related revolving or multiple advance
arrangement is permanently reduced by a corresponding amount), or (iii) used to
retire Indebtedness secured by the assets to which such Event of Loss relates
(if required by its terms as a result of the applicable Event of Loss) and any
related revolving or multiple advance arrangement is permanently reduced by a
corresponding amount, and pay related fees and reasonable expenses, multiplied
by (B) a fraction, the numerator of which is the aggregate principal amount of
the New Notes outstanding on the date of such Event of Loss and the denominator
of which is the sum of (1) the aggregate principal amount of the New Notes
outstanding on the date of such Event of Loss, plus (2) the aggregate principal
amount of any other Indebtedness of the Company or its Subsidiaries existing on
the date of such Event of Loss that is not retired under clause (A) (2) (ii) or
(iii) of this sentence, (x) is pari passu with the New Notes and, pursuant to
the instruments relating thereto, is required to be repaid with the proceeds of
such Event of Loss. The Indenture will provide that an Event of Loss Offer may
be deferred until the accumulated Event of Loss Offer Amounts of all Events of
Loss exceeds $10.0 million. The Company will be required to keep each Event of
Loss Offer open for 20 Business Days following its commencement and no longer,
except to the extent that a longer period is required by applicable law (the
'Event of Loss Offer Period'). Upon the expiration of each Event of Loss Offer
Period, the Company shall apply the Event of Loss Offer Amount, plus an amount
equal to accrued interest, to the purchase of all New Notes properly tendered
(on a pro rata basis if the Event of Loss Amount is insufficient to purchase all
New Notes so tendered) or, if New Notes are tendered in an amount less than the
Event of Loss Amount, to the purchase of all the New Notes tendered.
Limitation on Restricted Payments
The Indenture will provide that the Company will not, and will not permit
any of its Subsidiaries to, directly or indirectly, make any Restricted Payment
if, immediately prior thereto and after giving effect thereto on a pro forma
basis, (1) a Default or an Event of Default shall have occurred and be
continuing, (2) the Company could not incur at least $1.00 of additional
Subordinated Indebtedness pursuant to clause (ii) of paragraph (a) of the
covenant described under '--Limitation on Incurrence of Additional Indebtedness
and Disqualified Capital Stock,' or (3) the aggregate amount of all Restricted
Payments made by the Company and its Subsidiaries, including after giving pro
forma effect to such proposed Restricted Payment, from and after the Issue Date,
would exceed the sum of (a) 50% of the aggregate Adjusted Consolidated Net
Income of the Company for the
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period (taken as one accounting period) commencing on the first day of the first
full fiscal quarter that preceded the Issue Date, to and including the last day
of the latest fiscal quarter ended immediately prior to the date of each such
calculation for which financial statements are available (or, in the event
Adjusted Consolidated Net Income for such period is a deficit, then minus 100%
of such deficit), plus (b) the aggregate Net Cash Proceeds received by the
Company as a capital contribution after the Issue Date or from the sale of the
Company's Qualified Capital Stock (other than to a Subsidiary of the Company and
other than in connection with a Qualified Exchange) after the Issue Date.
The foregoing clauses (2) and (3) of the immediately preceding paragraph
will not prohibit (t) Investments in a Maryland Heights Joint Venture Entity in
an amount not in excess of $65.0 million, (u) Investments in one or more persons
in an amount not in excess of $45.0 million in the aggregate at any one time
outstanding for all such Investments made in any one or more persons in reliance
upon this clause (u), for the purpose of developing, constructing or acquiring
(i) a Casino or Casinos or, if applicable, any Related Businesses in connection
with such Casino or Casinos, or (ii) a Related Business to be used primarily in
connection with an existing Casino or Casinos in which the Company or its
Subsidiaries have at least a fifty percent (50%) ownership interest, (v) in the
case of any Subsidiary, pro rata distributions on its Capital Stock, (w) the
payment of any dividend on or redemption of Qualified Capital Stock within 60
days after the date of its declaration or authorization, respectively, if such
dividend or redemption could have been made on the date of such declaration or
authorization, respectively, in compliance with the foregoing provisions, (x)
the redemption or repurchase of any Capital Stock or Indebtedness of the Company
or any of its Subsidiaries (other than any Capital Stock or Indebtedness that is
held or beneficially owned by any Excluded Person) required by the Regulatory
Redemption provisions of the Indenture (or any substantially comparable
provision governing other Indebtedness), or by any Governmental Authority or the
Board of Directors of the Company if, in any such case, the ownership of such
Capital Stock or Indebtedness by the holder thereof will preclude, interfere
with, threaten or delay the issuaance, maintenance, existence or reinstatement
of any gaming or liquor license, permit or approval, or result in the imposition
of burdensome terms or conditions on such license, permit or approval, (y) a
Qualified Exchange or (z) other Restricted Payments which in the aggregate do
not exceed $10.0 million for all such Restricted Payments permitted by this
clause (z) taken together. The full amount of any Restricted Payment made
pursuant to clause (w) or (x), however, will be deducted in the calculation of
the aggregate amount of Restricted Payments available to be made referred to in
clause (3) of the immediately preceding paragraph.
Maintenance of Insurance
The Company will maintain and cause its Subsidiaries to maintain customary
property and comprehensive general liability insurance and (as applicable)
brownwater coverage, in each case on terms and in an amount reasonably
sufficient (taking into account, among other factors, the creditworthiness of
the insurer) to avoid a material adverse change in the financial condition or
results of operation of the Company and its Subsidiaries, taken as a whole.
Limitation on Transactions with Affiliates
The Indenture will provide that neither the Company nor any of its
Subsidiaries or Unrestricted Subsidiaries will be permitted after the Issue Date
to enter into any contract, arrangement, understanding or transaction with an
Affiliate (an 'Affiliate Transaction') or series of related Affiliate
Transactions involving consideration to either party in excess of $5.0 million
except for transactions approved by a majority of the disinterested (as to such
transaction) directors of the Company and evidenced by an Officers' Certificate
addressed and delivered to the Trustee stating that such Affiliate Transaction
has been so approved and is made in good faith and that the terms of such
Affiliate Transaction are fair and reasonable to the Company and such
Subsidiaries and Unrestricted Subsidiaries, as the case may be; provided,
however, that with respect to any Affiliate Transaction (including any series of
related transactions) involving consideration to either party in excess of $10.0
million the Company also must, prior to the consummation thereof, obtain a
written favorable opinion as to the fairness of such transaction to the Company
and such Subsidiaries and Unrestricted Subsidiaries, as the case may be, from a
financial point of view from an independent investment banking firm of national
reputation. Notwithstanding the foregoing, 'Affiliate Transaction,' shall not
include: (a) payments of reasonable and customary compensation, directors' fees
and indemnities of directors, officers and employees, (b) payments under the
Griffin License as in effect on the Issue Date, (c) related party transactions
described under 'Certain Transactions' in the Company's Proxy Statement for its
1994 Annual Meeting of Stockholders as in effect on the Issue Date, (d)
Restricted
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Payments permitted under the covenant '--Limitation on Restricted Payments'
described above, (e) transactions solely between or among the Company and one or
more wholly-owned Guarantors or between or among one or more wholly-owned
Guarantors, and (f) any employment agreement entered into by the Company or any
of its Subsidiaries in the ordinary course of business and consistent with the
past practice of the Company or such Subsidiary.
Limitation on Incurrence of Additional Indebtedness and Disqualified Capital
Stock
The Indenture will provide that, except as set forth below, neither the
Company nor any of its Subsidiaries will, directly or indirectly, issue, assume,
guarantee, incur, become directly or indirectly liable with respect to
(including as a result of an acquisition, merger or consolidation), extend the
maturity of, or otherwise become responsible for, contingently or otherwise
(individually and collectively, to 'incur' or, as appropriate, an 'incurrence'),
any Indebtedness or any Disqualified Capital Stock from and after the Issue
Date. Notwithstanding the foregoing:
(a) The Company and the Guarantors may incur Indebtedness or
Disqualified Capital Stock if (i) no Default or Event of Default shall have
occurred and be continuing at the time of, or would occur after giving
effect on a pro forma basis to, such incurrence of Indebtedness or
Disqualified Capital Stock and (ii) on the date of such incurrence (the
'Incurrence Date'), the Consolidated Coverage Ratio of the Company for the
Reference Period immediately preceding the Incurrence Date, after giving
effect on a pro forma basis to such incurrence of such Indebtedness or
Disqualified Capital Stock, would be at least 3.0 to 1 (or 2.5 to 1 in the
case of the incurrence of Subordinated Indebtedness or Disqualified Capital
Stock);
(b) The Company and the Guarantors may incur Indebtedness evidenced by
the Notes and represented by the Indenture up to the amounts specified
therein as of the Issue Date and the Guarantees thereof;
(c) The Company and its Subsidiaries may incur Purchase Money
Indebtedness to finance the purchase of land, buildings, furnitures,
fixtures or equipment for any Casino owned and operated by the Company that
has at least 200 slot machines and 10 table games; provided, however, that
the aggregate amount of such Indebtedness outstanding at any time pursuant
to this paragraph (c) (including any Indebtedness issued to refinance,
replace or refund such Indebtedness) with respect to any such Casino shall
not exceed $15.0 million.
(d) The Company and its Subsidiaries may incur Refinancing
Indebtedness with respect to any Indebtedness or Disqualified Capital
Stock, as applicable, described in clauses (a), (b) and (c) of this
covenant; provided, however, that in the case of the refinancing of
Indebtedness described in clause (c), such Refinancing Indebtedness is
Non-recourse Indebtedness as to any assets other than with respect to the
assets acquired with the Indebtedness refinanced, replaced or refunded;
(e) The Company and the Guarantors may incur Indebtedness (in addition
to any Indebtedness incurred in accordance with any other provision of this
covenant) in an aggregate amount outstanding at any time (including any
Indebtedness issued to refinance, replace, or refund such Indebtedness) of
up to an aggregate of $10.0 million for the Company and all of its
Subsidiaries taken together, minus the amount of any Indebtedness incurred
pursuant to this clause (e) retired with Net Cash Proceeds from any Asset
Sale or Event of Loss or assumed by a transferee in an Asset Sale;
(f) The Company and its Subsidiaries may incur Indebtedness pursuant
to the Credit Agreement on or after the Issue Date up to an aggregate
amount outstanding (including any Indebtedness issued to refinance, refund
or replace such Indebtedness) at any time equal to the sum of (i) $120.0
million minus the amount of any Indebtedness incurred pursuant to this
clause (f) retired with the Net Cash Proceeds from any Asset Sale or Event
of Loss or assumed by a transferee in an Asset Sale, plus (ii) such
additional amounts as may be deemed to be outstanding in the form of
Interest Swap and Hedging Obligations with lenders party to the Credit
Agreement; provided, however, that the maximum aggregate amount permitted
to be outstanding under this paragraph (f) shall not be deemed to limit
additional Indebtedness under the Credit Agreement to the extent such
additional Indebtedness is permitted pursuant to paragraph (a) hereof; and
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(g) Permitted Indebtedness.
In the event that the Company incurs Indebtedness, or any Subsidiary incurs
Indebtedness or Disqualified Capital Stock, to any wholly-owned Subsidiary
pursuant to clause (b) of the definition of Permitted Indebtedness, and such
latter Subsidiary thereafter ceases to remain a 'Subsidiary' as defined in the
Indenture, the aggregate outstanding amount of such Indebtedness incurred by the
Company, or of such Indebtedness or Disqualified Capital Stock incurred by such
Subsidiary, to the Subsidiary that ceases to so remain a 'Subsidiary' shall be
deemed to be Indebtedness incurred by the Company or such Subsidiary at the time
of such change in Subsidiary status. Indebtedness and Disqualified Capital Stock
issued by any person that is not a Subsidiary, which Indebtedness or
Disqualified Capital Stock is outstanding at the time such person becomes a
Subsidiary of the Company, or is merged into or consolidated with the Company or
a Subsidiary of the Company, shall be deemed to have been incurred at the time
such person becomes a Subsidiary of the Company, or is merged into or
consolidated with the Company or a Subsidiary of the Company. A guarantee by the
Company or a Subsidiary of the Company of Indebtedness incurred by the Company
or a Subsidiary is not considered a separate incurrence for purposes of this
covenant.
Limitation on Dividends and Other Payment Restrictions Affecting Subsidiaries
The Indenture will provide that neither the Company nor any of its
Subsidiaries will, directly or indirectly, create, assume or suffer to exist any
consensual encumbrance or restriction on the ability of any Subsidiary to pay
dividends or make other distributions to, or to pay any obligation (including,
without limitation, in respect of a Guarantee) to, or to otherwise transfer
assets or make or pay loans or advances to, the Company or any of its
Subsidiaries, except (a) reasonable and customary provisions restricting
subletting or assignment of any lease entered into in the ordinary course of
business, consistent with industry practices, (b) restrictions imposed by
applicable law (including gaming regulations), (c) restrictions under any
Acquired Indebtedness or any agreement relating to any property, asset or
business acquired by the Company or any of its Subsidiaries, which restrictions
existed at the time of acquisition, were not put in place in connection with or
in anticipation of such acquisition and are not applicable to any person, other
than the person acquired or to any property, asset or business other than the
property, assets and business so acquired, (d) restrictions with respect solely
to a Subsidiary of the Company imposed pursuant to a binding agreement (subject
only to reasonable and customary closing conditions and termination provisions)
that has been entered into for the sale or disposition of all or substantially
all of the Capital Stock or assets to be sold of such Subsidiary, provided such
restrictions apply solely to the Capital Stock or assets to be sold of such
Subsidiary, and such sale or disposition is permitted under the covenant
'--Limitation on Sale of Assets and Subsidiary Stock; Event of Loss,' (e)
reasonable and customary restrictions on transfers of collateral imposed in
connection with Liens securing Indebtedness, to the extent such Liens are
permitted by the covenant '--Liens' and to the extent such Indebtedness is
permitted by the covenant '-- Limitation on Incurrence of Additional
Indebtedness and Disqualified Capital Stock,' and (f) replacements of
restrictions imposed pursuant to clause (c) and this clause (f) that are not
more restrictive than those being replaced and do not apply to any additional
property or assets.
Liens
The Indenture will provide that neither the Company nor any of its
Subsidiaries, directly or indirectly, create, grant, assume, incur or suffer to
exist any Lien upon any of its property or assets, whether now owned or
hereafter acquired, or any income or profits therefrom, securing Indebtedness,
other than: (i) Permitted Liens; (ii) Liens securing Indebtedness incurred in
accordance with clause (c) of the covenant '--Limitation on Incurrence of
Additional Indebtedness and Disqualified Capital Stock;' (iii) Liens securing
Refinancing Indebtedness in accordance with clause (d) of the covenant
'--Limitation on Incurrence of Additional Indebtedness and Disqualified Capital
Stock' but only if such Liens have the same relative priority and do not extend
to property or assets permitted to be subject to the Liens securing the
Indebtedness being refinanced; (iv) Liens securing Indebtedness incurred in
accordance with clause (f) of the covenant '--Limitation on Incurrence of
Additional Indebtedness and Disqualified Capital Stock' and Liens securing any
increases in the amount of Indebtedness under the Credit Agreement above the
amount of Indebtedness permitted under such clause (f), but only to the extent
that the increase in such Indebtedness is permitted under clause (a) of the
covenant '--Limitation on Incurrence of Additional Indebtedness and Disqualified
Capital Stock' at the time of the incurrence of such additional Indebtedness;
(v) a Lien on the Lake Charles Star Riverboat to secure
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Indebtedness to the seller of the Interests in connection with the purchase of
such Interests by the Company's Subsidiaries in a principal amount not to exceed
$10.0 million and a maturity date no later than December 31, 1995; and (vi)
Liens in favor of the Company. Notwithstanding the foregoing, the Company may
not and may not permit any Subsidiary to, directly or indirectly, create, grant,
assume, incur or suffer to exist any Lien (other than Permitted Liens) upon any
of its property or assets, whether now owned or hereafter acquired, securing
Subordinated Indebtedness.
Limitation on Consolidation, Merger and Sale of Assets
The Indenture will provide that neither the Company nor any Subsidiary may
consolidate with or merge with or into another person or, directly or
indirectly, sell, lease or convey all or substantially all of its assets,
whether in a single transaction or a series of related transactions, to another
Person or group of affiliated Persons, unless (i)if the transaction involves the
Company or a Guarantor, either (a) the Company or such Guarantor, as the case
may be, is the continuing entity, and in the case of a Guarantor, (1) such
Guarantor remains a Subsidiary of the Company, and (2) such Guarantor's
Guarantee remains in full force and effect and the rights of the Holders
thereunder and under the New Notes and the Indenture are not be adversely
affected as a result thereof, or (b) the resulting, surviving or transferee
entity is a corporation organized under the laws of the United States, any state
thereof or the District of Columbia and expressly assumes by supplemental
indenture all of the Obligations of the Company or such Guarantor, as the case
may be, in connection with the New Notes, the Indenture and any applicable
Guarantee, and the rights of the Holders under the New Notes, the Indenture and
any such Guarantee are not adversely affected as a result thereof; (ii) no
Default or Event of Default shall exist or shall occur immediately after giving
effect on a pro forma basis to such transaction; (iii) other than in the case of
a transaction between the Company and a wholly-owned Subsidiary or between
wholly-owned Subsidiaries of the Company, immediately after giving effect to
such transaction on a pro forma basis, the Consolidated Net Worth of the
consolidated surviving or transferee entity is at least equal to the
Consolidated Net Worth of the Company or such Subsidiary, as the case may be,
immediately prior to such transaction; (iv) other than in the case of a
transaction solely between the Company and any wholly-owned Subsidiary or
between wholly-owned Subsidiaries of the Company, the consolidated surviving or
transferee entity would, immediately after giving effect to such transaction on
a pro forma basis, be permitted to incur at least $1.00 of additional
Subordinated Indebtedness pursuant to clause (ii) of paragraph (a) under the
caption '--Limitation on Incurrence of Additional Indebtedness and Disqualified
Capital Stock;' and (v) such transaction will not result in the loss of any
material Gaming License. For purposes of this covenant, the Consolidated
Coverage Ratio shall be determined on a pro forma consolidated basis (giving pro
forma effect to the transaction and any related incurrence of Indebtedness or
Disqualified Capital Stock) for the four fiscal quarters that ended immediately
preceding such transaction for which financial statements are available.
Notwithstanding the foregoing, a Subsidiary shall not be subject to the
foregoing restrictions in circumstances involving the disposition by the Company
of such Subsidiary or a disposition of all or substantially all of the assets of
such Subsidiary in a transaction that is not prohibited by the covenant
'--Limitation on Sale of Assets and Subsidiary Stock; Event of Loss.'
Upon any consolidation or merger or any transfer of all or substantially
all of the assets of the Company or a Guarantor that is subject to the foregoing
restrictions, the successor corporation formed by such consolidation or into
which the Company or such Guarantor, as the case may be, is merged or to which
such transfer is made, shall succeed to, and be substituted for, and may
exercise every right and power of, the Company or such Guarantor, as the case
may be, under the Indenture and the New Notes (including, without limitation,
any Guarantee) with the same effect as if such successor corporation had been
named therein as the Company, or such Guarantor, as the case may be, and the
Company or such Guarantor, as applicable, will be released from its obligations
under the Indenture, the New Notes and any applicable Guarantee, except as to
any obligations that arise from or as a result of such transaction.
Limitation on Lines of Business
The Indenture will provide that neither the Company nor any of its
Subsidiaries or Unrestricted Subsidiaries shall directly or indirectly engage to
any substantial extent in any line or lines of business activity other than in a
Related Business.
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Limitation on Status as Investment Company
The Indenture will prohibit the Company and its Subsidiaries from being
required to register as an 'investment company' (as that term is defined in the
Investment Company Act of 1940, as amended), or from otherwise becoming subject
to regulation under the Investment Company Act.
Restriction on Issuance or Sale of Subsidiary Stock
The Indenture will provide that the Company will not sell, and will not
permit any of its Subsidiaries to issue or sell, any shares of Capital Stock of
any Subsidiary, other than common stock with no special rights and no
preferences, privileges, or redemption or prepayment provisions, to any Person
other than the Company or a wholly-owned Subsidiary. The Indenture will also
provide that all of the Capital Stock of a Subsidiary may be sold in a
transaction that complies with the covenant '--Limitation on Sale of Assets and
Subsidiary Stock; Event of Loss.'
Guarantee by Maryland Heights Investment Subsidiary and Maryland Heights
Operating Subsidiary
The Indenture provides that the Company shall cause the Maryland Heights
Investment Subsidiary and the Maryland Heights Operating Subsidiary, which may
be the same Subsidiary of the Company, to become Guarantors on the same basis as
the Initial Guarantors and to execute supplemental indentures, in the form
prescribed by the Indenture, and a Guarantee evidencing such obligations in the
same form as the Guarantee executed by the Initial Guarantors with respect to
the New Notes, and deliver such executed supplemental indentures and Guarantees
to the Trustee within five Business Days after they become Subsidiaries, subject
to the receipt of any approval required by any Gaming Authority, which the
Company, the Maryland Heights Investment Subsidiary and the Maryland Heights
Operating Subsidiary shall use their best efforts to obtain. The Indenture
further provides that the Company shall cause the Maryland Heights Investment
Subsidiary and the Maryland Heights Operating Subsidiary to be and remain
wholly-owned Subsidiaries of the Company. Under the Indenture, the Company does
not have any obligation to cause the Maryland Heights Joint Venture Entity to
become a Guarantor or execute such a supplemental indenture or Guarantee.
Additional Subsidiary Guarantors
The Indenture provides that the Company shall cause each of its
Subsidiaries created or acquired after the Issue Date to execute a Guarantee and
a supplemental indenture, in the form prescribed by the Indenture, and to
deliver copies thereof to the Trustee, subject to the receipt of any approval
required by any Gaming Authority, which the Company and its Subsidiaries shall
use their best efforts to obtain.
RELEASE OF GUARANTORS
The Indenture provides that if all the Capital Stock of a Guarantor is sold
by the Company or any Subsidiary or upon the consolidation or merger of a
Guarantor with or into any other person other than the Company or a Subsidiary,
in circumstances where such sale, consolidation or merger is not prohibited
under the covenant '--Limitation on Sale of Assets and Subsidiary Stock; Event
of Loss,' such Guarantor shall be deemed automatically and unconditionally
released and discharged from all obligations under its Guarantee and the
Indenture without any further action required on the part of the Trustee or any
Holder.
REPORTS
Whether or not the Company is subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, the Company shall deliver to the
Trustee and each Holder, within 15 days after it is or would have been required
to file such with the SEC, annual and quarterly consolidated financial
statements substantially equivalent to financial statements that would have been
included in reports filed with the SEC if the Company was subject to the
requirements of Section 13 or 15(d) of the Exchange Act, including, with respect
to annual information only, a report thereon by the Company's certified
independent public accountants as such would be required in such reports to the
SEC and, in each case, together with a management's discussion and analysis of
financial condition and results of operations as such would be so required.
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EVENTS OF DEFAULT AND REMEDIES
The Indenture defines an Event of Default as (i) the failure by the Company
to pay any installment of interest on the New Notes as and when due and payable
and the continuance of any such failure for 30 days, (ii) the failure by the
Company to pay all or any part of the principal, or premium, if any, on the New
Notes when and as the same become due and payable at maturity, redemption, by
acceleration or otherwise, including, without limitation, pursuant to any Offer
to Purchase, or otherwise, (iii) the failure by the Company or any Guarantor to
observe or perform any other covenant or agreement contained in the New Notes,
the Indenture or any Guarantee and, subject to certain exceptions, the
continuance of such failure for a period of 30 days after written notice is
given to the Company by the Trustee or to the Company and the Trustee by the
Holders of at least 25% in aggregate principal amount of the New Notes
outstanding, (iv) certain events of bankruptcy, insolvency or reorganization in
respect of the Company, any of its Subsidiaries that individually or as a group
constitute a Significant Subsidiary, (v) a default in the payment of principal,
premium or interest when due which extends beyond any stated period of grace
applicable thereto or an acceleration for any other reason of the maturity of
any Indebtedness of the Company or any of the its Subsidiaries with an aggregate
principal amount in excess of $10.0 million, (vi) final, non-appealable,
unsatisfied judgments not covered by insurance aggregating in excess of $10.0
million, at any one time being rendered against the Company or any of its
Subsidiaries and not stayed, bonded or discharged within 60 days, and (vii) the
loss of the legal right to operate any Casino by the Company or any of its
Subsidiaries and such loss continuing for more than 90 days. The Indenture
provides that if a Default occurs and is continuing, the Trustee must, within 90
days after the occurrence of such default, give to the Holders notice of such
default. Except in the case of a Default in payment of principal of or interest
on any New Note, the Trustee may withhold the notice if and so long as a
committee of its Trust Officers in good faith determines that withholding the
notice is in the interest of the Holders.
If an Event of Default occurs and is continuing (other than an Event of
Default specified in clause (iv) of the preceding paragraph), then in every such
case, unless the principal of all of the New Notes shall have already become due
and payable, either the Trustee or the Holders of 25% in aggregate principal
amount of the New Notes then outstanding, by notice in writing to the Company
(and to the Trustee if given by Holders) (an 'Acceleration Notice'), may declare
all principal and accrued interest thereon to be due and payable immediately. If
an Event of Default specified in clause (iv) in the preceding paragraph occurs,
all principal and accrued interest thereon will be immediately due and payable
on all outstanding New Notes without any declaration or other act on the part of
Trustee or the Holders. The Holders of no less than a majority in aggregate
principal amount of the New Notes at the time outstanding generally are
authorized to rescind such acceleration if all existing Events of Default, other
than the non-payment of the principal of, premium, if any, and interest on the
New Notes which have become due solely by such acceleration, have been cured or
waived.
Prior to the declaration of acceleration of the maturity of the New Notes,
the Holders of a majority in aggregate principal amount of the New Notes at the
time outstanding may waive on behalf of all the Holders any default, except a
default in the payment of principal of or interest on any New Note not yet
cured, or a default with respect to any covenant or provision that cannot be
modified or amended without the consent of the Holder of each outstanding New
Note affected. Subject to the provisions of the Indenture relating to the duties
of the Trustee, the Trustee will be under no obligation to exercise any of its
rights or powers under the Indenture at the request, order or direction of any
of the Holders, unless such Holders have offered to the Trustee reasonable
security or indemnity. Subject to all provisions of the Indenture and applicable
law, the Holders of a majority in aggregate principal amount of the New Notes at
the time outstanding will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee. The Indenture will provide that the
Company will be required to file annually with the Trustee a certificate as to
the performance by the Company and the Guarantors of certain of their
obligations under the Indenture and as to any default in such performances.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The Company may, at its option at any time elect to have the obligations of
the Company and the Guarantors discharged with respect to the outstanding New
Notes ('Legal Defeasance'). Such Legal Defeasance means that the Company shall
be deemed to have paid and discharged the entire indebtedness represented, and
the Indenture shall cease to be of further effect as to all outstanding New
Notes and Guarantees except as to (i) rights of Holders to receive payments in
respect of the principal of, premium, if any, and interest on such New
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Notes when such payments are due, from the funds in the defeasance trust; (ii)
the Company's obligations with respect to such New Notes concerning issuing
temporary New Notes, registration of New Notes, mutilated, destroyed, lost or
stolen New Notes, and the maintenance of an office or agency for payment and
money for security payments held in trust; (iii) the rights, powers, trust,
duties and immunities of the Trustee, and the Company's obligations in
connection therewith; and (iv) the Legal Defeasance provisions of the Indenture.
In addition, the Company may, at its option and at any time, elect to have the
obligations of the Company and the Guarantors released with respect to certain
covenants that are described in the Indenture ('Covenant Defeasance') and
thereafter any omission to comply with such obligations shall not constitute a
Default or Event of Default with respect to the New Notes. In the event Covenant
Defeasance occurs, certain events (not including non-payment, bankruptcy,
receivership, rehabilitation and insolvency events) described under 'Events of
Default' will no longer constitute an Event of Default with respect to the New
Notes.
In order to exercise either Legal Defeasance or Covenant Defeasance, (i)
the Company must irrevocably deposit with the Trustee, in trust, for the benefit
of the Holders of the New Notes, U.S. Legal Tender, U.S. Government Obligations
or a combination thereof, in such amounts as will be sufficient, in the opinion
of a nationally recognized firm of independent public accountants, to pay the
principal of, premium, if any, and interest on such New Notes on the stated date
for payment thereof or on the redemption date of such principal or installment
of principal of, premium, if any, or interest on such New Notes, and the Trustee
on behalf of the Holders must have a valid, perfected, exclusive security
interest in such trust; (ii) in the case of Legal Defeasance, the Company shall
have delivered to the Trustee an opinion of counsel in the United States
reasonably acceptable to Trustee confirming that (A) the Company has received
from, or there has been published by, the Internal Revenue Service a ruling or
(B) since the date of the Indenture, there has been a change in the applicable
federal income tax law, in either case to the effect that, and based thereon
such opinion of counsel shall confirm that, the Holders of such New Notes will
not recognize income, gain or loss for federal income tax purposes as a result
of such Legal Defeasance and will be subject to federal income tax in the same
amounts, in the same manner and at the same times as would have been the case if
such Legal Defeasance had not occurred; (iii) in the case of Covenant
Defeasance, the Company shall have delivered to the Trustee an opinion of
counsel in the United States reasonably acceptable to such Trustee confirming
that the Holders of such New Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such Covenant Defeasance and will be
subject to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Covenant Defeasance had not
occurred; (iv) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or insofar as Events of Default from
bankruptcy or insolvency events are concerned, at any time in the period ending
on the 91st day after the date of deposit; (v) such Legal Defeasance or Covenant
Defeasance shall not result in a breach or violation of, or constitute a default
under, the Indenture or any other material agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries is bound; (vi) the Company shall have delivered to the Trustee
an Officers' Certificate stating that the deposit was not made by the Company
with the intent of preferring the Holders of such New Notes over any other
creditors of the Company or with the intent of defeating, hindering, delaying or
defrauding any other creditors of the Company or others; and (vii) the Company
shall have delivered to the Trustee an Officers' Certificate and an opinion of
counsel, each stating that all conditions precedent provided for or relating to
the Legal Defeasance or the Covenant Defeasance have been met.
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AMENDMENTS AND SUPPLEMENTS
Except as provided below, with the consent of the Holders of not less than
a majority in aggregate principal amount of the New Notes at the time
outstanding (including consents obtained in connection with a tender offer or
exchange offer for New Notes), the Company, the Guarantors and the Trustee are
permitted to amend or supplement the Indenture or any supplemental indenture or
any Guarantee or modify the rights of the Holders. Notwithstanding the
foregoing, without the consent of the Holders of not less than two-thirds in
aggregate principal amount of the New Notes at any time outstanding, no
amendment or waiver of the Indenture may change any provision relating to (i)
events of default or remedies, (ii) the Guarantees, or (iii) the maturity of any
New Note (except for changes relating to the Stated Maturity, which require the
consent of each Holder). Without the consent of each Holder affected thereby, no
amendment or waiver of the Indenture may: (i) change the Stated Maturity of any
New Note, or reduce the principal amount thereof or the rate (or extend the time
for payment) of interest thereon or alter the redemption thereof (including any
price to be paid by the Company upon any redemption) in a manner adverse to any
Holder, or change the place of payment where, or the coin or currency in which,
any New Note or any premium or the interest thereon is payable, or impair the
right to institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date), (ii) reduce the percentage in principal amount of the
outstanding New Notes, the consent of whose Holders is required for any such
amendment, supplemental indenture or waiver provided for in the Indenture, (iii)
change the provisions described above under the caption 'Repurchase of New Notes
at the Option of the Holder Upon a Change of Control' in a manner that adversely
affects the rights of any Holder of New Notes, or (iv) change the terms of any
Asset Sale Offer (including, without limitation, the Asset Sale Offer Amount or
Asset Sale Offer Price) or any Event of Loss Offer (including, without
limitation, the Event of Loss Offer Amount or Event of Loss Offer Price) in a
manner that adversely affects the rights of any Holder of New Notes.
Notwithstanding the foregoing, without the consent of any Holder of New
Notes, the Company and the Trustee may amend or supplement the Indenture or the
New Notes for, among other purposes, to cure any ambiguity, defect or
inconsistency, to provide for uncertificated New Notes in addition to or in
place of certificated New Notes, to provide for the assumption of the Company's
Obligations to Holders of the New Notes in the case of a merger or
consolidation, to make any change that would provide any additional rights or
benefits to the Holders of the New Notes or that does not adversely affect the
legal rights under the Indenture of any Holder, to comply with the Trust
Indenture Act, or to set forth such other matters as may be necessary or
desirable in connection with the Exchange Offer.
SATISFACTION AND DISCHARGE
The Indenture will cease to be of further effect when either (a) all such
outstanding New Notes theretofore authenticated and delivered (except lost,
stolen or destroyed New Notes which have been replaced or paid) have been
delivered to the Trustee for cancellation or (b) all such New Notes not
theretofore delivered to the Trustee for cancellation have become due and
payable and the Company has irrevocably deposited or caused to be deposited with
the Trustee funds in an amount sufficient to pay and discharge the entire
indebtedness on the New Notes not theretofore delivered to the Trustee for
cancellation, for principal of, premium, if any, and interest to the Stated
Maturity of the New Notes; (ii) the Company has paid all other sums payable
under the Indenture; and (iii) the Company has delivered to the Trustee an
officers' certificate and an opinion of counsel each stating that all conditions
precedent under the Indenture relating to the satisfaction and discharge of the
Indenture have been complied with.
NO PERSONAL LIABILITY OF STOCKHOLDERS, EMPLOYEES, OFFICERS OR DIRECTORS
The Indenture will provide that no direct or indirect stockholder,
incorporator, employee, officer or director, as such, past, present or future of
the Company, the Guarantors or any successor entity shall have any personal
liability in respect of the Obligations of the Company or the Guarantors under
the Indenture or the New Notes by reason of his, her or its status as such
stockholder, incorporator, employee, officer or director.
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CERTAIN DEFINITIONS
'Acquired Indebtedness' with respect to a person means Indebtedness of
another person existing at the time such person becomes a Subsidiary of the
subject person or is merged or consolidated into or with the subject person or
one of its Subsidiaries, and not incurred in connection with or in anticipation
of, such merger or consolidation or such other person becoming a Subsidiary of
such subject person.
'Acquisition' means the purchase or other acquisition of any person or
substantially all the assets of any person by any other person, whether by
purchase, merger, consolidation or other transfer, and whether or not for
consideration.
'Adjusted Consolidated Net Income' means, with respect to any period,
Consolidated Net Income for such period, minus 100% of the amount of any
writedowns, writeoffs or negative extraordinary charges not otherwise reflected
in Consolidated Net Income during such period.
'Affiliate' means (i) any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or any
of its Subsidiaries, (ii) any spouse, immediate family member or other relative
who has the same principal residence of any person described in clause (i)
above, and (iii) any trust in which any person described in clause (i) or (ii)
above has a beneficial interest. For purposes of this definition, the term
'control' means (a) the power to direct the management and policies of a person,
directly or through one or more intermediaries, whether through the ownership of
voting securities, by contract, or otherwise, or (b) the beneficial ownership of
10% or more of any class of voting Capital Stock of a person (on a fully diluted
basis) or of warrants or other rights to acquire such class of Capital Stock
(whether or not presently exercisable).
'Average Life' means, as of the date of determination, with respect to any
security or instrument, the quotient obtained by dividing (i) the sum of the
products of the number of years from the date of determination to the date of
each successive scheduled principal (or redemption) payment of such security or
instrument multiplied by the amount of each such respective principal (or
redemption) payment by (ii) the sum of all such principal (or redemption)
payments.
'Beneficial Owner' for purposes of the definition of Change of Control has
the meaning attributed to it in Rules 13d-3 and 13d-5 under the Exchange Act,
whether or not applicable, except that a 'person' shall be deemed to have
'beneficial ownership' of all shares that any such person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time.
'Business Day' means each Monday, Tuesday, Wednesday, Thursday and Friday
that is not a day on which banking institutions in New York, New York are
authorized or obligated by law or executive order to close.
'Capital Stock' means, with respect to any corporation, any and all shares,
interests, rights to purchase (other than convertible or exchangeable
Indebtedness), warrants, options, participations or other equivalents of or
interests (however designated) in stock issued by that corporation.
'Capitalized Lease Obligation' means rental obligations under a lease that
are required to be capitalized for financial reporting purposes in accordance
with GAAP, and the amount of Indebtedness represented by such obligations shall
be the capitalized amount of such obligations, as determined in accordance with
GAAP.
'Cash Equivalent' means (i) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof), (ii) time deposits and
certificates of deposit having a maturity not greater than one year of any
domestic commercial bank, or U.S. branch of a foreign bank, of recognized
standing having capital and surplus in excess of $500,000,000, and time deposits
and certificates of deposit having a maturity not greater than one year of other
banks located in jurisdictions where the Company and its Subsidiaries do
business; provided, however, the aggregate amount of all time deposits and
certificates of deposit of such other banks may not exceed $5.0 million, (iii)
commercial paper rated at least A-2 or the equivalent thereof by Standard &
Poor's Corporation or at least P-2 or the equivalent thereof by Moody's
Investors Service, Inc. and maturing within one year after the date of
acquisition, (iv) repurchase obligations with a term of not more than ten days
for underlying securities of the types described in clause (i) above entered
into with any bank meeting the qualifications specified in clause (ii) above,
(v) marketable obligations issued by any state of the United States of America
or any political subdivision of any such state or any public instrumentality
thereof
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maturing, or payable at the demand of the holder thereof, within one year from
the date of acquisition thereof and, at the time of acquisition, having one of
the three highest ratings obtainable from either Standard & Poor's Corporation
or Moody's Investors Service, Inc.; and (vi) investments in money market funds
substantially all of whose assets comprise securities of the types described in
clauses (i) through (v) above.
'Casino' means any gaming establishment and other property or assets
directly ancillary thereto or used in connection therewith, including any
building, restaurant, hotel, theater, parking facilities, retail shops, land,
golf courses and other recreation and entertainment facilities, vessel, barge,
ship and equipment.
'Consolidated Coverage Ratio' of any person on any date of determination
(the 'Transaction Date') means, the ratio, on a pro forma basis, of (a) the
aggregate amount of Consolidated EBITDA of such person attributable to
continuing operations and businesses (exclusive of amounts attributable to
operations and businesses permanently discontinued or disposed of prior to the
Transaction Date) to (b) the aggregate Consolidated Fixed Charges of such person
(exclusive of amounts attributable to operations and businesses permanently
discontinued or disposed of prior to the Transaction Date but only to the extent
that the obligations giving rise to such Consolidated Fixed Charges would no
longer be obligations contributing to such person's Consolidated Fixed Charges
subsequent to the Transaction Date) during the Reference Period; provided,
however, that for purposes of such calculation, (i) Acquisitions which occurred
during the Reference Period or subsequent to the Reference Period and on or
prior to the Transaction Date shall be assumed to have occurred on the first day
of the Reference Period, (ii) transactions giving rise to the need to calculate
the Consolidated Coverage Ratio shall be assumed to have occurred on the first
day of the Reference Period, (iii) the incurrence of any Indebtedness or
issuance of any Disqualified Capital Stock during the Reference Period or
subsequent to the Reference Period and on or prior to the Transaction Date (and
the application of the proceeds therefrom to the extent used to refinance or
retire other Indebtedness) shall be assumed to have occurred on the first day of
such Reference Period, and (iv) the Consolidated Fixed Charges of such person
attributable to interest on any Indebtedness or dividends on any Disqualified
Capital Stock bearing a floating interest (or dividend) rate shall be computed
on a pro forma basis as if the average rate in effect from the beginning of the
Reference Period to the Transaction Date had been the applicable rate for the
entire period, unless such person or any of its Subsidiaries is a party to an
Interest Swap and Hedging Obligation (which shall remain in effect for the
12-month period immediately following the Transaction Date) that has the effect
of fixing the interest rate on the date of computation, in which case such rate
(whether higher or lower) shall be used.
'Consolidated Debt' means, with respect to any person, as of a specific
date, all Indebtedness of such person and its Consolidated Subsidiaries as of
such date, determined in accordance with GAAP.
'Consolidated EBITDA' means, with respect to any person, for any period,
the Consolidated Net Income of such person for such period adjusted to add
thereto (to the extent deducted from net revenues in determining Consolidated
Net Income), without duplication, the sum of (i) consolidated income tax
expense, (ii) consolidated depreciation and amortization expense, (iii)
Consolidated Fixed Charges, and (iv) consolidated preopening expenses.
'Consolidated Fixed Charges' of any person means, for any period, the
aggregate amount (without duplication and determined in each case in accordance
with GAAP) of (a) interest expense of such person for such period, whether paid
or accrued (including, in accordance with the following sentence, interest
attributable to Capitalized Lease Obligations), of such person and its
Consolidated Subsidiaries during such period, including, without limitation, to
the extent such expense was deducted in computing Consolidated Net Income for
such period (i) amortization of original issue discount and non-cash interest
payments or accruals on any Indebtedness, (ii) the interest portion of all
deferred payment obligations that constitute Indebtedness, and (iii) all
commissions, discounts and other fees and charges owed with respect to bankers'
acceptances and letters of credit financings and currency and Interest Swap and
Hedging Obligations, (b) one-third of rental expense for such period
attributable to operating leases of such person and its Consolidated
Subsidiaries, and (c) the amount of dividends payable by such person or any of
its Consolidated Subsidiaries in respect of Disqualified Capital Stock (other
than by Subsidiaries of such person to such person or such person's wholly-owned
Subsidiaries). For purposes of this definition, (x) interest on a Capitalized
Lease Obligation shall be deemed to accrue at an interest rate reasonably
determined by the Company to be the rate of interest implicit in such
Capitalized Lease Obligation in accordance with GAAP and (y) interest expense
attributable to any Indebtedness represented by the guarantee by such person or
a Subsidiary of such person of an obligation of another person shall be deemed
to be the interest expense attributable to the Indebtedness guaranteed.
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'Consolidated Net Income' means, with respect to any person for any period,
the net income (or loss) of such person and its Consolidated Subsidiaries
(determined in accordance with GAAP) for such period, adjusted to exclude (only
to the extent included in computing such net income (or loss) and without
duplication): (a) all gains (but not losses) which are either extraordinary (as
determined in accordance with GAAP) or are either unusual or nonrecurring
(including, without limitation, from the sale of assets outside of the ordinary
course of business or from the issuance or sale of any Capital Stock), (b) the
net income, if positive, of any person, other than a Consolidated Subsidiary, in
which such person or any of its Consolidated Subsidiaries has an interest,
except to the extent of the amount of any dividends or distributions actually
paid in cash to such person or a Consolidated Subsidiary of such person during
such period, but not in excess of such person's pro rata share of such person's
net income for such period, (c) the net income (or loss) of any person acquired
in a pooling of interests transaction for any period prior to the date of such
acquisition, (d) the net income, if positive, of any of such person's
Consolidated Subsidiaries to the extent that the declaration or payment of
dividends or similar distributions is not at the time permitted by operation of
the terms of its charter or bylaws or any other agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation (other than any Gaming
Law that is generally applicable to all persons operating Casinos through
Subsidiaries in any jurisdiction in which the Company or such Subsidiary is
conducting business so long as there is in effect no specific order, decree or
other prohibition pursuant to such Gaming Law in such jurisdiction limiting the
payment of a dividend or similar distribution by such a Consolidated Subsidiary)
applicable to such Consolidated Subsidiary and (e) the cumulative effect of a
change in accounting principles.
'Consolidated Net Worth' of any person at any date means the aggregate of
capital, surplus and retained earnings of such person and its Consolidated
Subsidiaries, as would be shown on the consolidated balance sheet of such person
prepared in accordance with GAAP adjusted to exclude (to the extent included in
calculating such equity), (a) the amount of capital, surplus and accrued but
unpaid dividends attributable to any Disqualified Capital Stock or treasury
stock of such person or any of its Consolidated Subsidiaries, (b) all upward
revaluations and other write-ups in the book value of any asset of such person
or a Consolidated Subsidiary of such person subsequent to the Issue Date and (c)
all investments in Subsidiaries that are not Consolidated Subsidiaries and in
persons that are not Subsidiaries.
'Consolidated Subsidiary' means, for any person, each Subsidiary of such
person (whether now existing or hereafter created or acquired) the financial
statements of which shall be (or should have been) consolidated for financial
statement reporting purposes with the financial statements of such person in
accordance with GAAP.
'Credit Agreement' means the credit agreement contemplated by that certain
letter dated March 15, 1995 to the Company from First Interstate Bank of Nevada,
N.A. and Bankers Trust Company, providing for an aggregate of $120.0 million
revolving credit facility or any substitute therefor, including any related
notes, guarantees, collateral documents, instruments and agreements executed in
connection therewith, as such credit agreement and/or related documents may be
amended, restated, supplemented, renewed, replaced or otherwise modified from
time to time whether or not with the same agent, trustee, representative lenders
or holders, and, subject to the proviso to the next succeeding sentence,
irrespective of any changes in the terms and conditions thereof. Without
limiting the generality of the foregoing, the term 'Credit Agreement' shall
include agreements in respect of Interest Swap and Hedging Obligations with
lenders party to the Credit Agreement and shall also include any amendment,
amendment and restatement, renewal, extension, restructuring, supplement or
modification to any Credit Agreement and all refundings, refinancings and
replacements of the Credit Agreement, and all refundings, refinancings and
replacements thereafter, including any agreement (i) extending the maturity of
any Indebtedness incurred thereunder or contemplated thereby, (ii) adding or
deleting borrowers, issuers or guarantors thereunder, so long as such borrowers,
issuers and guarantors include one or more of the Company and its Subsidiaries
and their respective successors and assigns, (iii) increasing the amount of
Indebtedness incurred thereunder or available to be borrowed thereunder,
provided, however, that on the date such additional Indebtedness is incurred the
incurrence thereof is permitted pursuant to paragraph (a) of the covenant
'--Limitation on Incurrence of Additional Indebtedness and Disqualified Capital
Stock,' or (iv) otherwise altering the terms and conditions thereof in a manner
not prohibited by the terms hereof.
'Current Market Price' on any date means the arithmetic mean of the Quoted
Price of the New Notes for the 20 consecutive trading days commencing 30 days
before such date.
'Disqualified Capital Stock' means (a) except as provided in (b), with
respect to any person, Capital Stock of such person that, by its terms or by the
terms of any security into which it is convertible, exercisable or
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exchangeable, is, or upon the happening of an event or the passage of time would
be, required to be redeemed or repurchased (including at the option of the
holder thereof) by such person or any of its Subsidiaries, in whole or in part,
on or prior to the Stated Maturity of the New Notes and (b) with respect to any
Subsidiary of such person (including any Subsidiary of the Company), any Capital
Stock other than any common stock with no special rights and no preferences,
privileges, or redemption or repayment provisions; provided, however, that the
Common Stock issued pursuant to, and subject to, the terms of the Beeber
Agreement shall not constitute Disqualified Capital Stock.
'Event of Loss' means, with respect to any property or asset, any (i) loss,
destruction or damage of such property or asset; or (ii) any condemnation,
seizure or taking, by exercise of the power of eminent domain or otherwise, of
such property or asset, or confiscation or requisition of the use of such
property or asset.
'Exchange Act' means the Securities Exchange Act of 1934, as amended.
'Excluded Person' means (a) the Company or any wholly-owned Guarantor, (b)
any employee benefit plan of the Company or any wholly-owned Guarantor or any
trustee or similar fiduciary holding Capital Stock of the Company for or
pursuant to the terms of any such plan, (c) Merv Griffin, (d) Edward Fishman,
(e) David Fishman, (f) Howard Goldberg, (g) Thomas E. Gallagher, (h) Marshall S.
Geller, (i) Lee Seidler, (j) Steven P. Perskie, (k) Peter J. Aranow and (l)
members of the immediate families and Affiliates (where the determination of
whether a person is an Affiliate is made without reference to clause (b) of the
definition of such term) of the foregoing persons.
'GAAP' means United States generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession as in effect on the Issue Date.
'Gaming Authority' means any Governmental Authority with the power to
regulate gaming in any Gaming Jurisdiction, and the corresponding Governmental
Authorities with the responsibility to interpret and enforce the laws and
regulations applicable to gaming in any Gaming Jurisdiction.
'Gaming Jurisdiction' means any Federal, state or local jurisdiction in
which any entity in which the Company has a direct or indirect beneficial, legal
or voting interest conducts casino gaming, now or in the future.
'Gaming Law' means any law, rule, regulation or ordinance governing gaming
activities (including, without limitation, The Riverboat Gambling Act of
Illinois, The Louisiana Riverboat Economic Development and Gaming Control Act,
the Missouri Riverboat Gaming Act, Mo. Rev. Stat. Section 313.800 et seq. and
the Nevada Gaming Control Act, in each case including all amendments or
modifications thereof), any administrative rules or regulations promulgated
thereunder, and any of the corresponding statutes, rules and regulations in each
Gaming Jurisdiction.
'Gaming Licenses' means every material license, material franchise or other
material authorization required to own, lease, operate or otherwise conduct or
manage riverboat, dockside or land-based gaming in any state or jurisdiction in
which the Company or any of the Guarantors conduct business now or in the future
and any applicable liquor licenses.
'Governmental Authority' means any agency, authority, board, bureau,
commission, department, office or instrumentality of any nature whatsoever of
the United States or foreign government, any state, any province or any city or
other political subdivision or otherwise and whether now or hereafter in
existence, or any officer or official thereof, and any maritime authority.
'Guarantors' means (1) the Initial Guarantors and (2) all future
Subsidiaries of the Company.
'Guarantees' means the guarantees in favor of the Holders executed by the
Initial Guarantors and to be executed by all future Subsidiaries of the Company.
'Indebtedness' of any person means, without duplication, (a) all
liabilities and obligations, contingent or otherwise, of such person, (i) in
respect of borrowed money (whether or not the recourse of the lender is to the
whole of the assets of such person or only to a portion thereof), (ii) evidenced
by bonds, notes, debentures or similar instruments, (iii) representing the
balance deferred and unpaid of the purchase price of any property or services,
except (other than accounts payable or other obligations to trade creditors
which have remained unpaid
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for greater than 90 days past their original due date or that are being
contested in good faith and for which adequate reserves have been made) those
incurred in the ordinary course of its business that would constitute ordinarily
a trade payable to trade creditors, (iv) evidenced by bankers' acceptances or
similar instruments issued or accepted by banks, (v) for the payment of money
relating to a Capitalized Lease Obligation, or (vi) evidenced by a letter of
credit or a reimbursement obligation of such person with respect to any letter
of credit; (b) all net obligations of such person under Interest and Hedging
Swap Obligations; (c) all liabilities of others of the kind described in the
preceding clause (a) or (b) that such person has guaranteed or that is otherwise
its legal liability and all obligations to purchase, redeem or acquire any
Capital Stock; (d) all obligations secured by a Lien to which the property or
assets (including, without limitation, leasehold interests and any other
tangible or intangible property rights) of such person are subject, whether or
not the obligations secured thereby shall have been assumed by or shall
otherwise be such person's legal liability, provided, however, that the amount
of such obligations shall be limited to the lesser of the fair market value of
the assets or property to which such Lien attaches and the amount of the
obligation so secured; and (e) any and all deferrals renewals, extensions,
refinancings and refundings (whether direct or indirect) of, or amendments,
modifications or supplements to, any liability of the kind described in any of
the preceding clauses (a), (b), (c) or (d), or this clause (e), whether or not
between or among the same parties.
'Initial Guarantors' means Players Lake Charles, Inc., a Louisiana
corporation; Players Riverboat Management, Inc., a Nevada corporation; Players
Riverboat, Inc., a Nevada corporation; Players Mesquite Golf Club, Inc., a
Nevada corporation; Players Indiana, Inc., an Indiana corporation; Players
Michigan City, Inc., an Indiana corporation; Players Riverboat, LLC, a Louisiana
limited liability company; Players Nevada, Inc., a Nevada corporation; Players
Bluegrass Downs, Inc., a Kentucky corporation; Players Mesquite Land, Inc., a
Nevada corporation; Players Michigan City Management, Inc., an Indiana
corporation; Players Maryland Heights, Inc., a Missouri corporation; River
Bottom, Inc., a Missouri corporation; Showboat Star Partnership, a Louisiana
general partnership; and Southern Illinois Riverboat/Casino Cruises, Inc., an
Illinois corporation.
'Interest Swap and Hedging Obligation' means any obligation of any person
pursuant to any interest rate swap agreement, interest rate cap agreement,
interest rate collar agreement, interest rate exchange agreement, currency
exchange agreement or any other agreement or arrangement designed to protect
against fluctuations in interest rates or currency values, including, without
limitation, any arrangement whereby, directly or indirectly, such person is
entitled to receive from time to time periodic payments calculated by applying
either a fixed or floating rate of interest on a stated notional amount in
exchange for periodic payments made by such person calculated by applying a
fixed or floating rate of interest on the same notional amount.
'Investment' by any person in any other person means (without duplication)
(a) the acquisition by such person (whether for cash, property, services,
securities or otherwise) of capital stock, bonds, notes, debentures, partnership
or other ownership interests or other securities, including any options or
warrants, of such other person or any agreement to make any such acquisition;
(b) the making by such person of any deposit with, or advance, loan or other
extension of credit to, such other person (including the purchase of property
from another person subject to an understanding or agreement, contingent or
otherwise, to resell such property to such other person) or any commitment to
make any such advance, loan or extension (but excluding accounts receivable
arising in the ordinary course of business); (c) other than the Guarantees of
the New Notes and guarantees of other Indebtedness of the Company or any
Subsidiary to the extent permitted by the covenant described under '--Limitation
on Incurrence of Additional Indebtedness and Disqualified Capital Stock,' the
entering into by such person of any guarantee of, or other credit support or
contingent obligation with respect to, Indebtedness or other liability of such
other person; (d) the making of any capital contribution by such person to
another person, other than to the Company or a wholly-owned Subsidiary; or (e)
the designation by the Board of Directors of the Company of a person to be an
Unrestricted Subsidiary in accordance with the definition of 'Unrestricted
Subsidiary.' The Company shall be deemed to make an 'Investment' in an amount
equal to the fair market value of the net assets of any person, determined by
the Board of Directors of the Company in good faith at the time that such person
is designated an Unrestricted Subsidiary, and any property transferred to an
Unrestricted Subsidiary from the Company or one of its Subsidiaries, shall be
deemed an Investment valued at its fair market value, determined by the Board of
Directors of the Company in good faith at the time of such transfer.
'Issue Date' means the date of first issuance of the New Notes under the
Indenture.
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'Maryland Heights Investment Subsidiary' means the wholly-owned Subsidiary
of the Company (which may be the Maryland Heights Operating Subsidiary) that
will make the Investment in the Maryland Heights Joint Venture Entity.
'Maryland Heights Joint Venture' means the joint venture and business
operations proposed to be conducted by the Company and its Subsidiaries, as
contemplated by that certain Letter of Intent dated March 3, 1995, among the
Company, The Promus Companies Incorporated (the predecessor of Harrah's before
Harrah's was the subject of a spin-off transaction) and Harrah's Club.
'Maryland Heights Joint Venture Entity' means the entity to be formed
jointly by the Company (or any wholly-owned Subsidiary thereof) and The Promus
Companies Incorporated or any successor thereto (i.e., Harrah's) or any
Affiliate thereof to develop and operate certain shoreside facilities in
connection with the Maryland Heights Joint Venture.
'Maryland Heights Operating Subsidiary' means the wholly-owned Subsidiary
of the Company that will operate a Casino and certain Related Business Assets in
connection with the Maryland Heights Joint Venture.
'Net Cash Proceeds' means the aggregate amount of U.S. Legal Tender or Cash
Equivalents received by the Company, in the case of a sale of Qualified Capital
Stock, and by the Company and its Subsidiaries in respect of an Asset Sale or an
Event of Loss, plus, in the case of an issuance of Qualified Capital Stock upon
any exercise, exchange or conversion of securities (including options, warrants,
rights and convertible or exchangeable debt) of the Company that were issued for
cash on or after the Issue Date, the amount of cash originally received by the
Company upon the issuance of such securities (including options, warrants,
rights and convertible or exchangeable debt), less, in each case, the sum of all
fees, commissions and other expenses incurred in connection with such Asset Sale
or an Event of Loss, and, in the case of an Asset Sale or an Event of Loss only,
less the amount (estimated reasonably and in good faith by the Company) of
income, franchise, sales and other applicable taxes required to be paid by the
Company or any of its Subsidiaries in connection with such Asset Sale or Event
of Loss.
'Non-recourse Indebtedness' means Indebtedness of a person to the extent
that under the terms thereof (including any related instruments, documents or
filings) (i) no personal recourse shall be had against such person for the
payment of the principal of or interest or premium on such Indebtedness, and
(ii) enforcement of obligations on such Indebtedness is limited only to recourse
against interests in property and assets purchased with the proceeds of the
incurrence of such Indebtedness or the Indebtedness refinanced by such
Indebtedness and as to which neither the Company nor any Subsidiary provides any
credit support.
'Obligation' means any principal, premium, interest, penalties, fees,
reimbursements, damages, indemnification and other liabilities relating to
obligations of the Company or any Guarantor under the New Notes, the Guarantees
or the Indenture, including any liquidated damages pursuant to the Exchange and
Registration Rights Agreement.
'Offer to Purchase' means any Change of Control Offer, Asset Sale Offer or
Event of Loss Offer.
'Paying Agent' means First Fidelity Bank, National Association or any
successor as paying agent under the Indenture.
'Pari Passu' as applied to the ranking of any Indebtedness of a person in
relation to other Indebtedness of such person, means that each such Indebtedness
either (i) is not subordinate or junior in right of payment to any Indebtedness
or (ii) is subordinate or junior in right of payment to the same Indebtedness as
is the other, and is so subordinate or junior to the same extent, and is not
subordinate or junior in right of payment to each other or to any Indebtedness
as to which the other is not so subordinate or junior.
'Permitted Indebtedness' means any of the following:
(a) The Company and each of its Subsidiaries may incur Indebtedness
solely in respect of bankers acceptances, letters of credit and performance
bonds (to the extent that such incurrence does not result in the incurrence
of any obligation for the payment of borrowed money of any person other
than the Company or such Subsidiary), all in the ordinary course of
business, in amounts and for the purposes customary in the Company's
industry for gaming operations similar to those of the Company and its
Subsidiaries; provided, however, that the aggregate principal amount
outstanding of such Indebtedness (including any Indebtedness
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issued to refinance, refund or replace such Indebtedness) for the Company
and its Subsidiaries shall at no time exceed $5.0 million;
(b) The Company may incur Indebtedness to any wholly-owned Subsidiary,
and any wholly-owned Subsidiary may incur Indebtedness, or issue
Disqualified Capital Stock, to any other wholly-owned Subsidiary or the
Company; provided, however, that such obligations, in any case where the
Company or a Guarantor is the obligor, shall be subordinated in all
respects to the Company's Obligations pursuant to the New Notes and each
Guarantor's Obligations pursuant to its Guarantee of the Company's
Obligations pursuant to the New Notes, as the case may be; and
(c) The Company and any Subsidiary may post a bond or surety
obligation (or incur an indemnity or similar obligation) in order to
prevent the impairment or loss of or to obtain a Gaming License, to the
extent required by applicable law and consistent in character and amount
with customary industry practice.
'Permitted Liens' means any of the following:
(a) Liens for taxes, assessments or other governmental charges not yet
due or which are being contested in good faith and by appropriate
proceedings by the Company or one or more of its Subsidiaries if adequate
reserves with respect thereto are maintained on the books of the Company or
such Subsidiary or Subsidiaries, as the case may be, in accordance with
GAAP;
(b) Liens of carriers, warehousemen, mechanics, landlords,
materialmen, repairmen and for crew wages or salvage or other like Liens
arising by operation of law in the ordinary course of business and
consistent with industry practices and Liens on deposits made to obtain the
release of such Liens if (i) the underlying obligations are not overdue for
a period of more than 60 days or (ii) such Liens are being contested in
good faith and by appropriate proceedings by the Company or its Subsidiary
and adequate reserves with respect thereto are maintained on the books of
the Company or such Subsidiary, as the case may be, in accordance with
GAAP;
(c) easements, rights-of-way, zoning and similar restrictions and
other similar encumbrances or title defects incurred or imposed, as
applicable, in the ordinary course of business and consistent with industry
practices which, in the aggregate, are not substantial in amount, and which
do not in any case materially detract from the value of the property
subject thereto (as such property is used by the Company or its Subsidiary)
or interfere with the ordinary conduct of the business of the Company or
such Subsidiary; provided, however, that any such Liens are not incurred in
connection with any borrowing of money or any commitment to loan any money
or to extend any credit;
(d) Liens disclosed on a schedule to the Indenture;
(e) Liens that secure Acquired Indebtedness of the Company or any of
its Subsidiaries, provided, however, in each case, that such Liens do not
secure any other property or assets and were not put in place in connection
with or in anticipation of such acquisition, merger or consolidation;
(f) customary Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business in connection with
worker's compensation, unemployment insurance and other types of social
security legislation;
(g) judgment and attachment Liens with respect to judgments and
attachments not giving rise to an Event of Default; and
(h) any Lien in favor of the Company or any wholly-owned Subsidiary
thereof.
'Person' or 'person' means an individual, corporation, partnership,
association, limited liability company, limited liability partnership, trust,
estate or other entity.
'Purchase Money Indebtedness' means any Non-recourse Indebtedness of such
person owed to any seller or other person incurred to finance the acquisition of
any Related Business Assets and incurred substantially concurrently with or
within 30 days following such acquisition.
'Qualified Capital Stock' means any Capital Stock of the Company that is
not Disqualified Capital Stock.
'Qualified Exchange' means any defeasance, redemption, repurchase or other
acquisition of Capital Stock or Subordinated Indebtedness of the Company with
the Net Cash Proceeds received by the Company from the
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substantially concurrent sale of Qualified Capital Stock of the Company or in
exchange for Qualified Capital Stock of the Company.
'Quoted Price' means for any day the last reported sale price regular way
or, in case no such reported sale takes place on such day, the average of the
closing bid and asked prices regular way for such day, in either case on the
principal national securities exchange on which the New Notes are listed or
admitted to trading, or if the New Notes are not listed or admitted to trading
on any national securities exchange, but are traded in the over the counter
market, the closing sale price of the New Notes or, in case no sale is publicly
reported, the average of the closing bid and asked prices, as furnished by two
members of the National Association of Securities Dealers, Inc. selected from
time to time by the Company for that purpose.
'Reference Period' with regard to any person means the four full fiscal
quarters (or such lesser period during which such person has been in existence)
for which financial information is available ended immediately preceding any
date upon which any determination is to be made pursuant to the terms of the New
Notes or the Indenture.
'Refinancing Indebtedness' means Indebtedness or Disqualified Capital Stock
(a) issued in exchange for, or the proceeds from the issuance and sale of which
are used substantially concurrently to repay, redeem, defease, refund,
refinance, discharge or otherwise retire for value, in whole or in part, or (b)
constituting an amendment, modification or supplement to, or a deferral or
renewal of ((a) and (b) above are, collectively, a 'Refinancing'), any
Indebtedness or Disqualified Capital Stock in a principal amount or, in the case
of Disqualified Capital Stock, liquidation preference, not to exceed (after
deduction of reasonable and customary fees and expenses incurred in connection
with the Refinancing) the lesser of (i) the principal amount or, in the case of
Disqualified Capital Stock, liquidation preference, of the Indebtedness or
Disqualified Capital Stock refinanced and (ii) if such Indebtedness being
refinanced was issued with an original issue discount, the accreted value
thereof (as determined in accordance with GAAP) at the time of such Refinancing;
provided, however, that (A) Refinancing Indebtedness of any Guarantor shall only
be used to refinance outstanding Indebtedness or Disqualified Capital Stock of
such Guarantor, (B) Refinancing Indebtedness shall (x) not have an Average Life
shorter than the Indebtedness or Disqualified Capital Stock to be so refinanced
at the time of such Refinancing and (y) in all respects, be no less
subordinated, if applicable, to the rights of holders of the New Notes than was
the Indebtedness or Disqualified Capital Stock to be refinanced and (C) such
Refinancing Indebtedness shall have no installment of principal (or redemption)
scheduled to come due earlier than the scheduled maturity of any installment of
principal of the Indebtedness (or Disqualified Capital Stock) to be so
refinanced which was scheduled to come due prior to the Stated Maturity.
'Regulatory Redemption' means (i) a disposition by the Holder of any New
Notes required by any Governmental Authority or the Board of Directors of the
Company or (ii) a redemption or repurchase by the Company of any New Notes
required by any Governmental Authority or the Board of Directors of the Company
if, in either case, the ownership of any of the New Notes by the Holder thereof
will preclude, interfere with, threaten or delay the issuance, maintenance,
existence or reinstatement of any gaming or liquor license, permit or approval,
or result in the imposition of burdensome terms or conditions on such license,
permit or approval.
'Related Business' means the gaming (including parimutuel betting) business
conducted (or proposed to be conducted) by the Company and its Subsidiaries as
of the Issue Date and any and all reasonably related businesses necessary for,
in support or anticipation of and ancillary to or in preparation for, the gaming
business including, without limitation, the development, expansion or operation
of any Casino (including any land-based, dockside, riverboat or other type of
Casino), owned, or to be owned, by the Company or one of its Subsidiaries.
'Related Business Asset' means property, goods or services pertaining to a
Related Business, other than debt or securities of any other person.
'Restricted Investment' means, in one or a series of related transactions,
any Investment other than in Cash Equivalents and in Investments of the type set
forth in clause (v) of the definition of Cash Equivalents that have a maturity
longer than one year so long as the Average Life of all such Investments does
not exceed 15 months; provided, however, that the extension of credit to
customers of Casinos consistent with industry practice in the ordinary course of
business shall not be a Restricted Investment.
'Restricted Payment' means, with respect to any person, (a) the declaration
or payment of any dividend or other distribution in respect of Capital Stock of
such person or any Subsidiary of such person, (b) any payment on
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account of the purchase, redemption or other acquisition or retirement for value
of Capital Stock of such person, or any Subsidiary of such person, (c) any
purchase, redemption or other acquisition or retirement for value of, or any
defeasance of, any Subordinated Indebtedness, directly or indirectly, by such
person or a Subsidiary of such person, prior to the scheduled maturity, any
scheduled repayment of principal or any scheduled sinking fund payment, as the
case may be, of such Subordinated Indebtedness (including any payment in respect
of any amendment of the terms of any such Subordinated Indebtedness, which
amendment is sought in connection with any such acquisition of such Indebtedness
or seeks to shorten any such due date), and (d) any Restricted Investment
(including, in any case, the designation of a person as an Unrestricted
Subsidiary) by such person; provided, however, that the term 'Restricted
Payment' does not include (i) any dividend, distribution or other payment on or
with respect to Capital Stock of an issuer to the extent payable solely in
shares of Qualified Capital Stock of such issuer; (ii) any dividend,
distribution or other payment to the Company, or to any of its wholly-owned
Subsidiaries, by any of its Subsidiaries; (iii) Investments in or loans to a
wholly-owned Subsidiary the proceeds of which are used by such Subsidiary in a
Related Business activity of such Subsidiary; (iv) loans or advances to officers
or employees of the Company or any of its Subsidiaries to pay business related
expenses or relocation costs of such officers or employees in connection with
their employment by the Company or any of its Subsidiaries in an aggregate
amount outstanding at any time not exceeding $5.0 million for all such officers
and employers; (v) any Investment received as consideration for any Asset Sale
to the extent that the Company or any of its Subsidiaries is permitted to
receive such Investment without violating the provisions of the covenant
'--Limitation on Sale of Assets and Subsidiary Stock; Event of Loss'; and (vi)
Investments received as part of the settlement of litigation or in satisfaction
of extensions of credit to any Person otherwise permitted under the Indenture
pursuant to the reorganization, bankruptcy or liquidation of such Person.
'Significant Subsidiary' means any Subsidiary that would be a 'significant
subsidiary' as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act of 1933, as amended, as such regulation is in
effect on the date hereof.
'SIRCC' means Southern Illinois Riverboat/Casino Cruises, Inc., an Illinois
corporation.
'Stated Maturity,' when used with respect to the principal of any New Note,
means April 15, 2005 and, with respect to interest on any New Note, means the
scheduled date for payment of such interest.
'Subordinated Indebtedness' means Indebtedness of the Company or a
Guarantor, as applicable, that is subordinated by its express terms in right of
payment to the New Notes or any Guarantee, as applicable, in all respects and
has no scheduled installment of principal due, by maturity, redemption, sinking
fund payment or otherwise, on or prior to the Stated Maturity of the New Notes.
'Subsidiary,' with respect to any person, means (i) a corporation a
majority of whose Capital Stock with voting power, under ordinary circumstances,
to elect directors is at the time, directly or indirectly, owned by such person,
by such person and one or more Subsidiaries of such person or by one or more
Subsidiaries of such person or (ii) any other person (other than a corporation)
in which such person, one or more Subsidiaries of such person, or such person
and one or more Subsidiaries of such person, directly or indirectly, at the date
of determination thereof has at least a majority ownership interest. When used
with respect to the Company, Subsidiary shall be deemed to include any direct
Subsidiary of the Company and each indirect Subsidiary that is a direct
Subsidiary of the Company or one or more of its direct or indirect Subsidiaries.
Notwithstanding the foregoing, no Unrestricted Subsidiary shall be a Subsidiary
of the Company or any of its Subsidiaries.
'Unrestricted Subsidiary' means any person that, at the time of
determination, shall be an Unrestricted Subsidiary (as designated by the Board
of Directors of the Company, as provided below) provided that such person shall
not engage, to any substantial extent, in any line or lines of business activity
other than a Related Business. The Board of Directors of the Company may
designate any person (including any newly acquired or newly formed Subsidiary at
or prior to the time it is so formed or acquired) to be an Unrestricted
Subsidiary if (a) such Restricted Payment is not prohibited by the terms of the
covenant '--Limitation on Restricted Payments;' provided, however, that the
determination of whether a Restricted Payment is prohibited under such covenant
may be made without reference to clause (3) of the first paragraph thereof in
the case of an Investment in any person that would be a Subsidiary but for the
designation as an Unrestricted Subsidiary (except that the definition of
'Subsidiary,' solely for purposes of this proviso, shall be modified by
substituting '50% or more' for the words 'a majority' in clause (i) of such
definition and the word 'majority' in clause (ii) of such definition) engaged
solely in, or being formed solely for the purposes of engaging in, the business
of developing,
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constructing, expanding or acquiring (y) a Casino or Casinos and, if applicable,
any Related Businesses in connection with such Casino or Casinos, or (z) a
Related Business to be used primarily in connection with an existing Casino or
Casinos in which the Company or its Subsidiaries have at least a fifty percent
(50%) ownership interest, if (A) the Consolidated Coverage Ratio of the Company
for the Reference Period immediately preceding the date of such designation is
not less than 3.25 to 1; or (B) the ratio of the Consolidated Debt of the
Company as of the date of such designation to Consolidated EBITDA of the Company
for such Reference Period is less than 3.25 to 1; provided, further, that the
full amount of any Restricted Payment pursuant to the foregoing proviso shall be
deducted in the calculation of the aggregate amount of Restricted Payments
available to be made pursuant to clause (3) of the covenant '--Limitation on
Restricted Payments;' (b) such person does not own any Capital Stock of, or own
or hold any Lien on any property of, or hold any debt of, the Company or any
Guarantor and (c) such person does not, at the time of designation, and does not
thereafter, create, incur, issue, assume, guarantee or otherwise become directly
or indirectly liable with respect to any Indebtedness pursuant to which the
holder of such Indebtedness has recourse to any of the assets of the Company or
any of its Subsidiaries. Any such designation also constitutes a Restricted
Payment for purposes of the covenant '--Limitation on Restricted Payments.' The
Board of Directors of the Company may designate any Unrestricted Subsidiary to
be a Subsidiary, provided, however, that (i) no Default or Event of Default is
existing or will occur as a consequence thereof and (ii) immediately after
giving effect to such designation, on a pro forma basis, the Company could incur
at least $1.00 of additional Subordinated Indebtedness pursuant to clause (ii)
of paragraph (a) of the covenant described under '--Limitation on Incurrence of
Additional Indebtedness and Disqualified Capital Stock.' Each such designation
shall be evidenced by filing with the Trustee a certified copy of the resolution
giving effect to such designation and an Officers' Certificate certifying that
such designation complied with the foregoing conditions. Notwithstanding
anything to the contrary, no Initial Guarantor may be designated an Unrestricted
Subsidiary.
'U.S. Government Obligations' means direct non-callable obligations of, or
non-callable obligations guaranteed by, the United States of America for the
payment of which obligation or guarantee the full faith and credit of the United
States of America is pledged.
'U.S. Legal Tender' means such coin or currency of the United States of
America as at the time of payment is legal tender for the payment of public and
private debts.
BOOK-ENTRY; DELIVERY AND FORM
Except as set forth below, the New Notes will initially be issued in the
form of one or more registered notes in global form (the 'Global New Notes').
Each Global New Note will be deposited on the Expiration Date with, or on behalf
of, The Depository Trust Company (the 'Depository') and registered in the name
of Cede & Co., as nominee of the Depository.
DTC has advised the Company that it is (i) a limited purpose trust company
organized under the laws of the State of New York, (ii) a member of the Federal
Reserve System, (iii) a 'clearing corporation' within the meaning of the Uniform
Commercial Code, as amended, and (iv) a 'Clearing Agency' registered pursuant to
Section 17A of the Exchange Act. DTC was created to hold securities for its
participants (collectively, the 'Participants') and facilitates the clearance
and settlement of securities transactions between Participants through
electronic book-entry changes to the accounts of its Participants, thereby
eliminating the need for physical transfer and delivery of certificates. The
Depository's Participants include securities brokers and dealers (including the
Initial Purchasers), banks and trust companies, clearing corporations and
certain other organizations. Access to the Depository's system is also available
to other entities such as banks, brokers, dealers and trust companies
(collectively, the 'Indirect Participants') that clear through or maintain a
custodial relationship with a Participant, either directly or indirectly.
Holders of Notes that are Participants may elect to hold Notes through the
Depository. Holders of Notes who are not Participants may beneficially own
securities held by or on behalf of the Depository only through Participants or
Indirect Participants.
The Company expects that pursuant to procedures established by the
Depository (i) upon deposit of the Global New Notes, the Depository will credit
the accounts of Participants which have elected to receive New Notes pursuant to
the Exchange Offer with an interest in the Global New Note and (ii) ownership of
New Notes will be shown on, and the transfer of ownership thereof will be
effected through, records maintained by the Depository (with respect to the
interests of Participants), the Participants and the Indirect Participants. The
laws of some states require that certain persons take physical delivery in
definitive form of securities that they own
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and that security interests in negotiable instruments can only be perfected by
delivery of certificates representing the instruments. As a result, the ability
of a person having a beneficial interest in New Notes represented by a Global
New Note to pledge such interest to persons or entities that do not participate
in the Depository's system or to otherwise take actions with respect to such
interest, may be affected by the lack of a physical certificate evidencing such
interest.
So long as the Depository or its nominee is the registered owner of a
Global New Note, the Depository or such nominee, as the case may be, will be
considered the sole owner or Holder of the New Notes represented by the Global
New Note for all purposes under the Indenture. Except as provided below, owners
of beneficial interests in a Global New Note will not be entitled to have New
Notes represented by such Global New Note registered in their names, will not
receive or be entitled to receive physical delivery of Certificated Securities,
and will not be considered the owners or holders thereof under the Indenture for
any purpose, including with respect to the giving of any directions,
instructions or approvals to the Trustee thereunder.
Payments with respect to the principal of, premium, if any, and interest on
any New Notes represented by a Global New Note registered in the name of the
Depository or its nominee on the applicable record date will be payable by the
Trustee to or at the direction of the Depository or its nominee in its capacity
as the registered holder of the Global New Note representing such New Notes
under the Indenture. Under the terms of the Indenture, the Company and the
Trustee may treat the persons in whose names the New Notes, including the Global
New Notes, are registered as the owners thereof for the purpose of receiving
such payments and for any and all other purposes whatsoever. Consequently,
neither the Company nor the Trustee has or will have any responsibility or
liability for the payment of such amounts to beneficial owners of New Notes
(including principal, premium, if any, and interest), or to immediately credit
the accounts of the relevant Participants with such payment, in amounts
proportionate to their respective holdings in principal amount of beneficial
interest in the Global New Note as shown on the records of the Depository.
Payments by the Participants and the Indirect Participants to the beneficial
owners of New Notes will be governed by standing instructions and customary
practice and will be the responsibility of the Participants or the Indirect
Participants.
CERTIFICATED SECURITIES
Any person having a beneficial interest in a Global New Note may, upon
request to the Trustee, exchange such beneficial interest for Certificated
Securities. Upon any such issuance, the Trustee is required to register such
Certificated Securities in the name of such person or persons (or the nominee of
any thereof), and cause the same to be delivered thereto. In addition, if (i)
the Company notifies the Trustee in writing that the Depository is no longer
willing or able to act as a depository and the Company is unable to locate a
qualified successor with 90 days or (ii) the Company, at its option, notifies
the Trustee in writing that it elects to cause the issuance of New Notes in
definitive form under the Indenture, then, upon surrender by the Depository of
its Global New Note, Certificated Securities will be issued to each person that
the Depository identifies as the beneficial owner of the New Notes represented
by the Global New Note.
Neither the Company nor the Trustee shall be liable for any delay by the
Depository or any Participant or Indirect Participant in identifying the
beneficial owners of the related New Notes and each such person may conclusively
rely on, and shall be protected in relying on, instructions from the Depository
for all purposes (including with respect to the registration and delivery, and
the respective principal amounts, of the New Notes to be issued).
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company incorporates herein by reference, the following documents filed
with the Commission under the Exchange Act:
<TABLE>
<S> <C>
(a) The Company's Annual Report on Form 10-K for the year ended March 31, 1995;
(b) The description of the Company's Common Stock contained in the Company's General Form for
Registration of Securities (Form 10) dated August 13, 1986, File No. 0-14897, filed by the Company to
register such securities under the Exchange Act, including all amendments and reports filed for the
purpose of updating such description prior to the termination of the Exchange Offer;
(c) The information under the caption entitled 'Certain Transactions' on pages 13-16 of the Company's
Proxy Statement dated August 30, 1994 relating to its 1994 Annual Meeting of Stockholders; and
(d) All documents and reports subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to termination of the Exchange
Offer, shall be deemed to be incorporated by reference in this Prospectus and to be a part hereof
from the date of filing of such documents or reports.
</TABLE>
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded, except as so modified or superseded, shall
not be deemed to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus has been delivered, on the written or oral request of such
person, a copy of any or all of the documents incorporated herein by reference,
other than exhibits to such documents unless they are specifically incorporated
by reference into such documents. Requests for such copies should be directed
to: Peter J. Aranow, Executive Vice President, Chief Financial Officer and
Secretary, Players International, Inc., 800 Bilbo Street, Lake Charles,
Louisiana 70601, (518) 387-1560.
LEGAL MATTERS
The validity of the New Notes will be passed upon for the Company by
Morgan, Lewis & Bockius, Philadelphia, Pennsylvania.
EXPERTS
The consolidated financial statements of Players International, Inc. at
March 31, 1995 and for the year then ended, appearing in this Prospectus and
Registration Statement have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon appearing elsewhere herein and in
the Registration Statement and are included in reliance upon such report given
upon the authority of such firm as experts in accounting and auditing.
The financial statements of the Company as of and for the years ended March
31, 1993 and 1994 included or incorporated by reference in this Prospectus and
elsewhere in the Registration Statement have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their report with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said report.
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PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 1993, 1994 AND 1995
<TABLE>
<S> <C>
PAGE
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Report of Independent Auditors.......................................................................... F-2
Report of Independent Public Accountants................................................................ F-3
Audited Financial Statements:
Consolidated Balance Sheets........................................................................... F-4
Consolidated Statements of Operations................................................................. F-5
Consolidated Statements of Stockholders' Equity....................................................... F-6
Consolidated Statements of Cash Flows................................................................. F-7
Notes to Consolidated Financial Statements............................................................ F-9
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders
Players International, Inc.
We have audited the accompanying consolidated balance sheet of Players
International, Inc. as of March 31, 1995 and the related consolidated statements
of operations, stockholders' equity, and cash flows for the year then ended.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Players International, Inc. as of March 31, 1995, and the results of its
operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.
ERNST & YOUNG LLP
Philadelphia, Pennsylvania
May 19, 1995
F-2
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Stockholders and Board of Directors of Players International, Inc.:
We have audited the accompanying consolidated balance sheet of PLAYERS
INTERNATIONAL, INC. (a Nevada corporation) and subsidiaries as of March 31,
1994, and the related consolidated statements of operations, stockholders'
equity and cash flows for the years ended March 31, 1994 and 1993. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Players International, Inc.
and subsidiaries as of March 31, 1994, and the results of their operations and
their cash flows for the years ended March 31, 1994 and 1993 in conformity with
generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Las Vegas, Nevada
May 24, 1994
F-3
<PAGE>
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT PAR VALUE)
ASSETS
<TABLE>
<CAPTION>
MARCH 31,
----------------------
1994 1995
---------- ----------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents............................................................ $ 13,957 $ 23,886
Marketable securities, net (Note 2).................................................. 63,589 26,446
Accounts receivable, net of allowance for doubtful accounts of $43 at March 31, 1994
and $130 at March 31, 1995........................................................ 949 1,351
Notes receivable..................................................................... 1,320 1,279
Inventories.......................................................................... 494 863
Deferred income tax (Note 5)......................................................... 1,773 2,345
Prepaid expenses and other current assets............................................ 1,415 5,452
---------- ----------
Total current assets.............................................................. 83,497 61,622
---------- ----------
PROPERTY AND EQUIPMENT, net of accumulated depreciation and amortization of $3,619 at
March 31, 1994 and $10,248 at March 31, 1995 (Note 4)................................ 46,899 118,105
---------- ----------
DEFERRED INCOME TAX -- long-term (Note 5).............................................. 3,180 1,943
---------- ----------
INTANGIBLES, net (Note 1).............................................................. 1,716 39,130
---------- ----------
OTHER ASSETS........................................................................... 3,273 2,990
---------- ----------
$ 138,565 $ 223,790
---------- ----------
---------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt (Note 7)........................................... $ 154 $ 3,375
Accounts payable..................................................................... 2,669 8,233
Accrued liabilities (Note 3)......................................................... 9,877 27,030
Other liabilities.................................................................... 548 669
Income taxes payable (Note 5)........................................................ 2,893 --
---------- ----------
Total current liabilities......................................................... 16,141 39,307
---------- ----------
OTHER LONG-TERM LIABILITIES (Note 6)................................................. 869 2,808
---------- ----------
LONG-TERM DEBT, net of current portion (Note 7)........................................ 5,711 5,532
---------- ----------
COMMITMENTS AND CONTINGENCIES (Note 11)
STOCKHOLDERS' EQUITY:
Preferred stock, no par value, Authorized -- 10,000,000 shares, Issued and
outstanding -- none............................................................... -- --
Common stock, $.005 par value, Authorized -- 90,000,000 shares, Issued and
outstanding -- 26,357,100 shares at March 31, 1994 and 29,672,400 shares at March
31, 1995.......................................................................... 132 148
Additional paid-in capital........................................................... 106,883 121,712
Unrealized loss on marketable securities, net of tax................................. (150) (451)
Retained earnings.................................................................... 8,979 54,734
---------- ----------
Total stockholders' equity........................................................ 115,844 176,143
---------- ----------
$ 138,565 $ 223,790
---------- ----------
---------- ----------
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
F-4
<PAGE>
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
----------------------------------------
1993 1994 1995
------------ ------------ ------------
<S> <C> <C> <C>
REVENUES:
Casino................................................................ $ 4,606 $ 95,873 $ 210,942
Food and beverage..................................................... 546 5,314 7,406
Other................................................................. 577 5,895 5,347
------------ ------------ ------------
5,729 107,082 223,695
------------ ------------ ------------
COSTS AND EXPENSES:
Casino.................................................................. 2,177 35,145 74,839
Food and beverage..................................................... 505 5,094 6,799
Other gaming related and general costs................................ 1,712 23,680 48,050
Corporate administrative expenses..................................... -- 2,675 7,276
Pre-opening and gaming development costs.............................. 4,995 7,026 9,117
Depreciation and amortization......................................... 180 3,706 7,065
Option and stock compensation expense................................. -- 2,868 --
------------ ------------ ------------
9,569 80,194 153,146
------------ ------------ ------------
Income (loss) from continuing operations before other income (expense)
and provision for income taxes...................................... (3,840) 26,888 70,549
------------ ------------ ------------
OTHER INCOME (EXPENSE):
Interest income....................................................... 6 1,623 3,340
Other income, net..................................................... -- 83 275
Interest expense...................................................... (274) (887) (694)
------------ ------------ ------------
(268) 819 2,921
------------ ------------ ------------
Income (loss) from continuing operations before provision for income
taxes............................................................... (4,108) 27,707 73,470
PROVISION FOR INCOME TAXES.............................................. 34 10,255 27,715
------------ ------------ ------------
Income (loss) from continuing operations.............................. (4,142) 17,452 45,755
------------ ------------ ------------
DISCONTINUED OPERATIONS (Note 13):
Loss from discontinued operations..................................... (6,071) -- --
Loss on disposition of discontinued operations, including a provision
of $748 for operating losses during phase out period................ (960) -- --
------------ ------------ ------------
(7,031) -- --
------------ ------------ ------------
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE..................... -- 3,500 --
------------ ------------ ------------
NET INCOME (LOSS)....................................................... $ (11,173) $ 20,952 $ 45,755
------------ ------------ ------------
------------ ------------ ------------
WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK AND COMMON STOCK
EQUIVALENTS OUTSTANDING
(Note 1).............................................................. 13,042,500 28,436,600 31,169,600
------------ ------------ ------------
------------ ------------ ------------
WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK AND COMMON STOCK
EQUIVALENTS OUTSTANDING ASSUMING FULL DILUTION (Note 1)............... 13,042,500 28,987,200 31,636,700
------------ ------------ ------------
------------ ------------ ------------
EARNINGS (LOSS) PER COMMON AND COMMON EQUIVALENT SHARE:
From continuing operations $ (.32) $ .61 $ 1.47
From change in accounting principle................................... -- .12 --
From discontinued operations.......................................... (.54) -- --
------------ ------------ ------------
$ (.86) $ .73 $ 1.47
------------ ------------ ------------
------------ ------------ ------------
EARNINGS PER COMMON SHARE -- ASSUMING FULL DILUTION:
From continuing operations............................................ $ (.32) $ .60 $ 1.45
From change in accounting principle................................... -- .12 --
From discontinued operations.......................................... (.54) -- --
------------ ------------ ------------
$ (.86) $ .72 $ 1.45
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
F-5
<PAGE>
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED MARCH 31, 1995
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL ACCUMULATED
-------------------------- PAID-IN UNREALIZED EARNINGS
SHARES AMOUNT CAPITAL LOSS (DEFICIT)
------------- ----------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C>
BALANCE, March 31, 1992........................... 12,417,200 $ 62 $ 2,728 $ -- $ (800)
Shares issued for contract settlement........... 527,100 3 2,282 -- --
Shares issued under stock option plans.......... 423,600 2 322 -- --
Shares issued for warrants exercised............ 2,152,200 11 5,156 -- --
Shares issued in exchange of debentures......... 396,100 2 861 -- --
Shares issued for services...................... 75,000 -- 201 -- --
Proceeds allocated to warrants issued in
conjunction with sale of 15 percent series
A&B exchangeable debentures (Note 9)......... -- -- 257 -- --
Net Loss........................................ -- -- -- -- (11,173)
------------- ----------- ---------- ----------- ------------
BALANCE, March 31, 1993........................... 15,991,200 80 11,807 -- (11,973)
Shares issued under stock option plans.......... 502,800 3 948 -- --
Shares issued for warrants exercised............ 245,100 1 912 -- --
Shares issued in exchange for debentures........ 2,028,700 10 4,413 -- --
Shares sold in public offering and subsequent
registration costs........................... 7,499,300 38 85,935 -- --
Shares issued in connection with employment
contracts.................................... 90,000 -- 1,065 -- --
Compensation in connection with nonemployee
directors' options........................... -- -- 1,803 -- --
Unrealized loss on marketable securities, net of
tax.......................................... -- -- -- (150) --
Net income -- -- -- -- 20,952
------------- ----------- ---------- ----------- ------------
BALANCE, March 31, 1994........................... 26,357,100 132 106,883 (150) 8,979
Shares issued under stock option plans.......... 277,700 1 688 -- --
Shares issued in exchange for land.............. 381,000 2 4,237 -- --
Shares issued for warrants exercised............ 2,656,600 13 7,261 -- --
Tax benefit from exercise of nonqualified
options...................................... -- -- 2,643 -- --
Change in unrealized loss on marketable
securities, net of tax....................... -- -- -- (301) --
Net income...................................... -- -- -- -- 45,755
------------- ----------- ---------- ----------- ------------
BALANCE, March 31, 1995........................... 29,672,400 $ 148 $ 121,712 $ (451) $ 54,734
------------- ----------- ---------- ----------- ------------
------------- ----------- ---------- ----------- ------------
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
F-6
<PAGE>
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MARCH 31,
-------------------------------
1993 1994 1995
--------- --------- ---------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)............................................................. $ (11,173) $ 20,952 $ 45,755
Adjustments to reconcile net income (loss) to net cash provided by (used in)
operating activities:
Depreciation and amortization.............................................. 180 3,706 7,065
Option and stock compensation expense...................................... -- 2,868 --
Net benefit realized from deferred tax asset............................... -- (1,299) --
Loss from discontinued operations.......................................... 6,071 -- --
Loss on disposition of discontinued operations............................. 960 -- --
Cumulative effect of change in accounting principle........................ -- (3,500) --
Other...................................................................... -- 141 279
Changes in assets and liabilities, net of effects of discontinued operations:
Accounts and notes receivable.............................................. (19) (2,292) (450)
Inventories................................................................ (135) (349) (369)
Prepaid expenses and other current assets.................................. (335) (1,080) (4,037)
Other assets............................................................... (593) (2,741) 780
Accounts payable........................................................... 1,460 1,211 1,934
Accrued interest........................................................... 880 (880) --
Accrued liabilities........................................................ 1,320 8,871 1,487
Other liabilities.......................................................... 150 1,081 (340)
Net effect of discontinued operations......................................... (2,871) (2,822) --
--------- --------- ---------
Net cash provided by (used in) operating activities........................ (4,105) 23,867 52,104
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net purchases of property and equipment....................................... (5,195) (33,845) (62,419)
Costs in excess of fair value of tangible assets acquired..................... -- (1,755) (24,090)
Purchases of marketable securities............................................ -- (63,922) (22,970)
Proceeds from sale of marketable securities................................... -- -- 59,509
Other assets -- pre-opening costs -- riverboat................................ 550 -- --
Net effect of discontinued operations......................................... 281 423 --
--------- --------- ---------
Net cash used in investing activities...................................... (4,364) (99,099) (49,970)
--------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Additions to long-term debt, net of debt issuance costs....................... 6,991 -- --
Payments of long-term debt.................................................... (28) (7,133) (169)
Proceeds allocated to warrants issued in conjunction with sale of 15 percent
series A&B exchangeable debentures (Note 9)................................ 257 -- --
Issuance of common stock for warrants exercised............................... 5,168 263 7,273
Proceeds from sale of common stock, net of all issuance and subsequent
registration costs......................................................... -- 85,973 --
Proceeds from exercise of stock options....................................... 524 1,601 691
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
F-7
<PAGE>
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MARCH 31,
-------------------------------
1993 1994 1995
--------- --------- ---------
<S> <C> <C> <C>
Net effect of discontinued operations......................................... (219) (306) --
--------- --------- ---------
Net cash provided by financing activities.................................. 12,693 80,398 7,795
--------- --------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS....................................... 4,224 5,166 9,929
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD................................ 4,567 8,791 13,957
--------- --------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD...................................... $ 8,791 $ 13,957 $ 23,886
--------- --------- ---------
--------- --------- ---------
SUPPLEMENTAL CASH FLOW INFORMATION:
CONTINUING OPERATIONS:
Interest paid, including amount capitalized................................... $ 249 $ 2,050 $ 694
Income taxes paid............................................................. -- 8,761 30,102
Debt incurred to purchase property and equipment.............................. 10,513 -- 3,200
Common stock issued for purchase of land...................................... -- -- 4,238
Accrued liabilities incurred to purchase property and equipment............... -- -- 8,005
Accrued liabilities relating to costs in excess of fair value of tangible
assets acquired............................................................ -- -- 13,441
Tax benefit related to exercise of non-qualified stock options................ -- -- 2,643
Debentures exchanged for common stock......................................... 908 4,650 --
Debenture loan costs amortized into additional paid-in capital................ 44 227 --
Land transferred to joint venture............................................. -- 167 --
Unrealized loss on marketable securities, net of tax.......................... -- 150 301
DISCONTINUED OPERATIONS:
Interest paid................................................................. 73 27 --
Taxes paid.................................................................... 34 -- --
Debt incurred to purchase property and equipment.............................. 57 -- --
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
F-8
<PAGE>
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
Players International, Inc. ('the Company') through wholly owned
subsidiaries operates three riverboat casinos and a horse racetrack facility.
Through another wholly owned subsidiary, the Company expects to open a
land-based hotel and casino in Mesquite, Nevada on or about July 1, 1995. All
operations include food and beverage facilities. A retail gift shop is also
included in the operations of each casino.
The accompanying consolidated financial statements include the accounts of
the Company and its wholly owned subsidiaries. All significant intercompany
balances and transactions have been eliminated in consolidation.
Certain reclassifications have been made to the consolidated financial
statements as previously presented to conform to the current classifications.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original
maturity of three months or less to be cash equivalents. Cash and cash
equivalents are carried at cost which approximates market value.
Investments
In May, 1993, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 115 ('SFAS 115'), 'Accounting for Certain
Investments in Debt and Equity Securities.' The Company adopted the provisions
of the new standard for investments held as of or acquired after March 31, 1994.
Pursuant to SFAS 115, management has determined that the Company's marketable
securities should be classified as available-for-sale. As available-for-sale
investments, these securities are carried at fair value (previously carried at
amortized cost) and unrealized gains and losses are reported in a separate
component of stockholders' equity. The amortized cost of investments is adjusted
for amortization of premiums and the accretion of discounts to maturity. Such
amortization is included in interest income. Realized gains and losses are
included in other income. The cost of securities sold is based on the specific
identification method.
Revenues and Promotional Allowances
Casino revenues are the net of gaming wins less losses. Revenues exclude
the retail value of complimentary admissions, food and beverage and other items
furnished to customers, which totaled approximately $141,000, $3,385,000 and
$9,916,000 for the years ended March 31, 1993, 1994 and 1995, respectively.
The estimated costs of providing such complimentary services are included
in casino costs and expenses through inter-department allocations from the
department granting the services as follows (dollars in thousands):
<TABLE>
<CAPTION>
1993 1994 1995
--------- --------- ---------
<S> <C> <C> <C>
Food and beverage.................................................. $ 70 $ 1,398 $ 5,583
Admissions......................................................... -- 1,548 2,848
Other.............................................................. 49 218 717
--------- --------- ---------
$ 119 $ 3,164 $ 9,148
--------- --------- ---------
--------- --------- ---------
</TABLE>
Pre-opening and Gaming Development Costs
The Company is currently pursuing expansion opportunities in new gaming
jurisdictions. All pre-opening and gaming development costs are expensed as they
are incurred except for the cost of property and equipment which is capitalized.
F-9
<PAGE>
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
Inventories
Inventories consisting of food, beverage and gift items are stated at the
lower of cost (first-in, first-out) or market.
Depreciation and Amortization
The Company computes depreciation for property and equipment using
primarily the straight-line method over the estimated useful life of the assets.
Amortization of leasehold and land improvements is computed using the
straight-line method over the lesser of the estimated useful life or lease term.
The following estimated useful lives are used:
<TABLE>
<S> <C>
Riverboat..................................... 10 years
Furniture, fixtures and equipment............. 5 to 7 years
Building and improvements..................... 10 to 20 years
</TABLE>
Intangibles
Costs in excess of fair value of tangible assets acquired are recorded as
intangibles on the accompanying consolidated balance sheets and are being
amortized using the straight-line method over 15 years. At March 31, 1995 the
increase in intangibles of $37,531,000 primarily related to the purchase of a
riverboat.
The Company periodically evaluates whether the remaining estimated useful
life of intangibles may warrant revision or the remaining balance of intangibles
may not be recoverable, generally based upon expectations of nondiscounted cash
flows and operating income. Based on present operations and strategic plans, the
Company believes that no impairment of intangibles has occurred.
Per Share Amounts
Per share amounts have been computed based on the weighted average number
of outstanding shares and common stock equivalents, if dilutive, during each
period. All per share amounts and shares outstanding reflect the 3-for-2 stock
split declared on April 26, 1995 for stockholders of record at the close of
business on May 8, 1995. For the year ended March 31, 1993, the effect of
options and warrants was not considered since they were antidilutive. A summary
of the number of shares used in computing primary earnings per share follows:
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
----------------------------------------
1993 1994 1995
------------ ------------ ------------
<S> <C> <C> <C>
Weighted average number of shares
outstanding....................................... 13,042,500 23,669,400 27,233,000
Dilutive effect of options and warrants............. -- 4,767,200 3,936,600
------------ ------------ ------------
Shares used in computing primary earnings per
share............................................. 13,042,500 28,436,600 31,169,600
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
The number of shares used in computing fully diluted earnings per share for
the year ended March 31, 1994 includes the conversion of convertible debentures
as of April 1, 1993. Also, net income includes the elimination of interest
expense on the convertible debentures of $116,000, net of tax. Fully diluted
earnings per share reflect additional dilution related to stock options, due to
the use of the market price at the end of the period, when higher than the
average price for the period. As a result, the number of shares used in
computing fully diluted earnings per share is as follows:
F-10
<PAGE>
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
----------------------------------------
1993 1994 1995
------------ ------------ ------------
<S> <C> <C> <C>
Weighted average number of shares
outstanding....................................... 13,042,500 23,669,400 27,233,000
Dilutive effect of exchangeable debentures.......... -- 550,600 --
Dilutive effect of options and warrants............. -- 4,767,200 4,403,700
------------ ------------ ------------
Shares used in computing fully diluted earnings per
share............................................. 13,042,500 28,987,200 31,636,700
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
2. MARKETABLE SECURITIES
All marketable securities at March 31, 1994 and 1995 are municipal bonds.
The following is a summary of marketable securities as of March 31, 1994 and
1995 (dollars in thousands):
<TABLE>
<CAPTION>
MARCH 31,
--------------------
1994 1995
--------- ---------
<S> <C> <C>
Cost.................................................................... $ 63,844 $ 27,165
Gross unrealized losses................................................. (255) (719)
--------- ---------
Estimated fair value.................................................... $ 63,589 $ 26,446
--------- ---------
--------- ---------
</TABLE>
The gross realized gains and (losses) on marketable securities totaled
$136,000 and ($30,000) for the year ended March 31, 1995. There were no realized
gains or (losses) for the years ended March 31, 1994 and 1993.
The contractual maturities of marketable securities at March 31, 1995 were
(dollars in thousands):
<TABLE>
<CAPTION>
ESTIMATED
COST FAIR VALUE
--------- -----------
<S> <C> <C>
Due in one year or less................................................ $ -- $ --
Due in one year through five years..................................... $ 22,147 $ 21,552
Due after five years................................................... $ 5,018 $ 4,894
</TABLE>
3. ACCRUED LIABILITIES
A summary of the accrued liabilities is as follows (dollars in thousands):
<TABLE>
<CAPTION>
MARCH 31,
--------------------
1994 1995
--------- ---------
<S> <C> <C>
Medical insurance claims................................................. $ 618 $ 842
Chip and token liability................................................. 245 322
Accrued payroll and related expenses..................................... 3,074 3,253
Accrued expenses......................................................... 5,940 7,197
Current portion of liabilities related to the purchase of a riverboat.... -- 15,416
--------- ---------
$ 9,877 $ 27,030
--------- ---------
--------- ---------
</TABLE>
F-11
<PAGE>
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
4. PROPERTY AND EQUIPMENT
A summary of property and equipment, stated at cost is as follows:
<TABLE>
<CAPTION>
MARCH 31,
----------------------
1994 1995
---------- ----------
<S> <C> <C>
Land.................................................................. $ 1,133 $ 14,828
Riverboat and barges.................................................. 22,798 44,607
Furniture, fixtures and equipment..................................... 16,270 25,975
Leasehold and land improvements....................................... 10,063 12,000
Construction in progress.............................................. 254 30,943
Less -- accumulated depreciation and amortization..................... (3,619) (10,248)
---------- ----------
$ 46,899 $ 118,105
---------- ----------
---------- ----------
</TABLE>
5. INCOME TAXES
Effective April 1, 1993, the Company changed its method of accounting for
income taxes from the deferred method to the liability method required by FASB
Statement No. 109, 'Accounting for Income Taxes'. As permitted under the new
rules, prior years' financial statements have not been restated.
The cumulative effect of adopting Statement 109 as of April 1, 1993 was to
increase net income by $3,500,000.
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amount of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax assets and liabilities as of March 31, 1994 and 1995
are as follows (dollars in thousands):
<TABLE>
<CAPTION>
MARCH 31,
--------------------
1994 1995
--------- ---------
<S> <C> <C>
Deferred tax assets:
Reserve for discontinued operations...................................... $ 689 $ 607
Pre-opening, development and other costs................................. 3,696 4,422
Unrealized loss on marketable securities................................. 95 268
Accrued liabilities and prepaid expenses................................. -- 1,305
Deferred revenue......................................................... 422 268
Accrual of directors' option expense..................................... 674 558
--------- ---------
Total deferred tax assets............................................. 5,576 7,428
Deferred tax liabilities:
Tax over book depreciation............................................... 616 1,626
Prepaid expenses......................................................... -- 394
Other.................................................................... 7 1,120
--------- ---------
Total deferred tax liabilities........................................ 623 3,140
--------- ---------
Net deferred tax assets.................................................... $ 4,953 $ 4,288
--------- ---------
--------- ---------
</TABLE>
F-12
<PAGE>
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
5. INCOME TAXES--(CONTINUED)
Significant components of the provision for income taxes attributable to
continuing operations are as follows (dollars in thousands):
<TABLE>
<CAPTION>
DEFERRED LIABILITY METHOD
METHOD ------------------------------------
MARCH 31, 1993 MARCH 31, 1994 MARCH 31, 1995
--------------------- ----------------- -----------------
<S> <C> <C> <C>
Current:
Federal............................ $ -- $ 9,324 $ 23,263
State.............................. 34 2,004 4,451
--- ----------------- -----------------
Total current...................... 34 11,328 27,714
Deferred:
Federal............................ -- (873) (89)
State.............................. -- (200) 90
--- ----------------- -----------------
Total deferred....................... -- (1,073) 1
--- ----------------- -----------------
$ 34 $ 10,255 $ 27,715
--- ----------------- -----------------
--- ----------------- -----------------
</TABLE>
The reconciliation of income tax attributable to continuing operations
computed at the Federal statutory rates to income tax expense is:
<TABLE>
<CAPTION>
DEFERRED LIABILITY METHOD
METHOD ------------------------------------------------
MARCH 31, 1993 MARCH 31, 1994 MARCH 31, 1995
--------------------- ----------------------- -----------------------
<S> <C> <C> <C>
Federal statutory rate............... (34%) 35% 35%
State taxes on income, net of Federal
income tax benefit................. 1 4 4
Losses producing no current tax
benefit............................ 32 -- --
Tax exempt interest income from
municipal bonds.................... -- (2) (1)
-- --
---
Financial statement provision rate... (1%) 37% 38%
-- --
---
</TABLE>
6. OTHER LONG-TERM LIABILITIES
A summary of other long-term liabilities follows (dollars in thousands):
<TABLE>
<CAPTION>
MARCH 31,
--------------------
1994 1995
--------- ---------
<S> <C> <C>
Long-term portion of liabilities related to purchase of a riverboat........ $ -- $ 2,400
Other...................................................................... 869 408
--------- ---------
$ 869 $ 2,808
--------- ---------
--------- ---------
</TABLE>
F-13
<PAGE>
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
7. LONG-TERM DEBT
A summary of long-term debt is as follows (dollars in thousands):
<TABLE>
<CAPTION>
MARCH 31,
--------------------
1994 1995
--------- ---------
<S> <C> <C>
First Ships Mortgage, secured by a riverboat, interest at prime plus 2
percent (8 percent at March 31, 1994 and 1995) adjusted every 60
months, payable in monthly installments of $49, due 2013............... $ 5,803 $ 5,669
Note payable to Gem Gaming, Inc., unsecured, interest at 9% per year,
principal due the earlier of the opening of the Mesquite facility or
December 31, 1995...................................................... -- 3,200
Other.................................................................... 62 38
--------- ---------
5,865 8,907
Less -- current portion (154) (3,375)
--------- ---------
$ 5,711 $ 5,532
--------- ---------
--------- ---------
</TABLE>
The aggregate annual maturities of long-term debt at March 31, 1995 are as
follows (dollars in thousands):
<TABLE>
<CAPTION>
YEAR ENDING MARCH 31:
- -----------------------------------------------------------------
<S> <C>
1996........................................................ $3,375
1997........................................................ 164
1998........................................................ 169
1999........................................................ 184
2000........................................................ 199
Thereafter.................................................. 4,816
---------
$8,907
---------
---------
</TABLE>
8. STOCKHOLDERS' EQUITY
In July 1993, the Company issued 7,499,250 shares of its $.005 par value
common stock in a public offering. The price to the public was $12.50 per share.
Net proceeds of the offering, after deducting all associated costs, were
$86,238,400, or $11.50 per newly issued share.
9. COMMON STOCK OPTIONS AND WARRANTS
The Company has four stock option plans, the 1985 Incentive Stock Option
Plan ('1985 Plan') for employees covering 600,000 shares of common stock, the
1990 Incentive Stock Option and Non-Qualified Option Plan covering 1,200,00
shares of common stock ('1990 Plan'), the 1993 Incentive Stock Option and
Non-Qualified Option Plan covering 3,000,000 shares of common stock ('1993
Plan'), and the 1994 Directors Stock Incentive Plan ('1994 Plan') covering
900,000 shares of common stock. As of March 31, 1995, the Company had 116,686,
495,375, 286,500 and 840,000 shares available for issuance in connection with
future options that may be granted under the 1985 Plan, 1990 Plan, 1993 Plan and
1994 Plan, respectively. Options granted are generally exercisable between three
and ten years from date of grant.
F-14
<PAGE>
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
9. COMMON STOCK OPTIONS AND WARRANTS--(CONTINUED)
The following is a summary of the 1985, 1990, 1993, and 1994 Plans:
<TABLE>
<CAPTION>
1985 1990 1993 1994
PLAN PLAN PLAN PLAN SUB-TOTAL
--------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C>
Outstanding March 31, 1992............................. 418,875 -- -- -- 418,875
Granted.............................................. 15,000 936,375 -- -- 951,375
Exercised............................................ (75,000) (12,000) -- -- (87,000)
Expired or canceled.................................. (96,375) (720,000) -- -- (816,375)
--------- --------- ---------- --------- ----------
Outstanding March 31, 1993............................. 262,500 204,375 -- -- 466,875
Granted.............................................. -- 262,500 628,500 -- 891,000
Exercised............................................ (207,170) (48,225) -- -- (255,395)
Expired or canceled.................................. (9,701) (2,250) -- -- (11,951)
--------- --------- ---------- --------- ----------
Outstanding March 31, 1994............................. 45,629 416,400 628,500 -- 1,090,529
Granted.............................................. -- 267,000 1,995,000 60,000 2,322,000
Exercised............................................ (9,652) (12,737) -- -- (22,389)
Expired or canceled.................................. (7,500) (42,750) -- -- (50,250)
--------- --------- ---------- --------- ----------
Outstanding March 31, 1995............................. 28,477 627,913 2,623,500 60,000 3,339,890
--------- --------- ---------- --------- ----------
--------- --------- ---------- --------- ----------
Exercisable at March 31, 1995.......................... 16,327 257,927 439,502 -- 713,756
--------- --------- ---------- --------- ----------
--------- --------- ---------- --------- ----------
</TABLE>
In addition to the foregoing plans, other option and warrant activity is
listed below including total for all plans and the exercise price range per
share:
<TABLE>
<CAPTION>
NON-EMPLOYEE OTHER EXERCISE PRICE
DIRECTORS OPTIONS WARRANTS TOTAL RANGE PER SHARE
------------- ---------- ----------- ----------- ------------------
<S> <C> <C> <C> <C> <C>
Outstanding March 31, 1992............ -- 1,532,347 -- 1,951,222 $0.33 - $2.83
Granted............................. -- 161,544 7,237,544 8,350,463 $1.19 - $6.92
Exercised........................... -- (336,645) (2,152,161) (2,575,806) $0.33 - $3.00
Expired or canceled................. -- (740,292) -- (1,556,667) $0.33 - $2.50
------------- ---------- ----------- -----------
Outstanding March 31, 1993............ -- 616,954 5,085,383 6,169,212 $0.33 - $6.92
Granted............................. 332,877 -- -- 1,223,877 $6.25 - $17.83
Exercised........................... -- (247,355) (245,088) (747,838) $0.33 - $4.13
Expired or canceled................. -- (8,982) -- (20,933) $0.83 - $11.17
------------- ---------- ----------- -----------
Outstanding March 31, 1994............ 332,877 360,617 4,840,295 6,624,318 $0.33 - $17.83
Granted............................. -- -- 150,000 2,472,000 $11.50 - $16.58
Exercised........................... (112,500) (142,857) (2,740,295) (3,018,041) $0.33 - $11.17
Expired or canceled................. -- (260) -- (50,510) $0.83 - $17.83
------------- ---------- ----------- -----------
Outstanding March 31, 1995............ 220,377 217,500 2,250,000 6,027,767 $0.67 - $17.83
------------- ---------- ----------- -----------
------------- ---------- ----------- -----------
Exercisable at March 31, 1995......... 220,377 217,500 1,612,500 2,764,133
------------- ---------- ----------- -----------
------------- ---------- ----------- -----------
</TABLE>
On June 23, 1992, a subsidiary of the Company sold to accredited investors
15 percent series A&B exchangeable debentures with a face value of $5,815,000,
due April 14, 1997. In addition, 4,750,650 warrants to purchase common stock of
the Company were issued. The debentures were exchangeable for common stock of
the Company at the rate of 417 shares of common stock per $1,000 face value of
debt. The Company called all outstanding debentures for redemption on June 28,
1993. These debentures were exchanged for 2,028,750 shares of the Company's
common stock. The warrants were fully exercised prior to their expiration on
February 23, 1995.
F-15
<PAGE>
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
9. COMMON OPTIONS AND WARRANTS (CONTINUED)
Under a contract with a spokesperson for the riverboats through December
31, 1996, the Company issued 2,100,000 warrants to purchase common stock of the
Company. The warrants, which vest at 25% per year beginning January 1, 1993, are
exercisable at $2.67 per warrant.
10. EMPLOYEE BENEFIT PLANS
The Company has a defined contribution plan that provides retirement
benefits for eligible employees. Eligible employees may elect to participate by
contributing a percentage of their pre-tax earnings to the plan. Employee
contributions to the plan, up to certain limits, are matched at 25% by the
employer. The expense for the Company's defined contribution plan was $224,000
for the fiscal year ended March 31, 1995. There were no employer contributions
in the prior years.
11. COMMITMENTS AND CONTINGENCIES
The Company leases office space, land and equipment under operating leases
expiring at various dates through December 2011.
The minimum annual payments under noncancelable lease agreements at March
31, 1995 are as follows (dollars in thousands):
<TABLE>
<CAPTION>
YEAR ENDING MARCH 31:
- -------------
<S> <C>
1996........................................................ $2,180
1997........................................................ 963
1998........................................................ 766
1999........................................................ 440
2000........................................................ 7
Thereafter.................................................. 80
---------
$4,436
---------
---------
</TABLE>
A lease agreement for one of the Company's subsidiaries provided for
contingent payments based on either the greater of the annual minimum rent or
the calculated rent based on adjusted passenger admission. Rent expense for all
operating leases was as follows (dollars in thousands):
<TABLE>
<CAPTION>
YEARS ENDED MARCH 31,
-------------------------------
1993 1994 1995
--------- --------- ---------
<S> <C> <C> <C>
Minimum rentals.................................................... $ 606 $ 869 $ 2,213
Contingent payments................................................ -- 662 3,236
--------- --------- ---------
$ 606 $ 1,531 $ 5,449
--------- --------- ---------
--------- --------- ---------
</TABLE>
For the fiscal years ended March 31, 1994 and 1995, $203,000 and $101,000,
respectively, of rent expense is included in pre-opening and gaming development
costs in the accompanying consolidated statements of operations.
In 1994, the Company began construction of a land based casino in Mesquite,
Nevada. The total cost of the project is approximately $75-80 million. Costs
incurred through March 31, 1995 were approximately $44 million. The project is
expected to open on or about July 1, 1995.
The Company is a defendant in various lawsuits. In the opinion of
management and counsel, the outcome of these matters will not have a material
adverse effect on the Company's business or results of operations.
F-16
<PAGE>
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
A law firm performed legal services for the Company during the fiscal years
ended March 31, 1993, 1994 and 1995 for which it was paid fees in the aggregate
amount of $240,000, $955,000 and $1,293,000, respectively. The President of the
Company was a partner of the firm through May 1993.
A member of the board of directors was paid $70,000 during the year ended
March 31, 1995 in consideration for consulting services rendered.
12. TRANSACTIONS WITH RELATED PARTIES
The Company purchases promotional items from a company owned by certain
directors and stockholders of the Company. During the years ended March 31,
1993, 1994 and 1995, the Company paid $98,000, $79,000 and $306,000,
respectively, for such materials.
In June 1992, the Company sold $2,250,000 face value of the 15% series A
exchangeable debentures to The Griffin Group, Inc. (Griffin) (see Note 9). One
of the affiliates of Griffin acquired $150,000 face value of debentures and
779,100 of the detachable warrants from Griffin. Subsequent to this purchase, a
representative of Griffin, became a member of the Board of Directors of the
Company. In December 1992, Griffin entered into a contract under which Mr. Merv
Griffin became the spokesperson for the Company's riverboats (see Note 9). In
February 1993, Griffin and its affiliates exercised 622,950 and 107,550,
respectively, of the warrants attached to the debentures and became stockholders
of the Company.
13. DISCONTINUED OPERATIONS
In fiscal year 1993 the Board of Directors of the Company approved a plan
to concentrate its efforts on the development and operation of riverboat casinos
and to discontinue its marketing of various services and products related to
gaming, travel and entertainment industries. The discontinued operations include
the services and products of Players Club International, International Gaming
Promotions, Players World Travel, the 900 Game Show Network and its cash advance
services.
In July 1993, the Company sold substantially all of its assets relating to
(i) its Players Club membership club, which provides discount and other benefits
to individuals who participate in recreational gaming, and (ii) its Players
World Travel travel agency, to Privilege Players Club Group, Inc. ('Privilege
Players'), as assignee of Winners Entertainment Group, Inc. In consideration of
the sale of the Players Club and Players World Travel assets the Company
received $350,000 cash and Privilege Players assumed certain liabilities
relating to such assets.
The consolidated financial statements report separately the operating
results and cash flows of the discontinued operations. There was no operating or
cash flow activity resulting from the discontinued operations for the year ended
March 31, 1995. Summary operating results of the discontinued operations are as
follows (dollars in thousands):
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
------------------------
1994 1995
----------- -----------
<S> <C> <C>
Revenues............................................................. $ 14,640 $ 3,360
Costs and expenses................................................... 20,711 4,376
----------- -----------
Loss before provision for income taxes and loss on disposition of
discontinued operations............................................ (6,071) (1,016)
Provision for income taxes........................................... -- --
----------- -----------
Loss before loss on disposition of discontinued operations........... (6,071) (1,016)
Loss on disposition of discontinued operations....................... (960) --
----------- -----------
Net loss............................................................. $ (7,031) $ (1,016)
----------- -----------
----------- -----------
</TABLE>
F-17
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
13. DISCONTINUED OPERATIONS--(CONTINUED)
The net loss from discontinued operations for the year ended March 31,
1994, had been previously provided for and reflected on the March 31, 1993
financial statements as a net liability for discontinued operations. The
significant components of the net effect of discontinued operations on cash
flows from operating activities are as follows (dollars in thousands):
<PAGE>
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
------------------------
1994 1995
----------- -----------
<S> <C> <C>
Net loss............................................................. $ (7,031) $ (1,016)
Issuance of common stock under contract settlement................... 2,284 --
Amortization of deferred membership acquisition costs................ 5,756 --
Payment of deferred membership acquisition costs..................... (3,874) --
Other................................................................ 550 163
Changes in net liability of discontinued operations.................. (556) (1,969)
----------- -----------
$ (2,871) $ (2,822)
----------- -----------
----------- -----------
</TABLE>
There were no significant components of the net effect of discontinued
operations on cash flows from investing and financing activities.
14. SUBSEQUENT EVENTS
On April 17, 1995, the Company issued $150,000,000 aggregate principal
amount of 10-7/8% Senior Notes due to mature on April 15, 2005. Interest is
payable in cash semi-annually on April 15 and October 15 commencing October 15,
1995. The Company intends to use the net proceeds for future expansion and
development.
On April 26, 1995, the Board of Directors declared a 3-for-2 stock split
for stockholders of record at the close of business on May 8, 1995. All
references to share data have been retroactively restated to reflect this split.
F-18
<PAGE>
All tendered Old Notes, executed Letters of Transmittal and other related
documents should be directed to the Exchange Agent. Questions and requests for
assistance and requests for additional copies of the Prospectus, the Letter of
Transmittal and other related documents should be addressed to the Exchange
Agent as follows:
By Hand, Registered or Certified Mail
or Overnight Carrier:
First Fidelity Bank, National Association
123 South Broad Street, 12th Floor
Philadelphia, Pennsylvania 19109
By Facsimile:
(215) 985-7290
Attention: John H. Clapham
Confirm by telephone: (215) 985-7157
(Originals of all documents submitted by facsimile should be sent promptly by
hand, overnight courier, or registered or certified mail)
No person has been authorized to give any information or to make any
representation other than those contained in this Prospectus and the
accompanying Letter of Transmittal, and, if given or made, such information or
representation must not be relied upon as having been authorized. Neither this
Prospectus nor the accompanying Letter of Transmittal nor both together
constitute an offer to sell at the solicitation of an offer to buy any
securities other than the securities to which such offer or solicitation is
unlawful. Neither the delivery of this Prospectus or the Letter of Transmittal
or both together nor any exchange made hereunder shall, under any circumstances,
create any implication that there has been no change in the affairs of the
Company since the date hereof or that the information contained herein is
correct as of anytime subsequent to its date.
Until ________________, 1995 (25 days after the date of this Exchange
Offer), all dealers effecting transactions in the New Notes, whether or not
participation in this Exchange Offer, may be required to deliver a Prospectus.
OFFER TO EXCHANGE
ALL OUTSTANDING
10 7/8% SENIOR NOTES DUE 2005
($150,000,000 PRINCIPAL AMOUNT)
FOR 10 7/8% SENIOR NOTES
DUE 2005
PAYMENT OF PRINCIPAL AND
INTEREST UNCONDITIONALLY
GUARANTEED BY CERTAIN
OF ITS SUBSIDIARIES
-------------------------------
PROSPECTUS
-------------------------------
JULY __, 1995
---------------------------------------------------------
---------------------------------------------------------
---------------------------------------------------------
---------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses of the sale and
distribution of the securities being registered, all of which are being borne by
the Company.
<TABLE>
<S> <C>
Securities and Exchange Commission filing fee.............. $ 51,724.15
Trustee's fees and expenses................................ 5,000.00
Printing and engraving fees and expenses................... 75,000.00
Accounting fees and expenses............................... 50,000.00
Legal fees and expenses.................................... 75,000.00
Blue Sky fees and expenses................................. 10,000.00
Miscellaneous.............................................. 15,000.00
-------------
Total................................................. $ 281,724.15
-------------
-------------
</TABLE>
All of the amounts shown are estimates except for the fees payable to the
Securities and Exchange Commission.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
For information regarding provisions under which a director or officer of
the Company may be insured or indemnified in any manner against liability which
he may incur in his capacity as such, reference is made to Section 78.751 of the
Nevada General Corporation Law, as amended, which provides in its entirety as
follows:
'1. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
except an action by or in the right of the corporation, by reason of the fact
that he is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses, including attorneys' fees, judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with the action, suit or proceeding if he acted in good faith and in
a manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, has no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, does not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and that, with respect to any criminal action or
proceeding, he had reasonable cause to believe that his conduct was unlawful.
2. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses, including amounts paid in
settlement and attorneys' fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit if he acted in
good faith and in a manner which he reasonably believed to be in or not opposed
to the best interests of the corporation. Indemnification may not be made for
any claim, issue or matter as to which such a person has been adjudged by a
court of competent jurisdiction, after exhaustion of all appeals therefrom, to
be liable to the corporation or for amounts paid in settlement to the
corporation, unless and only to the extent that the court in which the action or
suit was brought or other court of competent jurisdiction determines upon
application that in view of all the circumstances of the case, the person is
fairly and reasonably entitled to indemnity for such expenses as the court deems
proper.
II-1
<PAGE>
3. To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections 1 and 2, or in defense of
any claim, issue or matter therein, he must be indemnified by the corporation
against expenses, including attorneys' fees, actually and reasonably incurred by
him in connection with the defense.
4. Any indemnification under subsections 1 and 2, unless ordered by a court
or advanced pursuant to subsection 5, must be made by the corporation only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the circumstances. The
determination must be made:
(a) By the stockholders;
(b) By the board of directors by majority vote of a quorum consisting of
directors who were not parties to the act, suit or proceeding;
(c) If a majority vote of a quorum consisting of directors who were not
parties to the act, suit or proceeding so orders, by independent legal counsel
in a written opinion; or
(d) If a quorum consisting of directors who were not parties to the act,
suit or proceeding cannot be obtained, by independent legal counsel in a written
opinion.
5. The articles of incorporation, the bylaws or an agreement made by the
corporation may provide that the expenses of officers and directors incurred in
defending a civil or criminal action, suit or proceeding must be paid by the
corporation as they are incurred and in advance of the final disposition of the
action, suit or proceeding, upon receipt of an undertaking by or on behalf of
the director or officer to repay the amount if it is ultimately determined by a
court of competent jurisdiction that he is not entitled to be indemnified by the
corporation. The provisions of this subsection do not affect any rights to
advancement of expenses to which corporate personnel other than directors or
officers may be entitled under any contract or otherwise by law.
6. The indemnification and advancement of expenses authorized in or ordered
by a court pursuant to this section:
(a) Does not exclude any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under the articles of
incorporation or any bylaw, agreement, vote of stockholders or disinterested
directors or otherwise, for either an action in his official capacity or an
action in another capacity while holding his office, except that
indemnification, unless ordered by a court pursuant to subsection 2 or for the
advancement of expenses made pursuant to subsection 5, may not be made to or on
behalf of any director or officer if a final adjudication establishes that his
acts or omissions involved intentional misconduct, fraud or a knowing violation
of the law and was material to the cause of action.
(b) Continues for a person who has ceased to be a director, officer,
employee or agent and inures to the benefit of the heirs, executors and
administrators of such a person.'
ARTICLE IX OF THE COMPANY'S BY-LAWS PROVIDES:
'Section 1--Right to Indemnification:
Each Indemnitee (as defined below) shall be indemnified and held harmless
by the Corporation for all actions taken by him and for all failures to take
action (regardless of the date of any such action or failure to take action) to
the fullest extent permitted by the Nevada General Corporation Law, as the same
exists or may hereafter be amended (but, in the case of any such amendment, the
rights of indemnification provided hereby shall continue as theretofore to the
maximum extent permitted by law notwithstanding such amendment unless such
amendment permits the Corporation to provide broader indemnification rights than
the law permitted the Corporation to provide prior to such amendment), against
all expense, liability and loss (including attorneys' fees, judgments, fines,
Employee Retirement Income Security Act excise taxes or penalties and amounts
paid or to be paid in settlement) actually and reasonably incurred or suffered
by the Indemnitee in connection with any proceeding (as defined below). The
right to indemnification conferred in this Article shall be a contract right and
shall include the right to be paid by the Corporation the expenses incurred by
an Indemnitee in defending a civil or criminal action, suit or proceeding as
they are incurred and in advance of the final disposition of such action,
II-2
<PAGE>
suit or proceeding; provided, however, that, if the Nevada General Corporation
Law continues so to require, the payment of such expenses incurred by an
Indemnitee in advance of the final disposition of such action, suit or
proceeding, shall be made only upon delivery to the Corporation of an
undertaking, by or on behalf of such Indemnitee, to repay all amounts so
advanced if it shall ultimately be determined by a court of competent
jurisdiction that such Indemnitee is not entitled to be indemnified by the
Corporation under this Article or otherwise.
(ii) Indemnification pursuant to this Section shall continue as to an
Indemnitee who has ceased to be a director or officer and shall inure to the
benefit of his or her heirs, executors and administrators.
(iii) For purpose of this Article, (A), 'Indemnitee' shall mean each
director or officer of the Corporation who was or is a party or is threatened to
be made a party to any Proceeding, by reason of the fact that he is or was a
director or officer of the Corporation, or is or was serving at the request of
the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, including
service with respect to employee benefit plans; and (B) 'Proceeding' shall mean
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative.
SECTION 2--INDEMNIFICATION OF EMPLOYEES AND AGENTS:
The Corporation may, by action of its Board of Directors, provide
indemnification to employees and agents of the Corporation with the same scope
and effect as of the foregoing indemnification of directors and officers.
SECTION 3--NON-EXCLUSIVITY OF RIGHTS:
The rights to indemnification and to the advancement of expenses provided
in this Article shall not be exclusive of any other rights that any person may
have or hereafter acquire under any statute, provision of the Articles of
Incorporation or By-laws, agreement, vote of stockholders or disinterested
directors or otherwise for either an action in his official capacity or an
action in another capacity while holding his office; provided, however, that if
the Nevada General Corporation Law so requires, indemnification, unless ordered
by a court (with respect to a proceeding by or in the right of the Corporation)
or for the advancement of expenses as set forth in Section 1 above, may not be
made to or on behalf of any director or officer if a final adjudication
establishes that his acts or omissions involved intentional misconduct, fraud or
a knowing violation of the law and was material to the cause of action.
SECTION 4--INSURANCE:
The Corporation may purchase and maintain insurance or make any other
financial arrangements permitted by applicable law on behalf of any person who
is or was a director, officer, employee or agent of the Corporation, or is or
was serving at the request of the Corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise for any liability asserted against him and liability and expenses
incurred by him in his capacity as a director, officer, employee or agent, or
arising out of his status as such, whether or not the Corporation has the
authority to indemnify him against such liability and expenses.'
The Company has purchased directors' and officers' liability insurance.
ITEM 16. EXHIBITS
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- --------- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1* -- Purchase Agreement by Players International, Inc. and certain subsidiaries to Donaldson Lufkin &
Jenrette Securities Corporation and Salomon Brothers Inc.
3.1** -- Articles of Incorporation of Players International, Inc.
3.2(1) -- By-laws of Players International, Inc.
4.1* -- Indenture among Players International, Inc., certain subsidiaries and First Fidelity Bank, National
Association, as Trustee, including form of Note (the 'Senior Note Indenture').
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- --------- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
4.2* -- Exchange and Registration Rights Agreement among Players International, Inc., certain subsidiaries,
Donaldson, Lufkin & Jenrette Securities Corporation and Salomon Brothers Inc.
4.3** -- Form of Letter of Transmittal regarding Exchange Offer concerning Players International, Inc. and
certain subsidiaries regarding 10 7/8% Senior Notes due 2005.
4.4** -- Form of First Supplemental Indenture to the Senior Note Indenture.
4.5** -- Form of Second Supplemental Indenture to the Senior Note Indenture.
5** -- Opinion of Morgan, Lewis & Bockius regarding validity of New Notes.
10.1 -- [Intentionally omitted].
10.2(2) -- The Company's 1985 Incentive Stock Option Plan.
10.3(3) -- Amendment No. 1 to the Company's 1985 Stock Option Plan.
10.4(4) -- The Company's 1990 Incentive Stock Option and Non-Qualified Option Plan, as amended.
10.5(1) -- The Company's 1993 Stock Incentive Plan.
10.6 -- [Intentionally omitted.]
10.7 -- [Intentionally omitted.]
10.8 -- [Intentionally omitted.]
10.9(1) -- Form of Registration Rights Agreement dated as of June 23, 1992 by and among the Company, Southern
Illinois Riverboat/Casino Cruises, Inc., and the purchasers named therein.
10.10(1) -- Agreement dated February 12, 1993 by and between Jebaco, Inc. and the Company with respect to the
assignment of an option agreement relating to the Downtowner Hotel.
10.11(1) -- Forms of Series A, B and C Warrants issued to Jebaco, Inc.
10.12(1) -- Form of Registration Rights Agreement with Jebaco, Inc.
10.13(1) -- Option Agreement dated December 24, 1991 by and among The Beeber Corporation and Elisabeth S.
Woodward and Jebaco, Inc. with respect to the Downtowner Hotel.
10.14(1) -- Amendment to Option Agreement dated March 9, 1993 by and among The Beeber Corporation and Elisabeth
S. Woodward and Players Lake Charles, Inc., a subsidiary of the Company, with respect to the
Downtowner Hotel.
10.15(1) -- License and Services Agreement dated December 8, 1992 by and among The Griffin Group, Inc., the
Company and Southern Illinois Riverboat/Casino Cruises, Inc., as amended.
10.16(1) -- [Intentionally omitted.]
10.17(1) -- Joint Venture Agreement dated May 1993 between Amerihost and a subsidiary of the Company with respect
to the construction of a hotel in Metropolis, Illinois.
10.18(1) -- Form of Employment Agreement with Howard A. Goldberg dated May 19, 1993.
10.19(1) -- Employment Agreement with Peter J. Aranow effective May 26, 1993.
10.20(1) -- [Intentionally omitted.]
10.21 -- [Intentionally omitted.]
10.22(5) -- Lease dated March 19, 1993 by and among the Beeber Corporation and Players Lake Charles, Inc., a
subsidiary of the Company.
10.23 -- [Intentionally omitted.]
10.24 -- [Intentionally omitted.]
10.25 -- [Intentionally omitted.]
10.26 -- [Intentionally omitted.]
10.27 -- [Intentionally omitted.]
10.28 -- [Intentionally omitted.].
10.29 -- [Intentionally omitted.]
10.30 -- [Intentionally omitted.]
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- --------- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
10.31(6) -- Agreement of Purchase and Sale dated June 16, 1994, between Gem Mesquite, Ltd. and Players Nevada,
Inc., a subsidiary of the Company (including form of letter Agreement from the Company to Gem
Mesquite, Ltd. relating to registration rights).
10.32(6) -- Transfer of Data Agreement dated June 16, 1994, between Gem Gaming, Inc. and Players Nevada, Inc.
(including form of Promissory Note).
10.33(6) -- Development Consulting Agreement dated June 16, 1994, between Gem Gaming, Inc. and Players Nevada,
Inc. (including form of 1994 Series G Warrant).
10.34(6) -- Option Transfer Agreement dated June 16, 1994, between Gem Gaming, Inc., Gem Mesquite, Ltd. and
Players Nevada, Inc.
10.35(7) -- Players International, Inc. 1994 Directors Stock Incentive Plan, as adopted April 14, 1994, and as
amended July 14, 1994.
10.36** -- Commitment Letter among Players International, Inc. and certain of its subsidiaries, First Interstate
Bank and certain other financial institutions.
10.37(8) -- Agreement for Sale of Partnership Interests among the Company and certain of its subsidiaries and
Showboat, Inc. and certain of its subsidiaries.
21(8) -- Subsidiaries of Players International, Inc.
23.1** -- Consent of Morgan, Lewis & Bockius (included in Exhibit 5).
23.2** -- Consent of Arthur Andersen LLP.
23.3** -- Consent of Ernst & Young LLP.
24* -- Powers of Attorney (included on pages II-6 through II-21).
25* -- Statement of Eligibility of First Fidelity Bank, National Association on Form T-1.
</TABLE>
* Previously filed.
** Filed herewith.
- ------------------
(1) Filed as an exhibit to the Company's Registration Statement on Form S-3,
File No. 33-61026 and incorporated herein by reference.
(2) Filed as an exhibit to the Company's Registration Statement on Form 10 filed
on August 13, 1986, File No. 0-14897, as amended on Form 8 filed October 17,
1987, and incorporated herein by reference.
(3) Filed as an exhibit to the Company's Annual Report on Form 10-K for the
fiscal year ended March 31, 1988 and incorporated herein by reference.
(4) Filed as an exhibit to the Company's Annual Report on Form 10-K for the
fiscal year ended March 31, 1991 and incorporated herein by reference.
(5) Filed as an exhibit to the Company's Registration Statement on Form S-3
filed on February 4, 1994, as amended by Form S-3, File No. 33-75006, and
incorporated herein by reference.
(6) Filed as an exhibit to the Company's Current Report on Form 8-K filed on
June 24, 1994.
(7) Filed as an exhibit to the Company's Registration Statement on Form S-3
filed on July 27, 1994.
(8) Filed as an exhibit to the Company's Annual Report on Form 10-K for the
fiscal year ended March 31, 1995.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
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
II-5
<PAGE>
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.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus 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.
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 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 the
be the initial bona fide offering thereof.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
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.
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing this Amendment No. 1 on Form S-4 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Las Vegas, State of Nevada on July 18,
1995.
PLAYERS INTERNATIONAL, INC.
By: _________________*________________
Edward Fishman,
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- -------------------------------------------- -------------------------------------------- ----------------
<S> <C> <C>
* Chairman, Chief Executive Officer and July 18, 1995
Edward Fishman Director (Principal Executive Officer)
* Vice Chairman and Director July 18, 1995
David Fishman
* Director July 18, 1995
Marshall Geller
* President, Chief Operating Officer and July 18, 1995
Howard Goldberg Director
* Director July 18, 1995
Lee Seidler
* Director July 18, 1995
Thomas E. Gallagher
* Executive Vice President, General Counsel July 18, 1995
Steven P. Perskie and Director
/S/PETER J. ARANOW Executive Vice President and Chief Financial July 18, 1995
Peter J. Aranow Officer (Principal Financial Officer)
* Controller (Principal Accounting Officer) July 18, 1995
Stephen Radusch
*By /S/PETER J. ARANOW
Peter J. Aranow
Attorney-in-fact
</TABLE>
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing this Amendment No.1 on Form S-4 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Las Vegas, State of Nevada on July 18, 1995.
PLAYERS RIVERBOAT MANAGEMENT, INC.
By: _________________*________________
Edward Fishman,
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- -------------------------------------------- -------------------------------------------- ----------------
<S> <C> <C>
* Chairman and Director July 18, 1995
Edward Fishman
* Vice Chairman and Director July 18, 1995
David Fishman
* President (Principal Executive Officer) and July 18, 1995
Howard Goldberg Director
/S/PETER J. ARANOW Treasurer (Principal Financial Officer) July 18, 1995
Peter J. Aranow
* Chief Accounting Officer July 18, 1995
Stephen Radusch
*By /S/PETER J. ARANOW
Peter J. Aranow
Attorney-in-fact
</TABLE>
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing this Amendment No. 1 on Form S-4 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Las Vegas, State of Nevada on July 18,
1995.
PLAYERS RIVERBOAT, INC.
By: _________________*________________
Edward Fishman,
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- -------------------------------------------- -------------------------------------------- ----------------
<S> <C> <C>
* Chairman and Director July 18, 1995
Edward Fishman
* Vice Chairman and Director July 18, 1995
David Fishman
* President (Principal Executive Officer) and July 18, 1995
Howard Goldberg Director
/S/PETER J. ARANOW Treasurer (Principal Financial Officer) July 18, 1995
Peter J. Aranow
* Chief Accounting Officer July 18, 1995
Stephen Radusch
*By /S/PETER J. ARANOW
Peter J. Aranow
Attorney-in-fact
</TABLE>
II-9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing this Amendment No. 1 on Form S-4 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Las Vegas, State of Nevada on July 18,
1995.
PLAYERS RIVERBOAT, LLC
By: PLAYERS RIVERBOAT MANAGEMENT, INC.
By: _________________*________________
Edward Fishman,
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the following
capacities on behalf of Players Riverboat Management, Inc. and on the dates
indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- -------------------------------------------- -------------------------------------------- ----------------
<S> <C> <C>
* Chairman and Director July 18, 1995
Edward Fishman
* Vice Chairman and Director July 18, 1995
David Fishman
* President (Principal Executive Officer) and July 18, 1995
Howard Goldberg Director
/S/PETER J. ARANOW Treasurer (Principal Financial Officer) July 18, 1995
Peter J. Aranow
* Chief Accounting Officer July 18, 1995
Stephen Radusch
*By /S/PETER J. ARANOW
Peter J. Aranow
Attorney-in-fact
</TABLE>
II-10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing this Amendment No. 1 on Form S-4 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Las Vegas, State of Nevada on July 18,
1995.
SHOWBOAT STAR PARTNERSHIP
By: PLAYERS RIVERBOAT, LLC
By: PLAYERS RIVERBOAT MANAGEMENT, INC.
By: _________________*________________
Edward Fishman,
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the following
capacities on behalf of Players Riverboat Management, Inc. and on the dates
indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- -------------------------------------------- -------------------------------------------- ----------------
<S> <C> <C>
* Chairman and Director July 18, 1995
Edward Fishman
* Vice Chairman and Director July 18, 1995
David Fishman
* President (Principal Executive Officer) and July 18, 1995
Howard Goldberg Director
/S/PETER J. ARANOW Treasurer (Principal Financial Officer) July 18, 1995
Peter J. Aranow
* Chief Accounting Officer July 18, 1995
Stephen Radusch
*By /S/PETER J. ARANOW
Peter J. Aranow
Attorney-in-fact
</TABLE>
II-11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing this Amendment No. 1 on Form S-4 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Las Vegas, State of Nevada on July 18,
1995.
PLAYERS NEVADA, INC.
By: _________________*________________
Edward Fishman,
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- -------------------------------------------- -------------------------------------------- ----------------
<S> <C> <C>
* Chairman and Director July 18, 1995
Edward Fishman
Vice Chairman and Director July 18, 1995
David Fishman
* President (Principal Executive Officer) July 18, 1995
Howard Goldberg and Director
/S/PETER J. ARANOW Treasurer (Principal Financial Officer) July 18, 1995
Peter J. Aranow
* Chief Accounting Officer July 18, 1995
Stephen Radusch
*By /S/PETER J. ARANOW
Peter J. Aranow
Attorney-in-fact
</TABLE>
II-12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing this Amendment No. 1 on Form S-4 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Las Vegas, State of Nevada on July 18,
1995.
PLAYERS MESQUITE GOLF CLUB, INC.
By: _________________*________________
Edward Fishman,
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- -------------------------------------------- -------------------------------------------- ----------------
<S> <C> <C>
* Chairman and Director July 18, 1995
Edward Fishman
* Vice Chairman and Director July 18, 1995
David Fishman
/S/HOWARD GOLDBERG President (Principal Executive Officer) July 18, 1995
Howard Goldberg and Director
/S/PETER J. ARANOW Treasurer (Principal Financial Officer) July 18, 1995
Peter J. Aranow
* Chief Accounting Officer July 18, 1995
Stephen Radusch
*By /S/PETER J. ARANOW
Peter J. Aranow
Attorney-in-fact
</TABLE>
II-13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing this Amendment No. 1 on Form S-4 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Las Vegas, State of Nevada on July 18,
1995.
PLAYERS MESQUITE LAND, INC.
By: _________________*________________
Edward Fishman,
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- -------------------------------------------- -------------------------------------------- ----------------
<S> <C> <C>
* Chairman and Director July 18, 1995
Edward Fishman
* Vice Chairman and Director July 18, 1995
David Fishman
* President (Principal Executive Officer) and July 18, 1995
Howard Goldberg Director
/S/PETER J. ARANOW Treasurer (Principal Financial Officer) July 18, 1995
Peter J. Aranow
* Chief Accounting Officer July 18, 1995
Stephen Radusch
*By /S/PETER J. ARANOW
Peter J. Aranow
Attorney-in-fact
</TABLE>
II-14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing this Amendment No. 1 on Form S-4 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Las Vegas, State of Nevada on July 18,
1995.
PLAYERS INDIANA, INC.
By: _________________*________________
Edward Fishman,
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- -------------------------------------------- -------------------------------------------- ----------------
<S> <C> <C>
* Chairman and Director July 18, 1995
Edward Fishman
* Vice Chairman and Director July 18, 1995
David Fishman
* President (Principal Executive Officer) and July 18, 1995
Howard Goldberg Director
/S/PETER J. ARANOW Treasurer (Principal Financial Officer) July 18, 1995
Peter J. Aranow
* Chief Accounting Officer July 18, 1995
Stephen Radusch
*By /S/PETER J. ARANOW
Peter J. Aranow
Attorney-in-fact
</TABLE>
II-15
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing this Amendment No. 1 on Form S-4 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Las Vegas, State of Nevada on July 18,
1995.
PLAYERS MICHIGAN CITY, INC.
By: _________________*________________
Edward Fishman,
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- -------------------------------------------- -------------------------------------------- ----------------
<S> <C> <C>
* Chairman and Director July 18, 1995
Edward Fishman
* Vice Chairman and Director July 18, 1995
David Fishman
* President (Principal Executive Officer) and July 18, 1995
Howard Goldberg Director
/S/PETER J. ARANOW Treasurer (Principal Financial Officer) July 18, 1995
Peter J. Aranow
* Chief Accounting Officer July 18, 1995
Stephen Radusch
*By /S/PETER J. ARANOW
Peter J. Aranow
Attorney-in-fact
</TABLE>
II-16
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing this Amendment No. 1 on Form S-4 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Las Vegas, State of Nevada on July 18,
1995.
PLAYERS MICHIGAN CITY MANAGEMENT, INC.
By: _________________*________________
Edward Fishman,
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- -------------------------------------------- -------------------------------------------- ----------------
<S> <C> <C>
* Chairman and Director July 18, 1995
Edward Fishman
* Vice Chairman and Director July 18, 1995
David Fishman
* President (Principal Executive Officer) and July 18, 1995
Howard Goldberg Director
/S/PETER J. ARANOW Treasurer (Principal Financial Officer) July 18, 1995
Peter J. Aranow
* Chief Accounting Officer July 18, 1995
Stephen Radusch
*By /S/PETER J. ARANOW
Peter J. Aranow
Attorney-in-fact
</TABLE>
II-17
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing this Amendment No. 1 on Form S-4 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Las Vegas, State of Nevada on July 18,
1995.
PLAYERS BLUEGRASS DOWNS, INC.
By: _________________*________________
Howard Goldberg,
President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- -------------------------------------------- -------------------------------------------- ----------------
<S> <C> <C>
/S/EDWARD FISHMAN Chairman and Director July 18, 1995
Edward Fishman
/S/DAVID FISHMAN Vice Chairman and Director July 18, 1995
David Fishman
* President (Principal Executive Officer) July 18, 1995
Howard Goldberg and Director
/S/PETER J. ARANOW Treasurer (Principal Financial Officer) July 18, 1995
Peter J. Aranow
* Chief Accounting Officer July 18, 1995
Stephen Radusch
*By /S/PETER J. ARANOW
Peter J. Aranow
Attorney-in-fact
</TABLE>
II-18
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing this Amendment No. 1 on Form S-4 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Las Vegas, State of Nevada on July 18,
1995.
RIVER BOTTOM, INC.
By: _________________*________________
Edward Fishman,
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- -------------------------------------------- -------------------------------------------- ----------------
<S> <C> <C>
* Chairman and Director July 18, 1995
Edward Fishman
* Vice Chairman and Director July 18, 1995
David Fishman
* President (Principal Executive Officer) and July 18, 1995
Howard Goldberg Director
/S/PETER J. ARANOW Treasurer (Principal Financial Officer) July 18, 1995
Peter J. Aranow
* Chief Accounting Officer July 18, 1995
Stephen Radusch
*By /S/PETER J. ARANOW
Peter J. Aranow
Attorney-in-fact
</TABLE>
II-19
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing this Amendment No. 1 on Form S-4 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Las Vegas, State of Nevada on July 18,
1995.
PLAYERS MARYLAND HEIGHTS, INC.
By: _________________*________________
Edward Fishman,
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- -------------------------------------------- -------------------------------------------- ----------------
<S> <C> <C>
* Chairman and Director July 18, 1995
Edward Fishman
* Vice Chairman and Director July 18, 1995
David Fishman
* President (Principal Executive Officer) and July 18, 1995
Howard Goldberg Director
/S/PETER J. ARANOW Treasurer (Principal Financial Officer) July 18, 1995
Peter J. Aranow
* Chief Accounting Officer July 18, 1995
Stephen Radusch
*By /S/PETER J. ARANOW
Peter J. Aranow
Attorney-in-fact
</TABLE>
II-20
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing this Amendment No. 1 on Form S-4 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Las Vegas, State of Nevada on July 18,
1995.
SOUTHERN ILLINOIS RIVERBOAT/CASINO
CRUISES, INC.
By: _________________*________________
Edward Fishman,
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- -------------------------------------------- -------------------------------------------- ----------------
<S> <C> <C>
* Chairman and Director July 18, 1995
Edward Fishman
* Vice Chairman and Director July 18, 1995
David Fishman
/S/HOWARD GOLDBERG President (Principal Executive Officer) and July 18, 1995
Howard Goldberg Director
/S/PETER J. ARANOW Treasurer (Principal Financial Officer) July 18, 1995
Peter J. Aranow
* Chief Accounting Officer July 18, 1995
Stephen Radusch
*By /S/PETER J. ARANOW
Peter J. Aranow
Attorney-in-fact
</TABLE>
II-21
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing this Amendment No. 1 on Form S-4 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Las Vegas, State of Nevada on July 18,
1995.
PLAYERS LAKE CHARLES, INC.
By: _________________*________________
Edward Fishman,
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- -------------------------------------------- -------------------------------------------- ----------------
<S> <C> <C>
* Chairman and Director July 18, 1995
Edward Fishman
* Vice Chairman and Director July 18, 1995
David Fishman
/S/HOWARD GOLDBERG President (Principal Executive Officer) and July 18, 1995
Howard Goldberg Director
/S/PETER J. ARANOW Treasurer (Principal Financial Officer) July 18, 1995
Peter J. Aranow
* Chief Accounting Officer July 18, 1995
Stephen Radusch
*By /S/PETER J. ARANOW
Peter J. Aranow
Attorney-in-fact
</TABLE>
II-22
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
PAGE NUMBER
EXHIBIT IN MANUALLY
NUMBER DESCRIPTION SIGNED COPY
- --------- ----------------------------------------------------------------------------------------------- --------------
<S> <C> <C> <C>
1 -- Purchase Agreement by Players International, Inc. and certain subsidiaries to
Donaldson Lufkin & Jenrette Securities Corporation and Salomon Brothers Inc.
3.1* -- Articles of Incorporation of Players International, Inc.
4.1 -- Indenture among Players International, Inc., certain subsidiaries and First Fidelity
Bank, National Association, as Trustee, including form of Note.
4.2 -- Exchange and Registration Rights Agreement among Players International, Inc.,
certain subsidiaries, Donaldson, Lufkin & Jenrette Securities Corporation and
Salomon Brothers Inc.
5* -- Opinion of Morgan, Lewis & Bockius regarding validity of Notes.
10.31* -- Commitment Letter among Players International, Inc. and certain of its subsidiaries,
First Interstate Bank and certain other financial institutions.
12* -- Calculation of Ratios.
21* -- Subsidiaries of Players International, Inc.
23.1* -- Consent of Morgan, Lewis & Bockius (included in Exhibit 5).
23.2* -- Consent of Arthur Andersen LLP
24 -- Powers of Attorney (included on pages II-6 through II-21).
25 -- Statement of Eligibility of First Fidelity Bank, National Association on Form T-1.
</TABLE>
* To be filed by amendment
<PAGE>
ARTICLES OF INCORPORATION
OF
PLAYERS CLUB INTERNATIONAL, INC.
WE, THE UNDERSIGNED natural persons of the age of twenty-one (21) years
or more, acting as incorporators of a corporation under the Nevada Business
Corporation Act, adopt the following Articles of Incorporation for such
corporation.
ARTICLE I - NAME
The name of the Corporation is Players Club International, Inc.
ARTICLE II - DURATION
The duration of the corporation is perpetual.
ARTICLE III - PURPOSES
The purpose or purposes for which this corporation is engaged are:
(a) To engage in all aspects of the business of marketing
memberships in a membership club and the operation of said
club with respect to certain pre-arranged membership benefits
such as discounts on hotel rooms, food, beverages,
entertainment, and related items, and any related business.
Also, for any and all other lawful purposes.
(b) To acquire by purchase, exchange, gift, bequest, subscription,
or otherwise; and to hold, own, mortgage, pledge, hypothecate,
sell, assign, transfer, exchange, or otherwise dispose of or
deal in or with its own
PH02/77681.1
<PAGE>
corporate securities or stock or other securities including,
without limitations, any shares of stock, bonds, debentures,
notes, mortgages, or other obligations, and any certificates,
receipts or other instruments representing rights or interests
therein on any property or assets created or issued by any
person, firm, associate, or corporation, or instrumentalities
thereof; to make payment therefor in any lawful manner or to
issue in exchange therefor its unreserved earned surplus for
the purchase of its own shares, and to exercise as owner or
holder of any securities, any and all rights, powers, and
privileges in respect thereof.
(c) To do each and everything necessary, suitable, or
proper for the accomplishment of any of the purposes or
the attainment of any one or more of the subjects
herein enumerated, or which may, at any time, appear
conducive to or expedient for the protection or benefit
of this corporation, and to do said acts as fully and
to the same extent as natural persons might, or could
do in any part of the world as principals, agents,
partners, trustees, or otherwise, either alone or in
conjunction with any other person, association, or
corporation.
(d) The foregoing clauses shall be construed both as
purposes and powers and shall not be held to limit or
restrict in any manner the general powers of the
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corporation, and the enjoyment and exercise thereof, as
conferred by the laws of the State of Nevada; and it is the
intention that the purposes and powers specified in each of
the paragraphs of this Article III shall be regarded as
independent purposes and powers.
ARTICLE IV - STOCK
The aggregate number of shares which this corporation shall have authority
to issue is 50,000,000 shares of Common Stock having a par value of $.001 per
share. All stock of the corporation shall be of the same class, common, and
shall have the same rights and preferences. Fully-paid stock of this corporation
shall not be liable to any further call or assessment.
ARTICLE V - AMENDMENT
These Articles of Incorporation may be amended by the affirmative vote of
"a majority" of the shares entitled to vote on each such amendment.
ARTICLE VI - SHAREHOLDERS RIGHTS
The authorized and treasury stock of this corporation may be issued at such
time, upon such terms and conditions and for such consideration as the Board of
Directors shall determine. Shareholders shall not have pre-emptive rights to
acquire unissued shares of the stock of this corporation.
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ARTICLE VII - CAPITALIZATION
This corporation will not commence business until consideration of a value
of at least $1,000 has been received for the issuance of said shares.
ARTICLE VIII - INITIAL OFFICE AND AGENT
Gateway Enterprises, Inc.
2050 Ellis Way
Elko, Nevada 89801
ARTICLE IX - DIRECTORS
The directors are hereby given the authority to do any act on behalf of the
corporation by law and in each instance where the Business Corporation Act
provides that the directors may act in certain instances where the Articles of
Incorporation authorize such action by the directors, the directors are hereby
given authority to act in such instances without specifically numerating such
potential action or instance herein.
The directors are specifically given the authority to mortgage or pledge
any or all assets of the business without stockholders' approval.
The number of directors constituting the initial Board of Directors of this
corporation is three. The names and addresses of persons who are to serve as
directors until the first annual meeting of stockholders or until their
successors are elected and qualify, are:
NAME ADDRESS
Edward Fishman 20201 Sherman Way, Suite 107
Canoga Park, CA 91306
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David Fishman 20201 Sherman Way, Suite 107
Canoga Park, CA 91306
Stanley Harfenish 20201 Sherman Way, Suite 107
Canoga Park, CA 91306
ARTICLE X - INCORPORATORS
The name and address of each incorporator is:
NAME ADDRESS
Thomas G. Kimble 311 South State, #440
Salt Lake City, UT 84111
Leon W. Crockett 311 South State, #440
Salt Lake City, UT 84111
Van L. Butler 311 South State, #440
Salt Lake City, UT 84111
ARTICLE XI
COMMON DIRECTORS - TRANSACTIONS BETWEEN CORPORATIONS
No contract or other transaction between this corporation and any one or
more of its directors or any other corporation, firm, association, or entity in
which one or more of its directors or officers are financially interested, shall
be either void or voidable because of such relationship or interest, or because
such director or directors are present at the meeting of the Board of Directors,
or a committee thereof, which authorizes, approves, or ratifies such contract or
transaction, or because his or their votes are counted for such purpose if: (a)
the fact of such relationship or interest is disclosed or known to the Board of
Directors or committee which authorizes, approves, or ratifies the contract or
transaction by vote or consent sufficient for the purpose without counting the
votes or consents of such interested director; or (b) the fact of such
relationship
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or interest is disclosed or know to the stockholders entitled to vote and they
authorize, approve, or ratify such contract or transaction by vote or written
consent, or (c) the contract or transaction is fair and reasonable to the
corporation.
Common or interested directors may be counted in determining the presence
of a quorum at a meeting of the Board of Directors or committee thereof which
authorizes, approves, or ratifies such contract or transaction.
Under penalties of perjury, we declare that these Articles of Incorporation
have been examined by us and are, to the best of our knowledge and belief, true,
correct and complete.
DATED this ____ day of April, 1985.
/s/ Thomas G. Kimble
Thomas G. Kimble
/s/ Leon W. Crockett
Leon W. Crockett
/s/ Van L. Butler
Van L. Butler
STATE OF UTAH )
: ss.
COUNTY OF SALT LAKE )
On the 23rd day of April, 1985, personally appeared before me, Thomas G.
Kimble, Leon W. Crockett and Van L. Butler, who duly acknowledged to me that
they signed the foregoing Articles of Incorporation.
My Commission Expires: /s/ Jody York
NOTARY PUBLIC
10/28/88 Residing at: Sandy, VT
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PLAN AND ARTICLES OF MERGER
This Plan and these Articles of Merger are hereby adopted by Players
Club International, Inc., a Utah corporation, (hereinafter "Players-Utah"), and
Players Club International, Inc., a Nevada corporation (hereinafter
"Players-Nevada"). This Plan and these Articles of Merger are adopted pursuant
to Section 78.486, Nevada Revised Statutes as amended; and Section 16-10-72,
Utah Code Annotated, 1953, as amended; all of such laws including the laws of
Nevada expressly permit the merger described herein; subject to and pursuant to
all of the terms and conditions as set forth herein.
I. PARTIES TO THE AGREEMENT
The parties to the Agreement are those corporations referred to in the
introductory paragraph hereof.
Players-Utah owns 100% of the issued and outstanding common stock of
Players-Nevada.
Players-Utah is to be merged into Players-Nevada; and Players-Nevada shall
be and is hereinafter designated as the "Surviving Corporation".
II. TERMS AND CONDITIONS OF MERGER
The merger shall be deemed effective when this Plan and these Articles have
been delivered to and filed with the Secretary of State for the State of Nevada.
The laws which are to govern the terms of this merger are the laws of
Nevada and the laws of Utah. The Surviving Corporation shall be a Nevada
corporation and shall be governed
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by the laws of Nevada and shall be continued to be governed by its existing
Articles of Incorporation on file in the State of Nevada.
Upon the effective date of this merger, the following results shall occur:
1. The two corporations which are parties to this Plan of Merger shall
become a single corporation, which shall be the Surviving Corporation, namely
Players-Nevada, a Nevada corporation, as provided for herein.
2. The separate existence of Players-Utah shall cease.
3. Such Surviving Corporation as designated herein shall have the rights,
privileges, immunities and powers and shall be subject to all duties and
obligations of the Corporation organized under the Nevada Business Corporation
Act.
4. The Surviving Corporation shall, upon the effective date hereof and
thereafter, possess all of the rights, privileges, immunities, and franchises as
well of a public and as of a private nature of each of the merged corporations;
all property, real, personal and mixed, and all debts due on whatever account,
including subscriptions to shares, and all other choses in action and all and
every other interest, of or belonging to or due to each of the corporation so
merged, shall be taken and deemed to be transferred and invested in such
Surviving Corporation without further act or deed; and the title to any real
estate or other property, or any interest therein, vested in any of such
corporations shall not revert to any other party or
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be in any way impaired by reason of such merger but shall vest in
the Surviving Corporation.
5. The Surviving Corporation shall henceforth be responsible and liable for
all of the liabilities and obligations and debts of each of the corporations so
merged; and any claim to existing action or proceeding pending by or against any
of such corporations may be prosecuted as if such merger had not taken place or
such Surviving Corporation may be substituted in the place of any submerged
corporation. Neither the rights of creditors nor any liens upon the property of
any merged corporation shall be impaired by the terms of this merger.
III. OWNERSHIP OF SHARES
Players-Nevada is a Nevada corporation and is a wholly-owned subsidiary of
Players-Utah and it has issued and outstanding 1,000 shares of common stock all
of which are owned by Players-Utah.
Players-Utah is a Utah corporation and as of May 14, 1985, had 27,250,000
shares of common stock issued and outstanding.
In the merger, Players-Nevada shall issue 27,250,000 shares of its common
stock to the stockholders of Players-Utah. All prior issued and outstanding
shares of common stock of Players-Utah shall be cancelled in the merger along
with the 1,000 shares of Players-Nevada presently held by Players-Utah.
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<PAGE>
IV. DIRECTORS' RESOLUTION
The Board of Directors and stockholders of Players-Utah and Players-Nevada,
each, pursuant to a duly convened meeting, held on May 14, 1985, held at 311
South State, Salt Lake City, Utah 84111, and upon motion duly made, seconded,
and carried, did duly and lawfully adopt the following resolution:
RESOLVED, that the officers of the Corporation are hereby authorized and
directed to execute and adopt a Plan and Articles of Merger to accomplish all
other acts necessary to consummate the Merger of Players Club International,
Inc., a Utah corporation into Players Club International, Inc., a Nevada
corporation, wherein Players Club International, Inc., a Nevada corporation, is
the Surviving Corporation. The terms and Articles of Merger shall provide for
the pro rata issuance of stock of the Surviving Corporation to the holders of
stock of the parent corporation as described above under the Article entitled
"Ownership of Shares".
This Plan and these Articles of Merger were duly approved by the
shareholders of Players-Utah and Players-Nevada at a meeting held on May 14,
1985, in Salt Lake City, Utah, after due notice of the purpose of the meeting
was mailed on or before April 23, 1985 to each of the stockholders of each of
said Corporations at said stockholder's address as they appeared on the records
of the Corporation. The Plan and Articles of Merger were duly approved by a
majority of the outstanding shares of the common stock of each corporation. The
number of shares voting in favor of said proposal being 21,800,000 and the
number of shares voted against the proposal to merge being -0-. A copy of the
Plan and Articles of Merger was mailed or hand delivered to each shareholder of
record of the subsidiary corporation, Players-Nevada. Such delivery was
accomplished on April 23, 1985.
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<PAGE>
V. COMPLIANCE WITH LAWS
All conditions required by the laws of the States of Nevada and Utah
applicable to the proposed merger have been satisfied.
VII. STATED CAPITAL
The amount of stated capital of the surviving corporation on the effective
date of the merger will be Twenty-Seven Thousand Two Hundred Fifty Dollars
($27,250).
VIII. SERVICE UNDER UTAH LAW
The Surviving Corporation hereby appoints Interwest Registrar and Transfer,
1981 East 4800 South, Salt Lake City, Utah 84117 as its registered agent in the
State of Utah for general service of process and agrees that it may be served
with process in Utah in any proceeding for the enforcement of any obligation of
Castle Peak Energy, a Utah corporation, and in any proceeding for the
enforcement of the rights of a dissenting shareholder of Castle Peak against the
Surviving Corporation. The Surviving Corporation hereby grants an irrevocable
appointment of the Lt. Governor - Secretary of State of Utah or legal successor
as its agent to accept service of process in any such proceedings; and agrees
that it will promptly pay to the dissenting shareholders of Castle Peak the
amount, if any, to which they shall be entitled under the provisions of Utah law
with respect to the rights of dissenting shareholders.
IX. SIGNATURES
This Plan and these Articles of Merger were duly adopted and executed in
duplicate by the President and Secretary of the
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<PAGE>
Surviving Corporation and each of the corporations which were parties hereto
this 14th day of May, 1985.
Attest: PLAYERS CLUB INTERNATIONAL, INC.
a Utah corporation
By:/s/ David Fishman By:/s/ Stanley Harfenist
Secretary President
Attest: PLAYERS CLUB INTERNATIONAL, INC.
a Nevada corporation
By:/s/ David Fishman By:/s/ Stanley Harfenist
Secretary President
VERIFICATION
The undersigned, after being duly sworn, does hereby depose and state, that
he is the Secretary of Players Club International, Inc., a Utah corporation, and
Players Club International, Inc., a Nevada corporation, and that has read the
foregoing Plan and Articles of Merger and knows the contents thereof, and does
hereby certify that this Plan and these Articles of Merger contain a truthful
statement of the Plan and Articles of Merger as duly adopted by the Directors
and Stockholders of the corporations.
/s/ David Fishman
Secretary
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PH02/77681.1
<PAGE>
STATE OF UTAH )
: ss.
COUNTY OF SALT LAKE )
On the 14th day of May, 1985, personally appeared before me the President
and Secretary of Players Club International, Inc., (a Utah corporation), and
Players Club International, Inc., (a Nevada corporation), the signers of the
above instrument who duly acknowledged to me that they executed the same on
behalf of said corporations pursuant to duly adopted director's resolutions.
/s/ Thomas G. Kimble
NOTARY PUBLIC
Residing in Salt Lake City, Utah
My Commission Expires:
November 1, 1985
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<PAGE>
ARTICLES OF MERGER
MERGING
PLAYERS CLUB INTERNATIONAL, INC.
(A UTAH CORPORATION)
INTO
PLAYERS CLUB INTERNATIONAL, INC.
(A NEVADA CORPORATION)
FILED AT THE REQUEST OF:
THOMAS G. KIMBLE & ASSOCIATES
SUITE #460
311 SOUTH STATE STREET
SALT LAKE CITY, UTAH 84111
FILING DATE: JUNE 18, 1985
FILING FEE : $ 50.00
FILE NUMBER: 3411-85
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PH02/77681.1
<PAGE>
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
Players International, Inc., a corporation organized under the laws of the
State of Nevada, by its president and secretary does hereby certify:
1. That the Board of Directors of said corporation at a meeting duly
convened and held on the 14th day of July, 1986, passed a resolution declaring
that the change and amendment in the Articles of Incorporation hereinafter set
forth is advisable, and called an annual meeting of the stockholders to take
action thereon.
2. That thereafter, on the 22nd day of August, 1986, pursuant to such call
of the Board of Directors, and upon notice given to each stockholder of record
entitled to vote on an amendment to the Articles of Incorporation as provided by
law, an annual meeting of the stockholders of the company was held, at which
meeting, the holders of 21,165,000 shares, representing at least a majority of
the voting power, were present in person or represented by proxy; that the
number of shares of the corporation outstanding and entitled to vote on the
adoption of said amendment was 29,668,367; and that -0- shares voted against
such change and amendment, and that 21,165,000 shares,
PH02/77681.1
<PAGE>
constituting at least a majority of the shares outstanding and entitled to vote
thereon, voted in favor of such change and amendment, such change and amendment
being as follows:
That Article I of said Articles of Incorporation be amended to read as
follows: "I. The name of the corporation is Players International, Inc."
WE, THE UNDERSIGNED, do make and file this amendment to the Articles of
Incorporation, hereby declaring and certifying that the facts herein are true,
and accordingly have hereunto set our hands this 5th day of September, 1986.
/s/ Stanley Harfenist
Stanley Harfenist, President
/s/ David Fishman
David Fishman, Secretary
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
On this 5th day of September, 1986, before me, a Notary Public, personally
appeared Stanley Harfenist and David Fishman, who severally acknowledged that
they executed the above instrument.
/s/ Ellen M. Toubail
Notary Public
(Stamp)
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<PAGE>
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
Players International, Inc., a corporation organized under the laws of the
State of Nevada, by its president and secretary does hereby certify:
1. That the Board of Directors of said corporation at a meeting duly
convened and held on the 14th day of July, 1986, passed a resolution declaring
that the change and amendment in the Articles of Incorporation hereinafter set
forth is advisable, and called an annual meeting of the stockholders to take
action thereon.
2. That thereafter, on the 22nd day of August, 1986, pursuant to such call
of the Board of Directors, and upon notice given to each stockholder of record
entitled to vote on an amendment to the Articles of Incorporation as provided by
law, an annual meeting of the stockholders of the company was held, at which
meeting, the holders of 21,165,000 shares, representing at least a majority of
the voting power, were present in person or represented by proxy; that the
number of shares of the corporation outstanding and entitled to vote on the
adoption of said amendment was 29,668,367; and that -0- shares voted against
such change and amendment, and that 21,165,000 shares, constituting at least a
majority of the shares outstanding and
PH02/77681.1
<PAGE>
entitled to vote thereon, voted in favor of such change and amendment, such
change and amendment being as follows:
That Article IV of said Articles of Incorporation be amended to read as
follows: "IV. The number of shares of Common Stock which the company is
authorized to issue is 30,000,000 shares with a par value of $.005 per share."
WE, THE UNDERSIGNED, do make and file this amendment to the Articles of
Incorporation, hereby declaring and certifying that the facts herein are true,
and accordingly have hereunto set our hands this 5th day of September, 1986.
/s/ Stanley Harfenist
Stanley Harfenist, President
/s/ David Fishman
David Fishman, Secretary
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
On this 5th day of September, 1986, before me, a Notary Public, personally
appeared Stanley Harfenist and David Fishman, who severally acknowledged that
they executed the above instrument.
/s/ Ellen M. Toubail
Notary Public
(Stamp)
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<PAGE>
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
Players International, Inc., a corporation organized under the laws of the
State of Nevada, by its President and Secretary does hereby certify:
1. That the Board of Directors of said corporation at a meeting duly
convened and held on the 30th day of April, 1987, passed a resolution declaring
that the amendment to the Articles of Incorporation hereinafter set forth is
advisable, and called an annual meeting of shareholders for the purpose of,
inter alia, taking action thereon.
2. Thereafter, on the 18th day of August, 1987, pursuant to such call of
the Board of Directors, and upon notice duly given to each stockholder of record
entitled to vote on amendments to the Articles of Incorporation as provided by
law, an annual meeting of the stockholders of the corporation was held. At such
meeting, the holders of 5,373,359 shares of the corporation's common stock,
representing approximately 72% of the 7,445,977 shares of common stock
outstanding and entitled to vote on the adoption of said amendment, were present
in person or represented by proxy. At the meeting, 24,800 shares voted against
such amendment, 16,440 shares abstained from voting, and
1
PH02/77681.1
<PAGE>
5,332,119 shares, constituting at least a majority of the outstanding shares
entitled to vote thereon, voted in favor of such amendment, such amendment being
the addition of a new Article XII to the Articles of Incorporation as follows:
ARTICLE XII - LIMITATION OF DIRECTORS' AND OFFICERS' LIABILITY
A director or officer of the corporation shall not be personally liable to
the corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director or officer, except for liability (i) for acts or omissions
which involve intentional misconduct, fraud or a knowing violation of law or
(ii) for the payment of dividends in violation of Section 78.300 of the Nevada
General Corporation Law.
Any repeal or modification of the foregoing paragraph by the stockholders
of the corporation shall be prospective only, and shall not adversely affect any
limitation on the personal liability of a director or officer of the corporation
existing at the time of such repeal or modification.
WE, THE UNDERSIGNED, do make and file this amendment to the Articles of
Incorporation hereby declaring and certifying that the facts herein are true and
accordingly have hereunto set our hands this 4th day of December, 1987.
/s/ Stanley Harfenist
Stanley Harfenist, President
/s/ David Fishman
David Fishman, Secretary
State of California
County of Los Angeles
On this 4th day of December, 1987,
before me a notary public in and
for the state and county aforesaid, personally
appeared Stanley Harfenist and David Fishman,
who severally acknowledged that they executed
the above instrument.
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<PAGE>
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
Players International, Inc., a corporation organized under the laws of the
State of Nevada, by its President and Secretary does hereby certify:
1. That the Board of Directors of said corporation at meetings duly
convened and held on July 20, 1993 and August 9, 1993 passed resolutions
declaring that the changes and amendments in the Articles of Incorporation
hereinafter set forth are advisable, and called an annual meeting of
stockholders to take action thereon.
2. That thereafter, on September 22, 1993, pursuant to such call of the
Board of Directors, and upon notice given to each stockholder of record entitled
to vote amendments to the Articles of Incorporation as provided by law, an
annual meeting of stockholders of the corporation was held, at which meeting,
holders representing at least a majority of the voting power were present in
person or represented by proxy; that the number of shares of the corporation
outstanding and entitled to vote of the adoption of said amendments were
17,377,480; and that a majority of the outstanding shares entitled to vote
thereon, were voted in favor of such changes and amendments, such changes and
amendments being as follows:
A) That Article IV of said Articles of Incorporation be amended to read as
follows:
"The number of shares of Common Stock which the corporation is
authorized to issue is 60,000,000 shares with a par value of
$.005 per share. The number of shares of Preferred Stock which
the corporation is authorized to issue is 10,000,000 shares
with no par value per share. Shares of Preferred Stock may be
issued from time to time in one or more series or classes. The
Board of Directors of the corporation is hereby authorized to
fix the designations and powers, preferences and relative,
participating, optional or other rights, if any, and
qualifications, limitations or other restrictions thereof,
including, without limitation, dividend rights and preferences
over dividend on Common Stock or any series or classes of
Preferred Stock, the dividend rate (and whether dividends are
cumulative), conversion rights, if any, voting rights (which
may be multiple or fractional shares), rights and terms of
redemption (including
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<PAGE>
sinking fund provisions, if any), redemption price and
liquidation preferences of any wholly unissued series or class
of Preferred Stock and the number of shares constituting any
such series or class and the designation thereof, of any of
them; and to increase or decrease the number of shares of any
series or class subsequent to the issue of shares of that
series or class, but not below the number of shares of such
series or class then outstanding."
B) That a new Article XIII be added to the Articles
of Incorporation to read as follows:
"ARTICLE XIII - REQUIRED DIVESTITURE OF CORPORATION'S
CAPITAL STOCK AND STOCK EQUIVALENTS AND RIGHT TO
ACQUIRE
Section 1 - Required Divestiture
(a) If any governmental commission, regulatory
authority, entity, agency, or instrumentality (collectively,
an "Authority") having jurisdiction over the corporation or
any affiliate of the corporation or that has granted a
license, certificate of authority, franchise, or similar
approval (collectively, a "License") to the corporation or any
affiliate of the corporation orders or requires any
stockholder of the corporation to divest any or all of the
shares of any class or series ("Capital Stock") owned by such
stockholder or any options or warrants to purchase Capital
Stock or securities convertible into Capital Stock
(collectively, "Stock Equivalents") of the corporation (a
"Divestiture Order"), and if the holder fails to do so by the
date required by the Divestiture Order (unless the Divestiture
Order is stayed), the corporation will have the right to
acquire the Capital Stock or Stock Equivalents from the holder
that the holder failed to divest as required by such
Divestiture Order.
(b) If, after reasonable notice and an opportunity
for affected parties to be heard, any Authority determines
that continued ownership of the corporation's Capital Stock or
Stock Equivalents by any holder shall be grounds for the
revocation, cancellation, non-renewal, restriction or
withholding of any License granted to or applied for by the
corporation or any affiliate of the corporation, or shall be
grounds for limiting the activities of the corporation or any
affiliate of the corporation, such holder shall divest the
Capital Stock or Stock Equivalents that provide the basis for
such
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<PAGE>
determination, and if such holder fails to divest such Capital
Stock or Stock Equivalents within 10 days after the date the
Authority's determination becomes effective (unless the
determination is stayed), the corporation shall have the right
to acquire such Capital Stock or Stock Equivalents from the
holder.
(c) If the corporation determines that one or more
persons who are not citizens of the United States as
determined under the Shipping Act of 1916 as amended, or the
Merchant Marine Act of 1936, as amended ("Foreign Citizens"),
own more than 25% of the corporation's outstanding Capital
Stock, the corporation may require the Foreign Citizen(s) who
most recently acquired the shares that bring total Foreign
Citizen ownership to more than 25% of the outstanding shares
("Excess Shares") to divest the Excess Shares to persons who
are United States citizens. If the Foreign Citizen(s) so
directed fail to divest the Excess Shares to United States
citizens within 30 days after the date on which the
corporation gives a written notice to the Foreign Citizen(s)
to divest the Excess Shares, the corporation shall have the
right to acquire the shares that the Foreign Citizen failed to
divest as required by the corporation's notice.
Section 2 - Purchase Price
Whenever the corporation has the right to acquire
shares of Capital Stock from a stockholder pursuant to the
provisions described in Section 1 of this Article XIII, the
corporation shall be required to pay the stockholder $.10 per
share or such higher price as may be required by applicable
legal requirements. If there is no other applicable legal
requirement, any amount payable to the stockholder in excess
of $.10 per share will be paid in five equal annual
installments with interest at the lower of the prime rate or
the LIBOR rate, as published from time to time in The Wall
Street Journal. In the case of Stock Equivalents, the payment
for each Stock Equivalent shall be $.01 each, and, if there is
no other legal requirement, any amount payable to a holder of
a Stock Equivalent in excess of $.01 per Stock Equivalent will
be paid in five equal annual installments with interest on the
terms described above.
Section 3 - Effect of Tender of Purchase Price
When any Divestiture Order becomes final and
non-appealable or when the corporation tenders the
consideration for which it may acquire Capital Stock or
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<PAGE>
Stock Equivalents as described in this Article XIII, whichever
first occurs, the Capital Stock or Stock Equivalents in
question shall no longer be entitled to any voting, dividend,
or other rights, if any, until such time as they have been
appropriately divested, whereupon all such rights shall be
restored prospectively from the date of the divesture.
Section 4 - Non-Exclusivity
The foregoing provisions of this Article XIII
relating to required divestiture are in addition to, and not
in replacement of, any applicable legal requirements."
I, HOWARD GOLDBERG, do make and file this Certificate of Amendment to the
Articles of Incorporation, hereby declaring and certifying that the facts herein
are true, and accordingly have hereunto set my hand this 27th day of September,
1993.
/s/ Howard A. Goldberg
Howard A. Goldberg, President
STATE OF NEVADA
COUNTY OF ATLANTIC
On this 27th day of September, 1993, before me a notary public in and for the
state and county aforesaid, personally appeared Howard Goldberg, who
acknowledged that he executed the above instrument.
/s/ Diane M. Bunting
Notary Public
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<PAGE>
I, DAVID FISHMAN, do make and file this Certificate of Amendment to the
Articles of Incorporation, hereby declaring and certifying that the facts herein
are true, and accordingly have hereunto set my hand this 28th day of September,
1993.
/s/ David Fishman
David Fishman, Secretary
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
On this 28th day of September, 1993, before me a notary public in and for the
state and county aforesaid, personally appeared David Fishman, who acknowledged
that he executed the above instrument.
/s/ Catherine Louise Clemente
Notary Public
PH02/77681.1
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PLAYERS INTERNATIONAL, INC.
CERTIFICATE PURSUANT TO N.R.S. SECTION 78.207
Pursuant to Nevada Revised Statutes ("N.R.S.") Section 78.207, the
undersigned hereby certifies that the Board of Directors of Players
International, Inc., a Nevada corporation (the "Corporation"), desiring to
increase the number of authorized shares of common stock of the Corporation and
correspondingly increase the number of issued and outstanding shares of the
Corporation's common stock (the "Class Change") without amending the Articles of
Incorporation of the Corporation, agreed to do so, as set forth more fully
below, by unanimous vote of the Directors of the Corporation at a duly called
meeting of the Directors held on the 26th day of April, 1995, and the
undersigned further certifies that:
(a) The Corporation's number of authorized shares of common stock and par
value per share were 60,000,000 and $.005, respectively, and 10,000,000 shares
no par value Preferred Stock prior to the Class Change;
(b) The Corporation's number of authorized shares of common stock and par
value per share are 90,000,000 and $.005, respectively, and the Preferred Stock
remains unchanged effective as of the date of the Class Change;
(c) The number of issued and outstanding shares of the Corporation's common
stock shall increase from 19,825,410 to 29,738,179 as a result of the Class
Change;
(d) Fractional shares will not be issued in connection with the Class
Change, the Corporation will pay cash in lieu of fractional shares, based upon
the closing price of the Corporation's common stock on the record date of the
Class Change (May 8, 1995), and the percentage of all issued and outstanding
shares of common stock affected by such payment is 0.00127%.
(e) Stockholder approval is not required, and will not be sought, with
regard to the Class Change; and
(f) The Class Change will be effective upon filing with the Secretary of
State.
By: /s/ Peter J. Aranow
Name: Peter J. Aranow
Title: Executive Vice President, Chief
Financial Officer and Secretary
STATE OF NEVADA )
: SS:
COUNTY OF CLARK )
This instrument was acknowledged before me on May 19, 1995 by Peter J.
Aranow as the Executive Vice President, Chief Financial Officer and Secretary of
Players International, Inc.
/s/ Tammy R. Kamrud
NOTARY PUBLIC
My Commission Expires on: 8/9/98
PH02/77681.1
LETTER OF TRANSMITTAL
===============================================================================
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE 5:00
P.M., NEW YORK CITY TIME, ON _______________, 1995 (AS SUCH DATE
MAY BE EXTENDED, THE "EXPIRATION DATE")
===============================================================================
PLAYERS INTERNATIONAL, INC.
10-7/8% Senior Notes due 2005
PLEASE READ CAREFULLY THE ATTACHED INSTRUCTIONS
If you desire to accept the Exchange Offer, this Letter of Transmittal should be
completed, signed, and submitted to:
FIRST FIDELITY BANK, NATIONAL ASSOCIATION
Exchange Agent
By Hand, Registered or Certified Mail or Overnight Carrier:
First Fidelity Bank, National Association
123 South Broad Street, 12th Floor
Philadelphia, PA 19109
By Facsimile:
(215) 985-7290
Attention: John H. Clapham
Confirm by Telephone
(215) 985-7157
(Originals of all documents sent by facsimile should be
sent promptly by hand, overnight courier or
registered or certified mail.)
Delivery of this Letter of Transmittal to an address other than that set forth
above or transmission of instruction via a facsimile number other than that set
forth above will not constitute a valid delivery.
PH02/75343.2
<PAGE>
The undersigned hereby acknowledges receipt of the Prospectus, dated July
__, 1995 (the "Prospectus"), of Players International, Inc., a Nevada
corporation (the "Company"), and this Letter of Transmittal (the "Letter of
Transmittal"), that together constitute the Company's offer (the "Exchange
Offer") to exchange $1,000 in principal amount of its l0-7/8% Senior Notes due
2005 (the "New Notes") for each $1,000 in principal amount of its outstanding
10-7/8% Senior Notes due 2005 (the "Old Notes"). The Old Notes and New Notes are
sometimes collectively referred to herein as the "Notes". Capitalized terms used
but not defined herein have the meanings ascribed to them in the Prospectus.
This Letter of Transmittal is to be used by Eligible Holders if
certificates representing the Old Notes are to be physically delivered herewith
or if the guaranteed delivery procedures described in the Prospectus are to be
utilized. Eligible Holders that are participants in the Book-Entry Transfer
Facility of The Depository Trust Company ("DTC") may make book-entry delivery of
the Old Notes by causing DTC to transfer such Old Notes into the Exchange
Agent's account in accordance with DTC's procedures for such transfer. In
connection with a book-entry transfer, a Letter of Transmittal need not be
transmitted to the Exchange Agent; however, Eligible Holders complying with
DTC's book-entry transfer procedures must agree to be bound by the terms hereof
and confirm the representations and warranties made herein pursuant to such
procedures.
"Eligible Holder" means the registered owner of any Old Notes that remain
Restricted Notes (as defined below) as reflected on the records of First
Fidelity Bank, National Association, as registrar for the Old Notes (in such
capacity, the "Registrar"), or any person whose Old Notes are held of record by
DTC, as of the Record Date. For purposes of the Exchange Offer, "Restricted
Notes" means the Old Notes upon original issuance thereof, and at all times
subsequent thereto, until each such Old Note (i) has been exchanged for a New
Note in the Exchange Offer, (ii) has been effectively registered under the
Securities Act of 1933, as amended (the "Securities Act") and disposed of in
accordance with the shelf registration statement covering it, (iii) is
distributed to the public pursuant to Rule 144 under the Securities Act, or (iv)
may be sold or transferred pursuant to Rule 144(k) (or any similar provisions
then in force under the Securities Act or otherwise).
The undersigned hereby tenders the Old Notes described in Box 1 below (the
"Tendered Old Notes") pursuant to the terms and conditions described in the
Prospectus and this Letter of Transmittal. If the undersigned is not the
beneficial owner of all the Tendered Old Notes (such beneficial owner(s) other
than the undersigned being called herein the "Beneficial Owners"), the
undersigned represents that it has received from each Beneficial Owner a duly
completed and executed form of "Instruction to Registered Holder from Beneficial
Owner" accompanying this Letter of Transmittal (the "Instruction to Registered
Holder"), instructing the undersigned to take the action described in this
Letter of Transmittal.
Subject to, and effective upon, the acceptance for exchange of the Tendered
Old Notes, the undersigned hereby exchanges, assigns and transfers to, or upon
the order of, the Company all right, title and interest in, to and under the
Tendered Old Notes.
PH02/75343.2
-2-
<PAGE>
Unless otherwise indicated under "Special Exchange Instructions" below (Box
3A), please issue the New Notes exchanged for Tendered Old Notes in the name(s)
of the undersigned. Similarly, unless otherwise indicated under "Special
Delivery Instructions" below (Box 3B), please send or cause to be sent the
certificates for New Notes (and accompanying documents, as appropriate) to the
undersigned at the address shown below in Box 2.
The undersigned hereby irrevocably constitutes and appoints the Exchange
Agent as the true and lawful agent and attorney-in-fact of the undersigned with
respect to the Tendered Old Notes, with full power of substitution (such power
of attorney being deemed to be an irrevocable power coupled with an interest),
to (i) deliver the Tendered Old Notes to the Company or cause ownership of the
Tendered Old Notes to be transferred to, or upon the order of, the Company on
the books of the Registrar for the Old Notes and deliver all accompanying
evidences of transfer and authenticity to, or upon the order of, the Company
upon receipt by the Exchange Agent, as the undersigned's agent, of the New Notes
to which the undersigned is entitled upon the acceptance by the Company of the
Tendered Old Notes pursuant to the Exchange Offer, and (ii) receive all benefits
and otherwise exercise all rights of beneficial ownership of the Tendered Old
Notes, all in accordance with the terms of the Exchange Offer.
The undersigned understands that tenders of Old Notes pursuant to the
procedures described under the caption "The Exchange Offer--Procedures for
Tendering Old Notes" in the Prospectus and in the instructions hereto (the
"Tendered Old Notes") will constitute a binding agreement between the
undersigned and the Company upon the terms and subject to the conditions of the
Exchange Offer.
The tender of Tendered Old Notes made hereby shall be binding on the
undersigned and all future holders and owners of the Tendered Old Notes, subject
only to withdrawal of such tender on the terms set forth in the Prospectus under
the caption "The Exchange Offer--Withdrawal Rights." All authority herein
conferred or agreed to be conferred shall survive the death or incapacity of the
undersigned and any Beneficial Owner(s), and every obligation of the undersigned
or any Beneficial Owner(s) hereunder shall be binding upon the heirs,
representatives, successors and assigns of the undersigned and such Beneficial
Owner(s).
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, exchange, assign and transfer the Tendered
Old Notes and that the Company will acquire good and unencumbered title thereto,
free and clear of all liens, restrictions, charges, encumbrances and adverse
claims when the Tendered Old Notes are acquired by the Company as contemplated
herein. The undersigned and each Beneficial Owner will, upon request, execute
and deliver any additional documents reasonably requested by the Company as
necessary or desirable to complete and give effect to the transactions
contemplated hereby.
PH02/75343.2
-3-
<PAGE>
The undersigned hereby represents and warrants that the Information set
forth in Box 2 is true and correct.
By tendering the Tendered Old Notes, the undersigned hereby represents to
the Company that (i) the New Notes to be acquired in connection with the
Exchange Offer by the undersigned and each Beneficial Owner of the Tendered Old
Notes are being acquired by the undersigned and each Beneficial Owner in the
ordinary course of business of the undersigned and each Beneficial Owner, (ii)
the undersigned and each Beneficial Owner are not participating, do not intend
to participate, and have no arrangement or understanding with any person to
participate, in the distribution of the New Notes, (iii) the undersigned and
each Beneficial Owner acknowledge and agree that any person participating in the
Exchange Offer for the purpose of distributing the New Notes must comply with
the registration and prospectus delivery requirements of the Securities Act in
connection with a secondary resale transaction of the New Notes acquired by such
person and cannot rely on the position of the Staff of the Securities and
Exchange Commission set forth in no-action letters that are discussed in the
Prospectus under "The Exchange Offer--Resales of the New Notes," (iv) that if it
is a broker-dealer that acquired Old Notes as a result of market-making or other
trading activities, it will deliver a prospectus in connection with any resale
of New Notes acquired in the Exchange Offer, (v) the undersigned and each
Beneficial Owner understand that a secondary resale transaction described in
clause (iii) or (iv) above should be covered by an effective registration
statement containing the selling security holder information required by Item
507 of Regulation S-K of the Securities and Exchange Commission, and (vi)
neither the undersigned nor any Beneficial Owner is an "affiliate," as defined
under Rule 405 of the Securities Act, of the Company except as otherwise
disclosed to the Company in writing in advance of, or contemporaneous with, the
tender of Tendered Old Notes. In connection with a book-entry transfer, each
participant will confirm that it makes the representations and warranties
contained in this Letter of Transmittal.
PH02/75343.2
-4-
<PAGE>
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING THE BOXES
<TABLE>
<CAPTION>
=============================================================================================================================
Box 1
DESCRIPTION OF OLD NOTES TENDERED
(Attach additional signed pages, if necessary)
- -----------------------------------------------------------------------------------------------------------------------------
Name(s) and address(es)
of Eligible Holder(s),
exactly as name(s)
appear(s) on Old Note Certificate Aggregate Principal
Certificate(s). Number(s) Amount Represented Aggregate Principal
(Please fill in, if blank). of Old Notes by Certificate(s) Amount Tendered*
<S> <C> <C> <C>
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
Total
=============================================================================================================================
</TABLE>
* The minimum permitted tender is 1,000 in principal amount of Old Notes.
All other tenders must be in integral multiples of $1,000 of principal
amount. Unless otherwise indicated in this column, the principal amount
of all Old Note Certificates identified in this Box 1 or delivered to
the Exchange Agent herewith shall be deemed tendered.
See Instruction 4.
<TABLE>
<CAPTION>
========================================================================================================================
Box 2
BENEFICIAL OWNER(S)
- ------------------------------------------------------------------------------------------------------------------------
State of Principal Residence of Each Principal Amount of Tendered Old Notes
Beneficial Owner of Tendered Old Shares Held for Account of Beneficial Owner
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
========================================================================================================================
</TABLE>
PH02/75343.2
-5-
<PAGE>
<TABLE>
===============================================================================================================================
<S> <C>
Box 3A Box 3B
SPECIAL EXCHANGE INSTRUCTIONS SPECIAL EXCHANGE INSTRUCTIONS
(See Instructions 5, 6 and 7) (See Instructions 5, 6 and 7)
- ---------------------------------------------------------------------------------------------------------------------------------
To be completed ONLY if the New Notes exchanged for the Old Notes To be completed ONLY if the New Notes exchanged for
or Old Notes (if any) represented by Old Note Certificates delivered to the Old Notes and untendered Old Notes are to be sent
the Exchange Agent herewith, to the extent not tendered, are to be to someone other than the undersigned, or to the
issued in the name of someone other than the undersigned. undersigned at an address other than that shown above.
- ---------------------------------------------------------------------------------------------------------------------------------
Issue New Note(s) and any untendered Old Notes to: Mail New Note(s) and any untendered Old Notes to:
- ---------------------------------------------------------------------------------------------------------------------------------
Name(s): Name(s):
(please print) (please print)
- ---------------------------------------------------------------------------------------------------------------------------------
Address: Address:
(including zip code) (including zip code)
- ---------------------------------------------------------------------------------------------------------------------------------
Tax Identification or Social Security No.: Tax Identification or Social Security No.:
=================================================================================================================================
</TABLE>
<TABLE>
=================================================================================================================================
Box 4
USE OF GUARANTEED DELIVERY
<S> <C>
[ ] CHECK HERE ONLY IF OLD NOTES ARE BEING TENDERED BY MEANS OF A
NOTICE OF GUARANTEED DELIVERY. See instruction 2. If this box is checked,
please provide the following information:
Name(s) of Eligible Holder(s):
Date of Execution of Notice of Guaranteed Delivery:
Name of Institution which Guaranteed Delivery:
=================================================================================================================================
</TABLE>
PH02/75343.2
-6-
<PAGE>
<TABLE>
====================================================================================================================================
BOX 5
TENDERING HOLDER SIGNATURE
(See Instructions 1 and 5)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
X Signature Guarantee
(If required by Instruction 5)
X
(Signature of Eligible Holder(s) or Authorized Signatory)
Authorized Signature
X
Note: The above lines must be signed by the Eligible
Holder(s) of Old Notes exactly as their name(s) appear(s) Name(s):
on the Old Notes or by person(s) authorized to become (please print)
Eligible Holder(s). If signature by a trustee, executor,
administrator, guardian, attorney-in-fact, officer or other Title:
person acting in a fiduciary or representative capacity, such
person must set forth his or her full title below. See Name of Firm:
Instruction 5. (Must be an Eligible Instruction as defined in
Instruction 2)
Name(s): Address:
(Include Zip Code)
Capacity: Area Code and Telephone Number:
Date:
Street Address:
(Include Zip Code)
Area Code and Telephone Number:
Tax Identification or Social Security Number:
====================================================================================================================================
</TABLE>
-7-
<PAGE>
Under the federal income tax laws, the Exchange Agent may be required to
withhold 31% of the amount of any payments made to certain Eligible Holders
pursuant to the Exchange Offer. In order to avoid any such backup withholding,
each tendering Eligible Holder must provide the Exchange Agent with such
Eligible Holder's correct taxpayer identification number by completing the Form
W-9 attached hereto. In general, if an Eligible Holder is an individual, the
taxpayer identification number is the Social Security number of such individual.
If the Exchange Agent is not provided with the correct taxpayer identification
number, the Eligible Holder may be subject to a $50 penalty imposed by the
Internal Revenue Service. Certain Eligible Holders (including, among others, all
corporations and certain foreign individuals) are not subject to these backup
withholding and reporting requirements. In order to satisfy the Exchange Agent
that a foreign individual qualifies as an exempt recipient, such Eligible Holder
must submit a statement, signed under penalties of perjury, attesting to that
Individual's exempt status. A form for such statements can be obtained from the
Exchange Agent. For further information concerning backup withholding and
instructions for completing the Substitute Form W-9 (including how to obtain a
taxpayer identification number if you do not have one and how to complete the
Substitute Form W-9 if Old Notes are held in more than one name), consult the
Guidelines of the Internal Revenue Service for Certification of Taxpayer
Identification Number on Substitute Form W-9.
Failure to complete the Substitute Form W-9 will not, by itself, cause Old
Notes to be deemed invalidly tendered, but may require the Exchange Agent to
withhold 31% of the amount of any payments made pursuant to the Exchange Offer.
Backup withholding is not an additional federal income tax. Rather, the federal
income tax liability of a person subject to backup withholding will be reduced
by the amount of tax withheld. If withholding results in an overpayment of
taxes, a refund from the Internal Revenue Service may be obtained.
NOTE: FAILURE TO COMPLETE AND RETURN THE ATTACHED FORM W-9 MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO THE HOLDER OF NEW NOTES. PLEASE
REVIEW THE ENCLOSED GUIDELINES OF THE INTERNAL REVENUE SERVICE FOR CERTIFICATION
OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
PH02/75343.2
-8-
<PAGE>
INSTRUCTIONS TO LETTER OF TRANSMITTAL
FORMING PART OF THE TERMS AND CONDITIONS
OF THE EXCHANGE OFFER
1. Delivery of this Letter of Transmittal and Old Notes. The Tendered Old
Notes, as well as a properly completed and duly executed copy of this Letter of
Transmittal (including, if applicable, "Instruction to Registered Holder From
Beneficial Owner") and any other documents required by this Letter of
Transmittal must be received by the Exchange Agent at its address set forth
herein prior to 5:00 p.m., New York City time, on the Expiration Date. Eligible
Holders that are participants in DTC's Book-Entry Transfer Facility system may
make book-entry delivery of the Old Notes by causing DTC to transfer such Old
Notes into the Exchange Agent's account in accordance with DTC's procedures for
such transfer. In connection with a book-entry transfer, a Letter of Transmittal
need not be transmitted to the Exchange Agent; however, the book-entry transfer
procedure must be complied with prior to 5:00 p.m., New York City time, on the
Expiration Date. THE METHOD OF DELIVERY OF OLD NOTES, LETTERS OF TRANSMITTAL,
AND ALL OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE ELIGIBLE
HOLDER. IF SUCH DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL,
PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED, BE USED. INSTEAD OF DELIVERY BY
MAIL, IT IS RECOMMENDED THAT THE ELIGIBLE HOLDER USE AN OVERNIGHT OR HAND
DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE
TIMELY DELIVERY.
2. Guaranteed Delivery Procedures. Eligible Holders who wish to tender
their Old Notes and (i) whose Old Notes are not immediately available, or (ii)
who cannot deliver their Old Notes or any other documents required by the Letter
of Transmittal to the Exchange Agent on or prior to the Expiration Date (or
complete the procedure for book-entry transfer on a timely basis), may tender
their Old Notes according to the guaranteed delivery procedures set forth below,
including completion of Box 4. Pursuant to such procedures: (i) such tender must
be made by or through a firm which is a member of a registered national security
exchange or of the National Association of Securities Dealers, Inc., or is a
commercial bank or trust company having an office or correspondent in the United
States, or is otherwise an "eligible guarantor institution" within the meaning
of Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (an
"Eligible Institution"), and the Notice of Guaranteed Delivery in the form
attached hereto must be signed by the Eligible Holder, (ii) on or prior to the
Expiration Date, the Exchange Agent must have received from the Eligible Holder
and the Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by mail or hand delivery) setting forth the name and
address of the Eligible Holder, the certificate number or numbers of the
Tendered Old Notes, and the principal amount of Tendered Old Notes, stating that
the Tender is being made thereby and guaranteeing that, within four business
days after the date of delivery of the Notice of Guaranteed Delivery, the
Tendered Old Notes, a duly executed Letter of Transmittal and any other required
documents will be deposited by the Eligible Institution with the Exchange Agent,
and (iii) such properly completed and executed documents required by this Letter
of Transmittal and the Tendered Old Notes in proper form for transfer (of
confirmation of a book-entry transfer of such Old Notes into the Exchange
Agent's account at DTC) must be received by the Exchange Agent within four
business days after the Expiration Date. Any Eligible Holder who wishes to
tender Old Notes pursuant to the guaranteed delivery procedures described above
must ensure that the Exchange Agent receives the Notice of Guaranteed Delivery
prior to 5:00 p.m., New York City time, on the Expiration Date.
3. Beneficial Owner Instructions to Registered Holders. Only an Eligible
Holder in whose name the Old Notes are registered on the books of the Registrar
(a "Registered Holder") (or the legal representative or attorney-in-fact of such
Registered Holder) may execute and deliver this Letter of Transmittal. Any
Beneficial Owner of Old Notes who is not the Registered Holder must arrange
promptly with the Registered Holder to execute and deliver this Letter of
Transmittal on his or her behalf through the execution and delivery to the
Registered Holder of the Instructions to Registered Holder form accompanying
this Letter of Transmittal. If
PH02/75343.2
-9-
<PAGE>
such Beneficial Owner wishes to tender directly, such Beneficial Owner must,
prior to completing and executing this Letter of Transmittal and tendering Old
Notes, make appropriate arrangements to register ownership of the Old Notes in
such Beneficial Owner's name. Beneficial Owners should be aware that the
transfer of registered ownership may take considerable time.
4. Partial Tenders. Tender of Old Notes will be accepted only in integral
multiples of $1,000 in principal amount. If less than the entire amount of any
Old Note is tendered, the tendering Eligible Holder should fill in the principal
amount tendered in the column labeled "Aggregate Principal Amount Tendered" of
the box entitled "Description of Old Notes Tendered" (Box 1) above. The entire
principal amount of old Notes delivered to the Exchange Agent will be deemed to
have been tendered unless otherwise indicated. If the entire principal amount of
all Old Notes is not tendered, Old Notes for the principal amount of Old Notes
not tendered and New Notes exchanged for any Old Notes tendered will be sent to
the Eligible Holder at his or her registered address, unless a different address
is provided in the appropriate box on this Letter of Transmittal, promptly after
the Old Notes are accepted.
5. Signatures on the Letter of Transmittal; Bond Powers and Endorsements;
Guarantee of Signatures. If this Letter of Transmittal is signed by the
Registered Holder(s) of the Tendered Old Notes, the signature must correspond
with the name(s) as written on the face of the Tendered Old Notes without
alteration, enlargement, or any change whatsoever.
If any of the Tendered Old Notes are owned of record by two or more joint
owners, all such owners must sign this Letter of Transmittal. If any Tendered
Old Notes are held in different names on several Old Notes, it will be necessary
to complete, sign, and submit as many separate copies of the Letter of
Transmittal documents as there are names in which Tendered Old Notes are held.
If this Letter of Transmittal is signed by the Registered Holder(s) of
Tendered Old Notes and New Notes are to be issued (and any untendered principal
amount of Old Notes is to be reissued) to the Registered Holder(s), the
Registered Holder(s) need not and should not endorse any Tendered Old Notes nor
provide a separate bond owner. In any other case, such Registered Holder(s) must
either properly endorse the Old Notes tendered or transmit a properly completed
separate bond power with this Letter of Transmittal, with the signature(s) on
the endorsement or bond power guaranteed by an Eligible Institution along with
the other documents required upon transfer by the Registration Rights Agreement.
If this Letter of Transmittal is signed by a person other than the
Registered Holder of the Old Notes, the Old Notes surrendered for exchange must
either (i) be endorsed by the Registered Holder, with the signature thereon
guaranteed by an Eligible Institution, or (ii) be accompanied by a bond power,
in satisfactory form as determined by the Company in its sole discretion, duly
executed by the Registered Holder, with the signature thereon guaranteed by an
Eligible Institution.
If this Letter of Transmittal or any endorsement, bond power, power of
attorney or any other document required by this Letter of Transmittal is signed
by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and, unless waived by the Company,
proper evidence satisfactory to the Company, in its sole discretion, of such
person's authority to so act must be submitted.
Signatures on this Letter of Transmittal must be guaranteed by an Eligible
Institution unless the Tendered Old Noes are tendered (i) by a Registered Holder
who has not completed the box set forth herein entitled "Special Exchange
Instructions" (Box 3A) or the box entitled "Special Delivery Instructions (Box
3B), or (ii) by an Eligible Institution.
PH02/75343.2
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<PAGE>
6. Special Exchange and Delivery Instructions. Tendering Eligible Holders
should indicate, in the applicable box or boxes (Box 3A and/or 3B), the name and
address to which the New Notes and/or substitute Old Notes for principal amounts
not tendered or not accepted for exchange are to be issued or sent, if different
from the name and address of the person signing this Letter of Transmittal. In
the case of issuance in a different name, the taxpayer identification or social
security number of the person named must also be indicated.
7. Transfer Taxes. The Company will pay all transfer taxes, if any,
applicable to the exchange of Old Notes pursuant to the Exchange Offer. If,
however, a transfer tax is imposed for any reason other than the exchange of Old
Notes pursuant to the Exchange Offer, then the amount of any such transfer taxes
(whether imposed on the Registered Holder or any other persons) will be payable
by the tendering holder. If satisfactory evidence of payment of such taxes or
exemption is not submitted with this Letter of Transmittal, the amount of such
transfer taxes will be billed directly to such tendering holder.
8. Validity of Tenders. All questions as to the validity, form, eligibility
(including time of receipt), acceptance and withdrawal of Old Notes tendered for
exchange will be determined by the Company in its sole discretion, which
determination shall be final and binding. The Company reserves the absolute
right to reject any and all Old Notes not properly tendered and to reject any
Old Notes the Company's acceptance of which might, in the judgment of the
Company or its counsel be unlawful. The Company also reserves the absolute right
to waive any defects or irregularities or conditions of the Exchange Offer as to
particular Old Notes either before or after the Expiration Date (including the
right to waive the eligibility of any holder who seeks to tender Old Notes in
the Exchange Offer). The interpretation of the terms and conditions of the
Exchange Offer (including the Letter of Transmittal and these instructions) by
the Company shall be final and binding on all parties. Unless waived, any
defects or irregularities in connection with tenders of Old Notes for exchange
must be cured within such period of time as the Company shall determine. The
Company will use reasonable efforts to give notification of defects or
irregularities with respect to tenders of Old Notes for exchange but shall not
incur any liability for failure to give such notification. Tenders of the Old
Notes will not be deemed to have been made until such irregularities have been
cured or waived.
9. Waiver of Conditions. The Company reserves the absolute right to amend,
waive, or modify specified conditions in the Exchange Offer in the case of any
tendered Old Notes.
10. No Conditional Tender. No alternative, condition, irregular or
contingent tender of Old Notes or transmittal of this Letter of Transmittal will
be accepted.
11. Mutilated, Lost, Stolen or Destroyed Old Notes. Any tendering Eligible
Holder whose Old Notes have been mutilated, lost, stolen or destroyed should
contact the Exchange Agent at the address indicated above for further
instructions.
12. Requests for Assistance or Additional Copies. Questions and requests
for assistance and requests for additional copies of the Prospectus may be
directed to the Exchange Agent at the address specified in the Prospectus.
Eligible Holders may also contact their broker, dealer, commercial bank, trust
company or other nominee for assistance concerning the Exchange Offer.
13. Return of Old Notes. If any Tendered Old Notes are not exchanged
pursuant to the Exchange Offer for any reason, such unexchanged Old Notes will
be returned, without expense, to the undersigned at the address shown in Box 1
or at a different address as may be indicated herein under "Special Exchange
Instructions" or "Special Delivery Instructions."
14. Withdrawal. Tenders may be withdrawn only pursuant to the limited
withdrawal rights set forth in the Prospectus under the caption "The Exchange
Offer--Withdrawal Rights."
PH02/75343.2
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<PAGE>
INSTRUCTION TO REGISTERED HOLDER
FROM BENEFICIAL OWNER
OF
PLAYERS INTERNATIONAL, INC.
10-7/8% Senior Notes Due 2005
The undersigned hereby acknowledges receipt of the Prospectus, dated July
__, 1995 (the "Prospectus"), of Players International, Inc., a Nevada
corporation (the "Company"), and the accompanying Letter of Transmittal (the
"Letter of Transmittal"), that together constitute the Company's offer (the
"Exchange Offer").
This will instruct you, the registered holder, as to the action to be taken
by you relating to the Exchange Offer with respect to the Old Notes (as defined
in the Letter of Transmittal) held by you for the account of the undersigned.
The aggregate face amount of the Old Notes held by you for the account of
the undersigned is (fill in amount):
$________ of the 10-7/8% Senior Notes Due 2005
With respect to the Exchange Offer, the undersigned hereby instructs you
(check appropriate box):
[ ] TO TENDER the following Old Notes held by you for the account of the
undersigned (insert principal amount of Old Notes to be tendered, if
any);
[ ] NOT TO TENDER any Old Notes held by you for the account of the
undersigned.
If the undersigned instructs you to tender the Old Notes held by you for
the account of the undersigned, it is understood that you are authorized (i) to
make, on behalf of the undersigned (and the undersigned by his signature below,
hereby makes to you), the representations and warranties contained in the Letter
of Transmittal that are to be made with respect to the undersigned as a
Beneficial Owner (as defined in the Letter of Transmittal that are to be made
with respect to the undersigned as a Beneficial Owner (as defined in the Letter
of Transmittal), in the state of (fill in state) _______________, (b) the New
Notes to be acquired in connection with the Exchange Offer are being acquired by
the undersigned in the ordinary course of business of the undersigned, (c) the
undersigned is not participating, does not intend to participate, and has no
arrangement or understanding with any person to participate, in the distribution
of the New Notes, (d) the undersigned acknowledges and agrees that any person
participating in the Exchange Offer for the purpose of distributing the New
Notes must comply with the registration and prospectus delivery requirements of
the Securities Act of 1933, as amended, in connection with a secondary resale
transaction of the New Notes acquired by such person and cannot rely on the
position of the Staff of the Securities and Exchange Commission set forth in
no-action letters that are discussed in the section of the Prospectus entitled
"The Exchange Offer--Resales of the New Notes," (e) the undersigned understands
that a secondary resale transaction described in clause (d) above should be
covered by an effective registration statement containing the selling security
holder information required by Item 507 of Regulation S-K of the Securities and
Exchange Commission, and (f) the undersigned is not an "affiliate" (as defined
in Rule 405 under the Securities Act of 1933, as amended) of the Company; (ii)
to agree, on behalf of the undersigned, to the covenants and agreements to be
made on behalf of or with respect to the undersigned, as set forth in the Letter
of Transmittal; and (iii) to take such other action as necessary under the
Prospectus or the Letter of Transmittal to effect the valid tender of such Old
Notes.
PH02/75343.2
-12-
<PAGE>
SIGN HERE
Name of Eligible Holder: ___________________________________________
Signature(s): ___________________________________________
Name(s) (please print): ___________________________________________
Address: ___________________________________________
Telephone Number: ___________________________________________
Taxpayer Identification or
Social Security Number: ___________________________________________
Date: ___________________________________________
PH02/75343.2
-13-
<PAGE>
NOTICE OF GUARANTEED DELIVERY
With Respect to
PLAYERS INTERNATIONAL, INC.
10-7/8% Senior Notes Due 2005
This form must be used by an Eligible Holder of the 10-7/8% Senior Notes
due 2005 (the "Old Notes") of Players International, Inc., a Nevada corporation
(the "Company"), who wishes to tender Old Notes to the Exchange Agent pursuant
to the guaranteed delivery procedures described in "The Exchange
Offer--Guaranteed Delivery Procedures" of the Prospectus, dated July __, 1995
(the "Prospectus"), and in Instruction 2 to the Letter of Transmittal. Any
Eligible Holder who wishes to tender Old Notes pursuant to such guaranteed
delivery procedures must ensure that the Exchange Agent receives this Notice of
Guaranteed Delivery prior to 5:00 p.m., New York City time, on the Expiration
Date of the Exchange Offer. Any Eligible Holder providing this Notice of
Guaranteed Delivery must also execute and deliver a Letter of Transmittal at the
time of the tender of the Old Notes. Capitalized terms not defined herein have
the meanings ascribed to them in the Prospectus or the Letter of Transmittal.
By Hand, Registered or Certified Mail or Overnight Carrier:
First Fidelity Bank, National Association
123 South Broad Street, 12th Floor
Philadelphia, PA 19109
By Facsimile:
(215) 985-7290
Attention: John H. Clapham
Confirm by Telephone
(215) 985-7157
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION VIA A FACSIMILE NUMBER OTHER THAN AS SET
FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
PH02/75343.2
-14-
<PAGE>
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to the Company, upon the terms and
subject to the conditions set forth in the Prospectus and the related Letter of
Transmittal, the principal amount of Old Notes specified below pursuant to the
guaranteed delivery procedures set forth in the Prospectus and in Instruction 2
of the Letter of Transmittal. The undersigned hereby tenders the Old Notes
listed below:
<TABLE>
<CAPTION>
==========================================================================================================================
Certificate Number(s) Aggregate Principal Aggregate Principal
(if known) Amount Represented Amount Tendered
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
==========================================================================================================================
</TABLE>
SIGN HERE
Name of Eligible Holder: ___________________________________________
Signature(s): ___________________________________________
Name(s) (please print): ___________________________________________
Address: ___________________________________________
Telephone Number: ___________________________________________
Date: ___________________________________________
PH02/75343.2
-15-
<PAGE>
IMPORTANT TAX INFORMATION
Under United States federal income tax law, a shareholder is required by
law to provide the Exchange Agent (as payer) with his correct taxpayer
identification number on Substitute Form W-9 with the enclosed Letter of
Transmittal. If such shareholder is an individual, the taxpayer identification
number is his social security number. If the Exchange Agent is not provided with
the correct taxpayer identification number, the shareholder may be subject to a
$50 penalty imposed by the Internal Revenue Service. In addition, payments that
are made to such shareholder pursuant to the Amalgamation may be subject to
backup withholding.
Exempt shareholders (including, among others, certain foreign entities and
individuals) are not subject to these backup withholding and reporting
requirements. See Instruction 7 of the Letter of Transmittal. In order for a
foreign entity or individual to qualify as an exempt recipient, that shareholder
must complete and sign the Form W-8. See the enclosed Form W-8 and Guidelines
for Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional instructions.
If backup withholding applies, the Exchange Agent is required to withhold
31 percent of any such payments made to the shareholder. Backup withholding is
not an additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained.
Purpose of Substitute Form W-9
The following Substitute Form W-9 should be completed and signed by the
registered owner(s) as the name(s) of such owner(s) appear(s) on the Players
International, Inc. Common Shares Certificate(s) or, if such certificate(s)
has(have) been endorsed for transfer to someone other than the registered owner,
then the Substitute Form W-9 should be completed and signed by the
transferee(s). If the Substitute Form W-9 is not properly completed and signed,
the Exchange Agent may, in accordance with federal law, withhold 31% of the
amount payable for the Players International, Inc. Common Shares represented by
the certificate(s) unless the Exchange Agent otherwise has the required
certification on file. Please read Instruction 7 of the accompanying
Instructions for additional details.
PAYER'S NAME: First Fidelity Bank, National Association
<TABLE>
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SUBSTITUTE Part 1: PLEASE PROVIDE Social Security Number
Form W-9 YOUR TIN IN THE BOX AT or Taxpayer Identification Number
RIGHT AND CERTIFY BY
SIGNING AND DATING _____________________
BELOW
--------------------------------------------------------------------------------------
Department of the Part 2: Check the box if you are NOT subject to backup withholding
Treasury under the provisions of section 3406(a)(1)(c) of the Internal Revenue
Internal Revenue Code because (1) you have not been notified that you are subject to
Service backup withholding as a result of failure to report all interest or
dividends or (2) the Internal Revenue Service has notified you that
you are no longer subject to backup withholding. -> [ ]
--------------------------------------------------------------------------------------
Payer's Request for CERTIFICATION-UNDER Part 3:
Taxpayer Identification THE PENALTIES OF
Number (TIN) PERJURY,
I CERTIFY THAT THE Awaiting TIN -> [ ]
INFORMATION PROVIDED
ON
THIS FORM IS TRUE,
CORRECT AND
COMPLETE
-------------------------------------------------
SIGNATURE DATE
x__________________________________ _____________, 1993
- -------------------------------------------------------
(Name of Payee)
- -------------------------------------------------------
(Address of Payee)
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY
RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU.
PH02/75343.2
-16-
EXHIBIT 4.4
FIRST SUPPLEMENTAL INDENTURE
This First Supplemental Indenture (the "First Supplemental Indenture")
dated as of April 25, 1995, is by and among Players International, Inc., a
Nevada corporation (the "Company"); the Initial Guarantors; Southern Illinois
Riverboat/Casino Cruises, Inc., an Illinois corporation ("SIRCC"); and First
Fidelity Bank, National Association, as Trustee (the "Trustee").
WITNESSETH:
WHEREAS, the Company, the Initial Guarantors and the Trustee have entered
into an Indenture dated as of April 10, 1995 (the "Indenture") in connection
with the Company's issuance of 10-7/8% Senior Notes due 2005 (the "Senior
Notes");
WHEREAS, Section 5.19 of the Indenture contemplates that, upon the receipt
of all necessary approvals of Gaming Authorities in the State of Illinois, SIRCC
shall become a Guarantor of the Senior Notes and a party to the Indenture;
WHEREAS, SIRCC has received all necessary approvals of Gaming Authorities
in the State of Illinois to execute and deliver (i) a Guarantee in support of
the Senior Notes and (ii) this First Supplemental Indenture;
WHEREAS, the parties hereto are authorized and deem it necessary and
desirable to enter into this First Supplemental Indenture for the purpose of
adding SIRCC as a Guarantor of the Senior Notes; and
WHEREAS, all acts and things necessary to constitute this First
Supplemental Indenture a valid indenture and agreement according to its terms
have been done and performed and the parties hereto have duly authorized the
execution and delivery of this First Supplemental Indenture and are jointly and
severally obligated hereunder.
NOW, THEREFORE, in consideration of the premises, the
parties hereto hereby covenant and agree as follows:
<PAGE>
1. Definitions. All capitalized terms used herein and not otherwise
defined shall have the meanings assigned to such terms in the Indenture.
2. SIRCC Guarantee. SIRCC shall execute and deliver to the Trustee a
guarantee in the form of Exhibit A hereto (the "SIRCC Guarantee"), and the
Trustee shall deliver the SIRCC Guarantee to the Holder of the Senior Notes. The
SIRCC Guarantee shall have the same force and effect as the Guarantee executed
and delivered by the Initial Guarantors.
3. Party to the Indenture. Upon execution and delivery of this First
Supplemental Indenture, SIRCC shall become a party to the Indenture with the
same force and effect as if it were an original signatory to the Indenture,
subject to all the terms and conditions contained therein.
4. Confirmation of Indenture. Except as amended and supplemented by this
First Supplemental Indenture, the Indenture is ratified and confirmed in all
respects.
5. Governing Law. This First Supplemental Indenture shall be governed by
and construed in accordance with the laws of the State of New York.
6. Execution in Counterparts. This First Supplemental Indenture may be
executed in several counterparts, each of which shall be an original and all of
which shall constitute one instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
First Supplemental Indenture to be duly executed as of the date
first written above.
PLAYERS INTERNATIONAL, INC.
By:________________________________
Name: Peter J. Aranow
Title: Executive Vice President,
Chief Financial Officer
and Secretary
FIRST FIDELITY BANK, NATIONAL
ASSOCIATION, as Trustee
By:________________________________
Name:
Title:
SOUTHERN ILLINOIS RIVERBOAT/
CASINO CRUISES, INC.
By:________________________________
Name: David Fishman
Title: President
PLAYERS LAKE CHARLES, INC.
By:________________________________
Name: David Fishman
Title: President
PLAYERS RIVERBOAT MANAGEMENT, INC.
By:________________________________
Name: Peter J. Aranow
Title: Treasurer
<PAGE>
PLAYERS RIVERBOAT, INC.
By:________________________________
Name: Peter J. Aranow
Title: Treasurer
PLAYERS RIVERBOAT, LLC
By: Players Riverboat Management,
Inc.
By:________________________________
Name: Steven P. Perskie
Title: Secretary
SHOWBOAT STAR PARTNERSHIP
By: Players Riverboat, LLC
By: Players Riverboat Management,
Inc.
By:________________________________
Name: Steven P. Perskie
Title: Secretary
By: Players Riverboat Management,
Inc.
By:________________________________
Name: Steven P. Perskie
Title: Secretary
PLAYERS NEVADA, INC.
By:________________________________
Name: David Fishman
Title: Secretary and Treasurer
<PAGE>
PLAYERS MESQUITE GOLF CLUB, INC.
By:________________________________
Name: David Fishman
Title: President and Treasurer
PLAYERS MESQUITE LAND, INC.
By:________________________________
Name: Peter J. Aranow
Title: Treasurer
PLAYERS INDIANA, INC.
By:________________________________
Name: David Fishman
Title: Secretary and Treasurer
PLAYERS MICHIGAN CITY, INC.
By:________________________________
Name: Peter J. Aranow
Title: Vice President and Treasurer
PLAYERS MICHIGAN CITY
MANAGEMENT, INC.
By:________________________________
Name: Peter J. Aranow
Title: Vice President and Treasurer
PLAYERS BLUEGRASS DOWNS, INC.
By:________________________________
Name: Peter J. Aranow
Title: Secretary
<PAGE>
RIVER BOTTOM, INC.
By:________________________________
Name: Peter J. Aranow
Title: Treasurer
PLAYERS MARYLAND HEIGHTS, INC.
By:________________________________
Name: Peter J. Aranow
Title: Vice President and Treasurer
EXHIBIT 4.5
- -------------------------------------------------------------------------------
PLAYERS INTERNATIONAL, INC.,
Issuer
and
THE GUARANTORS NAMED HEREIN
and
FIRST FIDELITY BANK, NATIONAL ASSOCIATION,
Trustee
-------------------
SECOND SUPPLEMENTAL INDENTURE
Dated as of ________, 1995
to Indenture dated as of April 10, 1995
-------------------
$150,000,000
10 7/8% Senior Notes Due 2005, Series B
- -------------------------------------------------------------------------------
<PAGE>
SECOND SUPPLEMENTAL INDENTURE
This Second Supplemental Indenture (the "Second Supplemental Indenture")
dated as of _______ __, 1995, is by and among Players International, Inc., a
Nevada corporation (the "Company"), the Guarantors whose names are set forth on
the signature pages below, and First Fidelity Bank, National Association, as
Trustee (the "Trustee").
WITNESSETH:
WHEREAS, the Company, the Guarantors and the Trustee have entered into an
Indenture dated as of April 10, 1995 (the "Original Indenture") as supplemented
by a First Supplemental Indenture dated as of April 25, 1995 in connection with
the Company's issuance of its 10-7/8% Senior Notes due 2005 (the "Original
Senior Notes");
WHEREAS, the Indenture provides for the issuance of Exchange Senior Notes
upon the surrender and cancellation of Original Senior Notes of like aggregate
principal amount in accordance with the Registration Rights Agreement;
WHEREAS, the Indenture contemplates the execution and delivery of a
supplemental indenture for the purpose of setting out the form of the Exchange
Senior Notes and to set forth such other matters as may be necessary or
desirable in connection with the Exchange Offer;
WHEREAS, all acts and things necessary to constitute this Second
Supplemental Indenture a valid indenture and agreement according to its terms
have been done and performed and the parties hereto have duly authorized the
execution and delivery of this Second Supplemental Indenture and are jointly and
severally obligated hereunder.
NOW, THEREFORE, in consideration of the premises, the parties hereto hereby
covenant and agree as follows:
1. Definitions. All capitalized terms used herein and not otherwise defined
shall have the meanings assigned to such terms in the Original Indenture.
2. Form and Dating. The Exchange Senior Notes and the Trustee's certificate
of authentication in respect thereof shall be substantially in the form of the
Exchange Senior Note and Trustee's certificate contained in Exhibit A hereto,
which Exhibit is a part of this Second Supplemental Indenture. The Exchange
Senior Notes may have had notations, legends or endorsements required by law,
stock exchange rule or usage. The Company shall approve the form of the Exchange
Senior Notes and any notation, legend or endorsement on them. Any such
notations, legends or endorsements not contained in the form of Exchange Senior
Note attached as Exhibit A hereto shall be delivered in writing to the
Trustee. Each Exchange Senior Note shall be dated the date of its
authentication.
The terms and provisions contained in the form of Exchange Senior Note
shall constitute, and are hereby expressly made, a part of the Indenture and, to
the extent applicable, the Company and the Trustee by their execution and
delivery of this Second Supplemental Indenture, hereby agree to such terms and
provisions and to be bound thereby.
3. Execution and Authentication. The Exchange Senior Notes shall be
executed and authenticated in accordance with the provisions of Section 2.2 of
the Indenture.
4. Execution and Delivery of Guaranty. To evidence its Guaranty of the
Exchange Senior Notes as provided in Section 13.1 of the Original Indenture,
each Guarantor agrees that a notation of such Guarantees in substantially the
form attached hereto as contained in Exhibit A shall be endorsed on each
Exchange Senior Note authenticated and delivered by the Trustee and such
Guaranty shall be executed on behalf of such Guarantor by manual or facsimile
signature of an Officer of such Guarantor or, if applicable, of its member or
general partner, as provided in the form of Guaranty set forth in Exhibit A.
5. Confirmation of Indenture. Except as amended and supplemented by this
Second Supplemental Indenture, the Original Indenture as heretofore supplemented
by the First Supplemental Indenture is ratified and confirmed in all respects.
6. Governing Law. This Second Supplemental Indenture shall be governed by
and construed in accordance with the laws of the State of New York.
7. Execution in Counterparts. This Second Supplemental Indenture may be
executed in several counterparts, each of which shall be an original and
all of which shall constitute one instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental
Indenture to be duly executed as of the date first written above.
PLAYERS INTERNATIONAL, INC.
By:________________________________
Name: Peter J. Aranow
Title: Executive Vice President, Chief
Financial Officer and Secretary
FIRST FIDELITY BANK, NATIONAL
ASSOCIATION, as Trustee
By:________________________________
Name:
Title:
PLAYERS LAKE CHARLES, INC.
By:________________________________
Name:
Title:
PLAYERS RIVERBOAT MANAGEMENT, INC.
By:________________________________
Name:
Title:
PLAYERS RIVERBOAT, INC.
By:________________________________
Name:
Title:
PLAYERS RIVERBOAT, LLC
By: Players Riverboat Management, Inc.,
member
By:________________________________
Name:
Title:
<PAGE>
SHOWBOAT STAR PARTNERSHIP
By: Players Riverboat, LLC,
general partner
By: Players Riverboat Management, Inc.,
member
By:________________________________
Name:
Title:
By: Players Riverboat Management, Inc.,
general partner
By:________________________________
Name:
Title:
PLAYERS NEVADA, INC.
By:________________________________
Name:
Title:
PLAYERS MESQUITE GOLF CLUB, INC.
By:________________________________
Name:
Title:
PLAYERS MESQUITE LAND, INC.
By:________________________________
Name:
Title:
PLAYERS INDIANA, INC.
By:________________________________
Name:
Title:
<PAGE>
PLAYERS MICHIGAN CITY, INC.
By:________________________________
Name:
Title:
PLAYERS MICHIGAN CITY MANAGEMENT, INC.
By:________________________________
Name:
Title:
PLAYERS BLUEGRASS DOWNS, INC.
By:________________________________
Name:
Title:
RIVER BOTTOM, INC.
By:________________________________
Name:
Title:
PLAYERS MARYLAND HEIGHTS, INC.
By:________________________________
Name:
Title:
SOUTHERN ILLINOIS RIVERBOAT/
CASINO CRUISES, INC.
By:________________________________
Name:
Title:
<PAGE>
EXHIBIT A
FORM OF EXCHANGE SENIOR NOTE
PLAYERS INTERNATIONAL, INC.
10 7/8% SENIOR NOTE
DUE 2005, SERIES B
No. $
Players International, Inc., a Nevada corporation (hereinafter
called the "Company," which term includes any successor corporation under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to _______, or registered assigns, the principal sum of _________ Dollars, on
April 15, 2005.
Interest Payment Dates: April 15 and October 15.
Record Dates: April 1 and October 1.
Reference is made to the further provisions of this Senior
Note on the reverse side, which will, for all purposes, have the same effect as
if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Instrument to
be duly executed under its corporate seal.
(seal) PLAYERS INTERNATIONAL, INC.
By: _________________________
Title: ______________________
Attest:
- ------------------------
Secretary
FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Senior Notes described in the
within-mentioned Indenture.
Dated: ________________
First Fidelity Bank, National
Association, as Trustee
By: ____________________________
Authorized Signatory
<PAGE>
[REVERSE SIDE OF NOTE]
PLAYERS INTERNATIONAL, INC.
10 7/8% Senior Note
due 2005, Series B
1. Interest.
Players International, Inc., a Nevada corporation (hereinafter called
the "Company," which term includes any successors under the Indenture
hereinafter referred to), promises to pay interest on the principal amount of
this Security at the rate of 10 7/8% per annum. To the extent it is lawful, the
Company promises to pay interest on any interest payment due but unpaid on such
principal amount at a rate of 10 7/8% per annum compounded semi-annually.
The Company will pay interest semi-annually on April 15 and October 15
of each year (each, an "Interest Payment Date"), commencing October 15, 1995.
Interest on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid on the Securities, from
April 17, 1995. Interest will be computed on the basis of a 360-day year
consisting of twelve 30-day months.
2. Method of Payment.
The Company shall pay interest on the Securities (except defaulted
interest) to the persons who are the registered Holders at the close of business
on the Record Date immediately preceding the Interest Payment Date. Holders must
surrender Securities to a Paying Agent to collect principal payments. Except as
provided below, the Company shall pay principal and interest in such coin or
currency of the United States of America as at the time of payment shall be
legal tender for payment of public and private debts ("U.S. Legal Tender").
However, the Company may pay principal and interest by wire transfer of Federal
funds, or interest by its check payable in such U.S. Legal Tender. The Company
may deliver any such interest payment to the Paying Agent or the Company may
mail any such interest payment to a Holder at the Holder's registered address.
3. Paying Agent and Registrar.
Initially, First Fidelity Bank, National Association (the "Trustee")
will act as Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or co-Registrar without notice to the Holders. The Company or any of
its Subsidiaries may, subject to certain exceptions, act as Paying Agent,
Registrar or co-Registrar.
<PAGE>
4. Indenture.
The Company issued the Securities under an Indenture, dated as of April
10, 1995, as supplemented by a First Supplemental Indenture dated as of April
25, 1995 and a Second Supplemental Indenture dated __________, 1995 (the
"Indenture"), among the Company, the Guarantors named therein and the Trustee.
Capitalized terms herein have the meanings ascribed to such terms in the
Indenture unless otherwise defined herein. The terms of the Securities include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act, as in effect on the date of the Indenture. The
Securities are subject to all such terms, and Holders of Securities are referred
to the Indenture and said Act for a statement thereof. The Securities are senior
unsecured obligations of the Company limited in aggregate principal amount to
$150,000,000 and are unconditionally guaranteed by certain of the Company's
present, and all of the Company's future, Subsidiaries.
5. Redemption.
The Securities may be redeemed in whole or, from time to time, in part,
at any time on or after April 15, 2000, at the option of the Company, at the
Redemption Price (expressed as a percentage of principal amount) set forth
below, if redeemed during the 12-month period commencing April 15 of each of the
years indicated below, in each case, plus any accrued but unpaid interest to the
Redemption Date. Except as otherwise provided in the next paragraph, the
Securities may not otherwise be redeemed.
<TABLE>
<CAPTION>
Year Redemption Price
---- ----------------
<S> <C>
2000 104.078%
2001 102.719%
2002 101.359%
2003 and thereafter 100.000%
</TABLE>
<PAGE>
The Securities may also be redeemed at any time if the ownership of any
of the Securities by any person or entity will preclude, interfere with,
threaten or delay the issuance, maintenance, existence or reinstatement of any
gaming or liquor license, permit or approval, or result in the imposition of
burdensome terms or conditions on such license, permit or approval, as
determined by any Governmental Authority or the Board of Directors of the
Company (including, without limitation, such Holder failing to qualify or to be
found suitable under applicable Gaming Laws).
Any redemption of the Securities will comply with Article III of the
Indenture.
6. Notice of Redemption.
Notice of redemption will be sent by first class mail, postage prepaid,
at least thirty (30) days but not more than sixty (60) days prior to the
Redemption Date to each Holder whose Securities are to be redeemed (unless a
shorter notice shall be required by any Governmental Authority) at such
Holder's last address as then shown upon the Company's registry books.
Securities may be redeemed in part in multiples of $1,000 only.
Except as set forth in the Indenture, from and after any Redemption
Date, if monies for the redemption of the Securities called for redemption shall
have been deposited with the Paying Agent on or before such Redemption Date, the
Securities called for redemption will cease to bear interest and the only right
of the Holders of such Securities will be to receive payment of the Redemption
Price, plus any accrued and unpaid interest to the Redemption Date.
7. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder may register
the transfer of, or exchange Securities in accordance with, the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not register the transfer
of or exchange of (a) any
<PAGE>
Definitive Security selected for redemption in whole or in part pursuant to
Article III of the Indenture, except the unredeemed portion of any Definitive
Security being redeemed in part, or (b) any Security for a period beginning
fifteen (15) Business Days before the mailing of a notice of an offer to
repurchase pursuant to Article XII or Section 5.14 of the Indenture or a notice
of the Company's intent to redeem Senior Notes pursuant to Article III of the
Indenture and ending at the close of business on the day of such mailing.
8. Persons Deemed Owners.
The registered Holder of a Security may be treated as the owner of the
Security for all purposes.
9. Unclaimed Money.
If money for the payment of principal or interest remains unclaimed for
two years, the Trustee and the Paying Agent(s) will pay the money back to the
Company at its written request. After that, all liability of the Trustee and
such Paying Agent(s) with respect to such money shall cease.
10. Discharge Prior to Redemption or Maturity.
If the Company irrevocably deposits with the Trustee, in trust, for the
benefit of the Holders, U.S. Legal Tender or U.S. Government Obligations or a
combination thereof, in such amounts as will be sufficient in the opinion of a
nationally recognize firm of independent public accountants selected by the
Trustee, to pay the principal of, premium, if any, and interest on the
Securities to redemption or maturity and complies with the other provisions of
the Indenture relating thereto, the Company and the Guarantors will be
discharged from certain provisions of the Indenture and the Securities
(including the financial covenants, but excluding their obligation to pay the
principal of, premium, if any, and interest on the Securities). Upon
satisfaction of certain additional conditions set forth in the Indenture, the
Company may elect to have its and the Guarantors' obligations discharged with
respect to outstanding Securities by defeasing the Securities, as more fully
described in Article IX of the Indenture.
11. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented with the written consent
<PAGE>
of the Holder or Holders of not less than a majority in aggregate principal
amount of the Securities then outstanding. Subject to Section 7.8 of the
Indenture, the Holder or Holders of a majority in principal amount of then
outstanding Securities may waive compliance by the Company or any Guarantor with
any provision of the Indenture or the Securities. Notwithstanding the foregoing,
and subject to the provisions of Section 10.2 of the Indenture, without the
consent of the Holders of at least sixty-six and two-thirds percent (66-2/3%) of
the aggregate principal amount of then outstanding Securities, no such
amendment, supplemental indenture or waiver shall change any provision of
Article VII or Article XIII of the Indenture or extend any Maturity Date of any
Senior Note. Without notice to or consent of any Holder, the parties thereto may
under certain circumstances amend or supplement the Indenture or the Securities
to, among other things, cure any ambiguity, defect or inconsistency, or make any
other change that does not adversely affect the rights of any Holder of a
Security.
12. Restrictive Covenants.
The Indenture imposes certain limitations on the ability of the Company
and the Guarantors to, among other things, incur additional Indebtedness and
Disqualified Capital Stock, pay dividends or make certain other restricted
payments, enter into certain transactions with Affiliates, incur Liens, sell
assets, merge or consolidate with any other Person or transfer (by lease,
assignment or otherwise) substantially all of the properties and assets of the
Company. The limitations are subject to a number of important qualifications and
exceptions. The Company must peri- odically report to the Trustee on compliance
with such limitations.
13. Ranking.
Payment of principal of, premium, if any, and interest on the
Securities ranks Pari Passu in right of payment with all present and future
senior Indebtedness of the Company and senior to all future subordinated
Indebtedness of the Company. The payment of the principal of, premium, if any,
and interest on the Securities is unconditionally guaranteed on a senior
unsecured basis by certain of the present and all future Subsidiaries of the
Company, as more fully set forth in the Indenture. The Guarantees will rank Pari
Passu with all existing and future senior Indebtedness of the Guarantors and
senior to all future subordinated Indebtedness of the Guarantors.
<PAGE>
14. Repurchase at Option of Holder.
(a) If there is a Change of Control, the Company shall be required to
offer to purchase on the Change of Control Payment Date all outstanding
Securities at a purchase price equal to 101% of the principal amount thereof,
plus accrued and unpaid interest, if any, to the Change of Control Payment Date.
Holders of Securities will receive a Change of Control Offer from the Company
prior to any related Change of Control Payment Date and may elect to have such
Securities purchased by completing the form entitled "Option of Holder to Elect
Purchase" appearing below.
(b) The Indenture imposes certain limitations on the ability of the
Company or any of its Subsidiaries to sell assets or to incur an Event of Loss.
In the event the Net Cash Proceeds from an Asset Sale or Event of Loss exceed
certain amounts, as specified in the Indenture, the Company will be required
either to reinvest the proceeds of such Asset Sale or Event of Loss in its
business or to make an offer to purchase each Holder's Securities at 100% of the
principal amount thereof, plus accrued interest, if any, to the purchase date.
15. Gaming Laws.
The rights of the Holder of this Security and any owner of any
beneficial interest in this Security are subject to the Gaming Laws and the
jurisdiction and requirements of the Gaming Authorities and the further
limitations and requirements set forth in the Indenture.
16. Defaults and Remedies.
If an Event of Default occurs and is continuing (other than an Event of
Default relating to certain events of bankruptcy, insolvency or reorganization),
then in every such case, unless the principal of all of the Securities shall
have already become due and payable, either the Trustee or the Holders of not
less than 25% in aggregate principal amount of Securities then outstanding may
declare all principal and interest thereon to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture or the Securities except as provided in the
Indenture. The Trustee may require indemnity satisfactory to it before the
<PAGE>
Trustee enforces the Indenture or the Securities. Subject to certain
limitations, Holders of not less than a majority in aggregate principal amount
of the Securities then outstanding may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Holders of Securities notice of
any continuing Default or Event of Default (except a Default in payment of
principal or interest), if it determines that withholding notice is in their
interest.
17. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the
Company or its Affiliates, and may otherwise deal with the Company or its
Affiliates as if it were not the Trustee.
18. Successors.
When a successor assumes all the obligations of its predecessor under
the Securities and the Indenture, the predecessor will be released from those
obligations.
19. No Recourse Against Others.
No direct or indirect stockholder, incorporator, employee, officer or
director, as such, past, present or future of the Company, the Guarantors or any
successor entity shall have any personal liability in respect of the Obligations
of the Company or the Guarantors under this Indenture or the Senior Notes by
reason of his, her or its status as such stockholder, incorporator, employee,
officer or director. Each Holder by accepting a Senior Note waives and releases
all such liability. Such waiver and release are part of the consideration for
the issuance of the Senior Notes.
20. Authentication.
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on the other side of this
Security.
21. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
22. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company will cause
CUSIP numbers to be printed on the Securities as a convenience to the Holders of
the Securities. No representation is made as to the accuracy of such numbers as
printed on the Securities and reliance may be placed only on the other
identification numbers printed hereon.
<PAGE>
FORM OF GUARANTEE
For value received, Players Lake Charles, Inc., a Louisiana
corporation; Players Riverboat Management, Inc., a Nevada corporation; Players
Riverboat, Inc., a Nevada corporation; Players Mesquite Golf Club, Inc., a
Nevada corporation; Players Indiana, Inc., an Indiana corporation; Players
Michigan City, Inc., an Indiana corporation; Players Riverboat, LLC, a Louisiana
limited liability company; Players Nevada, Inc., a Nevada corporation; Players
Bluegrass Downs, Inc., a Kentucky corporation; Players Mesquite Land, Inc., a
Nevada corporation; Players Michigan City Management, Inc., an Indiana
corporation; Players Maryland Heights, Inc., a Missouri corporation; River
Bottom, Inc., a Missouri corporation; Showboat Star Partnership, a Louisiana
general partnership, and Southern Illinois Riverboat/Casino Cruises, Inc., an
Illinois corporation, hereby unconditionally guarantee to the Holder of the
Senior Note upon which this Guarantee is endorsed the due and punctual payment,
as set forth in the Indenture pursuant to which such Senior Note and this
Guarantee were issued, of the principal of, premium (if any) and interest on
such Senior Note when and as the same shall become due and payable for any
reason according to the terms of such Senior Note and Article XIII of the
Indenture. The Guarantee of the Senior Note upon which this Guarantee is
endorsed will not become effective until the Trustee signs the certificate of
authentication on such Senior Note.
<TABLE>
<S> <C>
Players Lake Charles, Inc., Players Michigan City, Inc.,
a Louisiana corporation an Indiana corporation
By:______________________________ By:______________________________
Its:_____________________________ Its:_____________________________
Players Riverboat Management, Players Riverboat, LLC
Inc., a Nevada corporation a Louisiana limited liability company
By:______________________________ By: Players Riverboat
Its:_____________________________ Management, Inc., member
By:______________________________
Its:_____________________________
Players Riverboat, Inc., Players Nevada, Inc.,
a Nevada corporation a Nevada corporation
By:______________________________ By:______________________________
Its:_____________________________ Its:_____________________________
<PAGE>
Players Mesquite Golf Club, Players Bluegrass Downs, Inc.,
Inc., a Nevada corporation a Kentucky corporation
By:______________________________ By:______________________________
Its:_____________________________ Its:_____________________________
Players Indiana, Inc., an Players Mesquite Land, Inc., a
Indiana corporation Nevada corporation
By:______________________________ By:______________________________
Its:_____________________________ Its:_____________________________
Players Michigan City Players Maryland Heights,
Management, Inc., an Indiana Inc., a Missouri corporation
corporation
By:______________________________ By:______________________________
Its:_____________________________ Its:_____________________________
River Bottom, Inc., a Missouri Showboat Star Partnership, a
corporation Louisiana general partnership
By: Players Riverboat, LLC,
general partner
By:______________________________ By: Players Riverboat
Its:_____________________________ Management, Inc.,
member
By:______________________________
Its:_____________________________
By: Players Riverboat
Management, Inc.,
general partner
By:______________________________
Its:_____________________________
Southern Illinois
Riverboat/Casino Cruises,
Inc. an Illinois corporation
By:______________________________
Its:_____________________________
</TABLE>
<PAGE>
FORM OF ASSIGNMENT
I or we assign this Security to
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
[Print or type name, address and zip code of assignee]
Please insert Social Security or other identifying number of
assignee
__________________________________________ and irrevocably appoint
______________________________ agent to transfer this Security on the books
of the Company. The agent may substitute another to act for him.
Dated: __________ Signed: ____________________________
(Sign exactly as name appears on
the other side of this Security)
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to any of the following provisions of the Indenture, check the
appropriate box:
/ / Section 5.14 / / Article XII
If you want to elect to have only part of this Security purchased by the
Company pursuant to Section 5.14 or Article XII of the Indenture, as the case
may be, state the principal amount you want to be purchased: $_______________
Date:_________________ Signature:____________________________________
(Sign exactly as your name
appears on the other side of
this Security)
EXHIBIT 5
July 20, 1995
Players International, Inc.
3900 Paradise Road
Suite F
Las Vegas, Nevada 89109
Re: Players International, Inc. -- Registration
Statement Form S-4 under the Securities Act
of 1933 (Registration No. 33-60085)
Gentlemen:
As counsel for Players International, Inc., a Nevada corporation (the
"Company"), we are furnishing this opinion in connection with the
above-captioned registration statement (the "Registration Statement") relating
to the offering by way of exchange offer of up to $150,000,000 aggregate
principal amount of 107/8% Senior Notes due 2005, Series B (the "New Notes") to
be issued by the Company and guaranteed under joint and several guarantees (the
"New Guarantees") by Players Lake Charles, Inc., Players Riverboat Management,
Inc., Players Riverboat, Inc., Players Riverboat, LLC, Showboat Star
Partnership, Players Nevada, Inc., Players Mesquite Golf Club, Inc., Players
Mesquite Land, Inc., Players Indiana, Inc., Players Michigan City, Inc., Players
Michigan City Management, Inc., Players Bluegrass Downs, Inc., River Bottom,
Inc., Players Maryland Heights, Inc. and Southern Illinois Riverboat/Casino
Cruises, Inc. (collectively, the "Guarantors"). Capitalized terms not otherwise
defined herein shall have the meanings set forth in the Registration Statement.
<PAGE>
Players International, Inc.
July 20, 1995
Page 2
The New Notes will be issued pursuant to an indenture dated as of April 10,
1995 (the "Original Indenture"), among the Company, the Guarantors and First
Fidelity Bank, National Association, as Trustee (the "Trustee"), as supplemented
by a First Supplemental Indenture dated as of April 25, 1995 and a Second
Supplemental Indenture to be dated as of the Expiration Date (the Original
Indenture, as so supplemented, being herein called the "Indenture"). The New
Notes are being offered in exchange for $150,000,000 aggregate principal amount
of substantially identical 107/8% Senior Notes due 2005 of the Company that were
issued pursuant to the Original Indenture and guaranteed by the Guarantors (the
"Old Notes"). For purposes of this opinion, we have examined such Registration
Statement and made such further examination of fact and law as we have deemed
appropriate.
In our opinion, when the New Notes and the New Guarantees have been duly
executed by the Company and the Guarantors, respectively, in accordance with the
terms of the Indenture, the New Notes have been authenticated by the Trustee
under the terms of the Indenture and the New Notes and the New Guarantees have
been delivered by the Company and the Guarantors in exchange for the Old Notes
as specified in the Indenture: (i) the New Notes will constitute valid and
binding obligations of the Company, enforceable in accordance with their terms,
except as enforcement thereof may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and by equitable principles of general
application; and (ii) the New Guarantees will constitute valid and binding
obligations of each of the Guarantors, enforceable against each of the
Guarantors in accordance with their terms, except as enforcement thereof may be
limited by bankruptcy, fraudulent conveyance, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and by equitable principles of general application.
<PAGE>
Players International, Inc.
July 20, 1995
Page 3
The foregoing opinion is limited to the laws of the State of New York. For
purposes of this opinion we have assumed that the Company and each of the
Guarantors is a validly existing corporation or partnership and that the New
Notes and the New Guarantees have been duly authorized by the Company and each
of the Guarantors pursuant to adequate corporate and partnership power.
We hereby consent to the filing of a copy of this opinion as an exhibit to
such Registration Statement and to the references to this Firm in the
Prospectus. In giving such consent, we do not thereby admit that we are acting
within the category of persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder.
Very truly yours,
Morgan, Lewis & Bockius
[EXECUTION]
First Interstate Bank of Nevada, N.A. Bankers Trust Commpany
3800 Howard Hughes Parkway BT Securities Corporation
Suite 400 130 Liberty Street
Las Vegas, Nevada 89193 New York, New York 10006
March 15, 1995
Players International, Inc.
3900 Paradise Road, Suite 135
Las Vegas, Nevada 89109
Attention: Mr. Peter Aranow
Chief Financial Officer
Re: $120 Million Reducing Revolving Credit Agreement
Ladies and Gentlemen:
You have advised us that Players International, Inc. (the "Company") wishes
to establish a $120 million bank credit facility (the "Credit Facility") for
general corporate purposes. First Interstate Bank of Nevada, N.A. ("FIB") is
pleased to confirm that it is willing to act as arranger, administrative agent
(the "Administrative Agent") and managing agent of the Credit Facility and to
provide up to $60 million of the Credit Facility. Bankers Trust Company ("BTCo")
is pleased to confirm that it is willing to provide up to $60 million of the
Credit Facility and act as managing agent of the Credit Facility (together with
FIB, the "Managing Agents") and that its affiliate BT Securities Corporation
("BTSC") will act as an arranger of the Credit Facility (BTSC, in such capacity,
collectively, with FIB, the "Co-Arrangers"). The Credit Facility shall consist
of a secured reducing revolving loan facility. The Credit Facility shall include
a $10 million subfacility for the issuance of standby letters of credit. With
your consent (which consent shall not be withheld unreasonably), FIB and BTSC
will arrange for other banks and financial institutions (each such bank and
financial institution, including the Co-Arrangers, being a "Lender" and,
collectively, the "Lenders") to provide a portion of the Credit Facility.
Certain of the terms of the Credit Facility are set forth in Annex A attached
hereto (the "Term Sheet").
We have reviewed certain financial projections of the Company and met with
representatives of the Company and we are pleased to advise you that the results
of our due
PH02/80758.1
<PAGE>
diligence investigation of the Company to date are satisfactory. However,
neither we nor our counsel have had the opportunity to complete the due
diligence efforts with respect to the Company necessary to substantiate the
premises upon which our proposal is based. Accordingly, our commitments to
provide the financing described in this letter are subject to our satisfaction,
upon completion of our remaining due diligence, with the business, operations,
condition (financial and otherwise) and prospects of the Company and
satisfaction of the conditions to be set forth in the definitive documentation
relating to the Credit Facility including, without limitation, those conditions
set forth in the Term Sheet. In the event that our continuing review of the
Company discloses information relating to conditions or events not previously
disclosed to us or relating to new information or additional developments
concerning conditions or events previously disclosed to us that we believe may
have a material adverse effect on the condition (financial or otherwise),
assets, properties, business or prospects of the Company, we may, in our sole
discretion, suggest alternative financing amounts or structures that ensure
adequate protection for the Lenders or decline to participate in the proposed
financing.
The Company hereby represents and covenants that (a) all information, other
than the Projections (as defined below), that has been or is hereafter made
available to the Co-Arrangers or the Lenders by the Company or any of its
representatives in connection with the transaction contemplated hereby (the
"Information") is, and, in the case of Information made available after the date
hereof, will be, complete and correct in all material respects and does not and
will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements contained therein in light of the
circumstances in which made not materially misleading and (b) all financial
projections concerning the Company that have been or are hereafter made
available to the Co-Arrangers or the Lenders by the Company or any of its
representatives in connection with the transaction contemplated hereby (the
"Projections") have been or, in the case of Projections made available after the
date hereof, will be, prepared in good faith based upon reasonable assumptions.
The Company agrees to supplement the Information and the Projections from time
to time until the Closing so that the representation and warranty in the
preceding sentence is correct on the Closing. In arranging and syndicating the
Credit Facility, the Co-Arrangers will be using and relying on the Information
and the Projections without independent verification thereof. The
representations and covenants contained in this paragraph shall remain effective
until a definitive financing agreement is executed and thereafter the
representations and covenants contained herein shall be superseded by those
contained in such definitive financing agreement.
The costs and expenses (including reasonable fees and expenses of counsel
to the Co-Arrangers, professional fees of consultants and other experts and
out-of-pocket expenses of the Co-Arrangers, including without limitation
syndication expenses) arising in connection with the preparation, execution and
delivery of this letter and the definitive financing agreements and the
syndication of the Credit Facility shall be for the account of the Company. The
Company further agrees to indemnify and hold harmless each of the Lenders and
the Co-Arrangers and each director, officer, employee and affiliate thereof
(each an "indemnified person") from and against any losses, claims, damages,
liabilities or other expenses to which a Lender, a Co-Arranger or such
indemnified persons may become
-2-
PH02/80758.1
<PAGE>
subject, insofar as such losses, claims, damages, liabilities (or actions or
other proceedings commenced or threatened in respect thereof) or other expenses
arise out of or in any way relate to or result from the actions of the Company
or its affiliates in connection with, or any of the statements contained in this
letter or directly relating to, the extension of the financing contemplated by
this letter, or any use or intended use of the proceeds of any of the loans,
letters of credit and other extensions of credit contemplated by this letter,
and to reimburse each of the Lenders, each Co-Arranger and each indemnified
person for any legal or other expenses incurred in connection with
investigating, defending or participating in any such investigation, litigation
or other proceeding (whether or not such Lender, such Co- Arranger or any such
person is a party to any investigation, litigation or proceeding out of which
any such expenses arise); provided, however, that the indemnity contained herein
shall not apply to the extent of such losses, claims, damages, liabilities or
other expenses that result from the gross negligence or willful misconduct of
such Lender, such Co-Arranger or indemnified person. The obligations to
indemnify each Lender, each Co-Arranger and such indemnified persons and pay
such legal and other expenses shall remain effective until a definitive
financing agreement is executed and thereafter the indemnification and expense
reimbursement obligations contained herein shall be superseded by those
contained in such definitive financing agreement. Neither Co-Arranger nor any
other Lender shall be responsible or liable to any other party or any other
person for consequential damages which may be alleged as a result of this
letter.
In connection with the services to be provided hereunder by the
Co-Arrangers, they may employ the services of their respective affiliates. The
Co-Arrangers may share with such affiliates, and such affiliates may share with
them, any information concerning the Company; provided that the Co-Arrangers and
such affiliates agree to hold any non-public information confidential in
accordance with their respective customary policies relating to non-public
information. Any such affiliate so employed (and its directors, officers,
employees and affiliates) shall be entitled to all of the benefits afforded to
the Co-Arrangers hereunder.
This letter is confidential and shall not be disclosed by you to any person
other than your accountants, attorneys, and, to the extent approved by the
Co-Managers and Co-Arrangers, other advisors, and then only on a confidential
basis. Additionally, you may make such disclosures of this letter as are
required by law or judicial process or as may be required or appropriate in
response to any summons or subpoena or in connection with any litigation.
Our offers will terminate on March 30, 1995, unless on or before that date
you sign and return an enclosed counterpart of this letter together with an
executed copy of the accompanying letter concerning certain fee arrangements and
the payment described therein. The Credit Facility referred to herein shall in
no event be available unless the conditions to closing thereunder shall have
been satisfied on or prior to June 15, 1995.
This letter may not be assigned or delegated by you whether by operation of
law, change in control or otherwise.
-3-
PH02/80758.1
<PAGE>
This letter agreement shall be construed in accordance with the internal
laws of the State of Nevada. This letter agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same instrument.
We appreciate having been given the opportunity by you to be involved in
this transaction.
Very truly yours,
FIRST INTERSTATE BANK OF NEVADA, N.A.
By: __________________________
Title: _______________________
BANKERS TRUST COMPANY
By: __________________________
Title: _______________________
BT SECURITIES CORPORATION
By:____________________________
Title:_________________________
AGREED AND ACCEPTED THIS
___ day of March, 1995
PLAYERS INTERNATIONAL, INC.
By:_____________________
Title:__________________
-4-
PH02/80758.1
<PAGE>
ANNEX A
PLAYERS INTERNATIONAL, INC.
SUMMARY OF PROPOSED TERMS
AND CONDITIONS OF
CREDIT FACILITY
The following summarizes certain terms for a Reducing Revolving Credit
Facility to be made available to Players International, Inc. This Summary of
Proposed Terms and Conditions (the "Term Sheet") is not meant to be, nor shall
it be construed as, an attempt to define all terms and conditions of the Credit
Facility. Rather, this Term Sheet is intended only to outline certain basic
points of business understanding around which the definitive documentation for
the Credit Facility is to be structured. Further negotiations within the scope
of the terms contained herein shall not be precluded by the issuance of this
Term Sheet. All terms defined in the financing letter to which this Annex A is
attached and not otherwise defined herein shall have the same meanings when used
herein.
I. THE CREDIT FACILITY
Borrower:
Players International, Inc. (the "Company").
The Lenders:
First Interstate Bank of Nevada, N.A. ("FIB") and Bankers
Trust Company ("BTCo") and a syndicate of banks and
financial institutions reasonably acceptable to Company (the
"Lenders").
The Co-Arrangers:
FIB and BT Securities Corporation (in such capacities, the "Co-Arrangers").
Administrative
Agent for the Lenders:
FIB (in such capacity, the "Administrative Agent").
Managing Agents:
FIB and BTCo
Type and Amount:
The Credit Facility shall consist of a $120 million Reducing Revolving Credit
Facility. Reductions in the Credit Facility shall commence on the last day (the
"Reduction Commencement Date") of the first calendar quarter occurring after the
second anniversary of the closing (the "Closing"). However, the Company may
request a one-year extension of the Reduction Commencement Date no less than
ninety days prior to the Reduction Commencement Date then in effect. Such
extension may be granted with the consent of all Lenders, subject to the
Company's payment of an extension fee based
A-1
<PAGE>
upon prevailing market conditions and satisfaction of other conditions such
as the Company's reaffirmation of all representations and warranties and the
absence of any actual or potential event of default. If all Lenders do not
consent to the requested extension, the requested extension will nonetheless
become effective with the approval of a majority (66 2/3%) of the Lenders who
had previously consented to such extension if (i) one of more of such Lenders in
its sole discretion increases its commitment in an amount equal to the
commitment(s) of the non-consenting Lender(s) or (ii) the Company elects to
either (a) continue the Credit Facility at the reduced level (after paying off
the non-consenting Lender(s)) or (b) bring in one or more additional financial
institutions to assume the commitment(s) of the non-consenting Lender(s). Once
reductions in the Credit Facility commence, they shall be made in eight equal
semiannual amounts. The Credit Facility shall mature four years after the
occurrence of the Reduction Commencement Date.
Loans under the Credit Facility will be subject to customary minimum borrowing
limitations and notice periods.
Use of Proceeds:
The proceeds of the Credit Facility may be used by the Company for general
corporate purposes excluding the funding of "hostile acquisitions" (to be
defined in a mutually agreed manner). The Administrative Agent will make a
$5,000,000 portion of the Credit Facility available for drawing on same day
notice ("Swing Line Loans"). Each Lender shall make a loan weekly to fund out
its proportionate share of outstanding Swing Line Loans and, prior to such
weekly funding, shall be deemed to have purchased a risk participation in
outstanding Swing Line Loans. Ten million dollars of the Credit Facility shall
be available for the issuance of standby letters of credit to support corporate
purposes to be agreed upon.
Security:
The Credit Facility shall be secured by liens on all real and personal property
(the "Collateral") related to the gaming operations conducted by the Company at
Mesquite, Metropolis and Lake Charles, including, without limitation, a pledge
of the stock of all Guarantors (defined below) and all vessels, barges,
leasehold interests, gaming equipment and fixtures.
To effect liens securing the Credit Facility, the Company and its subsidiaries
shall execute and deliver to Administrative Agent all security agreements,
financing statements, deeds of trust, ship mortgages, stock powers and other
documents and
A-2
<PAGE>
instruments as are necessary to grant a first priority perfected security
interest in and lien upon all the Collateral, subject to (i) liens existing at
the closing, (ii) liens to secure permitted purchase money financing and (iii)
customary permitted liens.
Negative pledge on all assets of the Company and its subsidiaries, subject to
exceptions to be agreed upon.
Guarantors:
All subsidiaries of the Company in existence on the Closing and all Significant
Subsidiaries (as defined below) organized or acquired by the Company after the
Closing. A Significant Subsidiary shall be one now existing or hereafter created
having a book value or fair market value in excess of $1,000,000.
Interest Rates:
All amounts outstanding under the Credit Facility (other than Swing Line Loans
and letters of credit) shall bear interest, at the Company's option, at the
Prime Rate or the LIBOR Rate plus the Applicable Margin. The Applicable Margin
shall be determined by reference to the Adjusted Leverage Ratio as follows:
=============================================================================
Adjusted Leverage LIBOR Prime Rate
Ratio Margin Margin
- -----------------------------------------------------------------------------
Less than.75 1.25% 0%
- -----------------------------------------------------------------------------
.75 to Lesss than 1.25 1.75% 0%
- -----------------------------------------------------------------------------
1.25 to Less than 1.75 2.00% 0.25%
- -----------------------------------------------------------------------------
1.75 and above 2.25% 0.50%
=============================================================================
The Adjusted Leverage Ratio shall be the ratio of the Company's Debt to EBITDA
and shall be determined quarterly.
"Debt" means, without duplication, the sum of the daily average outstandings
under the Credit Facility for such quarter plus Other Allowed Indebtedness
(defined below) outstanding on the last day of such quarter plus letters of
credit outstanding on such date plus Contingent Obligations on such date. This
definition of Debt is applicable only to pricing.
"Contingent Obligations" means all debt with recourse to the Company or one of
its subsidiaries, including all contingent liabilities for debt of a New Venture
Subsidiary (as defined below) or New Venture (as defined below) and contingent
liabilities or
A-3
<PAGE>
contingent assessments for additional capitalization and/or investment in
such New Venture Subsidiary or New Venture.
"EBITDA" means income from operations of the Company and its subsidiaries after
deducting all expenses other than interest, taxes, depreciation, and
amortization, and after eliminating all extra-ordinary and non-recurring items.
Swing Line Loans shall bear interest at the Prime Rate plus the Applicable
Margin.
As used herein, the terms "Prime Rate" and "LIBOR Rate" shall have meanings
customary and appropriate for financings of this type.
Interest on Prime Rate loans shall accrue on the basis of a 365/366 day year,
and interest on LIBOR loans shall accrue on the basis of a 360 day year.
LIBOR loans will be available, at the Company's option, for one, two, three or
six-month periods.
After an event of default, interest will accrue at the rate otherwise applicable
plus 2% per annum.
Interest Payments:
Quarterly for Prime Rate loans; on the last day of the selected interest periods
for LIBOR loans (and at the end of every three months, in the case of interest
periods of longer than three months).
Letters of Credit:
The standby letter of credit fee shall be the Applicable Margin for LIBOR loans
and shall be shared by all Lenders. An additional fee of .25% per annum shall be
paid to the Administrative Agent as issuing bank. Such fees shall be calculated
based on the maximum amount available for drawing and shall be paid in advance
on the date of issuance of each letter of credit. The term of letters of credit
may not exceed the earlier of one year from the date of issuance or the maturity
of the Credit Facility. Each Lender shall buy a risk participation in all
outstanding letters of credit.
PH02/80758.1
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Commitment Fee:
The Commitment Fee will be calculated based on the Adjusted Leverage as set
forth below:
=========================================================================
Adjusted Leverage Commitment
Ratio Fee
- -------------------------------------------------------------------------
Less than.75 0.375%
- -------------------------------------------------------------------------
.75 to Less than 1.25 0.375%
- -------------------------------------------------------------------------
1.25 to Less than 1.75 0.50%
- -------------------------------------------------------------------------
1.75 and above 0.50%
=========================================================================
The Commitment Fee is a per annum rate calculated on the unused portion of the
Credit Facility (reduced by the amount of letters of credit issued and
outstanding but not by the outstanding Swing Line Loans), payable quarterly in
arrears and accruing from the Closing. The Commitment Fee shall be calculated
using the actual days elapsed and a 365/366 day year.
Voluntary Prepayments
and Facility Reductions:
The Credit Facility may be prepaid in whole or in part without premium or
penalty (LIBOR loans prepayable only on the last days of related interest
periods). The Company may voluntarily reduce the principal amount of the Credit
Facility at any time. Voluntary reductions of the Credit Facility shall be
applied as the Company directs to scheduled commitment reductions.
Representations and
Warranties:
Customary and appropriate, including without limitation due organization and
authorization, financial condition, no material adverse changes, title to
properties, liens, litigation, payment of taxes, no material adverse agreements,
compliance with laws, environmental liabilities and full disclosure.
Covenants:
Customary and appropriate affirmative and negative covenants, including but not
limited to financial covenants related to minimum fixed charge coverage, minimum
EBITDA, maximum leverage and minimum tangible net worth.
Financial Covenants:
1. The minimum fixed charge coverage ratio shall be calculated on a
rolling four quarters basis as follows: EBITDA for such period divided
by the current portion of long-term debt plus cash interest expense
plus capital lease payments, in each case for such period. The Company
shall be required to maintain a fixed charge coverage ratio of no less
than:
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Period Ratio
First four quarters 1.50
Quarters five through eight 1.60
Thereafter 1.75
2. The minimum EBITDA test shall be calculated on a rolling
four quarters basis and shall be as follows:
Period Minimum
First four quarters $55 million
Quarters five through eight $65 million
Thereafter $75 million
3. The maximum leverage ratio shall be as follows:
Period Maximum
First four quarters 2.50
Quarters five through eight 2.25
Thereafter 2.00
The leverage ratio shall be measured quarterly by dividing (a) the sum
of (without duplication) (i) the average daily amount of loans and
letters of credit outstanding under the Credit Facility during the most
recent quarter plus (ii) Other Allowed Indebtedness outstanding on such
date plus (iii) Contingent Obligations on such date by (b) EBITDA for
the most recent four quarters.
4. Consolidated Tangible Net Worth shall be measured
quarterly and shall be not less than 90% of Consolidated
Tangible Net Worth as of the most recent quarter end prior
to the Closing plus 75% of subsequent quarterly
consolidated net income (not reduced by consolidated net
losses) plus 50% of the net proceeds of any equity offering
completed by the Company subsequent to the Closing
minus any repurchases by the Company of its equity
securities. Consolidated Tangible Net Worth shall be the
sum of the par value of the Company's capital stock plus
capital in excess of par plus retained earnings minus
intangible assets such as trademarks and goodwill.
Investment
Restriction:
The Company shall not make investments (including New Venture Investments) and
capital expenditures for any New Venture
A-6
<PAGE>
Project without the consent of Majority Lenders if the aggregate amount thereof
for any such New Venture Project would exceed:
(a) $75 million if the Company's EBITDA for the most recent
12 month period is less than $75 million, or
(b) $100 million unless the Company's EBITDA for the most recent 12 month
period is greater than $75 million.
"New Venture Subsidiary" means any subsidiary of the Company (formed after
Closing) to hold, directly or indirectly, an interest in a gaming establishment.
"New Venture" means a gaming establishment either owned by a New Venture
Subsidiary or by an entity in which a New Venture Subsidiary is a partner,
stockholder or co-owner.
"New Venture Investments" means all capitalization, investments, loans,
distributions and advances of any kind and character whatsoever made by the
Company in any New Venture Subsidiary or New Venture.
Restriction on
Stock Repurchases:
The Company shall not purchase any of its equity securities except in open
market transactions and for an aggregate amount not in excess of $25 million
plus 20% of quarterly net income after taxes.
Restriction on
Debt:
The Company shall not incur secured debt except for (a) secured interest rate
swaps with Lenders having a maximum notional amount to be agreed upon, (b)
existing secured purchase money debt and capital leases not to exceed $5
million, (c) secured purchase money debt and capital leases not to exceed $10
million for each New Venture Subsidiary and for the Mesquite operations and (d)
secured purchase money debt and capital leases acquired through permitted
acquisitions and purchases. The Company may incur secured and unsecured debt in
an aggregate amount equal to the lesser of (i) $275 million or (ii) the maximum
permitted under the Leverage Ratio. The debt described in clauses (a)-(d) above
and the debt described in the prior sentence together constitute "Other Allowed
Indebtedness" for purposes of the Adjusted Leverage Ratio and the Leverage
Ratio.
Other Negative
Covenants:
Other negative covenants will include limitations on other liens except as
described above under "Security", loans and advances except for loans in
connection with New Ventures and New Venture Investments, restricted junior
payments (dividends and
A-7
<PAGE>
payments on subordinated debt), mergers and acquisitions, sales of assets,
transactions with affiliates and other provisions customary and appropriate for
financings of this type, including exceptions and baskets to be mutually agreed
upon.
Affirmative
Covenants:
The affirmative covenants shall include the following reporting provisions and
other customary requirements:
o All reports required to be filed by the Company (10Q's,
10K's, proxies, etc.) within 15 days of filing.
o Quarterly compliance certificates within 45 days of each
quarter end.
o Quarterly New Venture project status report.
o Annual audited financial statements accompanied by an unqualified
opinion by an independent certified public accountant within 90 days of
each fiscal year end.
o Annual operating projections and capital expenditure budget within 120
days of each fiscal year end.
o Such additional information as the Lenders may reasonably
request.
Events of Default:
Customary and appropriate, including without limitation failure to make payments
when due, defaults under other agreements or instruments of indebtedness, a
material adverse change (as described in item 6 on page A-9), noncompliance with
covenants, breaches of representations and warranties, bankruptcy, judgments in
excess of specified amounts, impairment of security interests in collateral,
invalidity of guarantees, loss of license, and "changes of control" (to be
defined in a mutually agreed upon manner).
II. CONDITIONS TO LOANS
Certain Conditions
Precedent to Initial
Funding:
Conditions precedent to the initial funding of the Credit Facility will include,
without limitation, the following:
1. Satisfactory Documentation. The definitive documentation evidencing the
Credit Facility (the "Definitive Financing Documents") shall be
prepared by counsel to Administrative Agent, shall be in form and
substance satisfactory to Administrative Agent and Lenders
A-8
<PAGE>
(including such credit committee approval, if any, as is required by
each Lender).
2. Security. The Administrative Agent, for the benefit of
Lenders, shall have been granted a perfected security
interest in all assets to the extent described above under
the heading "Security".
3. Insurance. The Administrative Agent shall have received
satisfactory assurances that an ALTA title insurance policy
insuring the interest of the Lenders in certain of the real
property securing the Credit Facility will be available in
form and substance satisfactory to Administrative Agent.
The Company shall provide Administrative Agent with
evidence of other insurance coverage as Lenders may
reasonably request and the Administrative Agent shall be
named as loss payee thereof.
4. Appraisals. The Administrative Agent shall have received
appraisals in form, scope and substance satisfactory to
Administrative Agent and satisfying the requirements of
any applicable laws and regulations concerning the real
property security.
5. Environmental Matters. The Administrative Agent and
Lenders shall have received reports and other information
in form, scope and substance satisfactory to Administrative
Agent and Lenders concerning environmental liabilities of
the Company and its subsidiaries.
6. No Material Adverse Change. Since March 31, 1994,
there shall have occurred no material adverse change in the
condition (financial or otherwise), business, assets,
liabilities, properties, results of operations or prospects of
the Company and its subsidiaries, taken as a whole.
7. No Disruption of Financial and Capital Markets. There
shall have been no material adverse change after the date
hereof to the syndication markets for credit facilities
similar in nature to the Credit Facility and there shall not
have occurred and be continuing a material disruption of
or material adverse change in financial, banking or capital
markets that would have an adverse effect on such
syndication market, in each case as determined by Co-
Arrangers in their sole discretion.
A-9
<PAGE>
8. Financial Statements. The Administrative Agent and the Lenders shall
have received the audited financial statements for the Company for the
period ended March 31, 1994 and the unaudited financial statements for
each subsequent quarter prior to the Closing (other than the quarter
ended March 31, 1995).
9. Due Diligence. The results of the Managing Agents'
continuing financial, legal, tax and accounting due
diligence investigations, and any supplemental business or
financial due diligence that the Managing Agents
reasonably determine has become necessary, shall not
disclose information not previously disclosed to the
Managing Agents which causes the results of such
diligence not to be satisfactory in all respects to the
Managing Agents and Lenders. The Managing Agents and
Lenders shall also have received any information
reasonably necessary to conduct their continuing due
diligence.
10. Customary Closing Documents. All documents required to be delivered
under the Definitive Financing Documents, including customary legal
opinions, evidence of necessary licenses, regulatory approvals and
governmental permits, corporate records and documents from public
officials and officers' certificates, shall have been delivered.
Conditions to All
Borrowings:
The conditions to all borrowings will include requirements relating to prior
written notice of borrowing, the accuracy of representations and warranties, and
the absence of any default or potential event of default, the absence of any
material adverse change, and will otherwise be customary and appropriate for
financings of this type.
III. MISCELLANEOUS
Syndication:
A syndicate of financial institutions will be arranged by the Co-Arrangers. The
Company shall cooperate with the Co-Arrangers in the syndication of the Credit
Facility (including, but not limited to, participation in meetings with Lenders
and assisting in the preparation of a Confidential Information Memorandum and
other materials to be used in connection with such syndication) and shall
provide and cause its advisors to provide all information reasonably deemed
necessary by the Co-Arrangers to complete a successful syndication.
A-10
<PAGE>
The Lenders may assign all or, in an amount of not less than $5 million, any
part of their share of the Credit Facility to affiliates or one or more banks or
other entities that are eligible assignees (to be described in the loan
documentation) which, in the case of assignments made by Lenders other than the
Managing Agents are reasonably acceptable to the Managing Agents, such consent
not to be unreasonably withheld, and upon such assignment, such affiliate, bank
or entity shall become a Lender for all purposes of the loan documentation;
provided that assignments made to affiliates and other Lenders shall not be
subject to the $5 million minimum assignment requirement. Lenders will have the
right to sell participations, subject to customary limitations on voting rights,
in their share of the Credit Facility.
Majority Lenders:
Majority Lenders shall mean Lenders holding in the aggregate not less than
66-2/3% of the commitments under the Credit Facility.
Taxes, Reserve
Requirements &
Indemnities:
All payments are to be made free and clear of any taxes (other than franchise
taxes and taxes on overall net income), imposts, assessments, withholdings, or
other deductions whatsoever. Unless foreign lenders furnish to the
Administrative Agent (for delivery to the Company) appropriate certificates or
other evidence of exemption from U.S. federal tax withholding, they shall not be
eligible for the foregoing indemnification payments.
The Company is to indemnify the Lenders against all increased costs of capital
resulting from reserve requirements or otherwise imposed, in each case subject
to customary increased costs, capital adequacy and similar provisions to the
extent not taken into account in the calculation of the Prime Rate or the LIBOR
Rate.
Governing Law and
Jurisdiction:
The Company will submit to the non-exclusive jurisdiction and venue of the
federal and state courts of the State of Nevada and will waive any right to
trial by jury. Nevada law shall govern loan documentation.
Administrative Agent's
Counsel:
O'Melveny & Myers.
PH02/80758.1
A-11
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
report on the consolidated financial statements of Players International, Inc.
and subsidiaries (and to all references to our Firm) included in or made a part
of this registration statement on Form S-4.
ARTHUR ANDERSEN LLP
Las Vegas, Nevada
July 17, 1995
EXHIBIT 23.3
CONSENT
We consent to the reference to our firm under the caption 'Experts' and to
the use of our report dated May 19, 1995, in the Registration Statement (Form
S-4 No. 33-60085) and related Prospectus of Players International, Inc. for the
registration of $150,000,000 10 7/8% Senior Notes Due 2005.
ERNST & YOUNG, LLP
Philadelphia, Pennsylvania
July 18, 1995
