As filed with the Securities and Exchange Commission on June 13, 2002
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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PINNACLE ENTERTAINMENT, INC.
and Additional Subsidiary Guarantor Registrants
(See Table of Other Registrants Below)
(Exact Name of Registrant as Specified in Its Charter)
Delaware 95-3667491
(State or Other
Jurisdiction of
Incorporation or (I.R.S. Employer
Organization) Identification Number)
330 North Brand Boulevard, Suite 1100
Glendale, California 91203-2308
(818) 662-5900
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
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Loren S. Ostrow, Esq.
Pinnacle Entertainment, Inc.
330 North Brand Boulevard, Suite 1100
Glendale, California 91203-2308
(818) 662-5900
(Name, Address, Including Zip Code, and Telephone
Number, Including Area Code, of Agent for Service)
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COPY TO:
Alvin G. Segel, Esq.
Irell & Manella LLP
1800 Avenue of the Stars, Suite 900
Los Angeles, California 90067
(310) 277-1010
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_] ________
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_] ________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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CALCULATION OF REGISTRATION FEE
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Title of Each Proposed Maximum Proposed Maximum Aggregate
Class of Securities Amount to be Offering Price Per Offering Amount of
to be Registered Registered(1)(2) Unit(1)(2) Price(1)(2) Registration Fee
- ------------------------------------------------------------------------------------------------------
Debt Securities(3)(4)...............
- ------------------------------------------------------------------------------------------------------
Preferred Stock(4)(5)...............
- ------------------------------------------------------------------------------------------------------
Depositary Shares(4)(6).............
- ------------------------------------------------------------------------------------------------------
Common Stock, par value $0.10 per
share(4)(7).......................
- ------------------------------------------------------------------------------------------------------
Warrants to Purchase Common
Stock(4)(8).......................
- ------------------------------------------------------------------------------------------------------
Guarantees of the Debt Securities(9)
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TOTAL............................... $500,000,000 100% $500,000,000 $46,000.00
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(1) We or the selling stockholders, as applicable, will determine the proposed
maximum offering price per unit from time to time in connection with
issuances of securities registered hereunder. The proposed maximum
aggregate offering price has been estimated solely for the purpose of
calculating the registration fee pursuant to Rule 457(o) under the
Securities Act of 1933, as amended.
(2) Not applicable pursuant to General Instruction II.D of Form S-3 under the
Securities Act of 1933.
(3) There is being registered hereunder an indeterminate principal amount of
debt securities of our company as may be offered or sold from time to time
by us. If any debt securities are issued at an original issue discount,
then the offering price shall be in such greater principal amount as shall
result in an aggregate initial offering price not to exceed $500,000,000.
(4) Includes such indeterminate amount of securities of our company as may be
issued upon conversion of or exchange for, as the case may be, any other
securities registered hereunder.
(5) There is being registered hereunder an indeterminate number of shares of
preferred stock as may be sold from time to time by us.
(6) There is being registered hereunder an indeterminate number of depositary
shares as may be sold from time to time by us.
(7) There is being registered hereunder an indeterminate number of shares of
our common stock as may be sold from time to time by us. Also includes an
indeterminate number of shares of our common stock which may be offered by
certain selling stockholders.
(8) There is being registered hereunder an indeterminate number of warrants to
purchase common stock as may be sold from time to time by us.
(9) No separate consideration will be received for the Guarantees.
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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.
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OTHER REGISTRANTS
Exact Name of Registrant State or Other Jurisdiction I.R.S. Employer
as Specified in its Charter of Incorporation or Organization Identification Number
--------------------------- -------------------------------- ---------------------
Belterra Resort Indiana, LLC...................... Nevada 93-1199012
Biloxi Casino Corp................................ Mississippi 64-0814408
Boomtown, Inc..................................... Delaware 94-3044204
Boomtown Hotel & Casino, Inc...................... Nevada 88-0101849
Casino Magic Corp................................. Minnesota 64-0817483
Casino One Corporation............................ Mississippi 64-0814345
Crystal Park Hotel and Casino Development Company,
LLC............................................. California 95-4595453
HP/Compton, Inc................................... California 95-4545471
Louisiana-I Gaming, a Louisiana Partnership in
Commendam....................................... Louisiana 72-1238179
Louisiana Gaming Enterprises, Inc................. Louisiana 72-1229201
PNK (Bossier City), Inc........................... Louisiana 64-0878110
PNK (Lake Charles), LLC........................... Louisiana 02-0614452
PNK Development 1, Inc............................ Applied
Delaware For
PNK Development 2, Inc............................ Applied
Delaware For
PNK Development 3, Inc............................ Applied
Delaware For
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
securities and exchange commission is effective. This prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED JUNE 13, 2002
PROSPECTUS
PINNACLE ENTERTAINMENT, INC.
$500,000,000
DEBT SECURITIES
PREFERRED STOCK
DEPOSITARY SHARES
COMMON STOCK
WARRANTS TO PURCHASE COMMON STOCK
[LOGO] Pinnacle Entertainment, Inc.
We may offer and sell, from time to time, in one or more classes or series
and in amounts, at prices and on terms that we will determine at the time of
offering, with an aggregate initial offering price not exceeding $500,000,000:
. debt securities, which may consist of debentures, notes or other types of
debt;
. shares of preferred stock;
. shares of preferred stock represented by depositary shares;
. shares of common stock; and
. warrants to purchase common stock.
Certain of our stockholders also may offer and sell common stock under this
prospectus. The aggregate offering price of securities covered by this
prospectus includes any common stock sold by such stockholders.
We will provide the specific terms of these securities in supplements to
this prospectus. This prospectus may not be used to sell securities unless
accompanied by a prospectus supplement. WE URGE YOU TO READ CAREFULLY THIS
PROSPECTUS AND THE ACCOMPANYING PROSPECTUS SUPPLEMENT, WHICH WILL DESCRIBE THE
SPECIFIC TERMS OF THE SECURITIES OFFERED, BEFORE YOU MAKE YOUR INVESTMENT
DECISION.
Our common stock trades on the New York Stock Exchange under the symbol
"PNK." If we decide to list or seek a quotation for any other securities, the
prospectus supplement relating thereto will disclose the exchange or market on
which such securities will be listed or quoted.
INVESTING IN THESE SECURITIES INVOLVES RISKS. YOU SHOULD CAREFULLY REVIEW
THE INFORMATION THAT WILL BE CONTAINED IN THE PROSPECTUS SUPPLEMENT UNDER THE
HEADING "RISK FACTORS."
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Neither the Securities and Exchange Commission, the Louisiana Gaming Control
Board, the Indiana Gaming Commission, the Mississippi Gaming Commission, the
Nevada Gaming Commission, the Nevada State Gaming Control Board, nor any other
regulatory agency of any other state has passed upon the adequacy or accuracy
of this prospectus or the investment merits of the securities offered hereby.
Any representation to the contrary is unlawful.
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The date of this prospectus is , 2002
TABLE OF CONTENTS
Page
----
About this Prospectus............................... i
Where You Can Find More Information................. i
Disclosure Regarding Forward-Looking Statements..... iii
Pinnacle Entertainment.............................. 1
Ratio of Earnings to Fixed Charges.................. 4
Use of Proceeds..................................... 4
Description of Debt Securities...................... 5
Description of Preferred Stock and Depositary Shares 13
Description of Common Stock......................... 18
Description of Warrants............................. 21
Government Regulations and Gaming Issues............ 23
Selling Stockholders................................ 38
Plan of Distribution................................ 38
Legal Matters....................................... 40
Experts............................................. 40
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission, which we refer to as the SEC, using the
SEC's shelf registration rules. Under the shelf registration rules, using this
prospectus, together with a prospectus supplement, we and the selling
stockholders collectively may sell from time to time, in one or more offerings,
any of the securities described in this prospectus having a total initial
offering price not exceeding $500,000,000.
In this prospectus "Pinnacle Entertainment," "the company," "we," "us," and
"our" refer to Pinnacle Entertainment, Inc., a Delaware corporation, and its
consolidated subsidiaries, unless the context otherwise requires.
This prospectus provides you with a general description of the securities we
may sell. Each time we sell securities under this prospectus, we will provide a
prospectus supplement that will contain specific information about the terms of
that offering. The prospectus supplement may also add, update or change
information contained in this prospectus. We use market and industry data
throughout this prospectus that we have obtained from market research, publicly
available information and industry publications. These sources generally state
that the information that they provide has been obtained from sources believed
to be reliable, but that the accuracy and completeness of such information are
not guaranteed. The market and industry data is often based on industry surveys
and the preparers' experience in the industry. Similarly, although we believe
that the surveys and market research that others have performed are reliable,
we have not independently verified this information. You should read this
prospectus, the applicable prospectus supplement and the additional information
described below under "Where You Can Find More Information" before making an
investment decision.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any reports, statements or
other information we file with the SEC at its public reference rooms at 450
Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the public reference rooms. Our
filings are also available to the public on the Internet, through a
i
database maintained by the SEC at http://www.sec.gov.
We filed a registration statement on Form S-3 to register with the SEC the
securities described in this prospectus. This prospectus is part of that
registration statement. As permitted by SEC rules, this prospectus does not
contain all the information contained in the registration statement or the
exhibits to the registration statement. You may refer to the registration
statement and accompanying exhibits for more information about us and our
securities.
The SEC allows us to incorporate by reference into this document the
information we have filed with it. This means that we can disclose important
business, financial and other information to you by referring you to other
documents separately filed with the SEC. All information incorporated by
reference is part of this document, unless and until that information is
updated and superseded by the information contained in this document or any
information subsequently incorporated by reference.
We incorporate by reference the documents listed below:
1. Our annual report on Form 10-K for the year ended December 31, 2001;
2. Our amendment to our annual report on Form 10-K for the year ended
December 31, 2001 filed on April 30, 2002;
3. Our quarterly report on Form 10-Q for the quarter ended March 31, 2002;
4. Our current report on Form 8-K filed on April 11, 2002;
5. Our current report on Form 8-K filed on May 3, 2002;
6. Our current report on Form 8-K filed on May 30, 2002; and
7. The description of our common stock contained in our registration
statement on Form 8-A/A filed on August 10, 2001.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Pinnacle Entertainment, Inc.
Investor Relations
330 North Brand Boulevard
Suite 1100
Glendale, California 91203
(818) 662-5900
Exhibits to the filings will not be sent, however, unless those exhibits
have specifically been incorporated by reference.
We also incorporate by reference all future filings we make with the SEC
under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934
(i) on or after the date of the filing of the registration statement containing
this prospectus and prior to the effectiveness of such registration statement
and (ii) on or after the date of this prospectus and prior to the termination
of the offering made hereby. Such documents will become a part of this
prospectus from the date that the documents are filed with the SEC.
You should rely only on the information contained or incorporated by
reference in this prospectus and any prospectus supplement. We have not
authorized any other person to provide you with different information. If
anyone provides you with different or inconsistent information, you should not
rely on it. We are not making an offer to sell these securities in any
jurisdiction where the offer and sale is not permitted. You should assume that
ii
the information appearing or incorporated by reference in this prospectus is
accurate only as of the date on the front cover of this prospectus. Our
business, financial condition, results of operation and prospects may have
changed since that date.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements in this prospectus, any prospectus supplement and any
documents incorporated by reference may constitute "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities and Exchange Act of 1934, as amended. Words
such as, but not limited to, "believe," "expect," "anticipate," "estimate,"
"intend," "plan," and similar expressions are intended to identify
forward-looking statements. Such forward-looking statements, which may include,
without limitation, statements regarding our expansion plans, cash needs, cash
reserves, liquidity, operating and capital expenses, financing options, expense
reductions and earnings and other operating results, are subject to a variety
of risks and uncertainties that could cause actual results to differ materially
from those anticipated by our management. Factors that may cause our actual
performance to differ materially from that contemplated by such forward-looking
statements include, among others:
. any failure to comply with the conditions negotiated with the Louisiana
Gaming Control Board for our casino development project in Lake Charles,
Louisiana, and our ability to complete the project on time and on budget;
. a failure to improve results at the Belterra Casino Resort and the
effectiveness of management at the Belterra Casino Resort in containing
costs without negatively affecting revenues, customer service or efforts
to expand the number of customers visiting the property;
. a failure to settle the harassment lawsuits by two former Belterra
employees and the related investigation of the Indiana Gaming Commission,
including any related fine, suspension or termination of Belterra's
license, or other serious disciplinary action, and other charges, on
reasonable terms;
. changes in gaming laws and regulations, including the expansion of casino
gaming in states in which we operate (or in states bordering the states
in which we operate), such as the expansion of Indian gaming in
California and Louisiana and the introduction of casino gaming in
Kentucky, Ohio or Arkansas;
. the effectiveness of the planned capital improvements at our Bossier City
casino in drawing additional customers to the property despite
significant competition in the local market;
. the effectiveness of the planned new hotel tower at the Belterra Casino
Resort in enhancing Belterra's status as a regional resort property and
in increasing utilization of its casino and other facilities;
. the effect of current and future weather conditions and other natural
events affecting the key markets in which we operate;
. the amount and effect of future impairment charges under Statement of
Financial Accounting Standards No. 121 and Statement of Financial
Accounting Standards No. 142;
. any failure to obtain adequate financing to meet strategic goals,
including financing for the Lake Charles project;
. any failure to obtain or retain gaming licenses or regulatory approvals,
or the limitation, conditioning, suspension or revocation of any existing
gaming license;
. risks associated with substantial indebtedness, leverage, debt service
and liquidation;
. loss or retirement of key executives;
. risks related to pending litigation and the possibility of future
litigation;
. increased competition from casino operators who have more resources and
have built or are building competitive casino properties;
iii
. increases in existing taxes or the imposition of new taxes on gaming
revenues or gaming devices;
. adverse changes in the public perception and acceptance of gaming and the
gaming industry;
. the impact of fuel and transportation costs on the willingness of
customers to travel by automobile to our casino properties; and
. other adverse changes in the gaming markets in which we operate.
In addition, these statements could be affected by general domestic and
international economic and political conditions, including slowdowns in the
economy, uncertainty as to the future direction of the economy and
vulnerability of the economy to domestic or international incidents, as well as
market conditions in our industry. For a more detailed discussion of certain of
these factors, see the section entitled "Risk Factors" in the applicable
prospectus supplement and "Factors Affecting Future Operating Results" in our
most recent Form 10-K and Form 10-Q (incorporated by reference in this
prospectus) and similar sections in our future filings which are incorporated
by reference in this prospectus, which describe risks and factors that could
cause results to differ materially from those projected in such forward-looking
statements. We caution the reader that these risk factors may not be
exhaustive. We operate in a continually changing business environment, and new
risk factors emerge from time to time. Management cannot predict such new risk
factors, nor can it assess the impact, if any, of such new risk factors on our
business or the extent to which any factor, or combination of factors, may
cause actual results to differ materially from those projected in any
forward-looking statements.
iv
PINNACLE ENTERTAINMENT, INC.
We are a diversified, multi-jurisdictional owner and operator of gaming
entertainment facilities in growing gaming markets. We own and operate five
properties in the United States, located in southeastern Indiana; Reno, Nevada;
Bossier City and New Orleans, Louisiana; and Biloxi, Mississippi. We also own
and operate two casinos in Argentina and we receive lease income from two card
clubs and own 97 acres of vacant land in southern California.
Properties
The following table summarizes certain features of each of our properties as
of June 6, 2002:
Customer
Type of Feeder Slot Table Hotel
Property Facility Market Machines Games Rooms
-------- ---------- -------------- -------- ----- -----
Boomtown New Orleans, LA................ Dockside Local 1,477 44 --
Casino Magic Biloxi, MS................. Dockside Regional 1,338 31 378
Casino Magic/Boomtown--Bossier, LA...... Dockside Regional 1,144(3) 36 188
Belterra-Vevay, IN...................... Riverboat Regional 1,357 47 308
Boomtown Reno, NV....................... Land-based Local/Regional 1,318 37 318
Casino Magic Argentina(1)............... Land-based Local 615 49 --
Card Clubs, Los Angeles, CA(2).......... Land-based Local -- 141 237
----- --- -----
Property Total....................... 7,249 385 1,429
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(1) Data presents the combined operations of the two facilities we operate in
Argentina.
(2) Data presents the combined operations of two card clubs in California that
we lease to a third-party operator.
(3) Data presents the number of slot machines we anticipate will be operational
upon completion of renovation of this property in early July 2002.
Our principal properties include:
Boomtown New Orleans. Boomtown New Orleans is a locals-oriented dockside
riverboat casino. The property features an 88,000 square foot adjoining
building which includes two restaurants, a deli, a 350-seat nightclub, 21,000
square feet of meeting space and an amusement center. The property opened in
1994 and is located on a 54-acre site in Harvey, Louisiana, across the
Mississippi River and approximately 10 miles from downtown New Orleans.
Casino Magic Biloxi. Casino Magic Biloxi is a regional resort property
built around a dockside riverboat casino. The property also features a 378
guest-room hotel, four restaurants, 6,600 square feet of convention space and a
health club. In 2001, the property was awarded a 4 diamond rating from AAA. The
property opened in 1993 and is located on a 16-acre site in Biloxi, Mississippi.
Casino Magic/Boomtown--Bossier. Our Bossier City property is a regional
resort property built around a dockside riverboat casino. We expect to
substantially complete a $25 million renovation and expansion of the Bossier
City property in July 2002. The renovation and expansion, which includes
rebranding the property from "Casino Magic" to "Boomtown", is designed to
enhance the property's status as a regional resort. The property opened in 1996
and is located on 23 acres of land in Bossier City, Louisiana directly off, and
highly visible from, Interstate 20, a major thoroughfare connecting
Shreveport/Bossier City to Dallas/Fort Worth.
Belterra Casino Resort. Belterra is a regional resort property built
around a cruising riverboat casino. It also features a 15-story, 308 guest-room
hotel, six restaurants, a 1,500 seat entertainment showroom, a spa and a Tom
Fazio-designed 18-hole golf course. The property opened in October 2000 and is
located on 315 acres of land along the Ohio River in southeastern Indiana,
approximately 45 miles southwest of downtown Cincinnati, Ohio, and 70 miles
northeast of Louisville, Kentucky. We intend to begin construction of a new $30
million 300
1
guest-room hotel tower in early 2003 and to complete construction in 2004. We
believe the new hotel tower will enhance Belterra's status as a regional resort
property and will increase utilization of the resort's casino and other
facilities.
Boomtown Reno. Boomtown Reno is a land-based casino. The property features
318 guest-rooms, four restaurants, two large fueling facilities, an RV park, a
25,000 square foot amusement center (including a motion simulator theater) and
over 10,000 square feet of meeting space. The facility has been operating for
over 30 years and is located on a portion of our 569 acres of land near Verdi,
Nevada, directly off Interstate 80, the primary highway connecting Northern
California to Northern Nevada and most of the rest of the United States.
Our Strategy and Competitive Strengths
Our strategy is to grow our revenues, cash flow and earnings through
internal growth initiatives, including a disciplined capital expenditure
program at our existing properties and the strategic development or acquisition
of gaming properties in attractive gaming markets.
We believe that the following key competitive strengths will contribute to
the successful implementation of our strategy:
. High Quality Properties in Attractive Locations
We own high quality casino properties in attractive locations. We are
committed to maintaining the quality of our properties by offering
up-to-date slot machine product, presenting fresh entertainment offerings
and renovating and improving our facilities wherever necessary. Most of
our properties have either opened or been extensively refurbished within
the past five years.
. Significant Near-Term Development Planned
We believe our new development in Lake Charles, the Belterra expansion
and the Bossier City renovation will provide substantial earnings growth.
. Significant Opportunities to Further Develop Our Properties
Several of our resorts occupy only a portion of their sites, allowing us
ample opportunities to add casino capacity, guestrooms and other
facilities, as our markets grow and demand warrants.
. Geographically Diversified Portfolio
We own five U.S. properties, each in a distinct market. Our regional
diversification reduces our dependence on any one market, while providing
us with an opportunity to build a diversified base of gaming customers.
This diversification will be enhanced upon the opening of our Lake
Charles project. In the 12 months ended March 31, 2002, no one property
accounted for more than one third of our cash flow. We intend to broaden
the diversification of our portfolio of properties through the continued
pursuit of development opportunities and strategic acquisitions in
attractive gaming markets.
. Well-Positioned to Expand Into New Jurisdictions
Historically, some states have legalized gaming to reduce budget
shortfalls. According to the National Association of State Budget
Officers, as of June 11, 2002, there are currently an estimated 45 states
with projected budget shortfalls for fiscal 2002. We believe we are
well-positioned to enter into and successfully compete in any such new
market that may elect to introduce or expand gaming.
. Experienced Management Team
Our executive and property-level management teams, led by Daniel R. Lee
and Wade W. Hundley, have extensive industry experience and an
established record of developing, acquiring, integrating and
2
operating gaming facilities. On April 11, 2002, we announced that we
hired Daniel R. Lee, formerly the Chief Financial Officer and Senior Vice
President-Development of Mirage Resorts, to become our Chief Executive
Officer and Chairman of the Board. Mr. Hundley was Executive Vice
President and Office of the CEO, Harveys Casino Resort from December 2000
through July 2001 and from June 1993 through November 2000 was Principal
at Colony Capital, which then owned Harveys.
Background
Pinnacle is the successor to the Hollywood Park Turf Club, organized in
1938. Pinnacle was incorporated in 1981 under the name Hollywood Park Realty
Enterprises, Inc.; in 1992, as part of a restructuring, was renamed Hollywood
Park, Inc.; and in February 2000, changed its name to Pinnacle Entertainment,
Inc.
Pinnacle is a Delaware corporation, and our principal executive office is
located at 330 North Brand Boulevard, Suite 1100, Glendale, California 91202,
telephone (818) 662-5900.
Our website address is www.pinnacle-entertainment-inc.com. Information
contained in our website, including any links contained in our website, does
not constitute part of this prospectus.
Belterra(R) and Casino Magic(R) are our registered servicemarks. Boomtown(R)
is our registered tradename and servicemark. We have applied for servicemark
registration for Belterra Casino Resort and its design. Each trademark,
tradename or servicemark of any other company appearing in this prospectus
belongs to its holder.
3
RATIO OF EARNINGS TO FIXED CHARGES AND
RATIO OF EARNINGS TO COMBINED FIXED
CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth the unaudited consolidated ratio of earnings
to fixed charges and the unaudited consolidated ratio of earnings to combined
fixed charges and preferred dividend requirements for the periods shown:
Three Months
Year Ended December 31, Ended March 31,
---------------------------- ---------------
1997 1998 1999 2000 2001 2001 2002
----- ----- ----- ----- ---- ---- ----
Ratio of earnings to fixed charges(1).......... 2.74x 1.73x 2.20x 2.93x .05x .73x .73x
Ratio of earnings to combined fixed charges and
preferred stock dividends(2)................. 2.31x 1.73x 2.20x 2.93x .05x .73x .73x
- --------
(1) In computing the ratio of earnings to fixed charges: (1) earnings were
calculated from income from continuing operations, before income taxes and
fixed charges, and excluding capitalized interest; and (2) fixed charges
were computed from interest expense, amortization of debt issuance costs,
capitalized interest, and the estimated interest included in rental
expense. Earnings were insufficient to cover fixed charges by $51 million
for the year ended December 31, 2001 and $3.5 million and $3.6 million for
the three months ended March 31, 2001 and 2002, respectively.
(2) The ratio of earnings to combined fixed charges and preferred dividend is
computed in the same manner as described in the footnote immediately above
for the preferred dividend paid in 1997.
USE OF PROCEEDS
Unless indicated otherwise in the applicable prospectus supplement, we
expect to use the net proceeds from the sale of our securities for our
operations and for other general corporate purposes, including, but not limited
to, repayment or refinancing of borrowings, working capital, capital
expenditures, investments, acquisitions and the repurchase of our common stock.
Additional information on the use of net proceeds from the sale of securities
offered by this prospectus may be set forth in the applicable prospectus
supplement relating to such offering.
We will not receive any proceeds from the sale of common stock by any
selling stockholders.
4
DESCRIPTION OF DEBT SECURITIES
The following provides a general description of the terms of the debt
securities that we may issue. The particular terms of any debt securities we
may offer and the extent, if any, to which the general provisions set forth
below may be modified or not apply will be described in the prospectus
supplement relating to those debt securities.
The debt securities will be issued under one or more indentures, each dated
as of a date on or before the issuance of the debt securities to which it
relates and in the form filed as an exhibit to the registration statement of
which this prospectus is a part, subject to any amendments or supplements as we
may adopt from time to time. Each indenture will be entered into between us, as
obligor, a trustee chosen by us and qualified to act as a trustee under the
Trust Indenture Act of 1939, and any of our subsidiaries which guarantee our
obligations under the indenture. You should read the indenture because it, and
not this description, will control your rights as a holder of debt securities.
The terms of the indenture are also governed by the Trust Indenture Act.
General
The debt securities will be our direct obligations, which will be unsecured,
rank subordinate to our credit facilities and any other existing or future
senior debt, and may rank subordinate to or equally with our other subordinated
indebtedness, including, as of March 31, 2002, $350.0 million principal amount
of our unsecured 9.25% notes due February 2007 and $125.0 million principal
amount of our unsecured 9.50% notes due August 2007. Under the indenture,
unsecured subordinated debt securities may be issued without limit as to
aggregate principal amount, in one or more series, in each case as established
from time to time in or pursuant to authority granted by a resolution from our
board of directors or as established in one or more indentures supplemental to
the indenture. All debt securities of one series do not need to be issued at
the same time. Additionally, unless otherwise provided, a series may be
reopened, without the consent of the holders of the debt securities of such
series, for issuances of additional debt securities of such series.
Terms of the Debt Securities
You should refer to the prospectus supplement for some or all of the
following terms of each series of the debt securities offered by such
supplement:
. the designation, aggregate principal amount and authorized denominations
of the series;
. the issue price as a percentage of the principal amount at which the
series will be issued and, if other than the principal amount of such
series, the portion of the principal amount of such series payable upon
declaration of acceleration of the maturity or upon redemption of such
series and the rate or rates at which original issue discount will accrue;
. the date or dates on which the series will mature;
. the rate or rates per annum, if any, at which the series will bear
interest;
. whether the debt securities of the series will accrete in principal
amount prior to accruing cash interest, or otherwise be issued with
original issue discount;
. the times from which any interest will accrue, be payable and the record
dates pertaining to such payment;
. the place or places where the principal and interest, if any, on the
series will be payable;
. any redemption or other special terms;
. the covenants applicable to the debt securities which are in addition to,
modify or delete those described in the indenture;
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. the events of default relating to the debt securities which are in
addition to, modify or delete those described in the indenture;
. whether the debt securities will be issued in certificated or book-entry
form, and the denominations of such debt securities;
. if applicable, the terms of any right to convert debt securities into
shares of, or exchange debt securities for, our common stock or other
securities or property;
. provisions, if any, for the defeasance or discharge of certain of our
obligations with respect to such debt securities, which provisions may be
in addition to, in substitution for, or in modification of (or any
combination of the foregoing), the provisions of the indenture;
. the manner in which the amounts of payment of principal of, premium, if
any, or any interest on such debt securities will be determined, if such
amounts may be determined by reference to an index based on a currency or
currencies other than that in which such debt securities are denominated
or designated to be payable or by reference to a commodity, commodity
index, stock exchange index or financial index;
. a discussion of any material and/or special United States federal income
tax considerations applicable to such debt securities;
. any depositaries, trustees, interest rate calculation agents, exchange
rate calculation agents or other agents with respect to the debt
securities other than those originally appointed;
. whether such debt securities will be issued in the form of one or more
global securities and whether such global securities are to be issuable
in a temporary global form or permanent global form;
. the terms, if any, on which such debt securities will be subordinate to
other debt;
. any listing or intended listing of the debt securities on a securities
exchange;
. the provisions, if any, relating to any guarantees of the debt
securities; and
. any other terms of the debt securities, which will not be inconsistent
with the provisions of the indenture.
Our debt securities may be sold at a discount below their principal amount.
Even if our debt securities are not issued at a discount below their principal
amount, these securities may, for United States federal income tax purposes, be
deemed to have been issued with original issue discount because of certain
interest payment or other characteristics. Special United States federal income
tax considerations applicable to debt securities issued with original issue
discount will be described in more detail in any applicable prospectus
supplement. In addition, special United States federal tax considerations or
other restrictions or terms applicable to any debt securities offered
exclusively to foreigners or denominated in a currency other than United States
dollars will also be set forth in the prospectus supplement, if applicable.
Information About the Trustee
Under our indenture, there may be more than one trustee, each with respect
to one or more series of debt securities. Any trustee under our indenture may
resign at any time or be removed with respect to one or more series of debt
securities, and a successor trustee may be appointed to act with respect to
such series. If two or more persons are acting as trustees with respect to
different series of debt securities, each trust shall be separate and apart
from the trust administered by any other trustee. Except as indicated in any
prospectus supplement, any action to be taken by the trustee may be taken only
with respect to the one or more series of debt securities for which it is
trustee under the indenture.
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Merger, Consolidation or Sale of Assets
Our indenture does not allow us to consolidate or merge with or into, or
sell, assign, convey, transfer or lease our properties and assets,
substantially in their entirety, as computed on a consolidated basis, to
another corporation, person or entity unless:
. either we are the surviving person, in the case of a merger or
consolidation, or the successor or transferee is a corporation organized
under the laws of the United States, or any state thereof or the District
of Columbia and the successor or transferee corporation expressly
assumes, by supplemental indenture, all of our obligations under the debt
securities and the indenture; and
. no default or event of default exists immediately after such transaction.
Denominations
Unless we specify in the prospectus supplement, the debt securities of any
series will be issuable only as debt securities in denominations of $1,000, and
integral multiples of $1,000, and will be payable only in U.S. dollars. The
indenture also provides that debt securities of a series may be issuable in
global form. See "Global Securities" below.
Registration and Transfer
If you surrender for transfer your registered debt securities at the office
or agency we maintain for such purpose, we will deliver, in the name you have
designated as transferee, one or more new debt securities of the same series of
like aggregate principal amount in such denominations as are authorized for
debt securities of such series and of a like maturity and with like terms and
conditions. You will not incur a service charge for any transfer or exchange of
debt securities, but we may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection with the transfer or
exchange.
We will not be required to:
. register, transfer or exchange debt securities of any series during a
period beginning with the opening of business 15 days before the day of
the transmission of a notice of redemption of debt securities of such
series selected for redemption, and ending at the close of business on
the day of the transmission; or
. register, transfer or exchange any debt security so selected for
redemption in whole or in part, except the unredeemed portion of any debt
security being redeemed in part.
Events of Default
Unless we inform you otherwise in the prospectus supplement, events of
default means any of the following:
. default in the payment of any interest upon any debt security of that
series when it becomes due and payable, and continuance of such default
for a period of 30 days;
. default in the payment of principal of or premium, if any, on any debt
security of that series when due;
. if applicable, default in the deposit of any sinking fund payment, when
and as due in respect of any debt security of that series;
. default in the performance, or breach, of any covenants or warranties in
the indenture if the default continues uncured for a period of 120 days
after written notice to us by the applicable trustee or to us and the
applicable trustee by the holders of at least 25% in principal amount of
the outstanding debt securities of that series as provided in the
indenture; and
. certain events of bankruptcy, insolvency or reorganization.
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If an event of default for any series of debt securities, which are at that
time outstanding, occurs and continues, then the applicable trustee or the
holders of not less than 25% in principal amount of the outstanding debt
securities of that series may, by a notice in writing to us, and to the
applicable trustee if given by the holders, declare to be due and payable
immediately the principal, or, if the debt securities of that series are
discount securities, such portion of the principal amount as may be specified
in the terms of that series and premium, if any, of all debt securities of that
series.
At any time after a declaration of acceleration with respect to debt
securities of any series has been made, but before a judgment or decree for
payment of the money due has been obtained by the applicable trustee, the
holders of a majority in principal amount of the outstanding debt securities of
that series may, subject to our having paid or deposited with the trustee a sum
sufficient to pay overdue interest and principal which has become due other
than by acceleration and certain other conditions, rescind and annul such
acceleration if all events of default, other than the non-payment of
accelerated principal and premium, if any, with respect to debt securities of
that series, have been cured or waived as provided in the indenture. For
information as to waiver of defaults see the discussion set forth below under
"Modification and Waiver."
You should refer to our prospectus supplement with regard to any series of
debt securities that are discount securities for the particular provisions
relating to acceleration of a portion of the principal amount of such discount
securities upon the occurrence and continuation of an event of default.
The indenture provides that the trustee is not obligated to exercise any of
its rights or powers under the indenture at the request of any holder of
outstanding debt securities, unless the trustee receives indemnity satisfactory
to it against any loss, liability or expense. Subject to certain rights of the
trustee, the holders of a majority in principal amount of the outstanding debt
securities of any series shall 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 with respect to the debt
securities of that series.
No holder of any debt security of any series will have any right to
institute any proceeding, judicial or otherwise with respect to the indenture
or for the appointment of a receiver or trustee, or for any remedy under the
indenture, unless such holder shall have previously given to the applicable
trustee written notice of a continuing event of default with respect to debt
securities of that series and the holders of at least 25% in principal amount
of the outstanding debt securities of that series shall have made written
request, and offered reasonable indemnity, to such trustee to institute such
proceeding as trustee, and the trustee shall not have received from the holders
of a majority in principal amount of the outstanding debt securities of that
series direction inconsistent with such request and shall have failed to
institute such proceeding within 60 days. However, the holder of any debt
security will have an absolute and unconditional right to receive payment of
the principal of, premium, if any, and any interest on such debt security on or
after the due dates expressed in such debt security and to institute suit for
the enforcement of any such payment.
We are required by the indenture, within 120 days after the end of each
fiscal year, to furnish to the trustee a statement as to compliance with the
indenture. The indenture provides that the trustee with respect to any series
of debt securities may withhold notice to the holders of debt securities of
such series of any default or event of default (except a default in payment on
any debt securities of such series) with respect to debt securities of such
series if and so long as a committee of its trust officers, in good faith,
determines that withholding such notice is in the interest of the holders of
debt securities of such series.
Modification and Waiver
We and the applicable trustee, at any time and from time to time, may modify
the indenture without prior notice to or consent of any holder of any series of
debt securities for any of the following purposes:
. to permit a successor corporation to assume our covenants and obligations
under the indenture and in such series of debt securities in accordance
with the terms of the indenture;
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. to add to our covenants for the benefit of the holders of any series of
debt securities (and if the covenants are to be for the benefit of less
than all series, we shall state that the covenants are expressly being
included solely for the benefit of the applicable series);
. to surrender any of our rights or powers conferred in the indenture;
. to add any additional events of default (and if the events of default are
to be applicable to less than all series, we shall state that the events
of default are expressly being included solely for the benefit of the
applicable series);
. to add to, change or eliminate any of the provisions of the indenture in
a manner that will become effective only when there is no outstanding
debt security which is entitled to the benefit of the provision and as to
which the modification would apply;
. to secure a series of debt securities or to provide that our obligations
under a series of debt securities or the indenture will be guaranteed and
the terms and conditions for the release or substitution of the security
or guarantee;
. to supplement any of the provisions of the indenture to the extent needed
to permit or facilitate the defeasance and discharge of a series of debt
securities in a manner that will not adversely affect the interests of
the holders of debt securities of that series or any other series of debt
securities issued under the indenture in any material respect;
. to establish the form or terms of debt securities as permitted by the
indenture;
. to provide for the acceptance of appointment by a successor trustee
regarding one or more series of debt securities and to add to or change
any of the provisions of the indenture as is necessary to provide for the
administration of the trusts by more than one trustee;
. to comply with the requirements of the Securities and Exchange Commission
in connection with qualification of the indenture under the Trust
Indenture Act;
. to cure any ambiguity;
. to correct or supplement any provision in the indenture which may be
defective or inconsistent with any other provision in the indenture;
. to eliminate any conflict between the terms of the indenture and the debt
securities and the Trust Indenture Act; or
. to make any other provisions with respect to matters or questions arising
under the indenture which will not be inconsistent with any provision of
the indenture as long as the new provisions do not adversely affect in
any material respect the interests of the holders of any outstanding debt
securities of any series created prior to the modification.
We may also modify the indenture for any other purpose if we receive the
written consent of the holders of not less than a majority in principal amount
of the outstanding debt securities of each series affected by such modification
voting separately. However, we may not, without the consent of the holder of
each outstanding debt security of each series affected:
. change the stated maturity or reduce the principal amount or the rate of
interest, or extend the time for payment of interest of any debt security
or any premium payable upon the redemption of any debt security, or
change the stated maturity of, or reduce the amount of the principal of a
discount security that would be due and payable upon a declaration of
acceleration of the maturity of a discount security or impair the right
to institute suit for the enforcement of any payment on or after the due
date thereof (including, in the case of redemption, on or after the
redemption date), or alter any redemption provisions in a manner adverse
to the holders of such series of debt securities;
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. reduce the percentage in principal amount of the outstanding debt
securities of a series where the consent of the holder is required for
any such amendment, supplemental indenture or waiver which is provided
for in the indenture;
. if applicable, adversely affect the right of a holder to convert any debt
security;
. modify any of the waiver provisions, except to increase any required
percentage or to provide that certain other provisions of the indenture
cannot be modified or waived without the consent of the holder of each
outstanding debt security which would be affected; or
. modify any provision described in the prospectus supplement as requiring
the consent of each affected holder of debt securities.
A modification that changes or eliminates any covenant or other provision of
the indenture with respect to one or more particular series of debt securities,
or that modifies the rights of the holders of debt securities of a series with
respect to such covenant or other provision, shall be deemed not to affect the
rights under the indenture of the holders of debt securities of any other
series.
The indenture provides that the holders of not less than a majority in
aggregate principal amount of the then outstanding debt securities of any
series, by notice to the relevant trustee, may on behalf of the holders of the
debt securities of such series waive any default and its consequences under the
indenture, except (1) a continuing default in the payment of interest on,
premium, if any, or the principal of, any such debt security held by a
nonconsenting holder or (2) a default in respect of a covenant or provision of
the indenture which cannot be modified or amended without the consent of the
holder of each outstanding debt security of each series affected.
Defeasance of Debt Securities or Certain Covenants in Certain Circumstances
Defeasance and Discharge. The indenture provides that we may be discharged
from any and all obligations under any debt securities other than:
. certain obligations to pay additional amounts, if any, upon the
occurrence of certain tax, assessment or governmental charge events
regarding payments on debt securities;
. to register the transfer or exchange of debt securities;
. to replace stolen, lost or mutilated debt securities; or
. to maintain paying agencies and to hold money for payment in trust.
We may only defease and discharge all of our obligations under the debt
securities of any series if:
. we irrevocably deposit with the trustee, in trust, the amount, as
certified by an officers' certificate, of money and/or U.S. government
obligations that, through the payment of interest and principal in
respect thereof in accordance with their terms, will be sufficient to pay
and discharge each installment of principal and premium, if any and any
interest on, and any mandatory sinking fund payments in respect of, the
debt securities of such series on the dates such payments are due; and
. we deliver to the trustee an opinion of counsel or a ruling from the
United States Internal Revenue Service, in either case to the effect that
holders of the debt securities of such series will not recognize income,
gain or loss for United States federal income tax purposes as a result of
such deposit, defeasance and discharge.
Defeasance of Certain Covenants. Upon compliance with certain conditions,
we may omit to comply with certain restrictive covenants contained in the
indenture or in the applicable prospectus supplement or any other restrictive
covenant relating to any series of debt securities provided for in a board
resolution or supplemental indenture which by its terms may be defeased
pursuant to the terms of such series of debt securities. Any
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omission to comply with such covenants shall not constitute a default or event
of default with respect to any such debt securities. In that event, you would
lose the protection of these covenants, but would gain the protection of having
money and/or U.S. government obligations set aside in trust to repay the series
of debt securities. We may only defease any covenants if, among other
requirements:
. we irrevocably deposit with the trustee money and/or U.S. government
obligations that, through the payment of interest and principal in
respect to such obligations, in accordance with their terms, will provide
money in an amount, as certified by an officers' certificate, sufficient
to pay principal, premium, if any, and any interest on and any mandatory
sinking fund payments in respect of the debt securities of such series on
the dates such payments are due; and
. we deliver to the trustee an opinion of counsel or a ruling from the
United States Internal Revenue Service to the effect that the holders of
the debt securities of such series will not recognize income, gain or
loss, for United States federal income tax purposes, as a result of the
covenant defeasance.
Limited Liability of Certain Persons
The indenture provides that none of our past, present or future
stockholders, incorporators, employees, officers or directors, or of any
successor corporation or any of our affiliates shall have any personal
liability in respect of our obligations under the indenture or the debt
securities by reason of his, her or its status as such stockholder,
incorporator, employee, officer or director.
Mandatory Disposition Pursuant to Gaming Laws
The indenture provides that each holder and beneficial owner, by accepting
any of the debt securities subject thereto, shall be deemed to have agreed that
if the gaming authority of any jurisdiction of which we or any of our
subsidiaries conducts or proposes to conduct gaming, requires that a person who
is a holder or the beneficial owner of the debt securities be licensed,
qualified or found suitable under applicable gaming laws, such holder or
beneficial owner, as the case may be, shall apply for a license, qualification
or a finding of suitability within the required time period. If such person
fails to apply or become licensed or qualified or is found unsuitable, we shall
have the right, at our option:
. to require such person to dispose of its debt securities or beneficial
interest therein within 30 days of receipt of notice of our election or
such earlier date as may be requested or prescribed by such gaming
authority; or
. to redeem such debt securities at a redemption price equal to 100% of the
principal amount thereof, plus accrued and unpaid interest, if any, to
the earlier of the redemption date or the date of the finding of
unsuitability, which may be less than 30 days following the notice of
redemption if so requested or prescribed by the applicable gaming
authority or such lesser amount as may be required by applicable law or
by order of any gaming authority.
We shall notify the trustee in writing of any such redemption as soon as
practicable. We shall not be responsible for any costs or expenses any such
holder may incur in connection with its application for a license,
qualification or a finding of suitability.
Conversion Rights
The terms and conditions, if any, upon which the debt securities are
convertible into common stock or other securities or property will be set forth
in the applicable prospectus supplement. Such terms will include the conversion
price (or manner of its calculation), the conversion period, provisions as to
whether conversion will be at our option or at the option of the holders, the
events requiring an adjustment of the conversion price and provisions affecting
conversion in the event of the redemption of such debt securities.
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Guarantee
Under our indenture, one or more of our subsidiaries may be a guarantor and
may "guarantee" the performance and punctual payment when due, whether at
stated maturity, by acceleration or otherwise, of all of our obligations under
the debt securities of any series and the indenture. The liability of the
guarantors will be independent of and not in consideration of or contingent
upon our liability or any other party obligated under the debt securities or
the indenture. A separate action or actions may be brought or prosecuted
against us or any other party obligated under the debt securities or the
indenture whether or not we or any other party obligated under the debt
securities or the indenture are joined in any such action or actions. However,
any guarantee will be limited to an amount not to exceed the maximum amount
that can be guaranteed by the guarantor without rendering the guarantee, as it
relates to such guarantor, original issue discountable under Section 548 of the
Federal Bankruptcy Code or any applicable provision of comparable state law.
Each guarantee will be a continuing guarantee and will remain in full force and
effect until payment in full of all of the guaranteed obligations.
Payment, Paying and Transfer Agents
We covenant and agree, for the benefit of each series of debt securities,
that we will duly and punctually pay the principal of, premium, if any, and any
interest on the debt securities in accordance with the terms of the debt
securities and the indenture. We will maintain an office or agency where debt
securities of that series may be presented or surrendered for payment, where
debt securities of that series may be surrendered for registration of transfer
or exchange and where notices and demands to or upon us in respect of the debt
securities of that series and the indenture may be served.
Global Securities
The debt securities of any series may be issued in whole or in part in the
form of one or more global securities that will be deposited with, or on behalf
of, a depositary identified in the applicable prospectus supplement relating to
such series. Global securities will be in registered form and may be issued in
either temporary or permanent form. The specific terms of the depositary
arrangement regarding a series of debt securities will be described in the
applicable prospectus supplement relating to such series.
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DESCRIPTION OF PREFERRED STOCK AND
DEPOSITARY SHARES
This section describes the general terms and provisions of the preferred
stock that we may offer by this prospectus. The applicable prospectus
supplement will describe the specific terms of the series of preferred stock
then offered, and the terms and provisions described in this section will apply
only to the extent not superseded by the terms of the applicable prospectus
supplement.
This section is only a summary of the preferred stock that we may offer. We
urge you to read carefully our certificate of incorporation and the certificate
of designation we will file in relation to an issue of any particular series of
preferred stock before you buy any preferred stock.
Preferred Stock
Our certificate of incorporation permits us to issue, without prior
permission from our stockholders, up to 250,000 shares of our $1.00 par value
preferred stock. As of June 6, 2002, none of our preferred stock was issued and
outstanding.
Terms of Future Series of Preferred Stock
Our board of directors may, without further action of the stockholders,
issue undesignated preferred stock in one or more classes or series. Any
undesignated preferred stock issued by us may:
. rank prior to our common stock as to dividend rights, liquidation
preference or both;
. have full or limited voting rights; and
. be convertible into shares of common stock or other securities.
The powers, designations, preferences and relative, participating, optional
or other special rights, and qualifications, limitations or restrictions,
including dividend rights, voting rights, conversion rights, terms of
redemption and liquidation preferences, of the preferred stock of each series
will be fixed or designated by our board of directors pursuant to a certificate
of designation. We will describe in the applicable prospectus supplement the
specific terms of a particular series of preferred stock, which may include the
following:
. the maximum number of shares in the series;
. the designation of the series;
. the terms of any voting rights of the series;
. the dividend rate, if any, on the shares of such series, the conditions
and dates upon which such dividends will be payable, the preference or
relation which such dividends will bear to the dividends payable on any
other class or classes or on any other series of capital stock, and
whether such dividends will be cumulative or non-cumulative;
. whether the shares of such series will be redeemable by us and, if so,
the times, prices and other terms and conditions of such redemption;
. the rights of the holders of shares of such series upon the liquidation,
dissolution or winding up of our company;
. whether or not the shares of such series will be subject to the operation
of a retirement or sinking fund and, if so, the extent to and manner in
which any such retirement or sinking fund shall be applied to the
purchase or redemption of the shares of such series for retirement or to
other corporate purposes and the terms and provisions relative to the
operation thereof;
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. whether or not the shares of such series shall be convertible into, or
exchangeable for, (a) our debt securities, (b) shares of any other class
or classes of stock of our company, or of any other series of the same
or different class of stock, or (c) shares of any class or series of
stock of any other corporation, and if so convertible or exchangeable,
the price or prices or the rate or rates of conversion or exchange and
the method, if any, of adjusting the same;
. while any shares of such series are outstanding, the limitations and
restrictions, if any, upon the payment of dividends or making of other
distributions on, and upon the purchase, redemption or other acquisition
by our company of, our common stock, or any other class or classes of
stock of our company ranking junior to the shares of such series either
as to dividends or upon liquidation;
. the conditions or restrictions, if any, upon the creation of
indebtedness of our company or upon the issue of any additional stock,
including additional shares of such series or of any other series or of
any other class, ranking on a parity with or prior to the shares of such
series as to dividends or distribution of assets on liquidation,
dissolution or winding up;
. whether fractional interests in shares of the series will be offered in
the form of depositary shares as described below under "--Depositary
Shares;"
. any other preference or provision and relative, participating, optional
or other special rights or qualifications, limitations or restrictions
thereof; and
. our ability to modify the rights of holders otherwise than by a vote of
a majority or more of the series outstanding.
The preferred stock will, when issued, be fully paid and non-assessable. We
will select the transfer agent, registrar and dividend disbursement agent for a
series of preferred stock and will describe its selection in the applicable
prospectus supplement. The registrar for shares of preferred stock will send
notices to stockholders of any meetings at which holders of the preferred stock
have the right to elect directors of our company or to vote on any other matter
of our company.
Although we have no present plans to issue any shares of preferred stock,
any issuance of shares of preferred stock, or the issuance of rights to
purchase preferred shares, may have the effect of delaying, deferring or
preventing a change of control in our company or an unsolicited acquisition
proposal. The issuance of preferred stock also could decrease the amount of
earnings and assets available for distribution to the holders of common stock
or could adversely affect the rights and powers, including voting rights, of
the holders of common stock.
Depositary Shares
This section describes the general terms and provisions of the depositary
shares we may offer. The applicable prospectus supplement will describe the
specific terms of the depositary shares offered through that prospectus
supplement, including, but not limited to, the title of the depositary shares
and the deposited security, the amount of deposited securities represented by
one depositary share and any general terms outlined in this section that will
not apply to those depositary shares.
We have summarized certain terms and provisions of the depositary agreement,
the depositary shares and the depositary receipts in this section. The summary
is not complete. We will file with the SEC, upon an offering of depositary
shares, the form of depositary agreement, including the form of depositary
receipt, both of which will be incorporated herein. You should read the forms
of depositary agreement and depositary receipt relating to a series of
preferred stock for additional information before you buy any depositary shares
that represent preferred stock of such series.
General. We may offer fractional interests in preferred stock rather than
full shares of preferred stock. If this occurs, we will provide for the
issuance by a depositary to the public of receipts for depositary shares, each
of which will represent a fractional interest in a share of a particular series
of preferred stock.
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The stock of any series of preferred stock underlying the depositary shares
will be deposited under a separate depositary agreement between us and a
depositary. For these purposes, the depositary will be a bank or trust company
having its principal office in the United States and having a combined capital
and surplus of at least $50 million. We will name the depositary and give the
address of its principal executive office in the applicable prospectus
supplement. Subject to the terms of the depositary agreement, each owner of a
depositary share will have a fractional interest in all the rights and
preferences of the preferred stock underlying such depositary shares. Those
rights include any dividend, voting, redemption, conversion and liquidation
rights.
The depositary shares will be evidenced by depositary receipts issued under
the depositary agreement. If you purchase fractional interests in shares of the
related series of preferred stock, you will receive depositary receipts as
described in the applicable prospectus supplement. While the final depositary
receipts are being prepared, we may order the depositary to issue temporary
depositary receipts substantially identical to the final depositary receipts in
final form. The holders of the temporary depositary receipts will be entitled
to the same rights as if they held the depositary receipts although not in
final form. Holders of the temporary depositary receipts can exchange them for
the final depositary receipts at our expense.
If you surrender depositary receipts at the principal office of the
depositary, unless the related depositary shares have previously been called
for redemption, you will not be entitled to receive at such office the number
of shares of preferred stock and any money or other property represented by
such depositary shares. We will not issue partial shares of preferred stock. If
you deliver depositary receipts evidencing a number of depositary shares that
represent more than a whole number of shares of preferred stock, the depositary
will issue you a new depositary receipt evidencing such excess number of
depositary shares at the same time that the shares of preferred stock are
withdrawn. Holders of preferred stock received in exchange for depositary
shares will no longer be entitled to deposit such shares under the depositary
agreement or to receive depositary shares in exchange for such preferred stock.
Dividends and Other Distributions. The depositary will distribute all cash
dividends or other distributions received with respect to the preferred stock
to the record holders of depositary shares representing the preferred stock in
proportion to the number of depositary shares owned by the holders on the
relevant record date. The depositary will distribute only the amount that can
be distributed without attributing to any holder of depositary shares a
fraction of one cent. The balance not distributed will be added to and treated
as part of the next sum received by the depositary for distribution to record
holders of depositary shares.
If there is a distribution other than in cash, the depositary will
distribute property to the holders of depositary shares, unless the depositary
determines that it is not feasible to make such distribution. If this occurs,
the depositary may, with our approval, sell the property and distribute the net
proceeds from the sale to the holders of depositary shares.
The depositary agreement will also contain provisions relating to how any
subscription or similar rights offered by us to the holders of the preferred
stock will be made available to the holders of depositary shares.
Conversion and Exchange. If any series of preferred stock underlying the
depositary shares is subject to conversion or exchange, the applicable
prospectus supplement will describe the rights or obligations of each record
holder of depositary receipts to convert or exchange the depositary shares.
Redemption of Depositary Shares. If the series of the preferred stock
underlying the depositary shares is subject to redemption, the depositary
shares will be redeemed from the redemption proceeds, in whole or in part, of
such series of the preferred stock held by the depositary. The depositary will
mail notice of redemption between 30 to 60 days prior to the date fixed for
redemption to the record holders of the depositary shares to be redeemed at
their addresses appearing in the depositary's records. The redemption price per
depositary share will bear the same relationship to the redemption price per
share of preferred stock that the depositary share bears to the underlying
preferred share. Whenever we redeem preferred stock held by the depositary, the
depositary will
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redeem, as of the same redemption date, the number of depositary shares
representing the preferred stock redeemed. If less than all the depositary
shares are to be redeemed, the depositary shares to be redeemed will be
selected by lot or pro rata as determined by the depositary.
After the date fixed for redemption, the depositary shares called for
redemption will no longer be outstanding. When the depositary shares are no
longer outstanding, all rights of the holders will cease, except the right to
receive money or other property that the holders of the depositary shares were
entitled to receive upon such redemption. Such payments will be made when
holders surrender their depositary receipts to the depositary.
Voting the Preferred Stock. Upon receipt of notice of any meeting at which
the holders of the preferred stock are entitled to vote, the depositary will
mail information about the meeting contained in the notice to the record
holders of the depositary shares relating to such preferred stock. Each record
holder of such depositary shares on the record date, which will be the same
date as the record date for the preferred stock, will be entitled to instruct
the depositary as to how the preferred stock underlying the holder's depositary
shares should be voted.
The depositary will try, if practical, to vote the number of shares of
preferred stock underlying the depositary shares according to the instructions
received. We will agree to take all action requested and deemed necessary by
the depositary in order to enable the depositary to vote the preferred stock in
that manner. The depositary will not vote any preferred stock for which it does
not receive specific instructions from the holder of the depositary shares
relating to such preferred stock.
Taxation. Provided that each obligation in the depositary agreement and any
related agreement is performed in accordance with its terms, owners of
depositary shares will be treated for United States federal income tax purposes
as if they were owners of the shares of preferred stock represented by the
depositary shares. Accordingly, for United States federal income tax purposes
they will have the income and deductions to which they would be entitled if
they were holders of the preferred stock. In addition:
. no gain or loss will be recognized for United States federal income tax
purposes upon withdrawal of preferred stock in exchange for depositary
shares as provided in the depositary agreement;
. the tax basis of each share of preferred stock to an exchanging owner of
depositary shares will, upon the exchange, be the same as the aggregate
tax basis of the depositary shares exchanged for such preferred stock;
and
. the holding period for the preferred stock, in the hands of an
exchanging owner of depositary shares who held the depositary shares as
a capital asset at the time of the exchange, will include the period
that the owner held such depositary shares.
Amendment and Termination of the Depositary Agreement. The form of
depositary receipt evidencing the depositary shares and any provision of the
depositary agreement may be amended by agreement between our company and the
depositary at any time. However, any amendment that materially and adversely
alters the rights of the existing holders of depositary shares will not be
effective unless approved by the record holders of at least a majority of the
depositary shares then outstanding. A depositary agreement may be terminated by
us or the depositary only if:
. all outstanding depositary shares relating to the depositary agreement
have been redeemed; or
. there has been a final distribution on the preferred stock of the
relevant series in connection with the liquidation, dissolution or
winding up of the business, and the distribution has been distributed to
the holders of the related depositary shares.
Charges of Depositary. We will pay all transfer and other taxes and
governmental charges arising solely from the existence of the depositary
arrangements. We will pay associated charges of the depositary for the initial
deposit of the preferred stock and any redemption of the preferred stock.
Holders of depositary shares will pay
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transfer and other taxes and governmental charges and any other charges that
are stated to be their responsibility in the depositary agreement.
Miscellaneous. We will forward to the holders of depositary shares all
reports and communications that we must furnish to the holders of the preferred
stock.
Neither the depositary nor we will be liable if the depositary is prevented
or delayed by law or any circumstance beyond its control in performing its
obligations under the depositary agreement. Our obligations and the
depositary's obligations under the depositary agreement will be limited to
performance in good faith of duties set forth in the depositary agreement.
Neither the depositary nor we will be obligated to prosecute or defend any
legal proceeding connected with any depositary shares or preferred stock unless
satisfactory indemnity is furnished to us or the depositary. We and the
depositary may rely upon written advice of counsel or accountants, or
information provided by persons presenting preferred stock for deposit, holders
of depositary shares or other persons believed to be competent and on documents
believed to be genuine.
Resignation and Removal of Depositary. The depositary may resign at any
time by delivering notice to us. We also may remove the depositary at any time.
Resignations or removals will take effect upon the appointment of a successor
depositary and its acceptance of the appointment. The successor depositary must
be appointed within 60 days after delivery of the notice of resignation or
removal and must be a bank or trust company having its principal office in the
United States and having a combined capital and surplus of at least $50 million.
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DESCRIPTION OF COMMON STOCK
Our authorized common stock consists of 40,000,000 shares of common stock,
par value $.10 per share. As of June 6, 2002, 25,910,812 shares of common stock
were issued and outstanding and held of record by approximately 2,904
stockholders. The following description of our common stock and provisions of
our certificate of incorporation and restated bylaws are only summaries, and we
encourage you to review complete copies of our certificate of incorporation and
restated bylaws, which we have previously filed with the SEC.
The holders of our common stock are entitled to one vote for each share of
the common stock on all matters voted on by such stockholders, including
elections of directors and, except as otherwise required by law or provided in
any resolution adopted by our board of directors with respect to any series of
preferred stock, the holders of the common stock exclusively possess all voting
power. Subject to any preferential rights of any outstanding series of
preferred stock designated by the board of directors from time to time, the
holders of the common stock are entitled to dividends from the funds legally
available therefor, and upon liquidation are entitled to receive pro rata all
of our assets available for distribution to such holders after distribution in
full of the preferential amount to be distributed to holders of shares of
preferred stock. All outstanding shares of the common stock are validly issued,
fully paid and nonassessable. The common stock has no preemptive or conversion
rights or other subscription rights and there are no sinking fund or, except as
described below under the heading "Delaware Anti-Takeover Law and Certain
Certificate of Incorporation and Bylaw Provisions," redemption provisions
applicable to the common stock.
The rights and privileges of our common stock may be subordinate to the
rights and preferences of any of our preferred stock.
Our common stock is traded on the New York Stock Exchange under the symbol
"PNK."
Delaware Anti-Takeover Law and Certain Certificate of Incorporation and Bylaw
Provisions
The provisions of Delaware law, and of our certificate of incorporation and
restated bylaws may have the effect of delaying, deferring or discouraging
another person from acquiring control of our company, including takeover
attempts that might result in a premium over the market price for the shares of
common stock.
Delaware Law
Our company has not expressly elected not to be governed by the provisions
of Section 203 of the Delaware corporate law. In general, Section 203 prohibits
a publicly held Delaware corporation from engaging in a business combination
with an interested stockholder for a three-year period following the time that
this stockholder becomes an interested stockholder, unless the business
combination is approved in a prescribed manner.
Certificate of Incorporation and Restated Bylaw Provisions
General
Under our restated bylaws, any vacancy on our board of directors, however
occurring, including a vacancy resulting from an enlargement of our board, may
only be filled by vote of a majority of our directors then in office, even if
less than a quorum. The limitations on the filling of vacancies could have the
effect of making it more difficult for a third party to acquire, or of
discouraging a third party from attempting to acquire, control of us.
Our restated bylaws also provide that any action required or permitted to be
taken by our stockholders at an annual meeting or special meeting of
stockholders may be taken by written consent in lieu of a meeting. Our
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restated bylaws further provide that special meetings of the stockholders may
only be called by the chairman of the board of directors or by a majority of
the board of directors. Our restated bylaws provide that stockholders at an
annual meeting may only consider proposals or nominations specified in the
notice of meeting or brought before the meeting by or at the direction of the
board or by a stockholder who was a stockholder of record on the record date
for the meeting, who is entitled to vote at the meeting and who has given to
our corporate secretary timely written notice, in proper form, of the
stockholder's intention to bring that proposal or nomination before the
meeting. In addition to some other applicable requirements, for a stockholder
proposal or nomination to be properly brought before an annual meeting by a
stockholder, the stockholder generally must have given notice in proper written
form to the corporate secretary not less than 90 days nor more than 120 days
prior to the anniversary date of the immediately preceding annual meeting of
stockholders. Although our restated bylaws do not give the board of directors
the power to approve or disapprove stockholder nominations of candidates or
proposals regarding other business to be conducted at annual meeting, our
restated bylaws may have the effect of precluding the consideration of some
business at a meeting if the proper procedures are not followed or may
discourage or deter a potential acquiror from conducting a solicitation of
proxies to elect its own slate of directors or otherwise attempting to obtain
control of us.
The Delaware corporate law provides generally that the affirmative vote of a
majority of the shares entitled to vote on any matter is required to amend a
corporation's certificate of incorporation or bylaws or to approve mergers,
consolidations or the sale of all or substantially all its assets, unless a
corporation's certificate of incorporation or bylaws, as the case may be,
requires a greater percentage. Our restated bylaws may be amended or repealed
by a majority vote of the board of directors, subject to any limitations set
forth in the restated bylaws, and may also be amended by the stockholders by
the affirmative vote of the holders of at least two-thirds of the outstanding
voting power of our capital stock issued and outstanding and entitled to vote
generally in the election of directors. The two-thirds stockholder vote would
be in addition to any separate class vote that might in the future be required
pursuant to the terms of any series of preferred stock that might be
outstanding at the time any of these amendments are submitted to stockholders.
Our certificate of incorporation authorizes the board of directors to issue,
without stockholder approval, preferred stock with such terms as our board may
determine.
Suitability Requirements
In addition to the foregoing, our certificate of incorporation requires that
if a person owns or controls our securities or the securities of our affiliated
companies and is determined by a gaming authority to be unsuitable to own or
control such securities, or in the sole discretion of our board of directors,
is deemed likely to jeopardize our right to conduct gaming activities in any of
the jurisdictions in which we conduct gaming activities, we may redeem, and if
required by a gaming authority, shall redeem, his securities to the extent
required by the government gaming authority or deemed necessary or advisable by
us.
If a gaming authority requires us, or if we deem it necessary or advisable,
to redeem such securities, we will serve notice on the holder who holds
securities subject to redemption and will call for the redemption of the
securities of such holder at a redemption price equal to that required to be
paid by the gaming authority making the finding of unsuitability, of if such
gaming authority does not require a certain price per share to be paid, a sum
deemed reasonable by us, which in our discretion may include the original
purchase price per share of such securities. The redemption price may be paid
in cash, by promissory note, or both, as required by the applicable gaming
authority and, if not so required, as we elect. Unless the gaming authority
requires otherwise, the redemption price will in no event exceed:
(1) the closing sales price of the securities on the national securities
exchange on which such shares are then listed on the date the notice of
redemption is delivered to the person who has been determined to be
unsuitable, or
(2) if such shares are not then listed for trading on any national
securities exchange, then the closing sales price of such shares as quoted
in the NASDAQ National Market System, or
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(3) if the shares are not then so quoted, then the mean between the
representative bid and the ask price as quoted by NASDAQ or another
generally recognized reporting system.
The foregoing is not a complete summary of all of the suitability
requirements and other gaming law requirements contained in our certificate of
incorporation. Please refer to the complete text of our certificate of
incorporation filed as an exhibit to the registration statement of which this
prospectus is a part.
Limitations of Liability and Indemnification of Directors and Officers
Our certificate of incorporation limits the liability of directors to us and
our stockholders. Specifically, a director will not be personally liable for
monetary damages for breach of fiduciary duty as a director, except for
liability:
. for any breach of the director's duty of loyalty to us or our
stockholders;
. for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of the law;
. under Section 174 of the Delaware General Corporation Law, which concerns
unlawful payments of dividends, stock purchases or redemptions; or
. for any transaction from which the director derived an improper personal
benefit.
Our certificate of incorporation provides that we will indemnify our
officers and directors to the fullest extent permitted by the Delaware General
Corporation Law, and our restated bylaws provide that we will indemnify and
advance expenses to our officers and directors to the fullest extent permitted
by the Delaware General Corporation Law, as it now exists or may in the future
be amended, against all expenses and liabilities reasonably incurred in
connection with their service for or on behalf of our company. We believe that
these provisions will assist us in attracting and retaining qualified
individuals to serve as directors and officers.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is American Stock
Transfer & Trust Company.
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DESCRIPTION OF WARRANTS
We may issue common stock warrants for the purchase of our common stock.
Warrants may be issued independently or together with any debt securities or
common stock offered by any prospectus supplement and may be attached to or
separate from those debt securities or common stock.
Each series of warrants will be issued under a separate warrant agreement to
be entered into between us and a bank or trust company, as warrant agent. The
warrant agent will act solely as our agent in connection with warrant
certificates evidencing the warrants. The warrant agent will not assume any
obligation or relationship of agency or trust for or with any holders of
warrant certificates or beneficial owners of warrants.
As of June 6, 2002, there were no warrants outstanding to purchase our
common stock.
The following description summarizes the general terms of the form of
warrant agreement and warrant certificate which we will file as exhibits to the
registration statement of which this prospectus forms a part upon our offering
of warrants. You should read the warrant agreement and warrant certificate for
provisions summarized below and others that may be important to you.
General
The prospectus supplement relating to a particular series of warrants will
include the specific terms of the series, including, where applicable, the
following:
. the title and aggregate number of the warrants;
. the offering price;
. the number of shares of common stock purchasable upon the exercise of a
Warrant;
. the exercise price or manner of determining the exercise price, the
manner in which the exercise price may be paid, including the currency or
currency units in which the price may be payable, and any minimum number
of warrants exercisable at one time;
. when the warrants become exercisable and the expiration date;
. the terms of any right of ours to redeem or call the warrants;
. the terms of any right of ours to accelerate the exercisability of the
warrants;
. where the warrant certificates may be transferred and exchanged;
. whether the warrants are to be issued with common stock or debt
securities and, if so, the number and terms of any such offered
securities;
. the date, if any, on and after which the warrants and the related shares
of common stock or debt securities will be separately transferable;
. United States federal income tax consequences applicable to the warrants;
and
. any other terms of the warrants, including terms, procedures and
limitations relating to exchange and exercise of the warrants.
Transfers and Exchange
Warrant certificates may be exchanged for new warrant certificates of
different denominations, may, if in registered form, be presented for
registration of transfer, and may be exercised at the corporate trust office of
the warrant agent. We may specify other offices where these activities may be
conducted in a prospectus supplement. No service charge will be made for any
permitted transfer or exchange of warrant certificates, but holders must
21
pay any tax or other applicable governmental charge. Before the exercise of any
warrants, holders of the warrants will not have any of the rights of holders of
the common stock purchasable upon exercise. This means holders of warrants will
not have the right to receive payments of dividends, if any, on the common
stock purchasable upon such exercise or to exercise any applicable right to
vote.
Exercise
Each warrant will entitle its holder to purchase the number of shares of
common stock at the exercise price that is set forth in, or calculable from,
the applicable prospectus supplement. Holders will be able to exercise warrants
at any time up to the time on the expiration date set forth in the applicable
prospectus supplement. After that time, or a later date to which such
expiration date may be extended by us, unexercised warrants will become void.
Holders will be able to exercise warrants by delivering to the warrant agent
at its corporate trust office warrant certificates properly completed and
paying the exercise price. As soon as practicable after such delivery, we will
issue and deliver to the indicated holder the shares of common stock issuable
upon that exercise. If fewer than all of the warrants represented by a warrant
certificate are exercised, we will issue a new warrant certificate for the
remaining number of warrants. The holder of a warrant must pay any tax or other
governmental charge imposed in connection with the issuance of underlying
common stock purchased upon exercise of a warrant.
Modifications
The warrant agreements and the terms of the warrants may be modified or
amended by us and the warrant agent, without the consent of any holder, for the
purpose of curing any ambiguity, or of curing, correcting or supplementing any
defective or inconsistent provision contained therein, or in any other manner
that we deem necessary or desirable and that will not materially adversely
affect the interests of the holders of the warrants.
Together with the warrant agent, we may also modify or amend the warrant
agreement and the terms of the warrants with the consent of a majority of the
holders of the then outstanding unexercised warrants affected thereby. No
modification or amendment of that type that accelerates the expiration date,
increases the exercise price, reduces the number of outstanding warrants
required for consent of any such modification or amendment, or otherwise
materially adversely affects the rights of the holders of the warrants may be
made without the consent of each holder affected thereby.
Warrant Adjustments
The terms and conditions on which the exercise price of and/or the number of
shares of our common stock covered by a Warrant are subject to adjustment will
be set forth in the warrant certificate and the applicable prospectus
supplement. Such terms may include:
. provisions for adjusting the exercise price and/or the number of shares
of our common stock covered by the Warrant;
. the events requiring an adjustment;
. the events upon which we may, in lieu of making an adjustment, make
proper provisions so that the holder of the warrant, upon its exercise,
would be treated as if the holder had exercised the warrant prior to the
occurrence of the events; and
. provisions affecting exercise in the event of certain events affecting
our common stock.
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GOVERNMENT REGULATION AND GAMING ISSUES
The ownership and operation of gaming companies are subject to extensive
regulation. In particular, Indiana, Louisiana, Mississippi, Nevada, California
and Argentina have regulations affecting the operation of our gaming business
and the ownership and disposition of our securities, including the securities
offered pursuant to this prospectus. We summarize these regulations below.
Our certificate of incorporation requires that anyone who owns or controls
our securities must comply with gaming regulations governing their
"suitability" as investors. These provisions apply to all the securities
offered using this prospectus. Any purchaser or holder of securities that we or
any selling stockholders have offered using this prospectus shall be deemed to
have agreed to such provisions. If a person owns or controls our securities or
the securities of our affiliated companies and is determined by a gaming
authority to be unsuitable to own or control such securities, or in the sole
discretion of our board of directors, is deemed likely to jeopardize our right
to conduct gaming activities in any of the jurisdictions in which we conduct
gaming activities, we may redeem, and if required by a gaming authority, shall
redeem, his securities to the extent required by the gaming authority or deemed
necessary or advisable by us.
If a gaming authority requires us, or if we deem it necessary or advisable,
to redeem a holder's securities, we will serve notice on the holder who holds
the securities subject to redemption and will call for the redemption of the
securities of such holder at a redemption price equal to that required to be
paid by the gaming authority making the finding of unsuitability, of if such
gaming authority does not require a certain price per share to be paid, a sum
deemed reasonable by us. See the section of this prospectus entitled
"Description of Common Stock--Certificate of Incorporation and Bylaw
Provisions" for additional information about these suitability and redemption
requirements.
Indiana. The ownership and operation of riverboat casinos at Indiana-based
sites are subject to extensive state regulation under the Indiana Riverboat
Gaming Act ("Indiana Act"), as well as regulations which the Indiana Gaming
Commission (the "Indiana Commission") has adopted pertaining to the Indiana
Act. The Indiana Act and regulations are significant to our prospects for
successfully operating the Belterra facility. The Indiana Act has been
challenged based on its constitutionality on two occasions. The Indiana Act was
found constitutional on both occasions.
The Indiana Act authorizes the issuance of up to eleven Riverboat Owner's
Licenses to be operated from counties that are contiguous to the Ohio River,
Lake Michigan and Patoka Lake. In October 2000, Belterra, the tenth riverboat,
commenced operations. Five of the riverboats are in counties contiguous to the
Ohio River and five are in counties contiguous to Lake Michigan. The Indiana
Commission has not considered an application for a license to be sited in a
county contiguous to Patoka Lake since Patoka Lake is a project of the U.S.
Army Corps of Engineers ("Corps") and the Corps has determined Patoka Lake is
unsuitable for a riverboat project.
Legislation that is currently pending would authorize a casino in Orange
County, a county contiguous to Patoka Lake. As currently proposed, the Orange
County casino could have a maximum of 500 slot machines and unlimited table
games.
Additionally, the current pending legislation would authorize horse race
tracks and certain satellite facilities to operate up to 700 pari-mutuel pull
tab machines. There is currently a race track in Anderson, Indiana, and one is
scheduled to open in Shelbyville, Indiana. The satellite facilities that would
have the ability to operate pari-mutuel pull tab machines would be located in
Indianapolis, Indiana.
The Indiana Act grants broad and pervasive regulatory powers and authority
to the Indiana Commission. Comprehensive regulations have been adopted covering
ownership and reporting for licensed riverboat casinos together with "rules of
the game" governing riverboat casino operations. The Indiana Commission has
also adopted a set of regulations under the Indiana Act which govern a series
of operational matters for Indiana riverboat casinos.
23
Among the regulations adopted by the Indiana Commission is one dealing with
riverboat excursions, routes and public safety. The Indiana Act requires
licensed riverboat casinos to be cruising vessels, and the regulations carry
out the legislative intent by requiring cruising with appropriate recognition
of public safety needs. The regulations explicitly preclude "dockside
gambling". Riverboat gaming excursions are limited to a maximum duration of
four hours unless otherwise expressly approved by the Indiana Commission.
Excursion routes and schedules are subject to the approval of the Indiana
Commission. No gaming may be conducted while the boat is docked except: (1) for
thirty-minute embarkment and disembarkment periods at the beginning and end of
a cruise; (2) if the master of the riverboat reasonably determines that
specific weather or water conditions present a danger to the riverboat, its
passengers and crew; (3) if either the vessel or the docking facility is
undergoing mechanical or structural repair; (4) if water traffic conditions
present a danger to the riverboat, riverboat passengers and crew, or to other
vessels on the water; or (5) if the master has been notified that a condition
exists that would cause a violation of Federal law if the riverboat were to
cruise. The current pending legislation would allow Indiana riverboats to
conduct dockside gaming operations.
For Ohio River excursions, such as those Belterra conducts from its
Switzerland County development, "full excursions" must be conducted at all
times during the year unless the master determines otherwise, for the
above-stated reasons. A "full excursion" is a cruise on the Ohio River. The
Ohio River has waters in both Indiana and Kentucky. The cruise route employed
by Belterra is completely in Indiana waters on the Ohio River with no need or
likelihood of entering Kentucky waters. Therefore, Kentucky laws precluding any
kind of casino gaming have no impact on the Belterra operations.
An Indiana license entitles the licensee to own and operate one riverboat. A
company may own 100% of one licensee and up to 10% of a second licensee. The
pending legislation would allow a company to own up to two Indiana licensees.
An Indiana riverboat owner's license has an initial effective period of five
years; thereafter, a license is subject to annual renewal. After the expiration
of the initial license, the Indiana Commission will conduct a complete
re-investigation every three years, but the Indiana Commission reserves the
right to investigate licenses at any times it deems necessary. The Indiana
Commission has broad discretion over the initial issuance of licenses and over
the renewal, revocation, suspension, restriction and control of riverboat
owner's licenses. Belterra will be subject to a reinvestigation in 2003 to
ensure it continues to be in compliance with the Indiana Act. Officers,
directors and principal owners of the actual license holder and employees who
are to work on the riverboat are subject to substantial disclosure requirements
as a part of securing and maintaining necessary licenses.
Contracts to which Belterra is party are subject to disclosure and approval
processes imposed by the regulations. A riverboat owner's licensee may not
enter into or perform any contract or transaction in which it transfers or
receives consideration which is not commercially reasonable or which does not
reflect the fair market value of the goods or services rendered or received.
All contracts are subject to disapproval by the Indiana Commission. Suppliers
of gaming equipment and materials must also be licensed under the Indiana Act.
Licensees are statutorily required to disclose to the Indiana Commission the
identity of all directors, officers and persons holding direct or indirect
beneficial interests of 1% or greater. The Indiana Commission also requires a
broad and comprehensive disclosure of financial and operating information on
licensees and their principal officers, and their parent corporations and other
upstream owners. The Indiana Act prohibits contributions to a candidate for a
state, legislative, or local office, or to a candidate's committee or to a
regular party committee by the holder of a riverboat owner's license or a
supplier's license, by an officer of a licensee, by an officer of a person that
holds at least a 1% interest in the licensee or by a person holding at least a
1% interest in the licensee. The prohibition against political contributions
extends for three years following a change in the circumstances that resulted
in the prohibition. The Indiana Commission has promulgated a rule requiring the
quarterly reporting of such licensees, officers, and persons.
Adjusted gross receipts from gambling games authorized under the Indiana Act
are subject to a tax at the rate of 20%. "Adjusted gross receipts" means the
total of all cash and property received from gaming operations
24
less cash paid out as winnings and uncollectible gaming receivables (not to
exceed 2%). The Indiana Act also prescribes an additional tax for admissions,
based upon $3 per person per excursion. The current pending legislation would
repeal the admission tax and introduce a graduated wagering tax. If passed, the
current pending legislation will impose a wagering tax of 28% on adjusted gross
receipts up to $100 million and 31% on adjusted gross receipts in excess of
$100 million. The Indiana Legislature is now in special session and there can
be no assurance that the current pending legislation will not be amended or
modified or that it will not result in overall tax increases. Real Property
taxes are imposed on riverboats at rates determined by local taxing
authorities. Income to us from Belterra is subject to the Indiana gross income
tax, the Indiana adjusted gross income tax and the Indiana supplemental
corporate net income tax. Sales on a riverboat and at related resort facilities
are subject to applicable use, excise and retail taxes. The Indiana Act
requires a riverboat owner licensee to directly reimburse the Indiana
Commission for the costs of inspectors and agents required to be present while
authorized gaming is conducted.
Through the establishment of purchasing goals, the Indiana Act encourages
minority and women's business enterprise participation in the riverboat gaming
industry. Each riverboat licensee must establish goals of expending at least
10% of total dollar value of the licensee's qualified contracts for goods and
services with minority business enterprises and 5% with women business
enterprises. The Indiana Commission may suspend, limit or revoke the owner's
license or impose a fine for failure to comply with the statutory goals. The
Indiana Commission has indicated it will be vigilant in monitoring attainment
of these goals. We are currently in compliance with such purchasing goals, but
have failed to achieve these goals at various times in the past. We have
adopted an Action Plan to insure compliance with the purchasing goals. The
Action Plan has been reviewed and approved by the Indiana Commission.
Minimum and maximum wagers on games on the riverboat are left to the
discretion of the licensee. Wagering may not be conducted with money or other
negotiable currency. There are no statutory restrictions on extending credit to
patrons; however, the matter of credit continues to be a matter of potential
legislative action.
If an institutional investor acquires 5% or more of any class of voting
securities of a holding company of a licensee, the investor is required to
notify the Indiana Commission and to provide additional information, and may be
subject to a finding of suitability. Institutional investors who acquire 15% or
more of any class of voting securities are subject to a finding of suitability.
Any other person who acquired 5% or more of any class of voting securities of a
holding company of a licensee is required to apply to the Indiana Commission
for a finding of suitability. A riverboat licensee or an affiliate may not
enter into a debt transaction of $1,000,000 or more without the approval of the
Indiana Commission. The Indiana Commission has taken the position that a "debt
transaction" includes increases in maximum amount available under reducing
revolving credit facilities. A riverboat owner's license is a revocable
privilege and is not a property right under the Indiana Act. A riverboat owner
licensee or any other person may not lease, hypothecate, borrow money against
or loan money against or otherwise securitize a riverboat owner's license.
A licensee, or its parent company, that is publicly traded must notify the
Indiana Commission of a public offering that will be registered with the SEC.
The licensee must notify the Indiana Commission within 10 business days of the
initial filing of a registration statement with the SEC. An ownership interest
in a licensee may only be transferred in accordance with the Indiana Act and
rules promulgated thereunder.
The Indiana Commission has promulgated a rule that prohibits distributions,
excluding distributions for the payment of taxes, by a licensee to its
partners, shareholders, itself or any affiliated entity if the distribution
would impair the financial viability of the riverboat gaming operation. The
Indiana Commission has also promulgated a rule mandating licensees to maintain
a cash reserve against defaults in gaming debts. The cash reserve must be equal
to licensee's average payout for a three-day period based on the riverboat's
performance the prior calendar year. The cash reserve can consist of cash on
hand, cash maintained in Indiana bank accounts and cash equivalents not
otherwise committed or obligated.
On April 11, 2002, we announced that the Indiana Commission had begun an
investigation into our regulatory compliance at Belterra Casino Resort. The
investigation was initiated as a result of allegations of harassment in a
lawsuit filed by two former employees of Belterra Casino Resort. The Indiana
25
Commission has the authority to impose a fine, suspend or terminate Belterra
Casino Resort's license, or take other serious disciplinary measures as a
result of the investigation. At its meeting on May 13, 2002, the Indiana
Commission instructed the staff to continue to negotiate with us, with a view
to settling this matter with the payment of a fine and other remedial actions,
rather than revoking the Belterra Casino Resort license. We cannot assure you
as to the actions the Indiana Commission may take, or settlement, if any, it
may agree to. Any such action or settlement could be materially adverse to us.
Louisiana. The ownership and operation of a riverboat gaming vessel is
subject to the Louisiana Riverboat Economic Development and Gaming Control Act
(the "Louisiana Act"). As of May 1, 1996, gaming activities are regulated by
the Louisiana Gaming Control Board (the "Board"). The Board is responsible for
issuing the gaming license and enforcing the laws, rules and regulations
relative to riverboat gaming activities. The Board is empowered to issue up to
fifteen 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 designated
waterway. An initial license to conduct gaming operations is valid for a term
of five years. The Louisiana Act provides for successive five year renewals
after the initial five year term.
The laws and regulations of Louisiana seek to: (i) prevent unsavory or
unsuitable persons from having any direct or indirect involvement with gaming
at any time or in any capacity; (ii) establish and maintain responsible
accounting practices and procedures; (iii) maintain effective control over the
financial practices of licensees, including establishing procedures for
reliable record keeping and making periodic reports to the Board; (iv) prevent
cheating and fraudulent practices; (v) provide a source of state and local
revenues through fees; and (vi) ensure that gaming licensees, to the extent
practicable, employ and contract with Louisiana residents, women and
minorities. The Louisiana Act specifies certain restrictions and conditions
relating to the operation of riverboat gaming, including, but not limited to,
the following: (i) in parishes bordering the Red River, such as the our Casino
Magic property in Bossier, gaming may be conducted dockside; however, prior to
the passage of legislation legalizing dockside gaming effective April 1, 2001
in the 2001 Special Session of the Louisiana Legislature, in all other
authorized locations such as Boomtown New Orleans, gaming is not permitted
while a riverboat is docked, other than for forty-five minutes between
excursions, unless dangerous weather or water conditions exist; (ii) prior to
the passage of legislation legalizing dockside gaming effective April 1, 2001
in the 2001 Special Session of the Louisiana Legislature, 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 Board are
permitted on board at any time during gaming operations; (iv) gaming devices,
equipment and supplies may be purchased or leased from permitted suppliers; (v)
gaming may only take place in the 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 Board.
No person may receive any percentage of the profits from our operations in
Louisiana without first being found suitable. In March 1994, Boomtown New
Orleans, its officers, key personnel, partners and persons holding a 5% or
greater interest in the partnership were found suitable by the predecessor to
the Board. In April 1996, the Board's predecessor confirmed that Casino Magic
Bossier's officers, key personnel, partners and persons holding a 5% or greater
interest in the corporation were suitable and authorized to acquire an existing
licensee. In July 1999, the Board renewed Boomtown New Orleans' license to
conduct gaming operations. In May 2001, the Board renewed Casino Magic
Bossier's license to conduct gaming operations. A gaming license is deemed to
be a privilege under Louisiana law and as such may be denied, revoked,
suspended, conditioned or limited at any
26
time by the Board. In issuing a license, the Board must find that the applicant
is a person of good character, honesty and integrity and the applicant is 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 Board will not grant any
licenses 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
Board; (iii) the applicant demonstrates a proven ability to operate a vessel of
comparable size, capacity and complexity to a 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; (vii) the applicant has a good faith plan to recruit,
train and upgrade minorities in all employment classifications; and (viii) the
applicant is of good moral character.
The Board may not award a license to any applicant who fails to provide
information and documentation to reveal any fact material to qualification or
who supplies information which is untrue or misleading as to a material fact
pertaining to the qualification criteria; who has been convicted of or pled
nolo contendere to an offense punishable by imprisonment of more than one year;
who is currently being prosecuted for or regarding whom charges are pending in
any jurisdiction of an offense punishable by more than one year imprisonment;
if any holder of 5% or more in the profits and losses of the applicant has been
convicted of or pled guilty or nolo contendere to an offense which at the time
of conviction is punishable as a felony.
The transfer of a license is prohibited; however, the sale, assignment,
transfer, pledge, or disposition of securities which represent 5% or more of
the total outstanding shares issued by a holder of a license may be
transferred, subject to prior Board approval. A security issued by a holder of
a license must generally disclose these restrictions.
Section 2501 of the regulations enacted by the Louisiana State Police
Riverboat Gaming Division pursuant to the Louisiana Act (the "Regulations")
requires prior written approval of the Board of all persons involved in the
sale, purchase, assignment, lease, grant or foreclosure of a security interest,
hypothecation, transfer, conveyance or acquisition of an ownership interest
(other than in a corporation) or economic interest of five percent (5%) or more
in any licensee.
Section 2523 of the Regulations requires notification to and prior approval
from the Board of the: (a) application for, receipt, acceptance or modification
of a loan, the (b) use of any cash, property, credit, loan or line of credit,
or the (c) guarantee or granting of other forms of security for a loan by a
licensee or person acting on a licensee's behalf. Exceptions to prior written
approval include, without limitation, any transaction for less than $2,500,000
in which all of the lending institutions are federally regulated, the
transaction modifies the terms of an existing, previously approved loan
transaction, or if the transaction involves publicly registered debt and
securities sold pursuant to a firm underwriting agreement.
The failure of a licensee to comply with the requirements set forth above
may result in the suspension or revocation of that licensee's gaming license.
Additionally, if the Board finds that the individual owner or holder of a
security of a corporate license or intermediary company or any person with an
economic interest in a licensee is not qualified under the Louisiana Act, the
Board may require, under penalty of suspension or revocation of the license,
that the person not: (a) receive dividends or interest on securities of the
corporation, (b) exercise directly or indirectly a right conferred by
securities of the corporation, (c) receive remuneration or economic benefit
from the licensee, or (d) continue in an ownership or economic interest in the
licensee.
A licensee must periodically report the following information to the Board,
which is not confidential and is to be available for public inspection: (a) the
licensee's net gaming proceeds from all authorized games; (b) the
27
amount of net gaming proceeds tax paid; and, (c) all quarterly and annual
financial statements presenting historical data that are submitted to the
Board, including annual financial statements that have been audited by an
independent certified public accountant.
The Louisiana Act restricts gaming space on riverboats to no more than
30,000 square feet. The Board has adopted rules governing the method for
approval of the area of operations and the rules and odds of authorized games
and devices permitted, and prescribing grounds and procedures for the
revocation, limitation or suspension of licenses and permits.
On April 19, 1996, the Louisiana legislature adopted legislation requiring
statewide local elections on a parish-by-parish basis to determine whether to
prohibit or continue to permit licensed riverboat gaming, licensed video poker
gaming, and licensed land-based gaming in Orleans Parish. The applicable local
election took place on November 5, 1996, and the voters in the parishes of
Boomtown New Orleans and Casino Magic Bossier voted to continue licensed
riverboat and video poker gaming. However, it is noteworthy that the current
legislation does not provide for any moratorium on future local elections on
gaming.
Prior to the passage of legislation in the 2001 Special Session of the
Louisiana Legislature, fees to the state of Louisiana 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) 18.5%
of net gaming proceeds. In the 2001 Special Session of the Louisiana
Legislature, a law was passed legalizing dockside gaming and increasing the
fees paid to the state of Louisiana to 21.5% of net gaming proceeds effective
April 1, 2001 for the nine riverboats in the southern region of the state,
including our Boomtown New Orleans property, while the fee increase to 21.5% of
net gaming proceeds will be phased in over an approximately two year period for
the riverboats operating in parishes bordering the Red River, including our
Casino Magic Bossier City property.
Mississippi. The ownership and operation of casino gaming facilities in
Mississippi are subject to extensive state and local regulation, but primarily
the licensing and regulatory control of the Mississippi Gaming Commission (the
"Mississippi Commission"). The Mississippi Gaming Control Act (the "Mississippi
Act"), which legalized dockside casino gaming in Mississippi, is similar to the
Nevada Gaming Control Act discussed below. The Mississippi Commission has
adopted regulations which are also similar in many respects to the Nevada
gaming regulations.
The laws, regulations and supervisory procedures of Mississippi and the
Mississippi Commission are based upon declarations of public policy that are
concerned with, among other things, (1) the prevention of unsavory or
unsuitable persons from having direct or indirect involvement with gaming at
any time or in any capacity; (2) the establishment and maintenance of
responsible accounting practices and procedures; (3) the maintenance of
effective controls over the financial practices of licensees, including the
establishment of minimum procedures for internal fiscal affairs and
safeguarding of assets and revenues, providing for reliable record keeping and
requiring the filing of periodic reports with the Mississippi Commission; (4)
the prevention of cheating and fraudulent practices; (5) providing a source of
state and local revenues through taxation and licensing fees; and (6) ensuring
that gaming licensees, to the extent practicable, employ Mississippi residents.
The regulations are subject to amendment and interpretation by the Mississippi
Commission. We believe that our compliance with the licensing procedures and
regulatory requirements of the Mississippi Commission will not affect the
marketability of our securities. Changes in Mississippi laws or regulations may
limit or otherwise materially affect the types of gaming that may be conducted
and such changes, if enacted, could have an adverse effect on us and our
Mississippi gaming operations.
The Mississippi Act provides for legalized dockside gaming in each of the
fourteen counties that border the Gulf Coast or the Mississippi River, but only
if the voters in the county have not voted to prohibit gaming in that county.
As of June 1, 2002, dockside gaming was permissible in nine of the fourteen
eligible counties in the state and gaming operations had commenced in seven
counties. Under Mississippi law, gaming vessels must be located on the
Mississippi River or on navigable waters in eligible counties along the
Mississippi River or in the waters lying south of the counties along the
Mississippi Gulf Coast.
28
The Mississippi Act permits unlimited stakes gaming on permanently moored
vessels on a 24-hour basis and does not restrict the percentage of space which
may be utilized for gaming. The Mississippi Act permits substantially all
traditional casino games and gaming devices.
We and any subsidiary of ours that operates a casino in Mississippi (a
"Mississippi Gaming Subsidiary") are subject to the licensing and regulatory
control of the Mississippi Commission. We are registered under the Mississippi
Act as a publicly traded corporation (a "Registered Corporation") of Biloxi
Casino Corp. d/b/a Casino Magic Biloxi ("Casino Magic Biloxi") and have been
found suitable to own the stock of Casino Magic Corp., which is registered as
an intermediary company (an "Intermediary Company"). Casino Magic Corp. has
been found suitable to own the stock of Casino Magic Biloxi. As a Registered
Corporation, we are required periodically to submit detailed financial and
operating reports to the Mississippi Commission and furnish any other
information which the Mississippi Commission may require. If we are unable to
continue to satisfy the registration requirements of the Mississippi Act, we
and any Mississippi Gaming Subsidiary cannot own or operate gaming facilities
in Mississippi. No person may become a stockholder of or receive any percentage
of profits from an Intermediary Company or a Mississippi Gaming Subsidiary of a
Registered Corporation without first obtaining licenses and approvals from the
Mississippi Commission. We have obtained such approvals from the Mississippi
Commission.
A Mississippi Gaming Subsidiary must maintain a gaming license from the
Mississippi Commission to operate a casino in Mississippi. Such licenses are
issued by the Mississippi Commission subject to certain conditions, including
continued compliance with all applicable state laws and regulations. There are
no limitations on the number of gaming licenses that may be issued in
Mississippi. Gaming licenses require the payment of periodic fees and taxes,
are not transferable, are issued for a three-year period (and may be continued
for two additional three-year periods) and must be renewed periodically
thereafter. Casino Magic Biloxi was granted a renewal of its gaming license by
the Mississippi Commission on December 21, 2000.
Certain of our officers and employees and the officers, directors and
certain key employees of Casino Magic Corp. and Casino Magic Biloxi must be
found suitable or approved by the Mississippi Commission. We believe that we
have obtained or applied for all necessary findings of suitability with respect
to such persons associated with us, Casino Magic Corp. or Casino Magic Biloxi,
although the Mississippi Commission, in its discretion, may require additional
persons to file applications for findings of suitability. In addition, any
person having a material relationship or involvement with us, Casino Magic
Corp. or Casino Magic Biloxi may be required to be found suitable, in which
case those persons must pay the costs and fees associated with such
investigation. The Mississippi Commission may deny an application for a finding
of suitability for any cause that it deems reasonable. Changes in certain
licensed positions must be reported to the Mississippi Commission. In addition
to its authority to deny an application for a finding of suitability, the
Mississippi Commission has jurisdiction to disapprove a change in a person's
corporate position or title and such changes must be reported to the
Mississippi Commission. The Mississippi Commission has the power to require us,
Casino Magic Corp. and Casino Magic Biloxi to suspend or dismiss officers,
directors and other key employees or sever relationships with other persons who
refuse to file appropriate applications or whom the authorities find unsuitable
to act in such capacities. Determinations of suitability or questions
pertaining to licensing are not subject to judicial review in Mississippi.
At any time, the Mississippi Commission has the power to investigate and
require the finding of suitability of any of our record or beneficial
stockholders. The Mississippi Act requires any person who acquires more than
five percent of any class of voting securities of a Registered Corporation, as
reported to the Securities and Exchange Commission ("SEC"), to report the
acquisition to the Mississippi Commission, and such person may be required to
be found suitable. Also, any person who becomes a beneficial owner of more than
ten percent of any class of voting securities of a Registered Corporation, as
reported to the SEC, must apply for a finding of suitability by the Mississippi
Commission. The Mississippi Commission generally has exercised its discretion
to require a finding of suitability of any beneficial owner of more than five
percent of any class of voting securities of a Registered Corporation. If a
stockholder 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. Any record or
29
beneficial stockholder required to apply for a finding suitability must pay all
investigative fees and costs of the Mississippi Commission in connection with
such investigation.
The Mississippi Commission has adopted a policy which provides that under
certain circumstances, an "institutional investor," as defined in the policy,
which acquires more than ten percent, but not more than fifteen percent, of a
Registered Corporation's voting securities may apply to the Mississippi
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 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, restated bylaws, management,
policies or operations of the Registered Corporation, or any of its gaming
affiliates, or any other action which the Mississippi 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 Mississippi Commission may
determine to be consistent with such investment intent.
Any person who fails or refuses to apply for a finding of suitability or a
license within thirty (30) days after being ordered to do so by the Mississippi
Commission 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 person found unsuitable and who holds, directly or indirectly, any
beneficial ownership of such securities beyond such time as the Mississippi
Commission prescribes, may be guilty of a misdemeanor. We may be subject to
disciplinary action if, after receiving notice that a person is unsuitable to
be a stockholder or to have any other relationship with us, Casino Magic Corp.
or Casino Magic Biloxi, the company involved: (1) pays the unsuitable person
any dividend or other distribution upon such person's voting securities; (2)
recognizes the exercise, directly or indirectly, of any voting rights conferred
by securities held by the unsuitable person; (3) pays the unsuitable person any
remuneration in any form for services rendered or otherwise, except in certain
limited and specific circumstances; or (4) fails to pursue all lawful efforts
to require the unsuitable person to divest himself of the securities,
including, if necessary, the immediate purchase of the securities for cash at a
fair market value.
We may be required to disclose to the Mississippi Commission, upon request,
the identities of the holders of any of our debt or other securities. In
addition, under the Mississippi Act, the Mississippi Commission may in its
discretion require the holder of any debt security of a Registered Corporation
to file an application, be investigated and be found suitable to own the debt
security. Although the Mississippi Commission generally does not require the
individual holders of obligations such as notes to be investigated and found
suitable, the Mississippi Commission retains the discretion to do so for any
reason, including but not limited to, a default, or where the holder of the
debt instrument exercises a material influence over the gaming operations of
the entity in question. Any holder of debt securities required to apply for a
finding of suitability must pay all investigative fees and costs of the
Mississippi Commission in connection with such an investigation.
If the Mississippi Commission determines that a person is unsuitable to own
a debt security, then the Registered Corporation may be sanctioned, including
the loss of its approvals, if without the prior approval of the Mississippi
Commission it: (1) pays to the unsuitable person any dividend, interest, or any
distribution whatsoever; (2) recognizes any voting right by the unsuitable
person in connection with those securities; (3) pays the unsuitable person
remuneration in any form; or (4) makes any payment to the unsuitable person by
way of principal, redemption, conversion, exchange, liquidation, or similar
transaction.
Each Mississippi Gaming Subsidiary and Intermediary Company must maintain in
Mississippi a current ledger with respect to ownership of its equity securities
and we must maintain in Mississippi a current list of our stockholders, which
must reflect the record ownership of each outstanding share of any class of our
equity
30
securities. The ledger and stockholder lists must be available for inspection
by the Mississippi Commission 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 to the Mississippi Commission. A failure to
make such disclosure may be grounds for finding the record holder unsuitable.
We must also render maximum assistance in determining the identity of the
beneficial owner.
The Mississippi Act requires that the certificates representing securities
of a Registered Corporation bear a legend indicating that the securities are
subject to the Mississippi Act and the regulations of the Mississippi
Commission. We have received from the Mississippi Commission a waiver from this
legend requirement. The Mississippi Commission has the power to impose
additional restrictions on the holders of our securities at any time.
Substantially all material loans, leases, sales of securities and similar
financing transactions by a Registered Corporation, an Intermediary Company or
a Mississippi Gaming Subsidiary must be reported to or approved by the
Mississippi Commission. A pledge of the stock of a Mississippi Gaming
Subsidiary and the foreclosure of such a pledge are ineffective without the
prior approval of the Mississippi Commission. Moreover, restrictions on the
transfer of an equity security issued by a Mississippi Gaming Subsidiary or
Intermediary Company and agreements not to encumber such securities are
ineffective without the prior approval of the Mississippi Commission.
A Registered Corporation may not make a public offering of its securities
without the prior approval of the Mississippi Commission if any part of the
proceeds of the offering is to be used to finance the construction, acquisition
or operation of gaming facilities in Mississippi or to retire or extend
obligations incurred for those purposes. Under the regulations of the
Mississippi Commission, a Mississippi Gaming Subsidiary may not guarantee a
security issued by an affiliated company pursuant to a public offering, or
pledge its assets to secure payment or performance of the obligations evidenced
by the security issued by the affiliated company, without the prior approval of
the Mississippi Commission. Such approval, if given, does not constitute a
recommendation or approval of the investment merits of the securities subject
to the offering.
On February 20, 2002, the Mississippi Commission granted us prior approval
to make public offerings and private placements of securities for a period of
two years, subject to certain conditions (the "Mississippi Shelf Approval").
The Mississippi Shelf Approval also includes approval for Casino Magic Corp.
and Casino Magic Biloxi to guarantee any security issued by, and for Casino
Magic Biloxi to hypothecate its assets to secure the payment or performance of,
any obligations evidenced by a security issued by us in a public offering or
private placement under the Mississippi Shelf Approval. The Mississippi Shelf
Approval also includes approval to place restrictions upon the transfer of and
enter into agreements not to encumber the equity securities of Casino Magic
Corp. and Casino Magic Biloxi. The Mississippi Shelf Approval, however, may be
rescinded for good cause without prior notice upon the issuance of an
interlocutory stop order by the Mississippi Commission. The Mississippi Shelf
Approval does not constitute a finding, recommendation or approval of the
Mississippi Commission as to the accuracy or the adequacy of any prospectus or
the investment merits of any securities offered thereby. Any representation to
the contrary is unlawful. The sale of securities pursuant to this shelf
registration statement will qualify as an offering made pursuant to the terms
of the Mississippi Shelf Approval as currently in effect or as may be renewed
in the discretion of the Mississippi Commission.
Changes in control of us through merger, consolidation, acquisition of
assets, management or consulting agreements, or any act or conduct by a person
by which he or she obtains control, may not occur without the prior approval of
the Mississippi Commission. Entities seeking to acquire control of a Registered
Corporation must satisfy the Mississippi Commission in a variety of stringent
standards prior to assuming control of the Registered Corporation. The
Mississippi 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.
31
The Mississippi legislature has declared that some corporate acquisitions
opposed by management, repurchases of voting securities and other corporate
defense tactics that affect corporate gaming licensees in Mississippi and
Registered Corporations may be injurious to stable and productive corporate
gaming. The Mississippi Commission has established a regulatory scheme to
ameliorate the potentially adverse effects of these business practices upon
Mississippi's gaming industry and to further Mississippi's policy to (1) assure
the financial stability of corporate gaming operations and their affiliates;
(2) preserve the beneficial aspects of conducting business in the corporate
form; and (3) promote a neutral environment for the orderly governance of
corporate affairs.
Approvals are, in certain circumstances, required from the Mississippi
Commission before a Registered Corporation may make exceptional repurchases of
voting securities (such as repurchases which treat holders differently) in
excess of the current market price and before a corporate acquisition opposed
by management can be consummated. Mississippi's gaming regulations also require
prior approval by the Mississippi Commission of a plan of recapitalization
proposed by the Registered Corporation's board of directors in response to a
tender offer made directly to the Registered Corporation's stockholders for the
purpose of acquiring control of the Registered Corporation.
Neither we, any Intermediary Company nor any Mississippi Gaming Subsidiary
may engage in gaming activities in Mississippi while also conducting gaming
operations outside of Mississippi without approval of the Mississippi
Commission. The Mississippi Commission may require determinations that, among
other things, there are means for the Mississippi Commission to have access to
information concerning the out-of-state gaming operations of us and our
affiliates. We have previously obtained a waiver of foreign gaming approval
from the Mississippi Commission for operations in other states in which we
conduct gaming operations and will be required to obtain the approval or a
waiver of such approval from the Mississippi Commission prior to engaging in
any additional future gaming operations outside of Mississippi.
If the Mississippi Commission determined that we, Casino Magic Corp. or
Casino Magic Biloxi violated a gaming law or regulation, the Mississippi
Commission could limit, condition, suspend or revoke our approvals, the
approvals of Casino Magic Corp. and the license of Casino Magic Biloxi, subject
to compliance with certain statutory and regulatory procedures. In addition,
we, Casino Magic Corp., Casino Magic Biloxi and the persons involved could be
subject to substantial fines for each separate violation. Because of such a
violation, the Mississippi Commission could seek to appoint a supervisor to
operate our Mississippi casino facilities. Limitation, conditioning or
suspension of any gaming license or approval or the appointment of a supervisor
could (and revocation of any gaming license or approval would) materially
adversely affect us, our gaming operations and our results of operations.
License fees and taxes, computed in various ways depending on the type of
gaming or activity involved, are payable to the State of Mississippi and to the
counties and cities in which a Mississippi Gaming Subsidiary's respective
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 (1) a percentage of the gross gaming revenues received by the casino
operation, (2) the number of gaming devices operated by the casino, or (3) the
number of table games operated by the casino. The license fee payable to the
State of Mississippi is based upon "gaming receipts" (generally defined as
gross receipts less payouts to customers as winnings) and the current maximum
tax rate imposed is 8% of gaming receipts in excess of $134,000 per month. The
gross revenue fees imposed by the local governments equal approximately 4% of
the gaming receipts.
The Mississippi Commission's regulations require as a condition of licensure
or license renewal that an existing licensed gaming establishment's plan
include a 500-car parking facility in close proximity to the casino complex and
infrastructure facilities which amount to at least twenty-five percent of the
casino cost. We believe that Casino Magic Biloxi is in compliance with this
requirement. The Mississippi Commission later adopted amendments to the
regulation that increase the infrastructure development requirement from
twenty-five percent to one hundred percent for new casinos (or upon acquisition
of a closed casino), but grandfathered existing licensees.
32
In recent years, certain anti-gaming groups proposed for adoption through
the initiative and referendum process certain amendments to the Mississippi
Constitution which would prohibit gaming in the state. The proposals were
declared illegal by the Mississippi courts on constitutional and procedural
grounds. The latest ruling was appealed to the Mississippi Supreme Court, which
affirmed the decision of the lower court. If another such proposal were to be
offered and if a sufficient number of signatures were to be gathered to place a
legal initiative on the ballot, it is possible for the voters of Mississippi to
consider such a proposal in November 2003. While we are unable to predict
whether such an initiative will appear on a ballot or the likelihood of such an
initiative being approved by the voters, if such an initiative were passed and
gaming were prohibited in Mississippi it would have a significant adverse
effect on us and our Mississippi gaming operations.
The sale of food or alcoholic beverages at Casino Magic Biloxi is subject to
licensing, control and regulation by the applicable state and local
authorities. The agencies involved have full power to limit, condition, suspend
or revoke any such license, and any such disciplinary action against Casino
Magic Biloxi could (and revocation would) have a materially adverse effect upon
our operations. Certain of our, Casino Magic Corp.'s and Casino Magic Biloxi's
officers and managers must be investigated by the Alcoholic Beverage Control
Division of the State Tax Commission (the "ABC") in connection with Casino
Magic Biloxi's liquor permits. Changes in licensed positions must be approved
by the ABC.
Nevada. The ownership and operation of casino gaming facilities in Nevada
are subject to: (i) the Nevada Gaming Control Act and the regulations
promulgated there under (collectively, "Nevada Act"); and (ii) various local
regulations. Our gaming operations are subject to the licensing and regulatory
control of the Nevada Gaming Commission ("Nevada Commission"), the Nevada State
Gaming Control Board ("Nevada Board") and Washoe County. The Nevada Commission,
the Nevada Board and Washoe County are 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. Changes in such laws,
regulations and procedures could have an adverse effect on Boomtown Reno's
gaming operations.
Boomtown Hotel & Casino, Inc. (the "Gaming Subsidiary"), which operates
Boomtown Reno and two other gaming operations with slot machines only, is
required to be licensed by the Nevada Gaming Authorities. The gaming licenses
require the periodic payment of fees and taxes and are not transferable. We are
currently registered by the Nevada Commission as a publicly traded corporation
(a "Registered Corporation") and have been found suitable to own the stock of
Boomtown, Inc., which is registered as an intermediary company ("Intermediary
Company"). Boomtown has been found suitable to own the stock of the Gaming
Subsidiary, which is a corporate licensee (a "Corporate Licensee") under the
terms of the Nevada Act. As a Registered Corporation, the we are required
periodically to submit detailed financial and operating reports to the Nevada
Commission and furnish any other information which the Nevada Commission may
require. No person may become a stockholder of, or holder of an interest of, or
receive any percentage of profits from an Intermediary Company or a Corporate
Licensee without first obtaining licenses and approvals from the Nevada Gaming
Authorities. We, Boomtown and the Gaming Subsidiary have obtained from the
Nevada Gaming Authorities the various registrations, findings of suitability,
approvals, permits and licenses required in order to engage in gaming
activities in Nevada.
The Nevada Gaming Authorities may investigate any individual who has a
material relationship to, or material involvement with, us, Boomtown or the
Gaming Subsidiary in order to determine whether such
33
individual is suitable or should be licensed as a business associate of a
gaming licensee. Our, Boomtown's and the Gaming Subsidiary's officers,
directors and certain key employees must file applications with the Nevada
Gaming Authorities and may be required to be licensed or found suitable by the
Nevada Gaming Authorities. Our and Boomtown's officers, directors and key
employees who are actively and directly involved in gaming activities of the
Gaming Subsidiary 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 us, Boomtown or the Gaming Subsidiary, the companies involved
would have to sever all relationships with such person. In addition, the Nevada
Commission may require us, Boomtown or the Gaming Subsidiary 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.
We and the Gaming Subsidiary 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 us, Boomtown
and the Gaming Subsidiary must be reported to or approved by the Nevada
Commission.
If it were determined that the Nevada Act was violated by the Gaming
Subsidiary, the gaming licenses it holds could be limited, conditioned,
suspended or revoked, subject to compliance with certain statutory and
regulatory procedures. In addition, we, Boomtown, the Gaming Subsidiary 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
Boomtown Reno 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 gaming licenses of the Gaming Subsidiary or the appointment
of a supervisor could (and revocation of any gaming license would) negatively
affect our gaming operations.
Any beneficial holder of our voting securities, regardless of the number of
shares owned, may be required to file an application, be investigated, and be
found suitable as a beneficial holder of the our voting securities 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 beneficial ownership of 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 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, restated bylaws, management, policies or
operations of the Registered Corporation, or any of its gaming affiliates, or
any other action which the Nevada Commission finds
34
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 common stock
beyond such period of time as may be prescribed by the Nevada Commission may be
guilty of a criminal offense. We are subject to disciplinary action if, after
we receive notice that a person is unsuitable to be a stockholder or to have
any other relationship with us, Boomtown or the Gaming Subsidiary, we: (i) pay
that person any dividend or interest upon voting securities of the company,
(ii) allow that person to exercise, directly or indirectly, any voting right
conferred through securities held by that person, (iii) pay remuneration in any
form to that person for services rendered or otherwise, or (iv) fail 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
or other security of a Registered Corporation to file applications, be
investigated and be found suitable to own the debt or other security of a
Registered Corporation if the Nevada Commission has reason to believe that his
acquisition of such debt or other security would otherwise be inconsistent with
the policy of the State of Nevada. 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 to the
unsuitable person any dividend, interest, or any distribution whatsoever; (ii)
recognizes any voting right by such unsuitable person in connection with such
securities; (iii) pays the unsuitable person remuneration in any form; or (iv)
makes any payment to the unsuitable person by way of principal, redemption,
conversion, exchange, liquidation, or similar transaction.
We are 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 to the Nevada Gaming Authorities.
A failure to make such disclosure may be grounds for finding the record holder
unsuitable. We are also required to render maximum assistance in determining
the identity of the beneficial owner. The Nevada Commission has the power to
require that the our stock certificates 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 us.
We are not permitted to make a public offering of our securities without the
prior approval of the Nevada Commission if the securities or the 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. On March 22, 2001, the Nevada Commission granted the us prior
approval to make public offerings for a period of two years, subject to certain
conditions (the "Nevada Shelf Approval"). The Nevada Shelf Approval also
applies to any affiliated company wholly owned by us (an "Affiliate"), which is
a publicly traded corporation or would thereby become a publicly traded
corporation pursuant to a public offering. The Nevada Shelf Approval also
includes approval for Boomtown and the Gaming Subsidiary to guarantee any
security issued by, and for the Gaming Subsidiary to hypothecate its assets to
secure the payment or performance of any obligations evidenced by a security
issued by us or an Affiliate in a public offering under the Nevada Shelf
Approval. The Nevada Shelf Approval also includes approval to place
restrictions upon the transfer of and enter into agreements not to encumber the
equity
35
securities of Boomtown and the Gaming Subsidiary. The Nevada Shelf Approval,
however, may be rescinded for good cause without prior notice upon the issuance
of an interlocutory stop order by the Chairman of the Nevada Board. The Nevada
Shelf Approval does not constitute a finding, recommendation or approval of the
Nevada Gaming Authorities as to the accuracy or the adequacy of the prospectus
or the investment merits of the securities offered thereby. Any representation
to the contrary is unlawful. The sale of common stock pursuant to this
prospectus will qualify as a public offering and will be made pursuant to the
terms of the Nevada Shelf Approval as currently in effect or as may be renewed
in the discretion of the Nevada Gaming Commission.
Changes in 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 Board of Directors in response to a tender offer made
directly to 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 Washoe
County, in which the Gaming Subsidiary'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; (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 a
cabaret, nightclub, cocktail lounge or casino showroom in connection with the
serving or selling of food or refreshments, or the selling of any merchandise.
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 such Licensee's 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 or enter into associations that are
harmful to the State of Nevada or its ability to collect gaming taxes and fees,
or employ, contract with, or associate with a person in the foreign operation
who has been denied a license or finding of suitability in Nevada on the ground
of unsuitability.
36
California. Operation of California card club casinos such as the Hollywood
Park-Casino and the Crystal Park Casino is governed by the Gambling Control Act
(the "GCA") and is subject to the oversight of the California Attorney General
and the California Gambling Control Commission. Under the GCA, a California
card club casino may only offer certain forms of card games, including Poker,
Pai Gow, and California Blackjack. A card club casino may not offer many of the
card games and other games of chance permitted in Nevada and other
jurisdictions where we conduct business. Although the California Attorney
General takes the position that, under the GCA, only individuals, partnerships
or privately-held companies (as opposed to publicly-traded companies such us)
are eligible to operate card club casinos, the enactment of California Senate
Bill 100 ("SB-100") in 1995, and the subsequent enactment of Senate Bill-8
permit a publicly-owned racing association to own and operate a card club
casino if it also owns and operates a race track on the same premises.
In September 1995, the Attorney General granted us a provisional
registration under SB-100 to operate the Hollywood Park-Casino, which
provisional registration was renewed effective January 1, 1999. Pursuant to the
GCA, on September 10, 1999, in connection with the sale of the Hollywood Park
Race Track (see Note 11 to the Notes to Consolidated Financial Statements of
our Annual Report on Form 10-K for the year ended December 31, 2001, which we
incorporate be reference in this prospectus), we were no longer eligible to
operate the Hollywood Park-Casino and therefore entered into a sublease
arrangement of the Hollywood Park-Casino with the same third party operator
which leases the Crystal Park Casino. In the event the GCA were to be amended
to permit publicly-traded companies such as us to operate card clubs, we, and
our officers, directors and certain stockholders, would likely have to file the
necessary licensing applications with the Attorney General, if we wished to
operate the Hollywood Park-Casino or the Crystal Park Casino.
Pursuant to the GCA, the operator of a card club casino, and its officers,
directors and certain stockholders are required to be registered by the
Attorney General and licensed by the municipality in which it is located. A
permanent registration will not be granted until the California Department of
Justice completes its review of our applications and the applications of our
corporate officers and directors. The Attorney General has broad discretion to
deny a gaming registration and may impose reasonably necessary conditions upon
the granting of a gaming registration. Grounds for denial include felony
convictions, criminal acts, convictions involving dishonesty, illegal gambling
activities, and false statements on a gaming application. Such grounds also
generally include having a financial interest in a business or organization
that engages in gaming activities that are illegal under California law. In
addition, the Attorney General possesses broad authority to suspend or revoke a
gaming registration on any of the foregoing grounds, as well as for violation
of any federal, state or local gambling law, failure to take reasonable steps
to prevent dishonest acts or illegal activities on the premises of the card
club casino, failure to cooperate with the Attorney General in its oversight of
the card club casino and failure to comply with any condition of the
registration. The City of Inglewood and the City of Compton have granted the
operator of the Hollywood Park-Casino and the Crystal Park Casino all municipal
gaming licenses necessary for operation of such facilities, and the operator
has received provisional registrations for both locations from the California
Department of Justice.
Argentina. The Provincial Government of Neuquen, Argentina enacted a casino
privatization program to issue twelve-year exclusive concession agreements to
operate existing casinos. Our two casinos are the only casinos in the province
of Neuquen, in west central Argentina, and are located in Neuquen City and San
Martin de los Andes. The casinos had previously been operated by the provincial
government. The Ministry of Finance of Argentina has adopted a modified
regulatory system for casinos, based somewhat on the regulatory system utilized
by the State of Nevada, and such regulatory system is being administered by the
Provincial Government of Neuquen. We cannot predict what effect the enactment
of other laws, regulations or pronouncements relating to casino operations may
have on the operations of Casino Magic Argentina.
37
SELLING STOCKHOLDERS
The selling stockholders may include R.D. Hubbard, a former director and
Chairman of the Board of the company, or certain of his affiliates. To our
knowledge, based on the information contained on a Schedule 13D he filed on May
16, 2002, Mr. Hubbard beneficially owns 2,322,699 or 8.9%, of our outstanding
common stock.
The prospectus supplement for any offering of our common stock by selling
stockholders will include, among other things, the following information:
. the names of the selling stockholders;
. the nature of any position, office, or other material relationship which
any selling stockholder has had within the past three years with us or
any of our predecessors or affiliates;
. the number of shares of common stock held by each of the selling
stockholders;
. the percentage of shares of our outstanding common stock held by each of
the selling stockholders; and
. the number of shares of common stock offered by each of the selling
stockholders.
PLAN OF DISTRIBUTION
We and the selling stockholders (with respect to common stock) may sell the
securities offered by this prospectus to one or more underwriters or dealers
for public offering, through agents, directly to purchasers or through a
combination of any such methods of sale. The name of any such underwriter,
dealer or agent involved in the offer and sale of the securities, the amounts
underwritten and the nature of its obligation to take the securities will be
stated in the applicable prospectus supplement. We and/or the selling
stockholders have reserved the right to sell the securities directly to
investors on our own and/or the selling stockholders' behalf in those
jurisdictions where we and/or the selling stockholders are authorized to do so.
The sale of the securities may be effected in transactions (a) on any national
or international securities exchange or quotation service on which the
securities may be listed or quoted at the time of sale, (b) in the
over-the-counter market, (c) in transactions otherwise than on such exchanges
or in the over-the-counter market or (d) through the writing of options.
In addition, we may issue the securities as a dividend or distribution or in
a subscription rights offering to our existing security holders. In some cases,
we or dealers acting with us or on our behalf, and/or selling stockholders or
dealers acting with them on their behalf, may also purchase securities and
reoffer them to the public by one or more of the methods described above. This
prospectus may be used in connection with any offering of our securities
through any of these methods or other methods described in the applicable
prospectus supplement.
We, our agents and underwriters, and/or any selling stockholder and its
agents and underwriters, may offer and sell the securities at a fixed price or
prices that may be changed, at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at negotiated prices. The
securities may be offered on an exchange, which will be disclosed in the
applicable prospectus supplement. We and/or any selling stockholders may, from
time to time, authorize dealers, acting as our or their agents, to offer and
sell the securities upon such terms and conditions as set forth in the
applicable prospectus supplement.
If we and/or any selling stockholders use underwriters to sell securities,
we and/or such selling stockholders will enter into an underwriting agreement
with them at the time of the sale to them. In connection with the sale of the
securities, underwriters may receive compensation from us and any selling
stockholders in the form of underwriting discounts or commissions and may also
receive commissions from purchasers of the securities for whom they may act as
agent. Any underwriting compensation paid by us and/or such selling
stockholders to underwriters or agents in connection with the offering of the
securities, and any discounts, concessions or commissions allowed by
underwriters to participating dealers, will be set forth in the applicable
prospectus
38
supplement to the extent required by applicable law. Underwriters may sell the
securities to or through dealers, and such dealers may receive compensation in
the form of discounts, concessions or commissions from the underwriters or
commissions (which may be changed from time to time) from the purchasers for
whom they may act as agents.
Dealers, agents and selling stockholders participating in the distribution
of the securities may be deemed to be underwriters, and any discounts and
commissions received by them and any profit realized by them on resale of the
securities may be deemed to be underwriting discounts and commissions under the
Securities Act. Unless otherwise indicated in the applicable prospectus
supplement, an agent will be acting on a best efforts basis, and a dealer will
purchase debt securities as a principal, and may then resell the debt
securities at varying prices to be determined by the dealer.
If so indicated in the prospectus supplement, we and/or the selling
stockholders will authorize underwriters, dealers or agents to solicit offers
by certain specified institutions to purchase offered securities from us and/or
the selling stockholders at the public offering price set forth in the
prospectus supplement pursuant to delayed delivery contracts providing for
payment and delivery on a specified date in the future. Such contracts will be
subject to any conditions set forth in the applicable prospectus supplement,
and the prospectus supplement will set forth the commission payable for
solicitation of such contracts. The underwriters and other persons soliciting
such contracts will have no responsibility for the validity or performance of
any such contracts.
If we offer securities in a subscription rights offering to our existing
security holders, we may enter into a standby underwriting agreement with
dealers, acting as standby underwriters. We may pay the standby underwriters a
commitment fee for the securities they commit to purchase on a standby basis.
If we do not enter into a standby underwriting arrangement, we may retain a
dealer-manager to manage a subscription rights offering for us.
Underwriters, dealers and agents may be entitled, under agreements entered
into with our company and/or any selling stockholders to indemnification
against and contribution towards certain civil liabilities, including any
liabilities under the Securities Act of 1933, as amended.
To facilitate the offering of securities, certain persons participating in
the offering may engage in transactions that stabilize, maintain, or otherwise
affect the price of the securities. These may include over-allotment,
stabilization, syndicate, short covering transactions and penalty bids.
Over-allotment involves sales in excess of the offering size, which creates a
short position. Stabilizing transactions involve bids to purchase the
underlying security so long as the stabilizing bids do not exceed a specified
maximum. Syndicate short covering transactions involve purchases of securities
in the open market after the distribution has been completed in order to cover
syndicate short positions. Penalty bids permit the underwriters to reclaim
selling concessions from dealers when the securities originally sold by the
dealers are purchased in covering transactions to cover syndicate short
positions. These transactions may cause the price of the securities sold in an
offering to be higher than it would otherwise be. These transactions, if
commenced, may be discontinued by the underwriters at any time.
Any securities other than our common stock issued hereunder may be new
issues of securities with no established trading market. Any underwriters or
agents to or through whom such securities are sold for public offering and sale
may make a market in such securities, but such underwriters or agents will not
be obligated to do so and may discontinue any market making at any time without
notice. No assurance can be given as to the liquidity of the trading market for
any such securities. The amount of expenses expected to be incurred by us in
connection with any issuance of securities will be set forth in the applicable
prospectus supplement. Certain of the underwriters, dealers or agents and their
associates may engage in transactions with, and perform services for, us and
certain of our affiliates in the ordinary course of our business.
39
LEGAL MATTERS
Unless otherwise specified in a prospectus supplement, the validity of any
securities issued hereunder will be passed upon for our company by Irell &
Manella LLP, Los Angeles, California.
EXPERTS
The financial statements incorporated in this prospectus by reference to the
Annual Report on Form 10-K for Pinnacle Entertainment, Inc. for the year ended
December 31, 2001 have been so incorporated in reliance on the report of Arthur
Andersen LLP, independent accountants, given on the authority of said firm as
experts in auditing and accounting. Arthur Andersen LLP has not consented to
the inclusion of their report in this prospectus, and we have dispensed with
the requirement to file their consent in reliance upon Rule 437a of the
Securities Act of 1933. Because Arthur Andersen LLP has not consented to the
inclusion of their report in this prospectus, you will not be able to recover
against Arthur Andersen LLP under Section 11 of the Securities Act for any
untrue statements of a material fact contained in the financial statements
audited by Arthur Andersen LLP or any omissions to state a material fact
required to be stated therein.
On May 30, 2002, we filed a current report on Form 8-K which stated in
substance as follows: On May 28, 2002, we dismissed Arthur Andersen LLP
("Andersen") as our independent public accountants. Our Audit Committee of the
Board of Directors participated in and approved the decision to dismiss
Andersen. The reports of Andersen on our financial statements for the past two
fiscal years contained no adverse opinion or disclaimer of opinion and were not
qualified or modified as to uncertainty, audit scope or accounting principle.
During the two most recent fiscal years and through May 28, 2002, there have
been no disagreements between us and Andersen on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure, which disagreements, if not resolved to the satisfaction of
Andersen, would have caused Andersen to make reference to the subject matter
thereof in its report on Pinnacle Entertainment's financial statements for such
periods. During the two most recent fiscal years and through May 28, 2002,
there have been no reportable events (as defined in Item 304(a) (1) of
Regulation S-K under the Securities Act of 1933, as amended). At our request,
Andersen furnished a letter addressed to the SEC stating that it agrees with
the above statements. A copy of such letter, dated May 29, 2002, is filed as
Exhibit 16 to the current report on Form 8-K.
In addition, in that current report on Form 8-K, we also stated in substance
as follows: We named Deloitte & Touche LLP ("Deloitte & Touche") as our new
independent accountants on May 28, 2002. Their engagement is subject to the
completion of Deloitte & Touche's customary client acceptance procedures.
During the two most recent fiscal years and through May 28, 2002, neither we
nor anyone acting on our behalf has consulted with Deloitte & Touche regarding
the matters described in, and required to be disclosed pursuant to, Item
304(a)(2)(i) or Item 304(a)(2)(ii) of Regulation S-K under the Securities Act
of 1933, as amended.
40
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth all fees and expenses payable by the
registrant in connection with the issuance and distribution of the securities
being registered hereby (other than underwriting discounts and commissions).
All such expenses, except the Securities and Exchange Commission, which we
refer to as the SEC, registration fee, are estimated.
Securities and Exchange Commission registration fee $46,000
Legal fees and expenses............................ *
Trustee's fees and expenses........................ *
Accounting fees and expenses....................... *
Printing expenses.................................. *
Miscellaneous...................................... *
-------
Total........................................... $ *
=======
- --------
* To be filed by amendment.
Item 15. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law ("DGCL") provides that 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 proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that the person is or was a director, officer, employee or agent of the
corporation or is or was serving at its request in such capacity in another
corporation or business association, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by the person in connection with such action, suit or proceeding if
the person acted in good faith and in a manner the person reasonably believed
to be in or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause to
believe the person's conduct was unlawful.
Section 102(b)(7) of the DGCL permits a corporation to provide in its
certificate of incorporation that a director 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, except for liability (i) for any
breach of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174
of the DGCL, or (iv) for any transaction from which the director derived an
improper personal benefit.
As permitted by Section 102(b)(7) of the DGCL, the Registrant's Certificate
of Incorporation, as amended, includes a provision that limits a director's
personal liability to the Registrant or its stockholders for monetary damages
for breaches of his or her fiduciary duty as a director. Article XII of the
Registrant's Certificate of Incorporation, as amended, provides that no
director of the Registrant shall be personally liable to the Registrant or its
stockholders for monetary damages for breach of fiduciary duty to the fullest
extent permitted by the DGCL.
As permitted by Section 145 of the DGCL, the Registrant's Restated bylaws
provide that, to the fullest extent permitted by the DGCL, directors, officers
and certain other persons who are made, or are threatened to be made, parties
to, or are involved in, any action, suit or proceeding will be indemnified by
the Registrant with respect thereto.
The Registrant maintains insurance policies under which its directors and
officers are insured, within the limits and subject to the limitations of the
policies, against expenses in connection with the defense of actions,
II-1
suits or proceedings, and certain liabilities that might be imposed as a result
of such actions, suits or proceedings, to which they are parties by reason of
being or having been directors or officers of the Registrant.
Item 16. Exhibits and Financial Statements Schedules.
The exhibits to this registration statement are listed in the Exhibit Index
to this registration statement, which Exhibit Index is hereby incorporated by
reference.
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(a) (1) To file, during any period in which offers or sales are being made
of the securities registered hereby, a post-effective amendment to the
registration statement:
(i) To include any prospectus required by Section 10(a)(3) to the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this 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. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(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 the undertakings set forth in clauses (i) and
(ii) above do not apply if the information required to be included in a
post-effective amendment by those clauses is contained in periodic
reports filed with or furnished to SEC by the registrant pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this 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; and
(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;
(b) That, for the purposes of determining any liability under the Act of
1933, each filing of our 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 this
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof;
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant, 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 Securities Act of 1933 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
II-2
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue; and
(d) The undersigned registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with the
rules and regulations prescribed by the SEC under Section 305(b)(2) of the
Trust Indenture Act.
(e) (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 purposes 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 be deemed to be the initial bona fide offering thereof.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Glendale, California, on the 12th day of June, 2002.
PINNACLE ENTERTAINMENT, INC.,
By: /s/ DANIEL R. LEE
-----------------------------
Daniel R. Lee
Chairman of the Board, and
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Daniel R. Lee, Bruce C. Hinckley and Loren S. Ostrow and each of them,
severally, as his attorney-in-fact and Agent, with full power of substitution
and resubstitution, in his name and on his behalf, to sign in any and all
capacities this registration statement and any and all amendments (including
post-effective amendments) and exhibits to this registration statement, any
subsequent registration statement for the same offering which may be filed
under Rule 462(b) under the Securities Act of 1933, as amended, and any and all
amendments (including post-effective amendments) and exhibits thereto, and any
and all applications and other documents relating thereto, with the Securities
and Exchange Commission, with full power and authority to perform and do any
and all acts and things whatsoever which any such attorney or substitute may
deem necessary or advisable to be performed or done in connection with any or
all of the above-described matters, as fully as each of the undersigned could
do if personally present and acting, hereby ratifying and approving all acts of
any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
registration statement has been signed by the following persons on June 12,
2002 in the capacities indicated below.
Signature Title
--------- -----
/s/ DANIEL R. LEE Chairman of the Board, Chief
- ----------------------------- Executive and Officer
Daniel R. Lee (Principal Executive
Officer)
/s/ BRUCE C. HINCKLEY Senior Vice President and
- ----------------------------- Chief Financial Officer
Bruce C. Hinckley (Principal Financial and
Accounting Officer)
/s/ JAMES L. MARTINEAU Director
- -----------------------------
James L. Martineau
/s/ GARY G. MILLER Director
- -----------------------------
Gary G. Miller
/s/ MICHAEL ORNEST Director
- -----------------------------
Michael Ornest
/s/ TIMOTHY J. PARROT Director
- -----------------------------
Timothy J. Parrot
/s/ LYNN P. REITNOUER Director
- -----------------------------
Lynn P. Reitnouer
/s/ MARLIN TORGUSON Director
- -----------------------------
Marlin Torguson
S-1
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Glendale, State of
California on the 12th day of June, 2002.
BELTERRA RESORT INDIANA, LLC,
a Nevada limited liability company
By: its Managing Member
PINNACLE ENTERTAINMENT,
INC.,
a Delaware Corporation
By: /s/ DANIEL R. LEE
-----------------------------
Daniel R. Lee
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Daniel R. Lee, Bruce C. Hinckley and Loren S. Ostrow and each of them,
severally, as his attorney-in-fact and Agent, with full power of substitution
and resubstitution, in his name and on his behalf, to sign in any and all
capacities this registration statement and any and all amendments (including
post-effective amendments) and exhibits to this registration statement, any
subsequent registration statement for the same offering which may be filed
under Rule 462(b) under the Securities Act of 1933, as amended, and any and all
amendments (including post-effective amendments) and exhibits thereto, and any
and all applications and other documents relating thereto, with the Securities
and Exchange Commission, with full power and authority to perform and do any
and all acts and things whatsoever which any such attorney or substitute may
deem necessary or advisable to be performed or done in connection with any or
all of the above-described matters, as fully as each of the undersigned could
do if personally present and acting, hereby ratifying and approving all acts of
any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capabilities and on the dates indicated.
Signature Title Date
--------- ----- ----
PINNACLE ENTERTAINMENT, INC. Managing Member of BELTERRA June 12, 2002
RESORT INDIANA, LLC, a
Nevada limited liability
company
/s/ DANIEL R. LEE Chairman of the Board and June 12, 2002
- ----------------------------- Chief Executive Officer of
Daniel R. Lee PINNACLE ENTERTAINMENT, INC.
S-2
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Glendale, State of
California on the 12th day of June, 2002.
BILOXI CASINO CORP.,
a Mississippi corporation
By: /s/ DANIEL R. LEE
-----------------------------
Daniel R. Lee
Sole Director, President and
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Daniel R. Lee, Bruce C. Hinckley and Loren S. Ostrow and each of them,
severally, as his attorney-in-fact and Agent, with full power of substitution
and resubstitution, in his name and on his behalf, to sign in any and all
capacities this registration statement and any and all amendments (including
post-effective amendments) and exhibits to this registration statement, any
subsequent registration statement for the same offering which may be filed
under Rule 462(b) under the Securities Act of 1933, as amended, and any and all
amendments (including post-effective amendments) and exhibits thereto, and any
and all applications and other documents relating thereto, with the Securities
and Exchange Commission, with full power and authority to perform and do any
and all acts and things whatsoever which any such attorney or substitute may
deem necessary or advisable to be performed or done in connection with any or
all of the above-described matters, as fully as each of the undersigned could
do if personally present and acting, hereby ratifying and approving all acts of
any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capabilities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ DANIEL R. LEE Sole Director, President and
- ----------------------------- Chief Executive Officer
Daniel R. Lee (Principal Executive
Officer) June 12, 2002
/s/ BRUCE C. HINCKLEY Chief Executive Officer and
- ----------------------------- Treasurer (Principal
Bruce C. Hinckley Financial and Accounting
Officer) June 12, 2002
S-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Glendale, State of
California on the 12th day of June, 2002.
BOOMTOWN, INC.,
a Delaware Corporation
By: /s/ DANIEL R. LEE
-----------------------------
Daniel R. Lee
Sole Director, President and
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Daniel R. Lee, Bruce C. Hinckley and Loren S. Ostrow and each of them,
severally, as his attorney-in-fact and Agent, with full power of substitution
and resubstitution, in his name and on his behalf, to sign in any and all
capacities this registration statement and any and all amendments (including
post-effective amendments) and exhibits to this registration statement, any
subsequent registration statement for the same offering which may be filed
under Rule 462(b) under the Securities Act of 1933, as amended, and any and all
amendments (including post-effective amendments) and exhibits thereto, and any
and all applications and other documents relating thereto, with the Securities
and Exchange Commission, with full power and authority to perform and do any
and all acts and things whatsoever which any such attorney or substitute may
deem necessary or advisable to be performed or done in connection with any or
all of the above-described matters, as fully as each of the undersigned could
do if personally present and acting, hereby ratifying and approving all acts of
any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capabilities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ DANIEL R. LEE Sole Director, President and
- ----------------------------- Chief Executive Officer
Daniel R. Lee (Principal Executive
Officer) June 12, 2002
/s/ BRUCE C. HINCKLEY Chief Financial Officer
- ----------------------------- (Principal Financial and
Bruce C. Hinckley Accounting Officer) June 12, 2002
S-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Glendale, State of
California on the 12th day of June, 2002.
BOOMTOWN HOTEL & CASINO, INC.,
a Nevada corporation
By: /s/ DANIEL R. LEE
-----------------------------
Daniel R. Lee
Sole Director, President and
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Daniel R. Lee, Bruce C. Hinckley and Loren S. Ostrow and each of them,
severally, as his attorney-in-fact and Agent, with full power of substitution
and resubstitution, in his name and on his behalf, to sign in any and all
capacities this registration statement and any and all amendments (including
post-effective amendments) and exhibits to this registration statement, any
subsequent registration statement for the same offering which may be filed
under Rule 462(b) under the Securities Act of 1933, as amended, and any and all
amendments (including post-effective amendments) and exhibits thereto, and any
and all applications and other documents relating thereto, with the Securities
and Exchange Commission, with full power and authority to perform and do any
and all acts and things whatsoever which any such attorney or substitute may
deem necessary or advisable to be performed or done in connection with any or
all of the above-described matters, as fully as each of the undersigned could
do if personally present and acting, hereby ratifying and approving all acts of
any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capabilities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ DANIEL R. LEE Sole Director, President and
- ----------------------------- Chief Executive Officer
Daniel R. Lee (Principal Executive
Officer) June 12, 2002
/s/ BRUCE C. HINCKLEY Treasurer (Principal
- ----------------------------- Financial and Accounting
Bruce C. Hinckley Officer) June 12, 2002
S-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Glendale, State of
California on the 12th day of June, 2002.
CASINO MAGIC CORP.,
a Minnesota corporation
By: /s/ DANIEL R. LEE
-----------------------------
Daniel R. Lee
Sole Director, President and
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Daniel R. Lee, Bruce C. Hinckley and Loren S. Ostrow and each of them,
severally, as his attorney-in-fact and Agent, with full power of substitution
and resubstitution, in his name and on his behalf, to sign in any and all
capacities this registration statement and any and all amendments (including
post-effective amendments) and exhibits to this registration statement, any
subsequent registration statement for the same offering which may be filed
under Rule 462(b) under the Securities Act of 1933, as amended, and any and all
amendments (including post-effective amendments) and exhibits thereto, and any
and all applications and other documents relating thereto, with the Securities
and Exchange Commission, with full power and authority to perform and do any
and all acts and things whatsoever which any such attorney or substitute may
deem necessary or advisable to be performed or done in connection with any or
all of the above-described matters, as fully as each of the undersigned could
do if personally present and acting, hereby ratifying and approving all acts of
any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capabilities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ DANIEL R. LEE Sole Director, President and
- ----------------------------- Chief Executive Officer
Daniel R. Lee (Principal Executive
Officer) June 12, 2002
/s/ BRUCE C. HINCKLEY Treasurer (Principal
- ----------------------------- Financial and Accounting
Bruce C. Hinckley Officer) June 12, 2002
S-6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Glendale, State of
California on the 12th day of June, 2002.
CASINO ONE CORPORATION,
a Mississippi corporation
By: /s/ DANIEL R. LEE
-----------------------------
Daniel R. Lee
Sole Director, President and
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Daniel R. Lee, Bruce C. Hinckley and Loren S. Ostrow and each of them,
severally, as his attorney-in-fact and Agent, with full power of substitution
and resubstitution, in his name and on his behalf, to sign in any and all
capacities this registration statement and any and all amendments (including
post-effective amendments) and exhibits to this registration statement, any
subsequent registration statement for the same offering which may be filed
under Rule 462(b) under the Securities Act of 1933, as amended, and any and all
amendments (including post-effective amendments) and exhibits thereto, and any
and all applications and other documents relating thereto, with the Securities
and Exchange Commission, with full power and authority to perform and do any
and all acts and things whatsoever which any such attorney or substitute may
deem necessary or advisable to be performed or done in connection with any or
all of the above-described matters, as fully as each of the undersigned could
do if personally present and acting, hereby ratifying and approving all acts of
any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capabilities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ DANIEL R. LEE Sole Director, President and June 12, 2002
- ----------------------------- Chief Executive Officer
Daniel R. Lee (Principal Executive
Officer)
/s/ BRUCE C. HINCKLEY Treasurer (Principal June 12, 2002
- ----------------------------- Financial and Accounting
Bruce C. Hinckley Officer)
S-7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Glendale, State of
California on the 12th day of June, 2002.
CRYSTAL PARK HOTEL AND CASINO
DEVELOPMENT COMPANY, LLC,
a California limited liability
company
By: its Manager/Member
HP/COMPTON, INC.,
a California corporation
By: /s/ DANIEL R. LEE
-----------------------------
Daniel R. Lee
Sole Director, President and
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Daniel R. Lee, Bruce C. Hinckley and Loren S. Ostrow and each of them,
severally, as his attorney-in-fact and Agent, with full power of substitution
and resubstitution, in his name and on his behalf, to sign in any and all
capacities this registration statement and any and all amendments (including
post-effective amendments) and exhibits to this registration statement, any
subsequent registration statement for the same offering which may be filed
under Rule 462(b) under the Securities Act of 1933, as amended, and any and all
amendments (including post-effective amendments) and exhibits thereto, and any
and all applications and other documents relating thereto, with the Securities
and Exchange Commission, with full power and authority to perform and do any
and all acts and things whatsoever which any such attorney or substitute may
deem necessary or advisable to be performed or done in connection with any or
all of the above-described matters, as fully as each of the undersigned could
do if personally present and acting, hereby ratifying and approving all acts of
any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capabilities and on the dates indicated.
Signature Title Date
--------- ----- ----
HP/COMPTON, INC. Manager of CRYSTAL PARK HOTEL June 12, 2002
& CASINO DEVELOPMENT
COMPANY, LLC
/s/ DANIEL R. LEE Sole Director, President and June 12, 2002
- ----------------------------- Chief Executive Officer of
Daniel R. Lee HP/ COMPTON, INC.
S-8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Glendale, State of
California on the 12th day of June, 2002.
HP/COMPTON, INC.,
a California corporation
By: /s/ DANIEL R. LEE
-----------------------------
Daniel R. Lee
Sole Director, President and
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Daniel R. Lee, Bruce C. Hinckley and Loren S. Ostrow and each of them,
severally, as his attorney-in-fact and Agent, with full power of substitution
and resubstitution, in his name and on his behalf, to sign in any and all
capacities this registration statement and any and all amendments (including
post-effective amendments) and exhibits to this registration statement, any
subsequent registration statement for the same offering which may be filed
under Rule 462(b) under the Securities Act of 1933, as amended, and any and all
amendments (including post-effective amendments) and exhibits thereto, and any
and all applications and other documents relating thereto, with the Securities
and Exchange Commission, with full power and authority to perform and do any
and all acts and things whatsoever which any such attorney or substitute may
deem necessary or advisable to be performed or done in connection with any or
all of the above-described matters, as fully as each of the undersigned could
do if personally present and acting, hereby ratifying and approving all acts of
any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capabilities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ DANIEL R. LEE Sole Director, President and June 12, 2002
- ----------------------------- Chief Executive Officer
Daniel R. Lee (Principal Executive
Officer)
/s/ BRUCE C. HINCKLEY Chief Financial Officer June 12, 2002
- ----------------------------- (Principal Financial and
Bruce C. Hinckley Accounting Officer)
S-9
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Glendale, State of
California on the 12th day of June, 2002.
LOUISIANA-I GAMING, A LOUISIANA
PARTNERSHIP IN COMMENDAM
By: its General Partner
LOUISIANA GAMING
ENTERPRISES, INC.,
a Louisiana corporation
By: /s/ DANIEL R. LEE
-----------------------------
Daniel R. Lee
Sole Director, President and
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Daniel R. Lee, Bruce C. Hinckley and Loren S. Ostrow and each of them,
severally, as his attorney-in-fact and Agent, with full power of substitution
and resubstitution, in his name and on his behalf, to sign in any and all
capacities this registration statement and any and all amendments (including
post-effective amendments) and exhibits to this registration statement, any
subsequent registration statement for the same offering which may be filed
under Rule 462(b) under the Securities Act of 1933, as amended, and any and all
amendments (including post-effective amendments) and exhibits thereto, and any
and all applications and other documents relating thereto, with the Securities
and Exchange Commission, with full power and authority to perform and do any
and all acts and things whatsoever which any such attorney or substitute may
deem necessary or advisable to be performed or done in connection with any or
all of the above-described matters, as fully as each of the undersigned could
do if personally present and acting, hereby ratifying and approving all acts of
any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capabilities and on the dates indicated.
Signature Title Date
--------- ----- ----
LOUISIANA GAMING ENTERPRISES, General Partner of June 12, 2002
INC. LOUISIANA-I GAMING, a
Louisiana Partnership in
Commendam
/s/ DANIEL R. LEE Sole Director, President and June 12, 2002
- ----------------------------- Chief Executive Officer of
Daniel R. Lee LOUISIANA GAMING
ENTERPRISES, INC.
S-10
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Glendale, State of
California on the 12th day of June, 2002.
LOUISIANA GAMING ENTERPRISES,
INC.,
a Louisiana corporation
By: /s/ DANIEL R. LEE
-----------------------------
Daniel R. Lee
Sole Director, President and
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Daniel R. Lee, Bruce C. Hinckley and Loren S. Ostrow and each of them,
severally, as his attorney-in-fact and Agent, with full power of substitution
and resubstitution, in his name and on his behalf, to sign in any and all
capacities this registration statement and any and all amendments (including
post-effective amendments) and exhibits to this registration statement, any
subsequent registration statement for the same offering which may be filed
under Rule 462(b) under the Securities Act of 1933, as amended, and any and all
amendments (including post-effective amendments) and exhibits thereto, and any
and all applications and other documents relating thereto, with the Securities
and Exchange Commission, with full power and authority to perform and do any
and all acts and things whatsoever which any such attorney or substitute may
deem necessary or advisable to be performed or done in connection with any or
all of the above-described matters, as fully as each of the undersigned could
do if personally present and acting, hereby ratifying and approving all acts of
any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capabilities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ DANIEL R. LEE Sole Director, President and
- ----------------------------- Chief Executive Officer
Daniel R. Lee (Principal Executive
Officer) June 12, 2002
/s/ BRUCE C. HINCKLEY Treasurer (Principal
- ----------------------------- Financial and Accounting
Bruce C. Hinckley Officer) June 12, 2002
S-11
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Glendale, State of
California on the 12th day of June, 2002.
PNK (BOSSIER CITY), INC.,
a Louisiana corporation
By: /s/ DANIEL R. LEE
-----------------------------
Daniel R. Lee
Sole Director, President and
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Daniel R. Lee, Bruce C. Hinckley and Loren S. Ostrow and each of them,
severally, as his attorney-in-fact and Agent, with full power of substitution
and resubstitution, in his name and on his behalf, to sign in any and all
capacities this registration statement and any and all amendments (including
post-effective amendments) and exhibits to this registration statement, any
subsequent registration statement for the same offering which may be filed
under Rule 462(b) under the Securities Act of 1933, as amended, and any and all
amendments (including post-effective amendments) and exhibits thereto, and any
and all applications and other documents relating thereto, with the Securities
and Exchange Commission, with full power and authority to perform and do any
and all acts and things whatsoever which any such attorney or substitute may
deem necessary or advisable to be performed or done in connection with any or
all of the above-described matters, as fully as each of the undersigned could
do if personally present and acting, hereby ratifying and approving all acts of
any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capabilities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ DANIEL R. LEE Sole Director, President and
- ----------------------------- Chief Executive Officer
Daniel R. Lee (Principal Executive
Officer) June 12, 2002
/s/ BRUCE C. HINCKLEY Treasurer (Principal
- ----------------------------- Financial and Accounting
Bruce C. Hinckley Officer) June 12, 2002
S-12
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Glendale, State of
California on the 12th day of June, 2002.
PNK (LAKE CHARLES), LLC
an Louisiana limited liability
company
By: PINNACLE ENTERTAINMENT, INC.
a Delaware Corporation
By: /s/ DANIEL R. LEE
-----------------------------
Daniel R. Lee
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Daniel R. Lee, Bruce C. Hinckley and Loren S. Ostrow and each of them,
severally, as his attorney-in-fact and Agent, with full power of substitution
and resubstitution, in his name and on his behalf, to sign in any and all
capacities this registration statement and any and all amendments (including
post-effective amendments) and exhibits to this registration statement, any
subsequent registration statement for the same offering which may be filed
under Rule 462(b) under the Securities Act of 1933, as amended, and any and all
amendments (including post-effective amendments) and exhibits thereto, and any
and all applications and other documents relating thereto, with the Securities
and Exchange Commission, with full power and authority to perform and do any
and all acts and things whatsoever which any such attorney or substitute may
deem necessary or advisable to be performed or done in connection with any or
all of the above-described matters, as fully as each of the undersigned could
do if personally present and acting, hereby ratifying and approving all acts of
any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capabilities and on the dates indicated.
Signature Title Date
--------- ----- ----
PINNACLE ENTERTAINMENT, INC. Managing Member of PNK (Lake
Charles), LLC, a Louisiana
limited liability company June 12, 2002
/s/ DANIEL R. LEE Chairman of the Board and
- ----------------------------- Chief Executive Officer of
Daniel R. Lee PINNACLE ENTERTAINMENT, INC. June 12, 2002
S-13
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Glendale, State of
California on the 12th day of June, 2002.
PNK DEVELOPMENT 1, INC.,
a Delaware corporation
By: /s/ DANIEL R. LEE
-----------------------------
Daniel R. Lee
Sole Director and
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Daniel R. Lee, Bruce C. Hinckley and Loren S. Ostrow and each of them,
severally, as his attorney-in-fact and Agent, with full power of substitution
and resubstitution, in his name and on his behalf, to sign in any and all
capacities this registration statement and any and all amendments (including
post-effective amendments) and exhibits to this registration statement, any
subsequent registration statement for the same offering which may be filed
under Rule 462(b) under the Securities Act of 1933, as amended, and any and all
amendments (including post-effective amendments) and exhibits thereto, and any
and all applications and other documents relating thereto, with the Securities
and Exchange Commission, with full power and authority to perform and do any
and all acts and things whatsoever which any such attorney or substitute may
deem necessary or advisable to be performed or done in connection with any or
all of the above-described matters, as fully as each of the undersigned could
do if personally present and acting, hereby ratifying and approving all acts of
any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capabilities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ DANIEL R. LEE Sole Director and Chief June 12, 2002
- ----------------------------- Executive Officer (Principal
Daniel R. Lee Executive Officer)
/s/ BRUCE C. HINCKLEY Treasurer (Principal June 12, 2002
- ----------------------------- Financial and Accounting
Bruce C. Hinckley Officer)
S-14
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Glendale, State of
California on the 12th day of June, 2002.
PNK DEVELOPMENT 2, INC.,
a Delaware corporation
By: /s/ DANIEL R. LEE
-----------------------------
Daniel R. Lee
Sole Director and
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Daniel R. Lee, Bruce C. Hinckley and Loren S. Ostrow and each of them,
severally, as his attorney-in-fact and Agent, with full power of substitution
and resubstitution, in his name and on his behalf, to sign in any and all
capacities this registration statement and any and all amendments (including
post-effective amendments) and exhibits to this registration statement, any
subsequent registration statement for the same offering which may be filed
under Rule 462(b) under the Securities Act of 1933, as amended, and any and all
amendments (including post-effective amendments) and exhibits thereto, and any
and all applications and other documents relating thereto, with the Securities
and Exchange Commission, with full power and authority to perform and do any
and all acts and things whatsoever which any such attorney or substitute may
deem necessary or advisable to be performed or done in connection with any or
all of the above-described matters, as fully as each of the undersigned could
do if personally present and acting, hereby ratifying and approving all acts of
any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capabilities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ DANIEL R. LEE Sole Director and Chief June 12, 2002
- ----------------------------- Executive Officer (Principal
Daniel R. Lee Executive Officer)
/s/ BRUCE C. HINCKLEY Treasurer (Principal June 12, 2002
- ----------------------------- Financial and Accounting
Bruce C. Hinckley Officer)
S-15
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Glendale, State of
California on the 12th day of June, 2002.
PNK DEVELOPMENT 3, INC.,
a Delaware corporation
By: /s/ DANIEL R. LEE
-----------------------------
Daniel R. Lee
Sole Director and
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Daniel R. Lee, Bruce C. Hinckley and Loren S. Ostrow and each of them,
severally, as his attorney-in-fact and Agent, with full power of substitution
and resubstitution, in his name and on his behalf, to sign in any and all
capacities this registration statement and any and all amendments (including
post-effective amendments) and exhibits to this registration statement, any
subsequent registration statement for the same offering which may be filed
under Rule 462(b) under the Securities Act of 1933, as amended, and any and all
amendments (including post-effective amendments) and exhibits thereto, and any
and all applications and other documents relating thereto, with the Securities
and Exchange Commission, with full power and authority to perform and do any
and all acts and things whatsoever which any such attorney or substitute may
deem necessary or advisable to be performed or done in connection with any or
all of the above-described matters, as fully as each of the undersigned could
do if personally present and acting, hereby ratifying and approving all acts of
any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capabilities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ DANIEL R. LEE Sole Director and Chief June 12, 2002
- ----------------------------- Executive Officer (Principal
Daniel R. Lee Executive Officer)
/s/ BRUCE C. HINCKLEY Treasurer (Principal June 12, 2002
- ----------------------------- Financial and Accounting
Bruce C. Hinckley Officer)
S-16
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
- ------ ----------------------
1.1* Form of Underwriting Agreement.
4.1 Certificate of Incorporation of Hollywood Park, Inc. is hereby incorporated by reference to Exhibit
3.1 to the Company's Amendment No. 1 to Form S-4 Registration Statement dated March 26,
1999.
4.2 Restated Bylaws of Hollywood Park, Inc. are hereby incorporated by reference to Exhibit 3.2 to the
Company's Amendment No. 1 to Form S-4 Registration Statement dated March 26, 1999.
4.3 Certificate of Ownership and Merger, dated February 23, 2000, merging Pinnacle Entertainment, Inc.
into Hollywood Park, Inc., is hereby incorporated by reference to Exhibit 3.3 to the Company's
Annual Report on Form 10-K filed March 29, 2000.
4.4 Articles of Incorporation of HP/Compton, Inc., are hereby incorporated by reference to Exhibit 3.9 to
the Company's Amendment No. 1 to Form S-4 Registration dated October 30, 1997.
4.5 Restated Bylaws of HP/Compton, Inc. are hereby incorporated by reference to Exhibit 3.10 to the
Company's Amendment No. 1 to Form S-4 Registration Statement dated October 30, 1997.
4.6 Articles of Organization of Crystal Park Hotel and Casino Development Company, LLC, are hereby
incorporated by reference to Exhibit 3.11 to the Company's Amendment No. 1 to Form S-4
Registration Statement dated October 30, 1997.
4.7 Operating Agreement of Crystal Park Hotel and Casino Development Company, LLC, are hereby
incorporated by reference to Exhibit 3.12 to the Company's Amendment No. 1 to Form S-4
Registration Statement dated October 30, 1997.
4.8 Amended and Restated Certificate of Incorporation of Boomtown, Inc. is hereby incorporated by
reference to Exhibit 3.17 to the Company's Amendment No. 1 to Form S-4 Registration Statement
dated October 30, 1997.
4.9 Restated Bylaws of Boomtown, Inc. are hereby incorporated by reference to Exhibit 3.18 to the
Company's Amendment No. 1 to Form S-4 Registration Statement dated October 30, 1997.
4.10 Certificate of Amended and Restated Articles of Incorporation of Boomtown Hotel & Casino, Inc.,
are hereby incorporated by reference to Exhibit 3.19 to the Company's Amendment No. 1 to
Form S-4 Registration Statement dated October 30, 1997.
4.11 Revised and Restated Restated Bylaws of Boomtown Hotel & Casino, Inc. are hereby incorporated
by reference to Exhibit 3.20 to the Company's Amendment No. 1 to Form S-4 Registration
Statement dated October 30, 1997.
4.12 Articles of Incorporation of Louisiana Gaming Enterprises, Inc. are hereby incorporated by reference
to Exhibit 3.25 to the Company's Amendment No. 1 to Form S-4 Registration Statement dated
October 30,1997.
4.13 Second Amended and Restated Partnership Agreement of Louisiana-I Gaming, a Louisiana
Partnership in Commendam, is hereby incorporated by reference to Exhibit 3.26 to the Company's
Amendment No. 1 to Form S-4 Registration Statement dated March 26, 1999.
4.14 Articles of Incorporation of Casino Magic Corp. are hereby incorporated by reference to Exhibit 3.29
to the Company's Amendment No. 1 to Form S-4 Registration Statement dated March 26, 1999.
4.15 Amended Restated Bylaws of Casino Magic Corp. are hereby incorporated by reference to Exhibit
3.30 to the Company's Amendment No. 1 to Form S-4 Registration Statement dated March 26,
1999.
E-1
Exhibit
Number Description of Exhibit
- ------ ----------------------
4.16 Articles of Incorporation of Biloxi Casino Corp. are hereby incorporated by reference to Exhibit
3.33 to the Company's Amendment No. 1 to Form S-4 Registration Statement dated March 26,
1999.
4.17 Restated Bylaws of Biloxi Casino Corp. are hereby incorporated by reference to Exhibit 3.34 to the
Company's Amendment No. 1 to Form S-4 Registration Statement dated March 26, 1999.
4.18 Articles of Incorporation of Casino One Corporation are hereby incorporated by reference to
Exhibit 3.37 to the Company's Amendment No. 1 to Form S-4 Registration Statement dated
March 26, 1999.
4.19 Restated Bylaws of Casino One Corporation are hereby incorporated by reference to Exhibit 3.38
to the Company's Amendment No. 1 to Form S-4 Registration Statement dated March 26, 1999.
4.20 Articles of Organization of Indiana Ventures, LLC (subsequently renamed Belterra Resort Indiana,
LLC) are hereby incorporated by reference to Exhibit 3.45 to the Company's Amendment No. 1
to Form S-4 Registration Statement dated March 26, 1999.
4.21 Operating Agreement of Indiana Ventures, LLC (subsequently renamed Belterra Resort Indiana,
LLC) is hereby incorporated by reference to Exhibit 3.46 to the Company's Amendment No. 1
to Form S-4 Registration Statement dated March 26, 1999.
4.22 Articles of Incorporation of PNK (Bossier City), Inc. (formerly Casino Magic of Louisiana) are
hereby incorporated by reference to Exhibit 3.44 to the Company's Annual Report on
Form 10-K for the year ended December 31, 2000.
4.23 Restated Bylaws of PNK (Bossier City), Inc. (formerly Casino Magic of Louisiana) are hereby
incorporated by reference to Exhibit 3.45 to the Company's Annual Report on Form 10-K for
the year ended December 31, 2000.
4.24** Articles of Organization of PNK (Lake Charles), LLC.
4.25** Operating Agreement of PNK (Lake Charles), LLC.
4.26*** Certificate of Incorporation of PNK Development 1, Inc.
4.27*** Bylaws of PNK Development 1, Inc.
4.28*** Certificate of Incorporation of PNK Development 2, Inc.
4.29*** Bylaws of PNK Development 2, Inc.
4.30*** Certificate of Incorporation of PNK Development 3, Inc.
4.31*** Bylaws of PNK Development 3, Inc.
4.32*** Form of Indenture.
4.33* Form of Common Stock Warrant Agreement.
4.34* Form of Warrant Certificate for Common Stock.
4.35* Form of Deposit Agreement.
4.36* Resolutions Establishing Terms of Preferred Stock.
5.1** Opinion of Irell & Manella LLP.
8.1* Opinion of Company Counsel Regarding Tax Matters.
12.1*** Computation of Ratios.
E-2
Exhibit
Number Description of Exhibit
- ------ ----------------------
23.1** Consent of Irell & Manella LLP (included as Exhibit 5.1).
24.1 Powers of Attorney (included in Signature pages of this Registration Statement).
25.1* Form T-1 Statement of Eligibility of the Indenture Trustee.
- --------
* To be filed by post-effective amendment to the Registration Statement or
incorporated by reference in the event of an offering of the specified
securities.
** To be filed by amendment.
*** Filed herewith.
E-3