-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, O+2F9KTCE1M0W/zCBS7UNSV384vTfJtipzbZR3HMX//bgVmP40FAlB2o2rjJAVvK 1ZN9VMx3wDxERuB8QDksAw== 0000898430-95-001165.txt : 199506280000898430-95-001165.hdr.sgml : 19950628 ACCESSION NUMBER: 0000898430-95-001165 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19950627 SROS: NYSE SROS: PSE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CIRCUS CIRCUS ENTERPRISES INC CENTRAL INDEX KEY: 0000725549 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS AMUSEMENT & RECREATION [7990] IRS NUMBER: 880121916 STATE OF INCORPORATION: NV FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-35737 FILM NUMBER: 95549332 BUSINESS ADDRESS: STREET 1: 2880 LAS VEGAS BLVD S CITY: LAS VEGAS STATE: NV ZIP: 89109 BUSINESS PHONE: 7027340410 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: ENSIGN MICHAEL S CENTRAL INDEX KEY: 0000946468 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 530309941 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 2880 LAS VEGAS BLVD SOUTH CITY: LAS VEGAS STATE: NV ZIP: 89109 BUSINESS PHONE: 2138917506 MAIL ADDRESS: STREET 1: 2880 LAS VEGAS BLVD SOUTH CITY: LAS VEGAS STATE: NV ZIP: 89109 SC 13D/A 1 SCHEDULE 13D-AMENDMENT #1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 1)* CIRCUS CIRCUS ENTERPRISES, INC. (Name of Issuer) COMMON STOCK, $.01 2/3 PAR VALUE (Title of Class of Securities) 172909 10 3 (CUSIP Number) Michael S. Ensign with a copy to: Vice Chairman and Mary Ellen Kanoff, Esq. Chief Operating Officer Latham & Watkins Circus Circus Enterprises, Inc. 633 West Fifth Street 2880 Las Vegas Blvd., South Suite 4000 Las Vegas, Nevada 89109 Los Angeles, California 90071 (702) 794-3806 (213) 485-1234 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) June 1, 1995 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [_]. Check the following box if a fee is being paid with the statement. [_] (A fee is not required only if the reporting person: (1) has a previous statement on file reporting beneficial ownership of more than five percent of the class of securities described in Item 1; and (2) has filed no amendment subsequent thereto reporting beneficial ownership of five percent or less of such class.) (See Rule 13d-7.) Note: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SCHEDULE 13D - --------------------- ------------------- CUSIP No. 172909 10 3 Page 2 of ___ Pages - --------------------- ------------------- - -------------------------------------------------------------------------------- 1 NAME OF PERSON MICHAEL S. ENSIGN - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF (a) [_] MEMBER OF A GROUP* (b) [_] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* PF - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS [_] REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION UNITED STATES - -------------------------------------------------------------------------------- 7 SOLE DISPOSITIVE POWER NUMBER OF 6,501,933 SHARES --------------------------------------------------------- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY N/A EACH --------------------------------------------------------- REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH 6,501,933 --------------------------------------------------------- 10 SHARED DISPOSITIVE POWER N/A - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 6,501,933 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [_] EXCLUDES CERTAIN SHARES* N/A - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.4% - -------------------------------------------------------------------------------- 14 TYPE OF PERSON REPORTING* IN - -------------------------------------------------------------------------------- * SEE INSTRUCTIONS BEFORE FILLING OUT ITEM 1. SECURITY AND ISSUER. This Amendment No. 1 amends and restates in its entirety the Schedule 13D previously filed by Michael S. Ensign on June 12, 1995 and relates to the shares of Common Stock, $.01 2/3 par value per share (the "Shares"), of Circus Circus Enterprises, Inc., a Nevada corporation (the "Issuer"). The principal executive offices of the Issuer are located at 2880 Las Vegas Blvd., South, Las Vegas, Nevada 89109. ITEM 2. IDENTITY AND BACKGROUND. (a) This statement is being filed by Michael S. Ensign (the "Reporting Person"). (b) The Reporting Person's business address is 2880 Las Vegas Blvd., South, Las Vegas, Nevada 89109. (c) The present principal occupation of the Reporting Person is Vice Chairman of the Board of Directors and Chief Operating Officer of the Issuer. The Issuer is primarily engaged in the gaming business and its principal executive offices are located at 2880 Las Vegas Blvd., South, Las Vegas, Nevada 89109. (d) During the last five years, the Reporting Person has not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) During the last five years, the Reporting Person has not been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgement, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) The Reporting Person is a citizen of the United States of America. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. Pursuant to the Agreement and Plan of Merger dated as of March 19, 1995 by and among the Issuer and M.S.E. Investments, Incorporated, Last Chance Investments, Incorporated, Goldstrike Investments, Incorporated, Diamond Gold, Inc., Gold Strike Aviation, Incorporated, Goldstrike Finance Company, Inc., Oasis Development Company, Inc., the Reporting Person, William A. Richardson, David R. Belding, Peter A. Simon II and Robert J. Verchota, as amended (the "Merger Agreement"), the Reporting Person agreed to transfer to certain subsidiaries of the Issuer his indirect interests in (i) three operating and licensed Nevada casinos, (ii) two gasoline service stations, holding restricted gaming licenses, (iii) an Illinois-licensed riverboat gaming facility, and (iv) various development properties located in Nevada, Indiana/Kentucky, and Mississippi (collectively, the "Gold Strike Properties"). In return, the Issuer agreed to issue 6,501,933 Shares, and distribute $4,795,193 in cash, to the Reporting Person. After the parties to the Merger Agreement obtained the requisite gaming and other governmental approvals and bank consents, the transactions contemplated by the Merger Agreement were effected (the "Closing") on June 1, 1995 (the "Closing Date"), resulting in, among other things, the transfer by the Reporting Person of the Gold Strike Properties to certain subsidiaries of the Issuer and the issuance and distribution by the Issuer of 6,501,933 Shares and $4,795,193 in cash to the Reporting Person. ITEM 4. PURPOSE OF TRANSACTION. The Reporting Person acquired the 6,501,933 Shares for investment purposes. Subject to compliance with the Standstill Agreement (as defined below) and compliance with applicable law, and depending on general market and economic conditions affecting the Issuer and the Page 3 of ___ Pages Reporting Person's view of the prospects for the Issuer and other relevant factors, the Reporting Person may purchase additional Shares or dispose of some or all of his Shares from time to time in open market transactions, private transactions or otherwise. The Reporting Person intends to participate in the formulation, determination and direction of basic business decisions and policies of the Issuer by virtue of his membership on the Issuer's Board of Directors and his service as an executive officer of the Issuer. For further discussion of (i) the Merger Agreement which contains provisions relating to the Reporting Person's membership on the Issuer's Board of Directors and (ii) the Employment Agreement (as defined below) which contains provisions relating to the Reporting Person's employment as an executive officer of the Issuer, see Item 6, below. Except as set forth herein, the Reporting Person has no present plans or proposals with respect to any material change in the Issuer's business or corporate structure or which relate to or would result in: (a) the acquisition by any person of additional securities of the Issuer, or the disposition of securities of the Issuer; (b) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Issuer or any of its subsidiaries; (c) a sale or transfer of a material amount of assets of the Issuer or any of its subsidiaries; (d) any change in the present board of directors or management of the Issuer, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board; (e) any material change in the present capitalization or dividend policy of the Issuer; (f) changes in the Issuer's charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Issuer by any person; (g) causing a class of securities of the Issuer to be delisted from a national securities exchange or cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (h) a class of equity securities of the Issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934; or (i) any action similar to any of those enumerated above. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. (a) The 6,501,933 Shares beneficially owned by the Reporting Person constitute approximately 6.4% of the total number of Shares outstanding as of the open of business on the Page 4 of ___ Pages Closing Date, after giving effect to the issuance of 16,291,551 Shares on such date in connection with the Closing. (b) The Reporting Person has the sole power to vote or to direct the vote, and to dispose or to direct the disposition of, the 6,501,933 Shares beneficially owned by him. (c) Except as set forth herein, the Reporting Person has not engaged in any transaction during the past 60 days in any securities of the Issuer. (d) Not applicable. (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. As described in Item 3, the Merger Agreement sets forth the Reporting Person's agreement to sell his interests in the Gold Strike Properties in return for the issuance of 6,501,933 Shares, and the distribution of $4,795,193 in cash, to the Reporting Person. In connection with the transactions contemplated by the Merger Agreement, the Issuer's Bylaws were amended to increase the number of Class III Directors from two to three. Pursuant to the Merger Agreement, on the Closing Date, the Reporting Person was elected by the Issuer's Board of Directors to fill the Class III vacancy resulting from the foregoing amendment to the Bylaws for the balance of the current term of such class. The Merger Agreement also requires the Issuer, at the end of the current term of the Reporting Person, to use its best efforts to cause the Reporting Person (or another individual designated by the Reporting Person) to be nominated for election to a full term when that class next stands for election in 1997. In connection with the Closing, the Reporting Person also entered into the following agreements with the Issuer which relate to the management and securities of the Issuer: Employment Agreement, Standstill Agreement, Registration Rights Agreement and Agreement Pursuant to Joint Venture Agreement. Each of which is discussed below. The Employment Agreement dated as of the Closing Date by and between the Reporting Person and the Issuer requires, among other things, the Issuer to employ the Reporting Person as Vice Chairman of the Board of Directors and Chief Operating Officer for a term of three years subject to automatic renewal unless the Reporting Person or the Issuer provides written notice to the contrary. The Standstill Agreement dated as of the Closing Date by and among the Issuer and the Reporting Person, William A. Richardson, David R. Belding, Peter A. Simon II and Glenn W. Schaeffer (the "Standstill Agreement"), contains a number of customary "standstill" restrictions, including limitations on the number of Shares which the Reporting Person can beneficially own. Pursuant to such restrictions, the Reporting Person has agreed, among other things and except in certain circumstances, for a five year period beginning on the Closing Date (i) not to acquire more than 9.9% of the outstanding equity securities of the Issuer, (ii) not to engage in the solicitation of proxies and (iii) not to make any acquisition proposal. The Registration Rights Agreement dated as of the Closing Date by and among the Issuer and the Reporting Person, William A. Richardson, David R. Belding, Peter A. Simon II, Glenn W. Schaeffer, Gregg H. Solomon, Antonio C. Alamo, Anthony Korfman, William Ensign and Robert J. Verchota provides the Reporting Person with certain demand and piggyback registration rights with respect to the Shares acquired by him pursuant to the Merger Agreement. The Agreement Pursuant to Joint Venture Agreement dated as of the Closing Date by and among the Issuer and the Reporting Person, Glenn W. Schaeffer and William A. Richardson, requires, during a certain period of time, the foregoing individuals to jointly and severally pay to the Issuer liquidated damages upon the occurrence of certain events relating to (i) the management of a joint venture which is currently managed by an affiliate of the Issuer and (ii) such individuals' employment with the Issuer or such individuals' beneficial ownership of the capital stock of the Issuer. The description of the terms of the Merger Agreement, Employment Agreement, Standstill Agreement, Registration Rights Agreement and Agreement Pursuant to Joint Venture Agreement set forth herein does not purport to be a Page 5 of ___ Pages complete statement of the parties' rights and obligations, and is qualified in its entirety by reference to such agreements, which are set forth as Exhibits 99.1 to 99.6 hereto. Reference is made to such agreements for a complete description of the terms and provisions thereof and the agreement of the parties thereunder. Except as set forth above, there are no other contracts, arrangements, understandings or relationships (legal or otherwise) among persons named in Item 2 and between such persons and any person with respect to any securities of the Issuer, including but not limited to transfer or voting of any of the securities of the Issuer, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees or profits, division of profits of loss, or the giving or withholding of proxies, or a pledge or otherwise subject to a contingency the occurrence of which would give another person voting power or investment power over the securities of the Issuer. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. 99.1 Agreement and Plan of Merger dated as of March 19, 1995 by and among the Issuer and M.S.E. Investments, Incorporated, Last Chance Investments, Incorporated, Goldstrike Investments, Incorporated, Diamond Gold, Inc., Gold Strike Aviation, Incorporated, Goldstrike Finance Company, Inc., Oasis Development Company, Inc., the Reporting Person, William A. Richardson, David R. Belding, Peter A. Simon II and Robert J. Verchota. 99.2 First Amendment to the Agreement and Plan of Merger dated May 30, 1995 by and among the Issuer and M.S.E. Investments, Incorporated, Last Chance Investments, Incorporated, Goldstrike Investments, Incorporated, Diamond Gold, Inc., Gold Strike Aviation, Incorporated, Goldstrike Finance Company, Inc., Oasis Development Company, Inc., the Reporting Person, William A. Richardson, David R. Belding, Peter A. Simon II and Robert J. Verchota. 99.3 Employment Agreement dated as of the Closing Date by and between the Reporting Person and the Issuer. 99.4 Standstill Agreement dated as of the Closing Date by and among the Issuer and the Reporting Person, William A. Richardson, David R. Belding, Peter A. Simon II and Glenn W. Schaeffer. 99.5 Registration Rights Agreement dated as of the Closing Date by and among the Issuer and the Reporting Person, William A. Richardson, David R. Belding, Peter A. Simon II, Glenn W. Schaeffer, Gregg H. Solomon, Antonio C. Alamo, Anthony Korfman, William Ensign and Robert J. Verchota. 99.6 Agreement Pursuant to Joint Venture Agreement dated as of the Closing Date by and among the Issuer and the Reporting Person, Glenn W. Schaeffer and William A. Richardson. Page 6 of ___Pages SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: June 26, 1995 /s/ Michael S. Ensign ---------------------------------------- Michael S. Ensign Page 7 of ___ Pages EXHIBIT LIST 99.1 Agreement and Plan of Merger dated as of March 19, 1995 by and among the Issuer and M.S.E. Investments, Incorporated, Last Chance Investments, Incorporated, Goldstrike Investments, Incorporated, Diamond Gold, Inc., Gold Strike Aviation, Incorporated, Goldstrike Finance Company, Inc., Oasis Development Company, Inc., the Reporting Person, William A. Richardson, David R. Belding, Peter A. Simon II and Robert J. Verchota (incorporated by reference to Exhibit 10(ee) to the Issuer's Annual Report on Form 10-K for the year ended January 31, 1995). 99.2 First Amendment to the Agreement and Plan of Merger dated May 30, 1995 by and among the Issuer and M.S.E. Investments, Incorporated, Last Chance Investments, Incorporated, Goldstrike Investments, Incorporated, Diamond Gold, Inc., Gold Strike Aviation, Incorporated, Goldstrike Finance Company, Inc., Oasis Development Company, Inc., the Reporting Person, William A. Richardson, David R. Belding, Peter A. Simon II and Robert J. Verchota. 99.3 Employment Agreement dated as of the Closing Date by and between the Reporting Person and the Issuer. 99.4 Standstill Agreement dated as of the Closing Date by and among the Issuer and the Reporting Person, William A. Richardson, David R. Belding, Peter A. Simon II and Glenn W. Schaeffer. 99.5 Registration Rights Agreement dated as of the Closing Date by and among the Issuer and the Reporting Person, William A. Richardson, David R. Belding, Peter A. Simon II, Glenn W. Schaeffer, Gregg H. Solomon, Antonio C. Alamo, Anthony Korfman, William Ensign and Robert J. Verchota. 99.6 Agreement Pursuant to Joint Venture Agreement dated as of the Closing Date by and among the Issuer and the Reporting Person, Glenn W. Schaeffer and William A. Richardson (incorporated by reference to Exhibit I to Exhibit 10(ee) to the Issuer's Annual Report on Form 10-K for the year ended January 31, 1995). Page 8 of ___ Pages EX-99.2 2 AGREEMENT/PLAN OF MERGER EXHIBIT 99.2 FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER ----------------------------------------------- THIS FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER, dated May 30, 1995, is made and entered into by and among CIRCUS CIRCUS ENTERPRISES, INC., a Nevada corporation, M.S.E. INVESTMENTS, INCORPORATED, a Nevada corporation, LAST CHANCE INVESTMENTS, INCORPORATED, a Nevada corporation, GOLDSTRIKE INVESTMENTS, INCORPORATED, a Nevada corporation, DIAMOND GOLD, INC., a Nevada corporation, GOLD STRIKE AVIATION, INCORPORATED, a Nevada corporation, GOLDSTRIKE FINANCE COMPANY, INC., a Nevada corporation, OASIS DEVELOPMENT COMPANY, INC., a Nevada corporation, MICHAEL S. ENSIGN, an individual, WILLIAM A. RICHARDSON, an individual, DAVID R. BELDING, an individual, PETER A. SIMON II, an individual and ROBERT J. VERCHOTA, an individual. Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to them in the Agreement and Plan of Merger (as defined below). RECITALS -------- WHEREAS, the parties hereto entered into an Agreement and Plan of Merger, dated as of March 19, 1995 (the "Agreement and Plan of Merger"); and WHEREAS, the parties hereto desire to amend the Agreement and Plan of Merger. NOW THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do agree to amend the Agreement and Plan of Merger as follows: 1. Section 1.1 of the Agreement and Plan of Merger entitled "Definitions" shall be and is hereby amended to substitute the following definition of "Joint Ventures:" "JOINT VENTURES" shall mean (a) Lakeview Gaming (but excluding Lakeview Company and Pioneer Investment Group), (b) Elgin Riverboat Resort (but excluding RBG), (c) Pine Hills Development (but excluding Family Lands) and (d) Victoria Partners (but excluding MRGS). 2. Section 1.1 of the Agreement and Plan of Merger entitled "Definitions" shall be and is hereby amended to substitute the following definition of "Registration Rights Agreement:" "REGISTRATION RIGHTS AGREEMENT" shall mean the Registration Rights Agreement by and among the Company and each of the Target Company Shareholders, the Individuals and Verchota, substantially in the form attached hereto as Exhibit "D". 3. Section 2.1(c) of the Agreement and Plan of Merger entitled "Ancillary Agreements" shall be and is hereby amended to read in its entirety as follows: On the Closing Date, upon the terms and subject to the conditions of this Agreement: the Company and Verchota shall execute and deliver the Verchota Assignment Agreement, the Company and Ensign shall execute and deliver the Ensign Assignment Agreement, the Company and Simon shall execute and deliver the Simon Assignment Agreement, the Company and each of the Target Company Shareholders, the Individuals and Verchota shall execute and deliver the Registration Rights Agreement, each of the Circus Circus Senior Executives and the Gold Strike Senior Executives and the Company shall execute and deliver a Senior Executive Employment Agreement and each of the Target Company Shareholders and Schaeffer and the Company shall execute and deliver the Standstill Agreement. 4. Section 2.2 of the Agreement and Plan of Merger entitled "Consideration for the Mergers and Transfers" shall be and is hereby amended to read in its entirety as follows: In consideration of the Mergers and the Transfers, the Company shall issue (the "STOCK ISSUANCE") fully paid and nonassessable shares of its Common Stock to the Target Company Shareholders and Verchota. The total number of shares of Common Stock to be issued shall be 16,291,551 shares, plus cash of $11,839,535. The cash and shares of Common Stock to be issued in the Stock Issuance shall be allocated among the Target Company Shareholders and Verchota as follows:
Total Consideration Total Shares Total Cash Michael S. Ensign 39.92616% 6,501,933 $4,795,193 Richardson 39.65520% 6,457,807 $4,762,650 Belding 9.89609% 1,611,567 $1,188,535 Simon 9.10194% 1,482,242 $1,093,157 Verchota 1.42061% 238,002 $0
The Target Company Shareholders and Verchota acknowledge that the shares of Common Stock to be issued in the Stock Issuance will not be registered under the Securities Act or under any state securities law and that they will be listed on the New York Stock Exchange. Of the cash to be received by Ensign and Simon, $300,000 shall be allocated to each of the Ensign Assignment Agreement and the Simon Assignment Agreement. 5. Section 3.4 of the Agreement and Plan of Merger entitled "Ownership of Each of the Joint Ventures" shall be and is hereby amended to substitute the following ownership table for "Lakeview Gaming":
ENTITY PARTNERS/ OWNERSHIP MEMBERS INTEREST Lakeview Gaming Lakeview Company 12.5% Railroad Pass 12.5% Jean Development 12.5% Jean West 12.5% Jean North 12.5% Pioneer Investment Group 12.5% Nevada Landing 12.5% GSLV 12.5%
2 6. Section 3.16 of the Agreement and Plan of Merger entitled "Financial Statements" shall be and is hereby amended to add a new subsection (c) as follows: (c) The Target Companies have previously delivered to the Company copies of the Target Companies' (excluding ODC and investments in Fuel and Fuel West), the Acquired Entities' and the Joint Ventures' (except that the investment in the Elgin Riverboat Resort is recorded under the equity method of accounting) audited combined financial statements for their year ended December 31, 1994 (the "Audited Year-End Financials"). The Audited Year-End Financials fairly present in all material respects the financial position and results of operations of the Target Companies (excluding ODC and investments in Fuel and Fuel West), the Acquired Entities and the Joint Ventures on a combined basis in accordance with generally accepted accounting principles applied on a basis consistent with prior periods, except as may be indicated in the notes or schedules thereto, and except (i) the income of Fuel and Fuel West is presented in discontinued operations and (ii) the financial position and results of operations of the Elgin Riverboat Resort are recorded under the equity method of accounting. The Audited Year-End Financials have been audited by, and include the related opinions of, Arthur Andersen LLP, independent public accountants, which place reliance on Coopers & Lybrand with regard to the investment in, and equity income derived from, the Elgin Riverboat Resort. The combined balance sheets included in the Audited Year-End Financials fairly present in all material respects the combined financial condition of the entities set forth therein as at their respective dates, and the statements of income and retained earnings and of cash flows, fairly present in all material respects the combined operations of the entities set forth therein for the periods ended on the respective dates of the related balance sheets. 7. Section 3.31 of the Agreement and Plan of Merger entitled "Investment Representations" shall be and is hereby amended to read in its entirety as follows: (a) Each of the Target Company Shareholders and Verchota understands that the Common Stock to be issued and delivered to him in the Stock Issuance has not been registered pursuant to the registration requirements of the Securities Act by reason of the reliance on an exemption from the registration requirements of the Securities Act pursuant to Section 4(2) thereof. (b) Each of the Target Company Shareholders and Verchota (i) has the capacity to protect his own interests in connection with the transactions contemplated hereby, (ii) is able to bear the economic risk thereof, (iii) is knowledgeable, sophisticated and experienced in business and financial matters and has previously invested in securities similar to the Common Stock, and (iv) is an "accredited investor" (as such term is defined in Rule 501(a) of Regulation D under the Securities Act) or if not an "accredited investor," is either alone or with his "purchaser representative" (as such term is defined in Rule 501(h) of Regulation D under the Securities Act) such knowledge and experience in financial matters that he is capable of evaluating the merits and risks of an investment in the Common Stock. The Company has delivered or made available to each of the Target Company Shareholders and Verchota such documents, materials and information pertaining to the Company as he may have requested and has afforded him an opportunity to ask questions of and receive answers from the Company and its executive officers and representatives. 3 (c) Each of the Target Company Shareholders and Verchota understands that the Common Stock to be issued in the Stock Issuance may not be sold, transferred or otherwise disposed of without registration under the Securities Act or an exemption therefrom, and that in the absence of an effective registration statement covering the same or an available exemption from registration under the Securities Act, such Common Stock must be held indefinitely. In the absence of an effective registration statement under the Securities Act or an exemption therefrom, each of the Target Company Shareholders and Verchota will not sell, transfer or otherwise dispose of any Common Stock received in the Stock Issuance, except in a manner consistent with his representations set forth in this Section. (d) Each of the Target Company Shareholders and Verchota understands and acknowledges that each certificate representing the Common Stock issued to him in the Stock Issuance will bear a legend to the following effect: "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH SECURITIES MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT PURSUANT TO (I) A REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES, WHICH IS EFFECTIVE UNDER SUCH ACT, OR (II) ANY EXEMPTION FROM REGISTRATION UNDER SUCH ACT RELATING TO THE DISPOSITION OF SECURITIES, INCLUDING RULE 144, PROVIDED AN OPINION OF COUNSEL IS FURNISHED, REASONABLY SATISFACTORY IN FORM AND SUBSTANCE TO THE COMPANY, THAT AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT IS AVAILABLE." (e) Each of the Target Company Shareholders and Verchota represents that he has carefully read this Section and discussed its requirements and other applicable limitations upon his ability to sell, transfer or otherwise dispose of the Common Stock received in the Stock Issuance to the extent that he felt necessary with his counsel and will not make any sale, transfer or other disposition of such Common Stock in violation of the Securities Act or the rules and regulations thereunder. 8. Section 3.32 of the Agreement and Plan of Merger entitled "Burton Agreement," which shall be re-titled "Burton Contract," is hereby amended to read in its entirety as follows: Gold Strike Resorts, Inc. has transferred all of its right, title and interest in and to the Burton Contract to GSLV. 9. Section 4.2 of the Agreement and Plan of Merger entitled "Capitalization" shall be and is hereby amended to read in its entirety as follows: The authorized capital stock of the Company consists of 450,000,000 shares of Common Stock and 75,000,000 shares of Preferred Stock. As of the date of this Agreement (i) 85,852,798 shares of Common Stock are validly issued and outstanding, fully paid and nonassessable, (ii) no shares of Preferred Stock are issued and outstanding and (iii) 5,617,204 shares of Common Stock are issuable upon exercise of outstanding Options heretofore granted. Except as contemplated by clauses (i) through (iii) above, Exhibits E and F hereto, or the Exchange Agreement, and except for the Rights, there are no other shares of capital stock, or other equity securities of the Company outstanding, and no other outstanding options, warrants, rights to subscribe to (including any 4 preemptive rights), calls or commitments of any character whatsoever to which the Company or any of its subsidiaries is a party or may be bound, requiring the issuance or sale of shares of any capital stock or other equity securities of the Company or securities or rights convertible into or exchangeable for such shares or other equity securities, and there are no contracts, commitments, understandings or arrangements by which the Company is or may become bound to issue additional shares of its capital stock or other equity securities or options, warrants or rights to purchase or acquire any additional shares of its capital stock or other equity securities or securities convertible into or exchangeable for such shares or other equity securities. 10. Section 5.4 of the Agreement and Plan of Merger entitled "Registration Rights" shall be and is hereby amended to read in its entirety as follows: At or prior to the Closing, the Company and each of the Target Company Shareholders and Verchota shall, and shall cause each of the Individuals to, enter into the Registration Rights Agreement. 11. Section 6.2(b) of the Agreement and Plan of Merger entitled "Additional Conditions to the Company's Obligations" shall be and is hereby amended to read in its entirety as follows: None of the Gold Strike Persons' representations and warranties contained in Article 3 shall be untrue in any respect, either when made or at and as of the Effective Time (except as affected by the transactions contemplated by this Agreement). 12. Section 9.11 of the Agreement and Plan of Merger entitled "Representations and Warranties of Verchota" shall be and is hereby amended to read in its entirety as follows: Verchota represents and warrants to the Company that, as of the date of this Agreement, each of the representations and warranties contained in Section 3.5 (with respect to his proportionate partnership interest in Railroad Pass), Section 3.10 (only with respect to Verchota), Section 3.12 (only with respect to Verchota) and Section 3.31 (only with respect to Verchota) are true and correct in all respects. 13. This Amendment shall be and is hereby incorporated in and forms a part of the Agreement and Plan of Merger, and shall be effective as of March 19, 1995. 14. This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument. 15. All other terms and provisions of the Agreement and Plan of Merger shall remain unchanged except as specifically modified herein. [Signature page to follow] 5 IN WITNESS WHEREOF, each party has executed this Amendment as of the date first above written. CIRCUS CIRCUS ENTERPRISES, INC., a Nevada corporation By /s/ Clyde T. Turner ___________________________________________ Name: Clyde T. Turner Title: President and Chief Executive Officer M.S.E. INVESTMENTS, INCORPORATED, a Nevada corporation By /s/ Michael S. Ensign ___________________________________________ Name: Michael S. Ensign Title: President LAST CHANCE INVESTMENTS, INCORPORATED, a Nevada corporation By /s/ William A. Richardson ___________________________________________ Name: William A. Richardson Title: President GOLDSTRIKE INVESTMENTS, INCORPORATED, a Nevada corporation By /s/ David R. Belding ___________________________________________ Name: David R. Belding Title: President DIAMOND GOLD, INC., a Nevada corporation By /s/ Peter A. Simon II ___________________________________________ Name: Peter A. Simon II Title: President S-1 GOLD STRIKE AVIATION, INCORPORATED, a Nevada corporation By /s/ William A. Richardson ___________________________________________ Name: William A. Richardson Title: President GOLDSTRIKE FINANCE COMPANY, INC., a Nevada corporation By /s/ Michael S. Ensign ___________________________________________ Name: Michael S. Ensign Title: President OASIS DEVELOPMENT COMPANY, INC. a Nevada corporation By /s/ Peter A. Simon II ___________________________________________ Name: Peter A. Simon II Title: President /s/ Michael S. Ensign _____________________________________________ Michael S. Ensign /s/ William A. Richardson _____________________________________________ William A. Richardson /s/ David R. Belding _____________________________________________ David R. Belding /s/ Peter A. Simon II _____________________________________________ Peter A. Simon II /s/ Robert J. Verchota _____________________________________________ Robert J. Verchota S-2 EX-99.3 3 EMPLOYMENT AGREEMENT EXHIBIT 99.3 EMPLOYMENT AGREEMENT THIS AGREEMENT is made and entered into this 1st day of June, 1995, by and between Circus Circus Enterprises, Inc., a Nevada corporation (the "Company") and Michael Ensign ("Executive"). W I T N E S S E T H: WHEREAS, Executive and the Company deem it to be in their respective best interests to enter into an agreement providing for the Company's employment of Executive pursuant to the terms herein stated; NOW, THEREFORE, in consideration of the premises and the mutual promises and agreements contained herein, it is hereby agreed as follows: 1. Effective Date. This Agreement shall be effective as of the 1st -------------- day of June, 1995, which date shall be referred to herein as the "Effective Date". 2. Position and Duties. ------------------- (a) The Company hereby employs Executive as its Vice Chairman of the Board and Chief Operating Officer commencing as of the Effective Date for the "Term of Employment" (as herein defined below). In this capacity, Executive shall devote his best efforts and his full business time and attention to the performance of the services customarily incident to such offices and position and to such other services of a senior executive nature as may be reasonably requested by the Board of Directors (the "Board") of the Company which may include services for one or more subsidiaries or affiliates of the Company. Executive shall in his capacity as an employee and officer of the Company be responsible to and obey the reasonable and lawful directives of the Board and of any officers ("Supervising Officers") to whom he shall report. (b) Executive shall devote his full time and attention to such duties, except for sick leave, reasonable vacations, and excused leaves of absence as more particularly provided herein. Executive shall use his best efforts during the Term of Employment to protect, encourage, and promote the interests of the Company. 3. Compensation. ------------ (a) Base Salary. The Company shall pay to Executive during the ----------- Term of Employment a minimum salary at the rate of six hundred twenty-five thousand dollars ($625,000) percalendar year and agrees that such salary shall be reviewed at least annually. Such salary shall be subject to mandatory annual increases for each year during the Term of Employment equal to 5% of the rate of salary in effect immediately prior to each such increase, with further discretionary increases as determined by the Board of Directors. Such salary shall be payable in accordance with the Company's normal payroll procedures. (Executive's annual salary, as set forth above or as it may be increased from time to time as set forth herein, shall be referred to hereinafter as "Base Salary.") At no time during the Term of Employment shall Executive's Base Salary be decreased from the amount of Base Salary then in effect. (b) Performance Bonus. In addition to the compensation ----------------- otherwise payable to Executive pursuant to this Agreement, Executive shall be eligible to receive an annual bonus ("Bonus") pursuant to a performance bonus plan (the "Bonus Plan") which shall be established by the Company for its senior executive officers and which shall provide for bonus compensation to be payable based upon the financial and other performance of the Company and its senior executives. It is intended that the Bonus Plan shall conform to the requirements applicable to "qualified performance based compensation" under Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"). During the Term of Employment, Executive's targeted annual bonus under the Bonus Plan shall not be less than 100% of Executive's then current Base Salary. 4. Benefits. During the Term of Employment: -------- (a) Executive shall be eligible to participate in any life, health and long-term disability insurance programs, pension and retirement programs, stock option and other incentive compensation programs, and other fringe benefit programs made available to senior executive employees of the Company from time to time, and Executive shall be entitled to receive such other fringe benefits as may be granted to him from time to time by the Company's Board of Directors. (b) Executive shall be allowed vacations and leaves of absence with pay on the same basis as other senior executive employees of the Company. (c) The Company shall reimburse Executive for reasonable business expenses incurred in performing Executive's duties and promoting the business of the Company, including, but not limited to, reasonable entertainment expenses, travel and lodging expenses, following presentation of documentation in accordance with the Company's business expense reimbursement policies. 2 (d) Executive shall be added as an additional named insured under all liability insurance policies now in force or hereafter obtained covering any officer or director of the Company in his or her capacity as an officer or director. Company shall indemnify Executive in his capacity as an officer or director and hold him harmless from any cost, expense or liability arising out of or relating to any acts or decisions made by him on behalf of or in the course of performing services for the Company (to the maximum extent provided by the Company's Bylaws and applicable law). 5. Term; Termination of Employment. As used herein, the phrase "Term ------------------------------- of Employment" shall mean the period commencing on the Effective Date and ending three (3) years from the Effective Date, provided that as of the expiration date of each of (i) the initial three (3) year Term of Employment and (ii) if applicable, any Renewal Period (as defined below), the Term of Employment shall automatically be extended for a one (1) year period (each a "Renewal Period") unless either the Company or Executive provides six (6) months' notice to the contrary. Notwithstanding the foregoing, the Term of Employment shall expire on the first to occur of the following: (a) Termination by the Company Without Cause or By Executive -------------------------------------------------------- With Good Reason. Notwithstanding anything to the contrary in this Agreement, - ---------------- whether express or implied, the Company may, at any time, terminate Executive's employment for any reason other than Cause (as defined below) by giving Executive at least 60 days' prior written notice of the effective date of termination. In the event Executive's employment hereunder is terminated by the Company other than for Cause or by Executive for Good Reason (as defined below), Executive shall be entitled to receive (x) his Base Salary as he would have received such amounts during the period commencing on the effective date of such termination and ending on the later of (i) the expiration of the Term of Employment or (ii) the date that is twelve (12) months following the effective date of such termination (the "Salary Continuation Period"), as if Executive were still employed hereunder during the Salary Continuation Period; (y) if it has not previously been paid to Executive, any Bonus to which Executive had become entitled under the Bonus Plan prior to the effective date of such termination; and (z) annual Bonuses during the Salary Continuation Period in an amount equal to the product of Executive's Base Salary on the effective date of such termination and the minimum targeted bonus percentage specified in Section 3(b), payable in the ordinary course and prorated, as applicable, for any partial fiscal year of the Bonus Plan ending on the final day of the Salary Continuation Period. In addition, all of Executive's stock options with respect to the Company's stock shall become immediately and fully exercisable. During the Salary Continuation Period, Executive and his spouse and dependents shall be entitled to continue to be covered by all group medical, health and accident insurance or other such health care arrangements in which Executive was a participant as of the date of such termination, at the same coverage level and on the same terms and conditions which applied immediately prior to the date of Executive's termination of employment, until Executive obtains alternative comparable coverage under another group plan, which coverage does not contain any pre-existing condition exclusions or limitations; provided, however, that -------- if, as the result of the termination of Executive's employment, Executive and/or his otherwise eligible dependents or 3 beneficiaries shall become ineligible for benefits under any one or more of the Company's benefit plans, the Company shall continue to provide Executive and his eligible dependents or beneficiaries, through other means, with benefits at a level at least equivalent to the level of benefits for which Executive and his dependents and beneficiaries were eligible under such plans immediately prior to the date of Executive's termination of employment. At the termination of the benefits coverage under the preceding sentence, Executive and his spouse and dependents shall be entitled to continuation coverage pursuant to Section 4980B of the Internal Revenue Code of 1986, as amended, Sections 601-608 of the Employee Retirement Income Security Act of 1974, as amended, and under any other applicable law, to the extent required by such laws, as if Executive had terminated employment with the Company on the date such benefits coverage terminates. For purposes of this Agreement, "Good Reason" shall mean, without the express written consent of Executive, the occurrence of any of the following events unless such events are fully corrected within 30 days following written notification by Executive to the Company that he intends to terminate his employment hereunder for one of the reasons set forth below: i) a material breach by the Company of any material provision of this Agreement, including, without limitation, the assignment to Executive of any duties inconsistent with Executive's position in the Company or an adverse alteration in the nature or status of Executive's responsibilities; ii) the Company's requiring Executive to be based anywhere other than the metropolitan area where he currently works and resides; iii) the occurrence of a "Change in Control" as defined below; and iv) the Company's notifying Executive that it does not consent to any automatic one-year extension of the Term of Employment. For purposes of this Agreement a "Change in Control" shall mean an event as a result of which: (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Securities and Exchange Act of 1934 (the "Exchange Act")), is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act, except that a person shall be deemed to have "beneficial ownership" of all securities that such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 50% of the total voting power of the voting stock of the Company; (ii) the Company consolidates with, or merges with or into another corporation or sells, assigns, conveys, transfers, leases or otherwise disposes of all or substantially all of its assets to any person, or any corporation consolidates with, or merges with or into, the Company, in any such event pursuant to a transaction in which the outstanding voting stock of the Company is changed into or exchanged for cash, securities or other property, other than any such 4 transaction where (A) the outstanding voting stock of the Company is changed into or exchanged for (x) voting stock of the surviving or transferee corporation or (y) cash, securities (whether or not including voting stock) or other property, and (B) the holders of the voting stock of the Company immediately prior to such transaction own, directly or indirectly, not less than 50% of the voting power of the voting stock of the surviving corporation immediately after such transaction; or (iii) during any period of two consecutive years, individuals who at the beginning of such period constituted the Board of the Company (together with any new directors whose election by such Board or whose nomination for election by the stockholders of the Company was approved by a vote of 66-2/3% of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of the Company then in office; or (iv) the Company is liquidated or dissolved or adopts a plan of liquidation, provided however that a Change in Control shall not include any going private or leveraged buy-out transaction which is sponsored by Executive or in which Executive acquires an equity interest materially in excess of his equity interest in the Company immediately prior to such transaction (each of the events described in (i), (ii), (iii) or (iv) above, as provided otherwise by the preceding clause being referred to herein as a "Change in Control"). (b) Termination for Cause. The Company shall have the right to --------------------- terminate Executive's employment at any time for Cause by giving Executive written notice of the effective date of termination (which effective date may, except as otherwise provided below, be the date of such notice). If the Company terminates Executive's employment for Cause, Executive shall be paid his unpaid Base Salary through the date of termination and the amount of any unpaid Bonus to which Executive had become entitled under the Bonus Plan prior to the effective date of such termination and the Company shall have no further obligation hereunder from and after the effective date of termination and the Company shall have all other rights and remedies available under this or any other agreement and at law or in equity. For purposes of this Agreement only, Cause shall mean: i) fraud, misappropriation, embezzlement, or other act of material misconduct against the Company or any of its affiliates; ii) substantial and willful failure to perform specific and lawful directives of the Board or any Supervising Officer, as reasonably determined by the Board; iii) willful and knowing violation of any rules or regulations of any governmental or regulatory body, which is materially injurious to the financial condition of the Company; iv) conviction of or plea of guilty or nolo contendere to a felony; 5 v) Executive's loss of any personal gaming or related regulatory approval or license required to perform his duties under this Agreement; or vi) a final determination by a court of competent jurisdiction that Executive breached the Standstill Agreement of even date herewith by and among Circus Circus Enterprises, Inc., a Nevada corporation, Michael S. Ensign, William R. Richardson, David R. Belding, Peter A. Simon II, and Glenn W. Schaeffer; provided, however, that with regard to subparagraph ii) above, Executive may not - -------- be terminated for Cause unless and until the Board has given him reasonable written notice of its intended actions and specifically describing the alleged events, activities or omissions giving rise thereto and with respect to those events, activities or omissions for which a cure is possible, a reasonable opportunity to cure such breach; and provided, further, that for purposes of -------- determining whether any such Cause is present, no act or failure to act by Executive shall be considered "willful" if done or omitted to be done by Executive in good faith and in the reasonable belief that such act or omission was in the best interest of the Company and/or required by applicable law. (c) Termination on Account of Death. In the event of ------------------------------- Executive's death while in the employ of the Company, his employment hereunder shall terminate on the date of his death and Executive shall be paid his unpaid Base Salary through the date of termination and the amount of any unpaid Bonus to which Executive had become entitled under the Bonus Plan prior to the effective date of such termination. In addition, any other benefits payable on behalf of Executive shall be determined under the Company's insurance and other compensation and benefit plans and programs then in effect in accordance with the terms of such programs. (d) Voluntary Termination by Executive. In the event that ---------------------------------- Executive's employment with the Company is voluntarily terminated by Executive other than for Good Reason, Executive shall be paid his unpaid Base Salary through the date of termination and the amount of any unpaid Bonus to which Executive had become entitled under the Bonus Plan prior to the effective date of such termination, and the Company shall have no further obligation hereunder from and after the effective date of termination and the Company shall have all other rights and remedies available under this Agreement or any other agreement and at law or in equity. Executive shall give the Company at least 30 days' advance written notice of his intention to terminate his employment hereunder. (e) Termination on Account of Disability. To the extent not ------------------------------------ prohibited by The Americans With Disabilities Act of 1990 or Chapter 613 of the Nevada Revised Statutes, if, as a result of Executive's incapacity due to physical or mental illness (as determined in good faith by a physician acceptable to the Company and Executive), Executive shall have been absent from the full-time performance of his duties with the Company for 120 6 consecutive days during any twelve (12) month period or if a physician acceptable to the Company advises the Company that it is likely that Executive will be unable to return to the full-time performance of his duties for 120 consecutive days during the succeeding twelve (12) month period, his employment may be terminated for "Disability." During any period that Executive fails to perform his full-time duties with the Company as a result of incapacity due to physical or mental illness, he shall continue to receive his Base Salary, Bonus and other benefits provided hereunder, together with all compensation payable to him under the Company's disability plan or program or other similar plan during such period, until Executive's employment hereunder is terminated pursuant to this Section 5(e). Thereafter, Executive's benefits shall be determined under the Company's retirement, insurance, and other compensation and benefit plans and programs then in effect, in accordance with the terms of such programs. 6. Confidential Information, Non-Solicitation and Non-Competition. -------------------------------------------------------------- (a) During the Term of Employment and for three (3) years thereafter, Executive shall not, except as may be required to perform his duties hereunder or as required by applicable law, disclose to others or use, whether directly or indirectly, any Confidential Information regarding the Company. "Confidential Information" shall mean information about the Company, its subsidiaries and affiliates, and their respective clients and customers that is not available to the general public and that was learned by Executive in the course of his employment by the Company, including (without limitation) any proprietary knowledge, trade secrets, data, formulae, information, and client and customer lists and all papers, resumes, records (including computer records) and the documents containing such Confidential Information. Executive acknowledges that such Confidential Information is specialized, unique in nature and of great value to the Company, and that such information gives the Company a competitive advantage. Upon the termination of his employment for any reason whatsoever, Executive shall promptly deliver to the Company all documents, computer tapes and disks (and all copies thereof) containing any Confidential Information. (b) During the period that Executive is receiving payments under this Agreement (which Executive may elect to terminate at any time), Executive shall not, directly or indirectly in any manner or capacity (e.g., as an advisor, principal, agent, partner, officer, director, shareholder, employee, member of any association or otherwise) engage in, work for, consult, provide advice or assistance or otherwise participate in any activity which is competitive with the business of the Company in any geographic area in which the Company is now or shall then be doing business. Executive further agrees that during such period he will not assist or encourage any other person in carrying out any activity that would be prohibited by the foregoing provisions of this Section 6 if such activity were carried out by Executive and, in particular, Executive agrees that he will not induce any employee of the Company to carry out any such activity; provided, however, that the "beneficial ownership" by Executive, either individually or as a member of a "group," as such terms are used in Rule 13d of the General Rules and Regulations under the Exchange Act, of not more than five percent (5%) of the voting stock of any publicly held corporation shall not be a violation of this Agreement. It 7 is further expressly agreed that the Company will or would suffer irreparable injury if Executive were to compete with the Company or any subsidiary or affiliate of the Company in violation of this Agreement and that the Company would by reason of such competition be entitled to injunctive relief in a court of appropriate jurisdiction, and Executive further consents and stipulates to the entry of such injunctive relief in such a court prohibiting Executive from competing with the Company or any subsidiary or affiliate of the Company in violation of this Agreement. (c) During the Term of Employment and for three (3) years thereafter, Executive shall not, directly or indirectly, influence or attempt to influence customers or suppliers of the Company or any of its subsidiaries or affiliates, to divert their business to any competitor of the Company. (d) Executive recognizes that he will possess confidential information about other employees of the Company relating to their education, experience, skills, abilities, compensation and benefits, and interpersonal relationships with customers of the Company. Executive recognizes that the information he will possess about these other employees is not generally known, is of substantial value to the Company in developing its business and in securing and retaining customers, and will be acquired by him because of his business position with the Company. Executive agrees that, during the Term of Employment, and for a period of three (3) years thereafter, he will not, directly or indirectly, solicit or recruit any employee of the Company for the purpose of being employed by him or by any competitor of the Company on whose behalf he is acting as an agent, representative or employee and that he will not convey any such confidential information or trade secrets about other employees of the Company to any other person. (e) If it is determined by a court of competent jurisdiction in any state that any restriction in this Section 6 is excessive in duration or scope or is unreasonable or unenforceable under the laws of that state, it is the intention of the parties that such restriction may be modified or amended by the court to render it enforceable to the maximum extent permitted by the law of that state. 7. No Offset - No Mitigation. Executive shall not be required to ------------------------- mitigate damages under this Agreement by seeking other comparable employment. The amount of any payment or benefit provided for in this Agreement, including welfare benefits, shall not be reduced by any compensation or benefits earned by or provided to him as the result of employment by another employer, except as provided otherwise in Section 5(a) with respect to health and insurance benefits provided during the Salary Continuation Period. 8. Designated Beneficiary. In the event of the death of Executive ---------------------- while in the employ of the Company, or at any time thereafter during which amounts remain payable to Executive under Section 5, such payments (other than the right to continuation of welfare benefits) shall thereafter be made to such person or persons as Executive may specifically designate (successively or contingently) to receive payments under this Agreement following 8 Executive's death by filing a written beneficiary designation with the Company during Executive's lifetime. Such beneficiary designation shall be in such form as may be prescribed by the Company and may be amended from time to time or may be revoked by Executive pursuant to written instruments filed with the Company during his lifetime. Beneficiaries designated by Executive may be any natural or legal person or persons, including a fiduciary, such as a trustee or a trust or the legal representative of an estate. Unless otherwise provided by the beneficiary designation filed by Executive, if all of the persons so designated die before Executive on the occurrence of a contingency not contemplated in such beneficiary designation, then the amounts payable under this Agreement shall be paid to Executive's estate. 9. Taxes. All payments to be made to Executive under this Agreement ----- will be subject to any applicable withholding of federal, state and local income and employment taxes. 10. Miscellaneous. This Agreement shall also be subject to the ------------- following miscellaneous considerations: (a) Executive and the Company each represent and warrant to the other that he or it has the authorization, power and right to deliver, execute, and fully perform his or its obligations under this Agreement in accordance with its terms. (b) This Agreement contains a complete statement of all the arrangements between the parties with respect to Executive's employment by the Company, this Agreement supersedes all prior and existing negotiations and agreements between the parties concerning Executive's employment, and this Agreement can only be changed or modified pursuant to a written instrument duly executed by each of the parties hereto. (c) If any provision of this Agreement or any portion thereof is declared invalid, illegal, or incapable of being enforced by any court of competent jurisdiction, the remainder of such provisions and all of the remaining provisions of this Agreement shall continue in full force and effect. (d) This Agreement shall be governed by and construed in accordance with the internal laws of the State of Nevada, except to the extent governed by federal law. (e) The Company may assign this Agreement to any direct or indirect subsidiary or parent of the Company or joint venture in which the Company has an interest, or any successor (whether by merger, consolidation, purchase or otherwise) to all or substantially all of the stock, assets or business of the Company and this Agreement shall be binding upon and inure to the benefit of such successors and assigns. Except as expressly provided herein, Executive may not sell, transfer, assign, or pledge any of his rights or interests pursuant to this Agreement. (f) Any rights of Executive hereunder shall be in addition to any rights Executive may otherwise have under benefit plans, agreements, or arrangements of the 9 Company to which he is a party or in which he is a participant, including, but not limited to, any Company-sponsored employee benefit plans. Provisions of this Agreement shall not in any way abrogate Executive's rights under such other plans, agreements, or arrangements. (g) For the purpose of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States certified or registered mail, return receipt requested, postage prepaid, addressed to the named Executive at the address set forth below under his signature; provided that all notices to the Company shall be directed to the attention of the Board with a copy to the Secretary of the Company, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt. (h) Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose. (i) Failure to insist upon strict compliance with any of the terms, covenants, or conditions hereof shall not be deemed a waiver of such term, covenant, or condition, nor shall any waiver or relinquishment of, or failure to insist upon strict compliance with, any right or power hereunder at any one or more times be deemed a waiver or relinquishment of such right or power at any other time or times. (j) This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument. 11. Resolution of Disputes. Any dispute or controversy arising under ---------------------- or in connection with this Agreement shall be settled exclusively by arbitration, conducted before a panel of three arbitrators in Las Vegas, Nevada in accordance with the rules of the American Arbitration Association then in effect. The Company and Executive hereby agree that the arbitrator will not have the authority to award punitive damages, damages for emotional distress or any other damages that are not contractual in nature. Judgment may be entered on the arbitrator's award in any court having jurisdiction; provided, however, that the Company shall be entitled to seek a restraining order or injunction in any court of competent jurisdiction to prevent any continuation of any violation of the provisions of Section 6, and Executive consents that such restraining order or injunction may be granted without the necessity of the Company's posting any bond except to the extent otherwise required by applicable law. The expense of such arbitration shall be borne by the Company. 12. Attorneys' Fees. Should either party hereto or their successors --------------- retain counsel for the purpose of enforcing, or preventing the breach of, any provision hereof, including, but not limited to, by instituting any action or proceeding in arbitration or a court to enforce any provision hereof or to enjoin a breach of any provision of this Agreement, or for a 10 declaration of such party's rights or obligations under the Agreement, or for any other remedy, whether in arbitration or in a court of law, then the successful party shall be entitled to be reimbursed by the other party for all costs and expenses incurred thereby, including, but not limited to, reasonable fees and expenses of attorneys and expert witnesses, including costs of appeal. If such successful party shall recover judgment in any such action or proceeding, such costs, expenses and fees may be included in and as part of such judgment. The successful party shall be the party who is entitled to recover his costs of suit, whether or not the suit proceeds to final judgment. If no costs are awarded, the successful party shall be determined by the arbitrator or court, as the case may be. 11 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. EXECUTIVE COMPANY MICHAEL ENSIGN CIRCUS CIRCUS ENTERPRISES, INC. By: /s/ Michael S. Ensign By: /s/ Clyde T. Turner _____________________________ _____________________________ Title: Vice Chairman of the Board and Title: Chief Executive Officer Chief Operating Officer Address: ______________________________________ ______________________________________ ______________________________________ 12 EX-99.4 4 STANDSTILL AGREEMENT EXHIBIT 99.4 ================================================================================ STANDSTILL AGREEMENT dated as of June 1, 1995 by and among CIRCUS CIRCUS ENTERPRISES, INC., a Nevada corporation, MICHAEL S. ENSIGN, WILLIAM R. RICHARDSON, DAVID R. BELDING, PETER A. SIMON II, and GLENN W. SCHAEFFER ================================================================================ TABLE OF CONTENTS -----------------
Page ---- ARTICLE 1 - DEFINITIONS...................................................... 1 ARTICLE 2 - REPRESENTATIONS AND WARRANTIES................................... 2 2.1 Legal Capacity........................................................ 2 2.2 Enforceability........................................................ 2 2.3 Consents, etc......................................................... 2 2.4 Conflicting Agreements and Other Matters.............................. 2 ARTICLE 3 - STANDSTILL....................................................... 3 ARTICLE 4 - GENERAL PROVISIONS............................................... 4 4.1 Entire Agreement...................................................... 4 4.2 No Third-Party Beneficiaries.......................................... 4 4.3 Notices............................................................... 4 4.4 No Assignment; Binding Effect......................................... 5 4.5 Severability.......................................................... 5 4.6 Survival of Agreement................................................. 5 4.7 Governing Law......................................................... 5 4.8 Counterparts.......................................................... 5
i STANDSTILL AGREEMENT -------------------- THIS STANDSTILL AGREEMENT, dated as of June 1, 1995 (this "Agreement"), is made and entered into by and among CIRCUS CIRCUS ENTERPRISES, INC. a Nevada corporation (the "Company"), and each of MICHAEL S. ENSIGN, an individual ("Ensign"), WILLIAM A. RICHARDSON, an individual ("Richardson"), DAVID R. BELDING, an individual ("Belding"), PETER A. SIMON II, an individual ("Simon" and collectively with Ensign, Richardson and Belding, the "Target Company Shareholders"), and GLENN W. SCHAEFFER, an individual ("Schaeffer" and collectively with all other individuals party hereto, the "Investors"). RECITALS -------- WHEREAS, the Company, the Target Company Shareholders, M.S.E. INVESTMENTS, INCORPORATED, a Nevada corporation, LAST CHANCE INVESTMENTS, INCORPORATED, a Nevada corporation, GOLDSTRIKE INVESTMENTS, INCORPORATED, a Nevada corporation, DIAMOND GOLD, INC., a Nevada corporation, GOLD STRIKE AVIATION, INCORPORATED, a Nevada corporation, GOLDSTRIKE FINANCE COMPANY, INC., a Nevada corporation, and OASIS DEVELOPMENT CO., a Nevada corporation, are entering into an Agreement and Plan of Merger, dated as of March 19, 1995, as amended, (the "Agreement and Plan of Merger"); and WHEREAS, as an inducement for certain parties to enter into the Agreement and Plan of Merger and to consummate the transactions contemplated thereby, each of the Investors and the Company has agreed to enter into this Agreement. AGREEMENT --------- NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: ARTICLE 1 DEFINITIONS The following defined terms shall, unless the context requires otherwise, have the meanings ascribed in this Article 1: "BOARD" shall mean the Board of Directors of the Company. "CLOSING DATE" shall mean the June 1, 1995. "EQUITY SECURITIES" shall mean all capital stock of the Company, all securities convertible into any such stock, and all securities carrying any warrant or right to subscribe to or purchase any such stock, or any such warrant or right. "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated pursuant thereto. "INVESTOR AFFILIATES" shall mean the "affiliates" (as such term is defined in Rule 12b-2 promulgated pursuant to the Exchange Act) of any Investor. "INVESTOR REPRESENTATIVES" shall mean the directors, officers, employees, agents or representatives of the Investors and the Investor Affiliates. "PERSON" shall mean any individual, firm, corporation, partnership, joint venture, limited liability company, trust, unincorporated organization or other entity. "PROHIBITED ACTIONS" shall mean the actions set forth in clauses (a) through (i) of the first paragraph of Article 3. ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF EACH OF THE INVESTORS Each of the Investors represents and warrants to the Company as of the date hereof as follows: 2.1 LEGAL CAPACITY. Each Investor has full legal right, power, capacity and authority to execute and deliver this Agreement, to carry out the transactions contemplated hereby and to comply with the terms, conditions and provisions hereof. 2.2 ENFORCEABILITY. This Agreement has been duly and validly executed and delivered by each of the Investors and constitutes a legal, valid and binding obligation of each of the Investors enforceable against such Investors in accordance with its terms, except to the extent that such enforceability may be limited by bankruptcy, insolvency, moratorium or other laws affecting the enforcement of creditor's rights generally or by general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law). 2.3 CONSENTS, ETC. None of the Investors is required to obtain any consent, order, permit, approval or authorization of, or to make any declaration or filing with, any governmental authority or entity or other agency as a condition to or in connection with the valid execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby, except, in each case, for such consents, orders, permits, approvals, authorizations, declarations or filings (a) as have been made or have been obtained prior to the date hereof or (b) the absence of which, or the failure to make or obtain which, would not prevent the performance and completion of the transactions contemplated hereby or materially and adversely affect any of the Investors' ability to perform its obligations hereunder. 2.4 CONFLICTING AGREEMENTS AND OTHER MATTERS. Neither the execution and delivery of this Agreement nor the performance by each of the Investors of its obligations hereunder will conflict with, result in a default of the terms, conditions or provisions of, or constitute a default under, any mortgage, 2 agreement, instrument, order, judgment, decree, statute, law, rule or regulation to which any of the Investors or any of their respective properties are subject, except, in each case, for such defaults, individually or in the aggregate, as would not prevent the consummation of the transactions contemplated hereby or materially and adversely affect any of the Investors' ability to perform its obligations hereunder. ARTICLE 3 STANDSTILL For a period beginning on the Closing Date and terminating on the fifth anniversary of the Closing Date, none of the Investors, the Investor Affiliates nor the Investor Representatives, acting alone or as part of any "group" (within the meaning of Section 13(d)(3) of the Exchange Act) shall, directly or indirectly, unless specifically requested to do so in writing in advance by the Board : (a) acquire or agree, offer, seek or propose to acquire, or cause to be acquired, ownership (including, but not limited to, beneficial ownership within the meaning of Rule 13d-3 promulgated pursuant to the Exchange Act) of more than 9.9 percent of the outstanding Equity Securities or any rights or options to acquire any such ownership (including from a third party); provided, that this -------- clause (a) shall not be deemed to be violated by any Investor as a result of an increase in the percentage Equity Securities owned by such Investor in connection with the purchase of Equity Securities by the Company, a recapitalization of the Company or any other similar action taken by the Company; (b) make, or in any way knowingly participate in, any "solicitation" of "proxies" (as such terms are used in the proxy rules of the Securities and Exchange Commission) to vote or seek to advise or influence in any manner whatsoever a Person with respect to the voting of any securities of the Company; (c) form, join, or in any way participate in a "group" (within the meaning of Section 13(d)(3) of the Exchange Act) with respect to any voting securities of the Company; (d) otherwise act, whether alone or in concert with others, to seek to propose to the Company or any of its stockholders any merger, business combination, restructuring, recapitalization or similar transaction to or with the Company; (e) otherwise act, whether alone or in concert with others, to seek to control, change or influence the management, Board or policies of the Company, or nominate any Person as a Director of the Company who is not nominated by the then incumbent Directors, or propose any matter to be voted upon by the stockholders of the Company; (f) solicit, negotiate with, or provide any information to, any Person with respect to a merger, exchange offer or liquidation of the Company or any other acquisition of the Company, any acquisition or voting securities of or all or any portion of the assets of the Company, or any other similar transaction; 3 (g) announce an intention to, or enter into any discussion, negotiations, arrangements or understandings with any third party with respect to, any of the foregoing; (h) disclose any intention, plan or arrangement inconsistent with the foregoing; or (i) advise, assist or encourage any other Person in connection with any of the foregoing; Notwithstanding the foregoing, if a matter (i) requires approval by the shareholders of the Company, (ii) was presented to and approved by the Board, and (iii) was opposed by both members of the Board who were nominated by the Target Company Shareholders pursuant to Section 5.3 of the Agreement and Plan of Merger, then, in seeking to cause the shareholders of the Company to disapprove of such matter, an Investor may undertake a Prohibited Action set forth in clauses (b), (c), (e), (g), (h) and (i) with respect to such matter; provided, that if the Prohibited Action to be taken pursuant to clause (b) above is a solicitation in opposition to a proposal involving a merger, exchange offer or liquidation of the Company or any other acquisition of the Company or similar transaction, then such solicitation shall not be deemed to be a violation of clause (f) above. In addition, each of the Investors shall also agree during such five-year period not to (i) request the Company (or any director, officer, employee, agent or representative thereof), directly or indirectly, to amend or waive any provision of this Article 3 (including this sentence), unless such request is made privately to the Board and remains confidential and undisclosed to the public; or (ii) except as set forth in the immediately preceding paragraph, take any action that might require the Company to make a public announcement regarding a possible transaction. Notwithstanding the foregoing Prohibited Actions, it is understood and acknowledged that any one or more of the Investors may be members of the Board or may be officers of the Company and that the foregoing provisions of this Article 3 shall not be construed as limiting in any way any such Person from participating fully in such capacity as a member of the Board or as "senior management" of the Company, respectively. It is further understood that the provisions of this Agreement shall supercede the provisions of the confidentiality and standstill agreement dated March 17, 1995, among the Company and Ensign, Richardson, Belding and Schaeffer. ARTICLE 4 GENERAL PROVISIONS 4.1 ENTIRE AGREEMENT. This Agreement, including all exhibits and schedules hereto, and the Agreement and Plan of Merger, including all exhibits and schedules hereto, contain the sole and entire agreement among the parties with respect to the subject matter hereof and supersedes any and all prior agreements, understandings, negotiations and discussions, whether oral or written, among the parties hereto with respect to such subject matter. 4 4.2 NO THIRD-PARTY BENEFICIARIES. The terms and provisions of this Agreement are intended solely for the benefit of each party hereto and their respective successors and permitted assigns, and it is not the intention of the parties to confer third-party beneficiary rights upon any other Person. 4.3 NOTICES. Unless otherwise specifically provided herein, all notices, demands, consents, waivers and other communications required or permitted by the terms of this Agreement shall be in writing, and any notice shall become effective three (3) days after deposit in the United States mails, first class postage prepaid, or one (1) day after delivery to an overnight courier or express company or immediately upon delivery by hand or in the form of telecopy, telegram or other electronic means of communication that produces a written copy, and, if mailed or delivered by courier, express company or hand, shall be addressed as indicated in Section 9.3 of the Agreement and Plan of Merger or Section 6.8 of the Exchange Agreement, dated as of March 19, 1995, by and between, among others, the Company and Schaeffer, as the case may be. 4.4 NO ASSIGNMENT; BINDING EFFECT. Neither this Agreement nor any right, interest, duty or obligation hereunder may be assigned by any party hereto without the prior written consent of the other parties hereto, and any attempt to assign this Agreement or any right, interest, duty or obligation hereunder without such prior written consent shall be null and void. Subject to the preceding sentence, this Agreement is binding upon, inures to the benefit of and is enforceable by the parties hereto and their respective successors and assigns. 4.5 SEVERABILITY. If any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future law, and if the rights or obligations of any party hereto under this Agreement will not be materially and adversely affected thereby, (i) such provision will be fully severable, (ii) this Agreement will be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof, and (iii) the remaining provisions of this Agreement will remain in full force and effect and will not be affected by the illegal, invalid or unenforceable provision or by its severance from this Agreement. 4.6 SURVIVAL OF AGREEMENT. The representations, warranties and agreements of the parties provided for in this Agreement, and the parties' obligations under any and all thereof, shall survive the Closing and shall be and continue in effect, notwithstanding any investigation made by any party, from and after the Closing Date. 4.7 GOVERNING LAW. This Agreement has been negotiated and executed and shall be performed in the State of Nevada and shall be governed and construed by the laws of such State, without giving effect to the conflicts of laws principles thereof. 4.8 COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. [Signature pages to follow] 5 IN WITNESS WHEREOF, each party has executed this Agreement as of the date first above written. CIRCUS CIRCUS ENTERPRISES, INC., a Nevada corporation By /s/ Clyde T. Turner ____________________________________________ Name: Clyde T. Turner Title: President and Chief Executive Officer /s/ Michael S. Ensign ______________________________________________ Michael S. Ensign, individually and on behalf of his Investor Affiliates and Investor Representatives /s/ William A. Richardson ______________________________________________ William A. Richardson, individually and on behalf of his Investor Affiliates and Investor Representatives /s/ David R. Belding ______________________________________________ David R. Belding, individually and on behalf of his Investor Affiliates and Investor Representatives /s/ Peter A. Simon II ______________________________________________ Peter A. Simon II, individually and on behalf of his Investor Affiliates and Investor Representatives /s/ Glenn W. Schaeffer ______________________________________________ Glenn W. Schaeffer, individually and on behalf of his Investor Affiliates and Investor Representatives S-1 EX-99.5 5 REGISTRATION RIGHTS AGREEMENT EXHIBIT 99.5 ================================================================================ REGISTRATION RIGHTS AGREEMENT dated as of June 1, 1995 by and among CIRCUS CIRCUS ENTERPRISES, INC., a Nevada corporation, MICHAEL S. ENSIGN, WILLIAM R. RICHARDSON, DAVID R. BELDING, PETER A. SIMON II, GLENN W. SCHAEFFER, GREGG H. SOLOMON, ANTONIO C. ALAMO, ANTHONY KORFMAN, WILLIAM ENSIGN and ROBERT J. VERCHOTA ================================================================================
TABLE OF CONTENTS ----------------- Page ---- ARTICLE 1 DEFINITIONS....................................................... 1 ARTICLE 2 DEMAND REGISTRATIONS.............................................. 4 2.1 Timing and Number of Demand Registrations.......................... 4 2.2 Required Thresholds................................................ 5 2.3 Participation...................................................... 5 2.4 Managing Underwriter............................................... 5 ARTICLE 3 PIGGYBACK REGISTRATIONS........................................... 5 3.1 Participation...................................................... 5 3.2 Underwriter's Cutback.............................................. 5 3.3 Company Control.................................................... 6 ARTICLE 4 HOLD-BACK AGREEMENTS.............................................. 6 4.1 By Holders......................................................... 6 4.2 By the Company and Others.......................................... 6 ARTICLE 5 REGISTRATION PROCEDURES........................................... 7 ARTICLE 6 REGISTRATION EXPENSES............................................. 9 ARTICLE 7 INDEMNIFICATION................................................... 9 7.1 Indemnification by Company......................................... 9 7.2 Indemnification Procedures......................................... 10 7.3 Indemnification by Holder.......................................... 10 7.4 Contribution....................................................... 11 ARTICLE 8 REQUIREMENTS FOR PARTICIPATION IN UNDERWRITTEN OFFERINGS.......... 12 ARTICLE 9 SUSPENSION OF SALES............................................... 12 ARTICLE 10 MISCELLANEOUS..................................................... 12 10.1 No Inconsistent Agreements......................................... 12 10.2 Entire Agreement................................................... 12 10.3 No Third-Party Beneficiaries....................................... 12 10.4 Notices............................................................ 12 10.5 No Assignment; Binding Effect...................................... 13 10.6 Severability....................................................... 13 10.7 Governing Law...................................................... 13 10.8 Counterparts....................................................... 13
REGISTRATION RIGHTS AGREEMENT ----------------------------- THIS REGISTRATION RIGHTS AGREEMENT, dated as of June 1, 1995 (this "Agreement"), is made and entered into by and among CIRCUS CIRCUS ENTERPRISES, INC., a Nevada corporation (the "Company"), and each of MICHAEL S. ENSIGN, an individual ("M. Ensign"), WILLIAM A. RICHARDSON, an individual ("Richardson"), DAVID R. BELDING, an individual ("Belding"), PETER A. SIMON II, an individual ("Simon"), GLENN W. SCHAEFFER, an individual ("Schaeffer"), GREGG H. SOLOMON, an individual ("Solomon"), ANTONIO C. ALAMO, an individual ("Alamo"), ANTHONY KORFMAN, an individual ("Korfman"), WILLIAM ENSIGN, an individual ("W. Ensign") and ROBERT J. VERCHOTA, an individual ("Verchota" and collectively with all other individuals party hereto, the "Investors"). RECITALS -------- WHEREAS, the Company, M. Ensign, Richardson, Belding, Simon, Verchota, and certain other parties, are entering into an Agreement and Plan of Merger, dated as of March 19, 1995, as amended (the "Agreement and Plan of Merger"); WHEREAS, the Company, Schaeffer, Solomon, Alamo, Korfman, W. Ensign and certain other parties are entering into an Exchange Agreement dated as of March 19, 1995 (the "Exchange Agreement"); and WHEREAS, in order to induce certain parties to enter into the Agreement and Plan of Merger and the Exchange Agreement and to consummate the transactions contemplated thereby, each of the Investors and the Company has agreed to enter into this Agreement. AGREEMENT --------- NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: ARTICLE 1 DEFINITIONS The following capitalized terms shall have the following meanings: "BOARD" shall mean the Board of Directors of the Company. "CLAIM" shall mean any loss, claim, damages, liability or expense (including the reasonable costs of investigation and legal fees and expenses). "COMMON STOCK" shall mean the common stock, par value $.01 2/3 (one cent and two-thirds cents) per share, of the Company. "DEMAND GROUP" shall mean all Demand Persons. "DEMAND PERSON" shall mean each of M. Ensign, Richardson and Belding, so long as such Demand Person is a Holder. "DEMAND REGISTRATION" shall mean a registration pursuant to Article 2 hereof. "EQUITY SECURITY" shall mean any capital stock of the Company or any security convertible, with or without consideration, into any such stock, or any security carrying any warrant or right to subscribe to or purchase any such stock, or any such warrant or right. "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations promulgated pursuant thereto. "EXCHANGEABLE PREFERRED STOCK" shall mean the Exchangeable Preferred Stock, no par value, issued to Schaeffer, Solomon, Alamo, Korfman and W. Ensign pursuant to the Exchange Agreement. "FIRM COMMITMENT UNDERWRITTEN OFFERING" shall mean an offering in which the underwriters agree to purchase securities for distribution pursuant to a registration statement under the Securities Act and in which the obligation of the underwriters is to purchase all the securities being offered if any are purchased. "FIRST DEMAND REGISTRATION STATEMENT" shall have the meaning set forth in Section 2.1 hereof. "HOLDER" shall mean each Investor, so long as such Investor is the beneficial owner of Registrable Securities. "INDEMNIFIED HOLDER" shall mean any Holder, any officer, director, employee or agent of any such Holder and any Person who controls any of the foregoing Persons within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act; provided, however, that no Person who was an officer, director or employee of the Company at the time of the effectiveness of any Registration Statement shall be an Indemnified Holder. "MISSTATEMENT" shall mean an untrue statement of a material fact or an omission to state a material fact required to be stated in a Registration Statement or Prospectus or necessary to make the statements in a Registration Statement, Prospectus or preliminary prospectus not misleading. "PERSON" shall mean a natural person, partnership, corporation, business trust, association, joint venture or other entity or a government or agency or political subdivision thereof. "PIGGYBACK REGISTRATION" shall mean a registration pursuant to Article 3 hereof. 2 "PROSPECTUS" shall mean the prospectus included in any Registration Statement, as supplemented by any and all prospectus supplements and as amended by any and all post-effective amendments and including all material incorporated by reference in such prospectus. "REGISTRATION" shall mean a Demand Registration or a Piggyback Registration. "REGISTRATION EXPENSES" shall mean the out-of-pocket expenses of the Company in connection with a Registration, including: (1) all registration and filing fees (including fees with respect to filings required to be made with the National Association of Securities Dealers); (2) fees and expenses of compliance with securities or blue sky laws (including fees and disbursements of counsel for the underwriters in connection with blue sky qualifications of the Registrable Securities and determinations of their eligibility for investment under the laws of such jurisdictions as the managing underwriters may designate); (3) printing expenses; (4) fees and disbursements of counsel for the Company and counsel for the underwriters; (5) fees and disbursements of all independent certified public accountants of the Company incurred specifically in connection with such Registration; (6) fees and disbursements of underwriters (excluding discounts, commissions or fees of underwriters, selling brokers, dealer managers or similar securities industry professionals relating to the distribution of the Registrable Securities); and (7) fees and expenses of any other Persons retained by the Company. "REGISTRABLE SECURITIES" shall mean all shares of Common Stock issued to the Investors pursuant to the Agreement and Plan of Merger, any shares of Common Stock issued in exchange for the Exchangeable Preferred Stock, and any securities issued with respect to such Common Stock by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or reorganization; provided that any such Common Stock or any such securities shall be deemed to be Registrable Securities only if and so long as it is a Transfer Restricted Security. "REGISTRATION STATEMENT" shall mean any registration statement which covers Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus included in such registration statement, amendments (including post-effective amendments) and supplements to such registration statement, and all exhibits to and all material incorporated by reference in such registration statement. 3 "SECOND DEMAND REGISTRATION STATEMENT" shall have the meaning set forth in Section 2.1 hereof. "SECURITIES ACT" shall mean the Securities Act of 1933, as amended from time to time, and the rules and regulations promulgated pursuant thereto. "SEC" shall mean the Securities and Exchange Commission. "TERMINATED WITHOUT CAUSE BY THE COMPANY OR WITH GOOD REASON BY SUCH DEMAND PERSON" shall mean the termination of the employment of a Demand Person by the Company without cause or by such Demand Person with good reason pursuant to Section 5(a) of the Employment Agreement dated as of the date first above written by and between the Company and such Demand Person. "THIRD DEMAND REGISTRATION STATEMENT" shall have the meaning set forth in Section 2.1 hereof. "TRANSFER RESTRICTED SECURITY" shall mean a security that has not been sold to or through a broker, dealer or underwriter in a public distribution or other public securities transaction or sold in a transaction exempt from the registration and prospectus delivery requirements of the Securities Act under Rule 144 promulgated thereunder (or any successor rule). The foregoing notwithstanding, a security shall remain a Transfer Restricted Security until all stop transfer instructions or notations and restrictive legends with respect to such security have been lifted or removed. "UNDERWRITTEN REGISTRATION" or "UNDERWRITTEN OFFERING" shall mean a registration in which securities of the Company are sold to an underwriter for distribution to the public. ARTICLE 2 DEMAND REGISTRATIONS 2.1 TIMING AND NUMBER OF DEMAND REGISTRATIONS. At any time after the first anniversary of the date of this Agreement, a Demand Person may request in writing (a "Demand Request") that the Company file a registration statement under the Securities Act covering shares of Registrable Securities then outstanding which are beneficially owned by the Demand Person and which are specified in the Demand Request. The Company shall be obligated to prepare, file and cause to become effective pursuant to this Article 2 no more than two Registration Statements (the first, if any, being referred to herein as the "First Demand Registration Statement" and the second, if any, being referred to herein as the "Second Demand Registration Statement"); provided, however, the Company shall be obligated to prepare, file and cause to become effective a third Registration Statement (the "Third Demand Registration Statement"), if at the time of the Demand Request with respect to the Third Demand Registration Statement the Demand Person making such Demand Request was Terminated Without Cause by the Company or With Good Reason by such Demand Person. Notwithstanding the foregoing, (i) no Demand Request shall be provided with respect to a Second Demand Registration 4 Statement or a Third Demand Registration Statement (and the Company shall not be obligated to prepare, file and cause to become effective a Second Demand Registration Statement or a Third Demand Registration Statement, respectively) prior to the period ending eighteen months after the effectiveness of the First Demand Registration Statement and prior to the period ending eighteen months after the effectiveness of the Second Demand Registration Statement, respectively, and (ii) a Demand Request that has been revoked by any Demand Person shall be deemed a request for the purposes of calculating the number of Registration Statements which have been prepared, filed and become effective pursuant to this paragraph of Section 2.1, unless such Demand Person reimburses the Company for all Registration Expenses incurred in connection with the preparation of a Registration Statement pursuant to such Demand Request. If a Demand Person requests that the Company effect a Demand Registration and the Company furnishes to such Demand Person a copy of a resolution of the Board certified by the Secretary of the Company stating that in the good faith judgment of the Board it would be seriously detrimental to the Company and its stockholders for such registration statement to be filed on or before the date such filing would otherwise be required hereunder, the Company shall have the right to defer such filing for a period of not more than 180 days after receipt of the Demand Request from such Demand Person; provided that during such time the Company may not file a registration statement (other than on Form S-8 or any successor form thereto) for securities to be issued and sold for its own account or that of anyone other than the Demand Group. 2.2 REQUIRED THRESHOLDS. The Company shall not be obligated to prepare, file and cause to become effective pursuant to this Article 2 a Registration Statement unless the proposed aggregate public offering price of the securities to be included in such Demand Registration is at least $25 million. The Company shall not be required to effect any Demand Registration unless the offering is to be a Firm Commitment Underwritten Offering. 2.3 PARTICIPATION. The Company shall promptly give written notice to all Holders upon receipt of a request for a Demand Registration pursuant to Section 2.1 above. The Company shall include in such Demand Registration the shares of Registrable Securities for which it has received written requests to register such shares within 30 days after such written notice has been given. 2.4 MANAGING UNDERWRITER. The managing underwriter or underwriters of any underwritten public offering covered by a Demand Registration shall be selected by the Company; provided, however, if no member of the Demand Group is a director or officer of the Company, the Company's selection of such managing underwriter or underwriters shall be subject to the approval of the Demand Group, which approval shall not be unreasonably withheld. 5 ARTICLE 3 PIGGYBACK REGISTRATIONS 3.1 PARTICIPATION. Each time after the first anniversary of the date of this Agreement that the Company decides to file a registration statement under the Securities Act (other than on Forms S-4 or S-8 or any successor form thereto) covering the offer and sale by it or any of its security holders of any of its Equity Securities, for money, the Company shall give written notice thereof to all Holders. The Company shall include in such registration statement the shares of Registrable Securities for which it has received written requests to register such shares within 30 days after such written notice has been given. If the registration statement is to cover an underwritten offering, such Registrable Securities shall be included in the underwriting on the same terms and conditions as the securities otherwise being sold through the underwriters. 3.2 UNDERWRITER'S CUTBACK. If, in the good faith judgment of the managing underwriter of such offering, the inclusion of all of the shares of Registrable Securities would adversely affect the successful marketing of a smaller number of such shares, then (i) the managing underwriter shall provide written notice of such judgment to all Holders requesting such inclusion and (ii) the number of shares of Registrable Securities to be included in the offering (except for shares to be issued by the Company in an offering initiated by the Company) shall be reduced pro rata among Holders requesting such inclusion pursuant to a Piggyback Registration and any other Persons requesting Common Stock to be included in such Registration based upon the number of shares of Common Stock and Registrable Securities owned by such Persons. All shares so excluded from the underwritten public offering shall be withheld from the market by the Holders thereof for a period (not to exceed 15 days prior to the effective date and 120 days thereafter) that the managing underwriter reasonably determines is necessary in order to effect the underwritten public offering. 3.3 COMPANY CONTROL. The Company may decline to file a Registration Statement after giving notice to any Holder pursuant to Section 3.1 above, or withdraw a Registration Statement after filing and after such notice, but prior to the effectiveness thereof. ARTICLE 4 HOLD-BACK AGREEMENTS 4.1 BY HOLDERS. Upon the written request of the managing underwriter of any underwritten offering of the Company's securities, a Holder shall not sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any Registrable Securities (other than those included in such registration) without the prior written consent of such managing underwriter for a period (not to exceed 15 days before the effective date and 120 days thereafter) that such managing underwriter reasonably determines is necessary in order to effect the underwritten public offering; provided that each of the officers and directors of the Company shall have entered into substantially similar holdback agreements with such managing underwriter covering at least the same period. 6 4.2 BY THE COMPANY AND OTHERS. The Company agrees: (a) not to effect any public or private sale or distribution of its Equity Securities during the 15-day period prior to, and during the 120-day period after, the effective date of each underwritten offering made pursuant to a Demand Registration or a Piggyback Registration, if so requested in writing by the managing underwriter (except as part of such underwritten offering or pursuant to registrations on Forms S-4 or S-8 or any successor form thereto), and (b) not to issue any Equity Securities other than for sale in a registered public offering unless each of the Persons to which such securities are issued has entered into a written agreement binding on its transferees not to effect any public sale or distribution of such securities during such period, including without limitation a sale pursuant to Rule 144 under the Securities Act (except as part of such underwritten registration, if and to the extent permitted hereunder). ARTICLE 5 REGISTRATION PROCEDURES If and whenever the Company is required to register Registrable Securities in a Demand Registration or a Piggyback Registration, the Company will use its best efforts to effect such registration to permit the sale of such Registrable Securities in accordance with the intended plan of distribution thereof, and pursuant thereto the Company will as expeditiously as possible: (a) prepare and file with the SEC as soon as practicable a Registration Statement with respect to such Registrable Securities and use its best efforts to cause such Registration Statement to become effective and remain effective until the Registrable Securities covered by such Registration Statement have been sold; provided that the Company shall not be required to maintain the effectiveness of any Registration Statement for more than 90 days after such Registration Statement becomes effective; and provided, further, that before filing a Registration Statement or Prospectus or any amendments or supplements thereto, the Company shall furnish to the Holders of the Registrable Securities covered by such Registration Statement and the underwriters, if any, draft copies of all such documents proposed to be filed, which documents will be subject to the review of such Holders and underwriters; (b) prepare and file with the SEC such amendments to the Registration Statement, and such supplements to the Prospectus, as may be required by the rules, regulations or instructions applicable to the registration form used by the Company or by the Securities Act to keep the Registration Statement effective until all Registrable Securities covered by such Registration Statement are sold in accordance with the intended plan of distribution set forth in such Registration Statement or supplement to the Prospectus or for such shorter period of time during which such Registration Statement must be kept effective by the terms of this Agreement; (c) promptly notify the selling Holders and the managing underwriter, if any, and (if requested by any such Person) confirm such advice in writing, (1) when the Prospectus or any supplement or post-effective amendment has been filed, and, with respect to the Registration Statement or any post-effective amendment, when the same has become effective, 7 (2) of any request by the SEC for amendments or supplements to the Registration Statement or the Prospectus or for additional information, (3) of the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose, (4) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, and (5) of the existence of any fact which results in the Registration Statement, the Prospectus or any document incorporated therein by reference containing a Misstatement; (d) make every reasonable effort to obtain the withdrawal of any order suspending the effectiveness of the Registration Statement at the earliest possible time; (e) promptly prior to the filing of any document which is to be incorporated by reference into the Registration Statement or the Prospectus (after initial filing of the Registration Statement) provide copies of such document to counsel to the selling Holders and to the managing underwriter, if any; (f) furnish to each selling Holder and the managing underwriter, without charge, at least one signed copy of the Registration Statement and any amendments thereto, including financial statements and schedules, all documents incorporated therein by reference and all exhibits (including those incorporated by reference); (g) deliver to each selling Holder and the underwriters, if any, without charge, as many copies of each Prospectus (and each preliminary prospectus) as such Persons may reasonably request (the Company hereby consenting to the use of each such Prospectus (or preliminary prospectus) by each of the selling Holders and the underwriters, if any, in connection with the offering and sale of the Registrable Securities covered by such Prospectus (or preliminary prospectus)); (h) prior to any public offering of Registrable Securities, register or qualify or cooperate with the selling Holders, the underwriters, if any, in connection with the registration or qualification of such Registrable Securities for offer and sale under the securities or blue sky laws of such jurisdictions as such selling Holders or underwriters may designate and do anything else necessary or advisable to enable the disposition in such jurisdictions of the Registrable Securities covered by the Registration Statement; provided that the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or to take any action which would subject it to general service of process in any such jurisdiction where it is not then so subject; (i) cooperate with the selling Holders and the managing underwriter, if any, to facilitate the timely preparation and delivery of certificates not bearing any restrictive legends representing the Registrable Securities to be sold and cause such Registrable Securities to be in such denominations and registered in such names as the managing underwriter may request at least three business days prior to any sale of Registrable Securities to the underwriters; 8 (j) use its best efforts to cause the Registrable Securities covered by the Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the seller or sellers thereof or the underwriters, if any, to consummate the disposition of such Registrable Securities; (k) if the Registration Statement or the Prospectus contains a Misstatement, prepare a supplement or amendment to the Registration Statement or the related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Securities, the Prospectus will not contain a Misstatement; (l) provide a CUSIP number for all Registrable Securities not later than 3 business days prior to the effective date of the Registration Statement; (m) enter into such agreements (including an underwriting agreement) and do anything else necessary or advisable in order to expedite or facilitate the disposition of such Registrable Securities; and (n) otherwise use its best efforts to comply with all applicable rules and regulations of the SEC, and make generally available to its security holders earnings statements satisfying the provisions of Section 11(a) of the Securities Act, no later than 45 days after the end of any 12-month period (or 90 days, if such period is a fiscal year) (x) commencing at the end of any fiscal quarter in which Registrable Securities are sold to underwriters in an underwritten offering, or, if not sold to underwriters in such an offering, (y) beginning with the first month of the Company's first fiscal quarter commencing after the effective date of the Registration Statement, which statements shall cover said 12-month periods. ARTICLE 6 REGISTRATION EXPENSES The Company shall bear all Registration Expenses incurred in connection with any Registration, except as set forth in Section 2.1 and the fees and disbursements of counsel to the selling security holders shall be paid by such holders. Notwithstanding the foregoing, if (i) any Holder requests that shares of Registrable Securities be registered, whether in connection with a Demand Registration pursuant to Article 2 or in connection with a Piggyback Registration pursuant to Article 3, and (ii) such Holder later requests that a lesser number of such shares be registered after the registration and filing fees with respect to such greater number of shares has been paid, then such Holder shall pay such registration and filing fees with respect to the number of shares which such Holder requested be withdrawn from registration and which number of shares are thereafter not included in such registration (whether registered on behalf of the Company or any other Person requesting registration). 9 ARTICLE 7 INDEMNIFICATION 7.1 INDEMNIFICATION BY COMPANY. The Company agrees to indemnify and hold harmless each Indemnified Holder from and against all Claims arising out of or based upon any Misstatement or alleged Misstatement, except insofar as such Misstatement or alleged Misstatement was based upon information furnished in writing to the Company by such Indemnified Holder expressly for use in the document containing such Misstatement or alleged Misstatement. This indemnity shall not be exclusive and shall be in addition to any liability which the Company may otherwise have. The foregoing notwithstanding, the Company shall not be liable to an Indemnified Holder to the extent that any such Claim arises out of or is based upon a Misstatement or alleged Misstatement in a Prospectus, if (i) such Claim is asserted by a Person (other than an underwriter participating in the offering to which such Prospectus relates) who purchased a Registrable Security from such Indemnified Holder, (ii) such Misstatement or alleged Misstatement was corrected in an amendment or supplement to such Prospectus, and (iii) having previously been furnished by or on behalf of the Company with copies of the Prospectus as so amended or supplemented, such Indemnified Holder thereafter failed to deliver such Prospectus as so amended or supplemented prior to or concurrently with the sale to such Person who purchased a Registrable Security from such Indemnified Holder and who is asserting such Claim. 7.2 INDEMNIFICATION PROCEDURES. If any action or proceeding (including any governmental investigation or inquiry) shall be brought or asserted against an Indemnified Holder in respect of which indemnity may be sought from the Company, such Indemnified Holder shall promptly notify the Company in writing, and the Company shall assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Holder and the payment of all reasonable expenses in connection therewith. Such Indemnified Holder shall have the right to employ separate counsel in any such action and to participate in the defense thereof, but the fees and expenses of such separate counsel shall be the expense of such Indemnified Holder unless (i) the Company has agreed to pay such fees and expenses, (ii) the Company shall have failed to assume the defense of such action or proceeding or has failed to employ counsel reasonably satisfactory to such Indemnified Holder in any such action or proceeding or (iii) the Company or other Persons indemnified by the Company are parties to such action or proceeding and such Indemnified Holder shall have been advised by counsel that there may be one or more legal defenses available to such Indemnified Holder that are different from or additional to those available to the Company or such other Persons. If such Indemnified Holder notifies the Company in writing that it elects to employ separate counsel at the expense of the Company as permitted by the provisions of the preceding paragraph, the Company shall not have the right to assume the defense of such action or proceeding on behalf of such Indemnified Holder. The foregoing notwithstanding, the Company shall not be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time for such Indemnified Holder and any other Indemnified Holders (which firm shall be designated in writing by such Indemnified Holders) in connection with any one such action or proceeding or separate but substantially similar or related actions or proceedings in the same 10 jurisdiction arising out of the same general allegations or circumstances, unless clause (iii) of the foregoing paragraph applies. The Company shall not be liable for any settlement of any such action or proceeding effected without its written consent, but if settled with its written consent, or if there be a final judgment for the plaintiff in any such action or proceeding, the Company agrees to indemnify and hold harmless such Indemnified Holders from and against any loss or liability by reason of such settlement or judgment. 7.3 INDEMNIFICATION BY HOLDER. Each Holder agrees to indemnify and hold harmless the Company, its directors and officers and each Person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Company to such Holder, but only with respect to information relating to such Holder furnished in writing by such Holder expressly for use in any Registration Statement, Prospectus or preliminary prospectus. In no event, however, shall the liability hereunder of any selling Holder be greater than the dollar amount of the proceeds received by such Holder upon the sale of the Registrable Securities giving rise to such indemnification obligation. In case any action or proceeding shall be brought against the Company or its directors or officers or any such controlling person, in respect of which indemnity may be sought against a Holder, such Holder shall have the rights and duties given the Company and the Company or its directors or officers or such controlling person shall have the rights and duties given to each Holder by Sections 7.1 and 7.2 above. The Company shall be entitled to receive indemnities from underwriters, selling brokers, dealer managers and similar securities industry professionals participating in the distribution, to the same extent as provided above with respect to information so furnished in writing by such Persons specifically for inclusion in any Prospectus or Registration Statement. 7.4 CONTRIBUTION. If the indemnification provided for in this Article 7 is unavailable to an indemnified party under Section 7.1 or Section 7.3 above (other than by reason of exceptions provided in those Sections) in respect of any Claims referred to in such Sections, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such Claims in such proportion as is appropriate to reflect the relative fault of the Company on the one hand and of the Indemnified Holder on the other in connection with the statements or omissions which resulted in such Claims as well as any other relevant equitable considerations. The amount paid or payable by a party as a result of the Claims referred to above shall be deemed to include, subject to the limitations set forth in Section 7.2, any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim. The relative fault of the Company on the one hand and of the Indemnified Holder on the other shall be determined by reference to, among other things, whether the Misstatement or alleged Misstatement relates to information supplied by the Company or by the Indemnified Holder and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such Misstatement or alleged Misstatement. 11 The Company and each Holder agree that it would not be just and equitable if contribution pursuant to this Section 7.4 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this Section 7.4, an Indemnified Holder shall not be required to contribute any amount in excess of the amount by which (i) the total price at which the securities that were sold by such Indemnified Holder and distributed to the public were offered to the public exceeds (ii) the amount of any damages which such Indemnified Holder has otherwise been required to pay by reason of such Misstatement. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. ARTICLE 8 REQUIREMENTS FOR PARTICIPATION IN UNDERWRITTEN OFFERINGS No Person may participate in any underwritten offering pursuant to a Registration hereunder unless such Person (a) agrees to sell such Person's securities on the basis provided in any underwriting arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements. ARTICLE 9 SUSPENSION OF SALES Upon receipt of written notice from the Company that a Registration Statement or Prospectus contains a Misstatement, each Holder shall forthwith discontinue disposition of Registrable Securities until such Holder has received copies of the supplemented or amended Prospectus required by Article 5 hereof, or until such Holder is advised in writing by the Company that the use of the Prospectus may be resumed, and, if so directed by the Company, such Holder shall deliver to the Company (at the Company's expense) all copies, other than permanent file copies then in such Holder's possession, of the Prospectus covering such Registrable Securities current at the time of receipt of such notice. In the event the Company shall give any such notice, the 90-day period referred to in Article 5 hereof shall be extended by the number of days during the period from and including the date of the giving of such notice to and including the date when each seller of Registrable Securities covered by such Registration Statement either has received the copies of the supplemented or amended prospectus contemplated by Article 5 hereof or has been advised in writing by the Company that the use of the Prospectus may be resumed. ARTICLE 10 MISCELLANEOUS 12 10.1 NO INCONSISTENT AGREEMENTS. The Company shall not on or after the date of this Agreement enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. 10.2 ENTIRE AGREEMENT. This Agreement, including all exhibits and schedules hereto, contains the sole and entire agreement among the parties with respect to the subject matter hereof and supersedes any and all prior agreements, understandings, negotiations and discussions, whether oral or written, among the parties hereto with respect to such subject matter. 10.3 NO THIRD-PARTY BENEFICIARIES. The terms and provisions of this Agreement are intended for the benefit of each party hereto and their respective successors and permitted assigns, and it is not the intention of the parties to confer third-party beneficiary rights upon any other Person (except as provided in Article 7). 10.4 NOTICES. Unless otherwise specifically provided herein, all notices, demands, consents, waivers and other communications required or permitted by the terms of this Agreement shall be in writing, and any notice shall become effective three (3) days after deposit in the United States mails, first class postage prepaid, or one (1) day after delivery to an overnight courier or express company or immediately upon delivery by hand or in the form of telecopy, telegram or other electronic means of communication that produces a written copy, and, if mailed or delivered by courier, express company or hand, shall be addressed as indicated in Section 9.3 of the Agreement and Plan of Merger or Section 6.8 of the Exchange Agreement, as the case may be. 10.5 NO ASSIGNMENT; BINDING EFFECT. Neither this Agreement nor any right, interest, duty or obligation hereunder may be assigned by the Company or any Holder without, in the case of the Company, the prior written consent of the Holders of a majority of the Registrable Securities and, in the case of any Holder, the prior written consent of the Company and the Holders of a majority of the Registrable Securities, and any attempt to assign this Agreement or any right, interest, duty or obligation hereunder without such prior written consent shall be null and void. Subject to the preceding sentence, this Agreement is binding upon, inures to the benefit of and is enforceable by the parties hereto and their respective successors and assigns. 10.6 SEVERABILITY. If any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future law, and if the rights or obligations of any party hereto under this Agreement will not be materially and adversely affected thereby, (i) such provision will be fully severable, (ii) this Agreement will be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof, and (iii) the remaining provisions of this Agreement will remain in full force and effect and will not be affected by the illegal, invalid or unenforceable provision or by its severance from this Agreement. 10.7 GOVERNING LAW. This Agreement has been negotiated and executed and shall be performed in the State of Nevada and shall be governed and construed by the laws of such State, without giving effect to the conflicts of laws principles thereof. 13 10.8 COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. [Signature pages to follow] 14 IN WITNESS WHEREOF, each party has executed this Agreement as of the date first above written. CIRCUS CIRCUS ENTERPRISES, INC., a Nevada corporation By /s/ Clyde T. Turner _______________________________________ Name: Clyde T. Turner Title: President and Chief Executive Officer /s/ Michael S. Ensign __________________________________________ Michael S. Ensign /s/ William A. Richardson __________________________________________ William A. Richardson /s/ David R. Belding __________________________________________ David R. Belding /s/ Peter A. Simon II __________________________________________ Peter A. Simon II /s/ Glenn W. Schaeffer __________________________________________ Glenn W. Schaeffer /s/ Gregg H. Solomon __________________________________________ Gregg H. Solomon S-1 /s/ Antonio C. Alamo __________________________________________ Antonio C. Alamo /s/ Anthony Korfman __________________________________________ Anthony Korfman /s/ William Ensign __________________________________________ William Ensign /s/ Robert J. Verchota __________________________________________ Robert J. Verchota S-2 -----END PRIVACY-ENHANCED MESSAGE-----