AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 17, 2001
REGISTRATION NO. 333-56266
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1 TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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HARRAH'S ENTERTAINMENT, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 7993 62-1411755
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of Industrial Identification No.)
incorporation or organization) Classification Code Number)
ONE HARRAH'S COURT
LAS VEGAS, NV 89119
(702) 407-6000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
HARRAH'S OPERATING COMPANY, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 7993 75-1941623
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of Industrial Identification No.)
incorporation or organization) Classification Code Number)
ONE HARRAH'S COURT
LAS VEGAS, NV 89119
(702) 407-6000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
STEPHEN H. BRAMMELL, ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
HARRAH'S ENTERTAINMENT, INC.
ONE HARRAH'S COURT
LAS VEGAS, NV 89119
(702) 407-6000
COPY TO:
EDWARD SONNENSCHEIN, JR., ESQ. BRAD L. KERBY, ESQ.
LATHAM & WATKINS ASSOCIATE GENERAL COUNSEL AND SECRETARY
633 WEST FIFTH STREET, SUITE 4000 HARRAH'S ENTERTAINMENT, INC.
LOS ANGELES, CALIFORNIA 90071-2007 ONE HARRAH'S COURT
(213) 485-1234 LAS VEGAS, NV 89119
(702) 407-6000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
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If any of the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. / / ________
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. / / ________
----------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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PROSPECTUS
HARRAH'S OPERATING COMPANY, INC.
HARRAH'S ENTERTAINMENT, INC.
OFFER TO EXCHANGE
$500,000,000 PRINCIPAL AMOUNT OF ITS
8.00% SENIOR NOTES DUE 2011,
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT,
FOR ANY AND ALL OF ITS OUTSTANDING UNREGISTERED 8.00% SENIOR NOTES DUE 2011
---------------------
MATERIAL TERMS OF THE EXCHANGE OFFER
- The exchange offer expires at 5:00 p.m., New York City time, on May 25,
2001, unless extended.
- We will exchange all outstanding notes that are validly tendered and not
validly withdrawn for an equal principal amount of a new series of notes
which are registered under the Securities Act.
- You may withdraw tenders of outstanding notes at any time before the
exchange offer expires.
- The exchange notes will not be listed on any securities exchange. A public
market for the exchange notes may not develop, which could make selling
the exchange notes difficult. If a market for the exchange notes develops,
the exchange notes could trade at prices that are higher or lower than the
initial prices of the unregistered notes.
- The exchange of notes will not be a taxable event for U.S. federal income
tax purposes.
- We will not receive any proceeds from the exchange offer.
- The terms of the new series of notes are substantially identical to the
outstanding notes, except for transfer restrictions and registration
rights relating to the outstanding notes.
- You may tender outstanding notes only in denominations of $1,000 and
multiples of $1,000.
- Our affiliates may not participate in the exchange offer.
- The exchange offer is not subject to any conditions other than that it not
violate applicable law or any applicable interpretation of the staff of
the SEC.
PLEASE REFER TO "RISK FACTORS" BEGINNING ON PAGE 10 OF THIS DOCUMENT FOR A
DESCRIPTION OF THE RISKS YOU SHOULD CONSIDER WHEN EVALUATING THIS INVESTMENT.
---------------------
We are not making this exchange offer in any state where it is not
permitted.
None of the Securities and Exchange Commission, any state securities
commission, any state gaming commission or any other gaming authority has
approved of the notes or determined that this prospectus is accurate or
complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is April 17, 2001.
We have not authorized any dealer, salesperson or other person to give any
information or to make any representation other than those contained in this
prospectus. You must not rely upon any information or representation not
contained in this prospectus as if we had authorized it. This prospectus does
not constitute an offer to sell or the solicitation of an offer to buy any
securities other than the registered securities to which it relates, nor does
this prospectus constitute an offer to sell or the solicitation of an offer to
buy securities in any jurisdiction to any person to whom it is unlawful to make
such offer or solicitation in such jurisdiction.
The information in this prospectus is current only as of the date on its
cover, and may change after that date. For any time after the cover date of this
prospectus, we do not represent that our affairs are the same as described or
that the information in this prospectus is correct, nor do we imply those things
by delivering this prospectus to you.
Each broker-dealer that receives exchange notes for its own account pursuant
to the exchange offer must acknowledge that it will deliver a prospectus in
connection with any resale of such exchange notes. The Letter of Transmittal
states that by so acknowledging and by delivering a prospectus, a broker-dealer
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act of 1933, as amended. This prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of exchange notes received in exchange for private notes where such
private notes were acquired by such broker-dealer as a result of market-making
activities or other trading activities. We have agreed that, starting on the
expiration date and ending on the close of business one year after the
expiration date, they will make this prospectus available to any broker-dealer
for use in connection with any such resale. See "Plan of Distribution."
------------------------
TABLE OF CONTENTS
Forward-Looking Statements.................................. 2
Summary..................................................... 3
The Exchange Offer.......................................... 3
The Exchange Notes.......................................... 5
Risk Factors................................................ 10
The Exchange Offer.......................................... 12
Use Of Proceeds............................................. 21
Capitalization.............................................. 22
Selected Financial Data..................................... 23
Regulation And Licensing.................................... 25
Description Of Notes........................................ 27
Plan Of Distribution........................................ 41
Legal Matters............................................... 41
Experts..................................................... 41
Where You Can Find More Information......................... 42
Documents Incorporated By Reference......................... 43
1
FORWARD-LOOKING STATEMENTS
This prospectus includes forward-looking statements, including, in
particular, the statements about our plans, strategies and properties under the
heading "Summary." These forward-looking statements generally can be identified
by phrases such as the company "believes," "expects," "anticipates," "foresees,"
"forecasts," "estimates" or other words or phrases of similar import. Similarly,
such statements herein that describe our business strategy, outlook, objectives,
plans, intentions or goals are also forward-looking statements. All such
forward-looking statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from those in forward-looking
statements. These risks and uncertainties include, but are not limited to:
- economic, bank, equity and debt market conditions;
- changes in laws or regulations;
- third-party relations and approvals;
- decisions of courts, regulators and governmental bodies;
- factors affecting leverage, including interest rates;
- abnormal gaming holds; and
- the effects of competition.
2
SUMMARY
IN THIS PROSPECTUS, THE WORDS "COMPANY," "HARRAH'S," "WE," "OUR," "OURS,"
AND "US" REFER TO HARRAH'S ENTERTAINMENT, INC., A DELAWARE CORPORATION
("HARRAH'S ENTERTAINMENT"), AND ITS WHOLLY OWNED SUBSIDIARY, HARRAH'S OPERATING
COMPANY, INC., A DELAWARE CORPORATION ("HARRAH'S OPERATING"), UNLESS OTHERWISE
STATED OR THE CONTEXT OTHERWISE REQUIRES. THE FOLLOWING SUMMARY CONTAINS BASIC
INFORMATION ABOUT THIS OFFERING. IT MAY NOT CONTAIN ALL THE INFORMATION THAT IS
IMPORTANT TO YOU. THE "DESCRIPTION OF NOTES" SECTION OF THIS PROSPECTUS CONTAINS
MORE DETAILED INFORMATION REGARDING THE TERMS AND CONDITIONS OF THE NOTES.
THE EXCHANGE OFFER
The Exchange Offer........................... We are offering to exchange our exchange notes for
our outstanding private notes properly tendered and
accepted. You may tender outstanding notes only in
denominations of $1,000 and multiples of $1,000. We
will issue the exchange notes on or promptly after
the exchange offer expires. As of the date of this
prospectus, $500,000,000 principal amount of private
notes is outstanding.
Expiration Date.............................. The exchange offer will expire at 5:00 p.m., New York
City time, on May 25, 2001, unless extended, in which
case the expiration date will mean the latest date
and time to which we extend the exchange offer.
Conditions to the Exchange Offer............. The exchange offer is not subject to any conditions
other than that it not violate applicable law or any
applicable interpretation of the staff of the SEC.
The exchange offer is not conditioned upon any
minimum principal amount of private notes being
tendered for exchange.
Procedures for Tendering Private
Notes...................................... If you wish to tender your private notes for exchange
notes pursuant to the exchange offer you must
transmit to the Bank One Trust Company, National
Association, as exchange agent, on or before the
expiration date, either:
- a computer generated message transmitted
through The Depository Trust Company's Automated
Tender Offer Program system and received by the
exchange agent and forming a part of a
confirmation of book-entry transfer in which
you acknowledge and agree to be bound by the
terms of the letter of transmittal; or
- a properly completed and duly executed letter
of transmittal, which accompanies this
prospectus, or a facsimile of the letter of
transmittal, together with your private notes
and any other required documentation, to the
exchange agent at its address listed in this
prospectus and on the front cover of the letter
of transmittal.
3
If you cannot satisfy either of these procedures on a
timely basis, then you should comply with the
guaranteed delivery procedures described below. By
executing the letter of transmittal, you will make
the representations to us described under "The
Exchange Offer--Procedures for Tendering."
Special Procedures for Beneficial Owners..... If you are a beneficial owner whose private notes are
registered in the name of a broker, dealer,
commercial bank, trust company or other nominee and
you wish to tender your private notes in the exchange
offer, you should contact the registered holder
promptly and instruct the registered holder to tender
on your behalf. If you wish to tender on your own
behalf, you must either (1) make appropriate
arrangements to register ownership of the private
notes in your name or (2) obtain a properly completed
bond power from the registered holder, before
completing and executing the letter of transmittal
and delivering your private notes.
Guaranteed Delivery Procedures............... If you wish to tender your private notes and time
will not permit the documents required by the letter
of transmittal to reach the exchange agent before the
expiration date, or the procedure for book-entry
transfer cannot be completed on a timely basis, you
must tender your private notes according to the
guaranteed delivery procedures described in this
prospectus under the heading "The Exchange
Offer--Guaranteed Delivery Procedures."
Acceptance of Private Notes and Delivery of
Exchange Notes............................. Subject to the satisfaction or waiver of the
conditions to the exchange offer, we will accept for
exchange any and all private notes which are validly
tendered in the exchange offer and not withdrawn
before 5:00 p.m., New York City time, on the
expiration date.
Withdrawal Rights............................ You may withdraw the tender of your private notes at
any time before 5:00 p.m., New York City time, on the
expiration date, by complying with the procedures for
withdrawal described in this prospectus under the
heading "The Exchange Offer--Withdrawal of Tenders."
Liquidated Damages........................... We issued the private notes on January 29, 2001, to
the initial purchasers pursuant to a purchase
agreement. At the same time, we entered into a
registration rights agreement with the initial
purchasers requiring us to make the exchange offer.
The registration rights agreement also required us
to:
- cause the registration statement filed with
respect to the exchange offer to be declared
effective by July 28, 2001; and
- consummate the exchange offer by August 27,
2001.
4
Exchange Agent............................... Bank One Trust Company, National Association, the
trustee under the indenture governing the private
notes, is serving as the exchange agent.
Consequences of Failure to Exchange Notes.... If you do not exchange your private notes for
exchange notes, you will continue to be subject to
the restrictions on transfer provided in the private
notes and in the indenture governing the private
notes. In general, the private notes may not be
offered or sold, unless registered under the
Securities Act, except pursuant to an exemption from,
or in a transaction not subject to, the Securities
Act and applicable state securities laws. We do not
currently plan to register the private notes under
the Securities Act.
Registration Rights Agreement................ You are entitled to exchange your private notes for
exchange notes with substantially identical terms.
The exchange offer satisfies this right. After the
exchange offer is completed, you will no longer be
entitled to any exchange or registration rights with
respect to your private notes. Under the
circumstances described in the registration rights
agreement, you may require us to file a shelf
registration statement under the Securities Act.
We explain the exchange offer in greater detail beginning on page 12.
THE EXCHANGE NOTES
The form and terms of the exchange notes are the same as the form and terms
of the private notes, except that the exchange notes will be registered under
the Securities Act and, therefore, the exchange notes will not be subject to the
transfer restrictions, registration rights and provisions providing for an
increase in the interest rate applicable to the private notes. The exchange
notes will evidence the same debt as the private notes and both the private
notes and the exchange notes, collectively, the "notes," are governed by the
same indenture.
Total Amount of Notes Offered................ $500,000,000 principal amount of 8.00% Senior Notes
due 2011.
Maturity..................................... February 1, 2011.
Interest..................................... 8.00% per year.
Interest Payment Dates....................... February 1 and August 1, beginning on August 1, 2001.
Interest will accrue from the issue date of the
notes.
Optional Redemption.......................... We may redeem some or all of the exchange notes at
any time at the redemption price described in the
"Description of Notes" section under the heading
"Optional Redemption," plus accrued interest to the
date of redemption.
5
Guarantee.................................... Harrah's Entertainment unconditionally guarantees the
notes. However, because Harrah's Entertainment's sole
material asset is its equity interest in Harrah's
Operating, Harrah's Entertainment is dependent on the
receipt of dividends or other payments from Harrah's
Operating to make payments on the guarantee of the
notes.
Ranking...................................... The notes are unsecured senior obligations of
Harrah's Operating. At December 31, 2000, after
giving effect to the issuance of the notes, the notes
would have ranked equal in right of payment with
$1,941.6 million of other senior indebtedness of
Harrah's Operating, including $1,234.4 million under
our credit facility. However, $103.2 million of such
indebtedness represents obligations of our
subsidiaries, all of which would effectively rank
senior to the notes.
Covenants.................................... The indenture governing the notes contains covenants
that limit our ability and our subsidiaries' ability
to:
- enter into certain sale and lease-back
transactions;
- incur liens on our assets to secure debt;
- merge or consolidate with another company; and
- transfer or sell substantially all of our assets.
For more details, see the "Additional Covenants of
Harrah's Operating" section under the headings
"Description of Notes" and "Merger, Consolidation or
Sale of Assets" in this prospectus.
Form of Exchange Notes....................... The exchange notes will be represented by one or more
permanent global certificates, in fully registered
form, deposited with a custodian for, and registered
in the name of a nominee of, The Depository Trust
Company, as depositary. You will not receive exchange
notes in certificated form unless one of the events
described under the heading "Book-Entry; Delivery;
Form and Transfer--Transfers of Interests in Global
Notes for Certificated Notes" occurs. Instead,
beneficial interests in the exchange notes will be
shown on, and transfers of these notes will be
effected only through, records maintained in
book-entry form by The Depository Trust Company and
its participants.
Use of Proceeds.............................. We will not receive any cash proceeds in the exchange
offer.
We explain the exchange notes in greater detail beginning on page 27.
6
THE COMPANY
We are one of the leading casino entertainment companies in the United
States, operating in more markets than any other casino company and offering a
Harrah's casino experience within a three-hour drive of one-third of the U.S.
population. Our casino entertainment facilities, operating under the Harrah's,
Rio, Showboat and Players brand names, include eight land-based casinos, nine
riverboat or dockside casinos, and three casinos on Indian reservations. In
addition, during the first quarter of 2000, we signed a definitive agreement
with the Rincon San Luiseno Band of Mission Indians to build and manage a
$125 million casino and hotel on Rincon tribal land. The Tribe began operations
of a temporary casino on January 11, 2001. We do not manage the Tribe's
temporary casino. We also own a non-controlling interest in and manage the only
land-based casino in New Orleans, Louisiana.
The following table sets forth our gaming operations as of December 31,
2000, including number of hotel rooms, slots and gaming tables, and casino
square footage.
CASINO
SQUARE HOTEL GAMING
MARKET/PROPERTY TYPE OF CASINO FOOTAGE ROOMS SLOTS TABLES
--------------- -------------- -------- -------- -------- --------
ATLANTIC CITY, NEW JERSEY
Harrah's Atlantic City............................ Land-based 94,600 1,174(1) 3,246 82
Atlantic City Showboat............................ Land-based 95,500 800 3,345 68
LAS VEGAS, NEVADA
Harrah's Las Vegas................................ Land-based 87,700 2,600 1,755 68
Rio Suite Hotel & Casino.......................... Land-based 109,500 2,548 2,294 106
LAKE TAHOE, NEVADA
Harrah's Lake Tahoe............................... Land-based 65,500 527 1,664 80
Bill's Lake Tahoe................................. Land-based 18,000 -- 573 19
RENO, NEVADA
Harrah's Reno..................................... Land-based 57,000 958 1,495 63
LAUGHLIN, NEVADA
Harrah's Laughlin................................. Land-based 47,000 1,580 1,212 39
NEW ORLEANS, LOUISIANA
Harrah's New Orleans(2)........................... Land-based 100,000 -- 2,700 130
LAKE CHARLES, LOUISIANA
Harrah's Lake Charles............................. Riverboat 28,300 264 1,618 65
CHICAGO, ILLINOIS AREA
Harrah's Joliet (Illinois)(3)..................... Dockside 39,160 204 1,127 33
Harrah's East Chicago (Indiana)................... Riverboat 49,210 --(4) 1,895 71
METROPOLIS, ILLINOIS
Players Island Casino Metropolis(5)............... Dockside 22,500 -- 1,057 29
TUNICA, MISSISSIPPI
Harrah's Tunica................................... Dockside 50,000 200 1,409 23
VICKSBURG, MISSISSIPPI
Harrah's Vicksburg................................ Dockside 21,000 117 748 15
SHREVEPORT, LOUISIANA
Harrah's Shreveport............................... Dockside 22,550 --(6) 1,174 32
NORTH KANSAS CITY, MISSOURI
Harrah's North Kansas City(7)..................... Dockside 62,100 198 2,215 61
ST. LOUIS, MISSOURI
Harrah's St. Louis Riverport...................... Dockside 120,000 291 3,215 77
PHOENIX, ARIZONA Indian
Harrah's Phoenix Ak-Chin Casino................... Reservation 38,000 --(8) 475 10
CHEROKEE, NORTH CAROLINA Indian
Harrah's Cherokee Smoky Mountains Casino.......... Reservation 60,000 --(9) 2,696 --
TOPEKA, KANSAS Indian
Harrah's Prairie Band Casino-Topeka............... Reservation 32,958 100 968 31
(FOOTNOTES ON FOLLOWING PAGE)
7
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(1) In April 2000, we announced plans for a 450-room expansion at Harrah's
Atlantic City, expected to be completed in the first quarter of 2002.
(2) Harrah's New Orleans is owned by JCC Holding Company, which is approximately
49% owned by us. We also manage the casino.
(3) We plan to convert Harrah's Joliet from a docked riverboat operation to a
dockside barge configuration, which is expected to be completed in the
fourth quarter of 2001.
(4) We currently are in the process of constructing a 292-room hotel at Harrah's
East Chicago, which is expected to be completed in the fourth quarter of
2001.
(5) Players Island Casino Metropolis is expected to be converted to Harrah's in
the fourth quarter of 2001.
(6) We opened a 514-room hotel at Harrah's Shreveport in the first quarter of
2001.
(7) Construction is underway to enlarge the dockside barge facility at Harrah's
North Kansas City. When this construction is completed in the second quarter
of 2001, we plan to consolidate the casino operations into this facility and
remove the riverboat casino from service to increase operation efficiencies.
(8) A 146-room hotel opened at Harrah's Phoenix Ak-Chin in the first quarter of
2001.
(9) Construction of a 252-room hotel is currently underway and is expected to be
completed in the fourth quarter of 2001.
BRAND STRATEGY
We seek to differentiate ourselves by building the industry's only national
brand. To accomplish this objective, we have invested significant time and
resources learning who the best customers in our industry are and what they want
from a gaming experience. We are building our brand with a focus on the broad
middle market gaming segment, but because of our strategy, we are uniquely
positioned to appeal to those customers that play in more than one market. We
believe that these customers represent 12% of the industry's customers, but
generate 55% of the industry's revenue. Our strategy is comprised of four
integrated components which we believe combine to create a sustainable
competitive advantage for Harrah's. These four elements are national geographic
distribution, quality facilities, proprietary technology and superior customer
service.
NATIONAL GEOGRAPHIC DISTRIBUTION
Geographic distribution serves as the foundation of our strategy. We
currently operate 21 casinos in 17 markets in the United States, more than
any other casino operator. As a result, we not only have diversified sources
of revenue and earnings, but this geographic distribution allows us to
develop relationships with a large number of customers in many markets.
Because many of our markets have a limited number of gaming licenses, most
of which have already been allocated, we believe it will be difficult for a
competitor to duplicate our nationwide scope. In addition, through strategic
growth opportunities, we expect to continue to expand our distribution and
build even greater access to our target customers.
QUALITY FACILITIES
We have completed a large investment program in our facilities to ensure
consistent quality among our properties as a necessary component in building
a national brand. Our ongoing maintenance capital expenditure program
ensures that our properties maintain a high level of
8
quality and meet the expectations of our target customer. In 2001, our
capital program includes: a 450-room expansion of Harrah's Atlantic City;
construction of a 292-room hotel at Harrah's East Chicago; completion of a
514-room hotel and shoreside expansion at Harrah's Shreveport; expanding the
casino floor at Harrah's North Kansas City; converting Harrah's Joliet from
a cruising riverboat operation to a dockside barge configuration to take
full advantage of dockside gaming in this market; and converting Players
Metropolis to a Harrah's branded property, including upgrading the existing
riverboat.
PROPRIETARY TECHNOLOGY
We have invested in proprietary technology and tools that help us better
market to and understand our customers. Our proprietary technology not only
enables us to market effectively and efficiently but also gives us the
ability to operate centralized back office systems to achieve economies of
scale and synergies. Our patent tiered player card program, Total Rewards,
is the only program in the casino industry that rewards and recognizes
casino customers on a nationwide basis. Total Rewards allows customers to
earn credits based on play. The number of credits establishes the Total
Rewards tier--Gold, Platinum, or Diamond--that a player qualifies. Each tier
provides a different level of benefits so that the more credits a player
earns by playing within Harrah's family of brands, the more benefits the
player gains. Total Rewards is available in all Harrah's branded properties
as well as Rio and Showboat. Credits can also be redeemed for cash,
merchandise, food, lodging or show tickets at any Harrah's Entertainment
casino across the country. There are currently over 19 million records in
our customer database. Total Rewards was launched in September 1997. Total
Rewards integrates all of our Harrah's casinos and, as such, serves as a
platform on which we are able to build national brand loyalty.
SUPERIOR CUSTOMER SERVICE
We are committed to ensuring that our employees deliver a recognizable,
differentiated customer experience based on level of play. Our goal is to
increase the number of target customers who visit our casinos and to capture
a greater share of their gaming budget. The key to this strategy is having
highly capable, motivated employees that engender customer loyalty in local
markets, and then capturing the revenues generated by these loyal customers
when they travel to other markets.
We believe that our strategy continues to evolve and build loyalty with our
target customer through the use and development of our unique capabilities in
addition to the four integrated components described above. We have developed
unique capabilities such as Total Rewards, sophisticated direct marketing and
telemarketing tools and programs, enhanced revenue management systems, Internet
capabilities and data mining and data modeling capabilities. These capabilities,
together with our information rich and extensive customer database, allow us to
build loyalty that translates into same store sales growth.
Our principal executive offices are located at One Harrah's Court, Las
Vegas, Nevada 89119. Our telephone number is (702) 407-6000.
9
RISK FACTORS
YOU SHOULD READ CAREFULLY THIS ENTIRE PROSPECTUS BEFORE INVESTING IN THE
NOTES. AMONG THE FACTORS THAT MAY ADVERSELY AFFECT AN INVESTMENT IN THE NOTES
ARE THE FOLLOWING:
OUR SUBSTANTIAL INDEBTEDNESS COULD ADVERSELY AFFECT OUR FINANCIAL RESULTS AND
PREVENT US FROM FULFILLING OUR OBLIGATIONS UNDER THE NOTES.
We currently have a significant amount of indebtedness. At December 31,
2000, after giving effect to this offering, our total consolidated indebtedness
would have been approximately $3,186.0 million. See "Capitalization."
The notes will not restrict our ability to borrow substantial additional
unsecured indebtedness in the future. If new indebtedness is added to our
current debt levels, the related risks that we now face could increase.
Our indebtedness could have important consequences for the holders of the
notes, including:
- limiting our ability to satisfy our obligations with respect to the notes;
- increasing our vulnerability to general adverse economic and industry
conditions;
- limiting our ability to obtain additional financing to fund future working
capital, capital expenditures and other general corporate requirements;
- requiring a substantial portion of our cash flow from operations for the
payment of principal of, and interest on, our indebtedness and reducing
our ability to use our cash flow to fund working capital, capital
expenditures and general corporate requirements;
- limiting our flexibility in planning for, or reacting to, changes in our
business and the industry; and
- disadvantaging us compared to competitors with less indebtedness.
SERVICING OUR INDEBTEDNESS WILL REQUIRE A SIGNIFICANT AMOUNT OF CASH. OUR
ABILITY TO GENERATE CASH DEPENDS ON MANY FACTORS BEYOND OUR CONTROL.
Our ability to make payments on our indebtedness, including these notes, and
to fund planned capital expenditures will depend on our ability to generate cash
in the future. Harrah's Entertainment is a holding company and Harrah's
Operating conducts substantially all of its operations through its subsidiaries.
As a result, our ability to meet our debt service obligations substantially
depends upon our subsidiaries' cash flow and payments of funds to us by our
subsidiaries. This ability, to some extent, is subject to general economic,
financial, competitive, legislative, regulatory and other factors that are
beyond our control.
Based on our current level of operations and recent acquisitions, we believe
our cash flow from operations, available cash and available borrowings under our
credit facility will be adequate to meet our liquidity needs for the next few
years.
We cannot assure you, however, that our business will generate sufficient
cash flow from operations or that future borrowings will be available to us
under our credit facility in an amount sufficient to enable us to pay our
indebtedness, including these notes, or to fund our other liquidity needs. We
may need to refinance all or a portion of our indebtedness, including these
notes on or before maturity. We cannot assure you that we will be able to
refinance any of our indebtedness on commercially reasonable terms or at all.
10
ALTHOUGH THESE NOTES ARE REFERRED TO AS "SENIOR NOTES," THEY WILL BE EFFECTIVELY
SUBORDINATED TO OUR SECURED INDEBTEDNESS AND THE INDEBTEDNESS OF OUR
SUBSIDIARIES.
The notes are unsecured and therefore will be effectively subordinated to
any secured indebtedness we may incur to the extent of the value of the assets
securing such indebtedness. In the event of a bankruptcy or similar proceeding
involving us, our assets which serve as collateral will be available to satisfy
the obligations under any secured indebtedness before any payments are made on
the notes. In addition, our subsidiaries will not guarantee the notes. In the
event of a bankruptcy, liquidation or reorganization of any of our subsidiaries,
creditors of our subsidiaries will generally be entitled to payment of their
claims from the assets of those subsidiaries before any assets are made
available for distribution to us, except to the extent we may also have a claim
as a creditor. Assuming we had completed this offering on December 31, 2000, the
notes would have been effectively junior to approximately $103.2 million of
indebtedness of subsidiaries of Harrah's Operating.
WE MAY INCUR ADDITIONAL LOSSES RELATED TO THE NEW ORLEANS LAND-BASED CASINO.
On January 4, 2001, JCC Holding Company, the owner and operator of the New
Orleans, Louisiana land-based casino managed by one of our subsidiaries pursuant
to a contract, filed a voluntary petition for relief under Chapter 11 of the
United States Bankruptcy Code. On January 12, 2001, JCC Holding filed a plan of
reorganization which was supported by us, and the bank lenders and bondholders
of JCC Holding. On the basis of the plan filed, we recorded reserves of
approximately $220 million against the loans, interest, deferred fees and other
receivables we hold for JCC Holding in the fourth quarter of 2000. The plan of
reorganization was consummated on March 29, 2001.
We could face additional losses relating to the New Orleans casino. In
connection with the consummation of the plan, we guaranteed tax payments to the
state up to $230 million. We also received $51 million in term debt of the
reorganized company and we are providing $35 million in revolving debt to the
reorganized company. If the casino does not perform well and experiences
financial difficulty, we would be responsible for state tax payments to the
extent that JCC Holding is unable to pay such amounts. We could also incur
losses resulting from the loans we provided to and our equity ownership in JCC
Holding. In addition, we face exposure to accounting losses if the casino does
not perform well. It is also possible that other stakeholders in the casino
could pursue litigation against us, although none has been filed or threatened
to date.
AN ACTIVE TRADING MARKET MAY NOT DEVELOP FOR THE NOTES.
There is no existing trading market for the notes. Although the initial
purchasers of the private notes have informed us that they currently intend to
make a market in the notes they have no obligation to do so and may discontinue
making a market at any time without notice.
We do not intend to apply for listing of the exchange notes on any
securities exchange or for quotation on the Nasdaq National Market.
The liquidity of any market for the notes will depend on a number of
factors, including:
- the number of holders of the notes;
- our performance;
- the market for similar securities;
- the interest of securities dealers in making a market in the notes; and
- prevailing interest rates.
We cannot assure you that an active market for the notes will develop or, if
developed, that it will continue.
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THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
We sold the private notes on January 29, 2001, to Salomon Smith
Barney Inc., Banc of America Securities LLC, Credit Suisse First Boston
Corporation, Deutsche Banc Alex. Brown Inc., Goldman, Sachs & Co., Lehman
Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan
Stanley & Co. Incorporated, Bear, Stearns & Co. Inc., BNY Capital
Markets, Inc., CIBC World Markets Corp., Commerzbank Capital Markets Corp.,
Credit Lyonnais Securities (USA) Inc., Fleet Securities, Inc., SG Cowen
Securities Corporation, Wasserstein Perella Securities, Inc., and Wells Fargo
Brokerage Services, LLC, the initial purchasers, pursuant to a purchase
agreement. The initial purchasers subsequently sold the private notes to
"qualified institutional buyers," as defined in Rule 144A under the Securities
Act, in reliance on Rule 144A, and outside the United States under Regulation S
of the Securities Act. As a condition to the sale of the private notes, we
entered into a registration rights agreement with the initial purchasers on
January 29, 2001. Pursuant to the registration rights agreement, we agreed that
we would:
(1) file a registration statement with the SEC with respect to the exchange
notes on or before April 29, 2001;
(2) use our best efforts to cause the registration statement to be declared
effective by the SEC on or before July 28, 2001;
(3) use our best efforts to complete the exchange offer by August 27, 2001;
(4) use our best efforts to keep the registration statement effective until
the closing of the exchange offer;
(5) use our best efforts to keep the exchange offer open for a period of not
less than 20 business days; and
(6) use our best efforts to cause the exchange offer to be completed no
later than the 30th business day after notice thereof is mailed to the
holders of the notes.
Upon the effectiveness of the registration statement, we will offer the
exchange notes in exchange for the private notes. We filed a copy of the
registration rights agreement as an exhibit to the registration statement.
RESALE OF THE EXCHANGE NOTES
Based upon an interpretation by the staff of the SEC contained in no-action
letters issued to third parties, we believe that you may exchange private notes
for exchange notes in the ordinary course of business. For further information
on the SEC's position, see EXXON CAPITAL HOLDINGS CORPORATION, available
May 13, 1988, MORGAN STANLEY & CO. INCORPORATED, available June 5, 1991 and
SHEARMAN & STERLING, available July 2, 1993, and other interpretive letters to
similar effect. You will be allowed to resell exchange notes to the public
without further registration under the Securities Act and without delivering to
purchasers of the exchange notes a prospectus that satisfies the requirements of
Section 10 of the Securities Act so long as you do not participate, do not
intend to participate, and have no arrangement with any person to participate,
in a distribution of the exchange notes. However, the foregoing does not apply
to you if you are:
- a broker-dealer who purchases the exchange notes directly from us to
resell pursuant to Rule 144A or any other available exemption under the
Securities Act; or
- you are an "affiliate" of ours within the meaning of Rule 405 under the
Securities Act.
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In addition, if:
- you are a broker-dealer, or
- you acquire exchange notes in the exchange offer for the purpose of
distributing or participating in the distribution of the exchange notes,
you cannot rely on the position of the staff of the SEC contained in the
no-action letters mentioned above and must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
resale transaction, unless an exemption from registration is otherwise
available.
Each broker-dealer that receives exchange notes for its own account in
exchange for private notes, which the broker-dealer acquired as a result of
market-making activities or other trading activities, must acknowledge that it
will deliver a prospectus in connection with any resale of the exchange notes.
The letter of transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. A broker-dealer may use
this prospectus, as it may be amended or supplemented from time to time, in
connection with resales of exchange notes received in exchange for private notes
which the broker-dealer acquired as a result of market-making or other trading
activities.
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions described in this prospectus
and in the letter of transmittal, we will accept any and all private notes
validly tendered and not withdrawn before the expiration date. We will issue
$1,000 principal amount of exchange notes in exchange for each $1,000 principal
amount of outstanding private notes surrendered pursuant to the exchange offer.
You may tender private notes only in integral multiples of $1,000.
The form and terms of the exchange notes are the same as the form and terms
of the private notes except that:
- we will register the exchange notes under the Securities Act and,
therefore, the exchange notes will not bear legends restricting their
transfer; and
- holders of the exchange notes will not be entitled to any of the rights of
holders of private notes under the registration rights agreement, which
rights will terminate upon the completion of the exchange offer.
The exchange notes will evidence the same debt as the private notes and will
be issued under the same indenture, so the exchange notes and the private notes
will be treated as a single class of debt securities under the indenture.
As of the date of this prospectus, $500,000,000 in aggregate principal
amount of the private notes are outstanding and registered in the name of
Cede & Co., as nominee for The Depository Trust Company. Only registered holders
of the private notes, or their legal representative or attorney-in-fact, as
reflected on the records of the trustee under the indenture may participate in
the exchange offer. We will not set a fixed record date for determining
registered holders of the private notes entitled to participate in the exchange
offer.
You do not have any appraisal or dissenters' rights under the indenture in
connection with the exchange offer. We intend to conduct the exchange offer in
accordance with the provisions of the registration rights agreement and the
applicable requirements of the Securities Act, the Exchange Act and the rules
and regulations of the SEC.
We will be deemed to have accepted validly tendered private notes when, as
and if we had given oral or written notice of acceptance to the exchange agent.
The exchange agent will act as your agent for the purposes of receiving the
exchange notes from us.
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If you tender private notes in the exchange offer you will not be required
to pay brokerage commissions or fees or, subject to the instructions in the
letter of transmittal, transfer taxes with respect to the exchange of private
notes pursuant to the exchange offer. We will pay all charges and expenses,
other than the applicable taxes described below, in connection with the exchange
offer.
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term expiration date will mean 5:00 p.m., New York City time on May 25,
2001, unless we, in our sole discretion, extend the exchange offer, in which
case the term expiration date will mean the latest date and time to which we
extend the exchange offer.
To extend the exchange offer, we will:
- notify the exchange agent of any extension orally or in writing; and
- mail to each registered holder an announcement that will include
disclosure of the approximate number of private notes deposited to date,
each before 9:00 a.m., New York City time, on the next business day after the
previously scheduled expiration date.
We reserve the right, in our reasonable discretion:
- to delay accepting any private notes:
- to extend the exchange offer; or
- if any conditions listed below under "--Conditions" are not satisfied, to
terminate the exchange offer by giving oral or written notice of the
delay, extension or termination to the exchange agent.
We will follow any delay in acceptance, extension or termination as promptly
as practicable by oral or written notice to the registered holders. If we amend
the exchange offer in a manner we determine constitutes a material change, we
will promptly disclose the amendment in a prospectus supplement that we will
distribute to the registered holders. We will also extend the exchange offer for
a period of five to ten business days, depending upon the significance of the
amendment and the manner of disclosure, if the exchange offer would otherwise
expire during the five to ten business day period.
INTEREST ON THE EXCHANGE NOTES
The exchange notes will bear interest at the same rate and on the same terms
as the private notes. Consequently, the exchange notes will bear interest at a
rate equal to 8.00% per annum. Interest will be payable semi-annually in arrears
on February 1 and August 1, commencing August 1, 2001.
You will receive interest on August 1, 2001 from the date of initial
issuance of the exchange notes, plus an amount equal to the accrued interest on
the private notes from the date of issuance to the day preceding the date of
exchange for exchange notes. We will deem the right to receive any interest
accrued on the private notes waived by you if we accept your private notes for
exchange.
PROCEDURES FOR TENDERING
You may tender private notes in the exchange offer only if you are a
registered holder of private notes. To tender in the exchange offer, you must:
- complete, sign and date the letter of transmittal or a facsimile of the
letter of transmittal;
- have the signatures guaranteed if required by the letter of transmittal;
and
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- mail or otherwise deliver the letter of transmittal or the facsimile to
the exchange agent at the address listed below under "--Exchange Agent"
for receipt before the expiration date.
In addition, either:
- the exchange agent must receive certificates for the private notes along
with the letter of transmittal into its account at the depositary pursuant
to the procedure for book-entry transfer described below before the
expiration date;
- the exchange agent must receive a timely confirmation of a book-entry
transfer of the private notes, if the procedure is available, into its
account at the depositary pursuant to the procedure for book-entry
transfer described below before the expiration date; or
- you must comply with the guaranteed delivery procedures described below.
Your tender, if not withdrawn before the expiration date, will constitute an
agreement between you and us in accordance with the terms and subject to the
conditions described in this prospectus and in the letter of transmittal.
THE METHOD OF DELIVERY OF PRIVATE NOTES AND THE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT YOUR ELECTION AND RISK.
WE RECOMMEND THAT INSTEAD OF DELIVERY BY MAIL, YOU USE AN OVERNIGHT OR HAND
DELIVERY SERVICE, PROPERLY INSURED. IF YOU CHOOSE DELIVERY BY MAIL, WE RECOMMEND
REGISTERED MAIL, RETURN RECEIPT REQUESTED, PROPERLY INSURED. IN ALL CASES, YOU
SHOULD ALLOW SUFFICIENT TIME TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE
EXPIRATION DATE. YOU SHOULD NOT SEND LETTERS OF TRANSMITTAL OR PRIVATE NOTES TO
US. YOU MAY REQUEST YOUR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST
COMPANIES OR NOMINEES TO EFFECT THE TRANSACTIONS DESCRIBED ABOVE FOR YOU.
If you are a beneficial owner of private notes whose private notes are
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee and you wish to tender your notes, you should contact the
registered holder promptly and instruct the registered holder to tender on your
behalf. If you wish to tender on your own behalf, before completing and
executing the letter of transmittal and delivering the private notes you must
either:
- make appropriate arrangements to register ownership of the private notes
in your name; or
- obtain a properly completed bond power from the registered holder.
The transfer of registered ownership may take considerable time. Unless the
private notes are tendered:
(1) by a registered holder who has not completed the box entitled "Special
Issuance Instructions" or the box entitled "Special Delivery
Instructions" on the letter of transmittal; or
(2) for the account of:
- a member firm of a registered national securities exchange or of the
National Association of Securities Dealers, Inc.,
- a commercial bank or trust company having an office or correspondent in
the United States; or
- an "eligible guarantor institution" within the meaning of Rule 17Ad-15
under the Exchange Act that is a member of one of the recognized
signature guarantee programs identified in the letter of transmittal,
an eligible guarantor institution must guarantee the signatures on a letter of
transmittal or a notice of withdrawal described below under "--Withdrawal of
Tenders."
15
If the letter of transmittal is signed by a person other than the registered
holder, the private notes must be endorsed or accompanied by a properly
completed bond power, signed by the registered holder as the registered holder's
name appears on the private notes.
If the letter of transmittal or any private notes or bond powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, they
should so indicate when signing, and unless waived by us, they must submit
evidence satisfactory to us of their authority to so act with the letter of
transmittal.
A tender will be deemed to have been received as of the date when the
tendering holder's duly signed letter of transmittal accompanied by the
unregistered notes tendered, or a timely confirmation received by a book-entry
transfer of unregistered notes into the exchange agent's account at DTC with an
agent's message, or a notice of guaranteed delivery from an eligible institution
is received by the exchange agent. Issuances of exchange notes in exchange for
unregistered notes tendered under a notice of guaranteed delivery by an eligible
institution will be made only against delivery of the letter of transmittal, and
any other required documents, and the tendered unregistered notes, or a timely
confirmation received of a book-entry transfer of unregistered notes into the
exchange agent's account at DTC with an agent's message, to the exchange agent.
The exchange agent and the depositary have confirmed that any financial
institution that is a participant in the depositary's system may utilize the
depositary's Automated Tender Offer Program to tender notes.
We will determine in our sole discretion all questions as to the validity,
form, eligibility, including time of receipt, acceptance and withdrawal of
tendered private notes, which determination will be final and binding. We
reserve the absolute right to reject any and all private notes not properly
tendered or any private notes our acceptance of which would, in the opinion of
our counsel, be unlawful. We also reserve the right to waive any defects,
irregularities or conditions of tender as to particular private notes. Our
interpretation of the terms and conditions of the exchange offer, including the
instructions in the letter of transmittal, will be final and binding on all
parties. Unless waived, you must cure any defects or irregularities in
connection with tenders of private notes within the time we determine. Although
we intend to notify you of defects or irregularities with respect to tenders of
private notes, neither we, the exchange agent nor any other person will incur
any liability for failure to give you that notification. Unless waived, we will
not deem tenders of private notes to have been made until you cure the defects
or irregularities.
While we have no present plan to acquire any private notes that are not
tendered in the exchange offer or to file a registration statement to permit
resales of any private notes that are not tendered in the exchange offer, we
reserve the right in our sole discretion to purchase or make offers for any
private notes that remain outstanding after the expiration date. We also reserve
the right to terminate the exchange offer, as described below under
"--Conditions," and, to the extent permitted by applicable law, purchase private
notes in the open market, in privately negotiated transactions or otherwise. The
terms of any of those purchases or offers could differ from the terms of the
exchange offer.
By tendering, you will be making several representations to us including
that:
(1) the exchange notes to be acquired by you are being acquired by you in
the ordinary course of your business;
(2) you are not participating in, and do not intend to participate in, a
distribution of the exchange notes;
(3) you have no arrangement or understanding with any person to participate
in the distribution of the exchange notes;
16
(4) you satisfy specific requirements of your state's securities
regulations;
(5) if you are a broker-dealer or are participating in the exchange offer
for the purposes of distributing the exchange notes, you will comply with
the registration and prospectus delivery requirements of the Securities
Act in connection with a secondary resale transaction of the exchange
notes acquired by you and cannot rely on the position of the staff of the
Securities and Exchange Commission set forth in no-action letters issued
to third parties;
(6) if you are a broker-dealer, you understand that a secondary resale
transaction described in clause (5) above and any resales of exchange
notes obtained by you in exchange for unregistered notes acquired by you
directly from us should be covered by an effective registration statement
containing the selling securityholder information required by Item 507
and Item 508, as applicable, of Regulation S-K under the Securities Act;
and
(7) you are not our affiliate as defined in Rule 405 under the Securities
Act.
If you are a broker-dealer that will receive exchange notes for your own
account in exchange for unregistered notes that were acquired as a result of
market-making activities or other trading activities, you will also be required
to acknowledge in the letter of transmittal that you will deliver a prospectus
in connection with any resale of those exchange notes; however, by so
acknowledging and by delivering a prospectus, you will not be deemed to admit
that you are an underwriter within the meaning of the Securities Act.
RETURN OF PRIVATE NOTES
If we do not accept any tendered private notes for any reason described in
the terms and conditions of the exchange offer or if you withdraw or submit
private notes for a greater principal amount than you desire to exchange, we
will return the unaccepted, withdrawn or non-exchanged notes without expense to
you as promptly as practicable. In the case of private notes tendered by book-
entry transfer into the exchange agent's account at the depositary pursuant to
the book-entry transfer procedures described below, we will credit the private
notes to an account maintained with the depositary as promptly as practicable.
BOOK-ENTRY TRANSFER
The exchange agent will make a request to establish an account with respect
to the private notes at the depositary for purposes of the exchange offer within
two business days after the date of this prospectus, and any financial
institution that is a participant in the depositary's systems may make book-
entry delivery of private notes by causing the depositary to transfer the
private notes into the exchange agent's account at the depositary in accordance
with the depositary's procedures for transfer. However, although delivery of
private notes may be effected through book-entry transfer at the depositary, you
must transmit and the exchange agent must receive, the letter of transmittal or
a facsimile of the letter of transmittal, with any required signature guarantees
and any other required documents, at the address below under "--Exchange Agent"
on or before the expiration date or pursuant to the guaranteed delivery
procedures described below.
GUARANTEED DELIVERY PROCEDURES
If you wish to tender your private notes and (1) the notes are not
immediately available or (2) you cannot deliver the private notes, the letter of
transmittal or any other required documents to the exchange agent before the
expiration date, you may effect a tender if:
(a) the tender is made through an eligible guarantor institution;
17
(b) before the expiration date, the exchange agent receives from the
eligible guarantor institution a properly completed and duly executed
notice of guaranteed delivery, substantially in the form provided by us,
that:
- states your name and address, the certificate number(s) of the private
notes and the principal amount of private notes tendered,
- states that the tender is being made by that notice of guaranteed
delivery, and
- guarantees that, within three New York Stock Exchange trading days
after the expiration date, the eligible guarantor institution will
deposit with the exchange agent the letter of transmittal, together
with the certificate(s) representing the private notes in proper form
for transfer or a confirmation of a book-entry transfer, as the case
may be, and any other documents required by the letter of transmittal;
and
(c) within five New York Stock Exchange trading days after the expiration
date, the exchange agent receives a properly executed letter of
transmittal, as well as the certificate(s) representing all tendered
private notes in proper form for transfer and all other documents
required by the letter of transmittal.
Upon request, the exchange agent will send to you a notice of guaranteed
delivery if you wish to tender your notes according to the guaranteed delivery
procedures described above.
WITHDRAWAL OF TENDERS
Except as otherwise provided in this prospectus, you may withdraw tenders of
private notes at any time before 5:00 p.m., New York time, on the expiration
date.
To withdraw a tender of private notes in the exchange offer, the exchange
agent must receive a written or facsimile transmission notice of withdrawal at
its address listed in this prospectus before the expiration date. Any notice of
withdrawal must:
- specify the name of the person who deposited the private notes to be
withdrawn;
- identify the private notes to be withdrawn, including the certificate
number(s) and principal amount of the private notes;
- be signed in the same manner as the original signature on the letter of
transmittal by which the private notes were tendered, including any
required signature guarantees; and
- if applicable because the unregistered notes have been tendered under the
book-entry procedures, specify the name and number of the participant's
account at DTC to be credited, if different than that of the person having
tendered the unregistered notes to be withdrawn.
We will determine in our sole discretion all questions as to the validity,
form and eligibility of the notices, and our determination will be final and
binding on all parties. We will not deem any properly withdrawn private notes to
have been validly tendered for purposes of the exchange offer, and we will not
issue exchange notes with respect to those private notes, unless you validly
retender the withdrawn private notes. You may retender properly withdrawn
private notes by following one of the procedures described above under "The
Exchange Offer--Procedures for Tendering" at any time before the expiration
date.
CONDITIONS
Notwithstanding any other term of the exchange offer, we will not be
required to accept for exchange, or exchange the exchange notes for, any private
notes, and may terminate the exchange offer as provided in this prospectus
before the acceptance of the private notes, if, in our reasonable
18
judgment, the exchange offer violates applicable law, rules or regulations or an
applicable interpretation of the staff of the SEC.
If we determine in our reasonable discretion that any of these conditions
are not satisfied, we may:
- refuse to accept any private notes and return all tendered private notes
to you;
- extend the exchange offer and retain all private notes tendered before the
exchange offer expires, subject, however, to your rights to withdraw the
private notes; or
- waive the unsatisfied conditions with respect to the exchange offer and
accept all properly tendered private notes that have not been withdrawn.
If the waiver constitutes a material change to the exchange offer, we will
promptly disclose the waiver by means of a prospectus supplement that we will
distribute to the registered holders of the private notes, and we will extend
the exchange offer for a period of five to ten business days, depending upon the
significance of the waiver and the manner of disclosure to the registered
holders, if the exchange offer would otherwise expire during the five to ten
business day period.
TERMINATION OF RIGHTS
All of your rights under the registration rights agreement will terminate
upon consummation of the exchange offer except with respect to our continuing
obligations:
- to indemnify you and parties related to you against liabilities, including
liabilities under the Securities Act;
- to provide, upon your request, the information required by
Rule 144A(d)(4) under the Securities Act to permit resales of the notes
pursuant to Rule 144A;
- provide copies of the latest version of the prospectus to broker-dealers
upon their request for a period of up to one year after the expiration
date; and
- use our best efforts, under specific circumstances, to file a shelf
registration statement and keep the registration statement effective to
the extent necessary to ensure that it is available for resales of
transfer restricted securities by broker-dealers for a period of up to two
years.
SHELF REGISTRATION
If (1) applicable law or SEC policy does not permit the exchange offer or
(2) you notify us before the 20th business day following the completion of the
exchange offer that:
- you are prohibited by law or SEC policy from participating in the exchange
offer;
- you may not resell the exchange notes acquired by you in the exchange
offer to the public without delivering a prospectus, and the prospectus
contained in the registration statement is not appropriate or available
for resales by you; or
- you are a broker-dealer and hold notes acquired directly from us,
we will file with the SEC a shelf registration statement to register for public
resale the transfer restricted securities held by you if you provide us with the
necessary information for inclusion in the shelf registration statement.
For the purposes of the registration rights agreement, "transfer restricted
securities" means each private note until the earliest date on which:
- the private note is exchanged in the exchange offer and entitled to be
resold to the public without complying with the prospectus delivery
requirements of the Securities Act;
- the private note is disposed of in accordance with the shelf registration
statement;
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- the private note is disposed of by a broker-dealer pursuant to the "Plan
of Distribution" contemplated by the registration statement; or
- the private note is distributed to the public pursuant to Rule 144 under
the Securities Act.
ADDITIONAL INTEREST
In the event of a registration default, as defined in the registration
rights agreement, we will pay you liquidated damages in the form of additional
interest that will accrue at a rate of 0.25% per annum during the 90-day period
immediately following the occurrence of any such registration default and shall
increase by 0.25% per annum at the end of each subsequent 90-day period until
all such registration defaults have been cured, but in no event shall such rate
exceed 0.50% per annum. Following the cure of all registration defaults, the
accrual of liquidated damages will cease.
EXCHANGE AGENT
We have appointed Bank One Trust Company, National Association, as exchange
agent for the exchange offer. You should direct questions and requests for
assistance, requests for additional copies of this prospectus or the letter of
transmittal and requests for a notice of guaranteed delivery to the exchange
agent addressed as follows.
BY REGISTERED OR CERTIFIED MAIL, OVERNIGHT DELIVERY, OR HAND DELIVERY:
Bank One Trust Company, N.A.
1111 Polaris Parkway
Suite N1-OH-0184
Columbus, Ohio 43240
Attention: Ms. Lora Marsch
Corporate Trust Operations
BY FACSIMILE:
(614) 248-9987
DELIVERY TO AN ADDRESS OTHER THAN THE ONE STATED ABOVE OR TRANSMISSION VIA A
FACSIMILE NUMBER OTHER THAN THE ONE STATED ABOVE WILL NOT CONSTITUTE A VALID
DELIVERY.
FEES AND EXPENSES
We will bear the expenses of soliciting tenders. We are making the principal
solicitation by mail; however, our and our affiliates' officers and regular
employees may make additional solicitations by telegraph, telephone or in
person.
We have not retained any dealer manager in connection with the exchange
offer and will not make any payments to brokers, dealers or others soliciting
acceptances of the exchange offer. We will, however, pay the exchange agent
reasonable and customary fees for its services and will reimburse it for its
reasonable out-of-pocket expenses.
We will pay the cash expenses incurred in connection with the exchange offer
which we estimate to be approximately $375,000. These expenses include
registration fees, fees and expenses of the exchange agent and the trustee,
accounting and legal fees and printing costs, among others.
We will pay all transfer taxes, if any, applicable to the exchange of notes
pursuant to the exchange offer. If, however, a transfer tax is imposed for any
reason other than the exchange of the private notes pursuant to the exchange
offer, then you must pay the amount of the transfer taxes. If you do not submit
satisfactory evidence of payment of the taxes or exemption from payment with the
letter of transmittal, we will bill the amount of the transfer taxes directly to
you.
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CONSEQUENCE OF FAILURES TO EXCHANGE
Participation in the exchange offer is voluntary. We urge you to consult
your financial and tax advisors in making your decisions on what action to take.
Private notes that are not exchanged for exchange notes pursuant to the
exchange offer will remain restricted securities. Accordingly, those private
notes may be resold only:
- to a person whom the seller reasonably believes is a qualified
institutional buyer in a transaction meeting the requirements of
Rule 144A;
- in a transaction meeting the requirements of Rule 144 under the Securities
Act;
- outside the United States to a foreign person in a transaction meeting the
requirements of Rule 903 or 904 of Regulation S under the Securities Act;
- in accordance with another exemption from the registration requirements of
the Securities Act and based upon an opinion of counsel if we so request;
- to us; or
- pursuant to an effective registration statement.
In each case, the private notes may be resold only in accordance with any
applicable securities laws of any state of the United States or any other
applicable jurisdiction.
USE OF PROCEEDS
The exchange offer satisfies an obligation under the registration rights
agreement. We will not receive any cash proceeds from the exchange offer.
21
CAPITALIZATION
The following table sets forth our debt and equity capitalization as of
December 31, 2000:
- on a historical basis; and
- as adjusted to give effect to the offering of the private notes and the
application of the net proceeds.
You should read this table in conjunction with our selected financial data
presented elsewhere in this prospectus along with the consolidated financial
statements and related notes of Harrah's Entertainment, Rio, Showboat and
Players, all of which can be found in our publicly available documents.
DECEMBER 31, 2000
----------------------
ACTUAL AS ADJUSTED
-------- -----------
(IN MILLIONS)
SHORT-TERM DEBT, INCLUDING CURRENT PORTION OF LONG-TERM
DEBT:
Citibank facility......................................... $ 150.0 $ --
Overnight borrowings...................................... 65.0 65.0
Current portion of long-term debt......................... 130.9 35.9
-------- --------
Total................................................... $ 345.9 $ 100.9
======== ========
LONG-TERM DEBT:
Revolving Credit Facilities............................... $1,574.6 $1,234.4
Commercial Paper Program.................................. 40.3 40.3
Atlantic City Mortgage Debt............................... 97.3 97.3
13% Senior Subordinated Notes due 2009.................... 2.4 2.4
7 1/2% Senior Notes due 2009.............................. 498.3 498.3
7 7/8% Senior Subordinated Notes due 2005................. 750.0 750.0
Unsecured Notes Payable................................... 2.9 2.9
Capitalized Lease Obligations............................. 1.0 1.0
8.00% Senior Notes, net of discount....................... -- 494.5
Less current portion of long-term debt.................... (130.9) (35.9)
-------- --------
Total long-term debt, net of current portion............ 2,835.9 3,085.2
STOCKHOLDERS' EQUITY:
Total stockholders' equity................................ 1,269.7 1,269.6
-------- --------
Total capitalization.................................... $4,105.6 $4,354.8
======== ========
22
SELECTED FINANCIAL DATA
The selected consolidated financial data below is derived from our audited
consolidated financial statements. You should read the financial data presented
below in conjunction with the consolidated financial statements, accompanying
notes and management's discussion and analysis of results of operations and
financial condition of Harrah's Entertainment, Rio, Showboat and Players, all of
which can be found in publicly available documents.
YEAR ENDED DECEMBER 31,
----------------------------------------------------
2000(1) 1999(2) 1998(3) 1997(4) 1996(5)
-------- -------- -------- -------- --------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS AND RATIOS)
INCOME STATEMENT DATA:
Revenues.......................................... $3,471.2 $3,024.4 $2,004.0 $1,619.2 $1,586.0
Income from operations............................ 282.7 481.0 287.8 213.5 236.9
Income before income taxes and minority
interests....................................... 17.8 359.6 203.3 183.6 172.1
Income (loss) from continuing operations.......... (11.3) 219.5 121.7 107.5 98.9
Net income (loss)................................. (12.1) 208.5 102.0 99.4 98.9
Net income (loss) per share-diluted............... (0.10) 1.62 1.00 0.98 0.95
OTHER FINANCIAL AND OPERATING DATA:
Property EBITDA(6)................................ 886.5 792.9 512.6 402.9 440.2
Cash flows provided by operating activities....... 547.6 490.1 297.9 255.1 285.7
Interest expense.................................. 227.1 193.4 117.3 79.1 70.0
Ratio of earnings to fixed charges(7)............. 2.2x 2.7x 2.4x 2.8x 2.8x
AT DECEMBER 31,
----------------------------------------------------
2000 1999 1998 1997 1996
-------- -------- -------- -------- --------
(IN MILLIONS)
BALANCE SHEET DATA:
Total assets...................................... $5,166.1 $4,766.8 $3,286.3 $2,005.5 $1,974.1
Short-term debt, including current portion of
long-term debt.................................. 345.9 2.9 2.3 1.8 1.8
Long-term debt.................................... 2,835.8 2,540.3 1,999.4 924.4 889.5
Stockholders' equity.............................. 1,269.7 1,486.3 851.4 735.5 719.7
--------------------------
(1) Our 2000 results include $220.0 million in pretax reserves for receivables
not expected to be recovered from JCC Holding Company and its subsidiary,
Jazz Casino Company LLC, $6.1 million in pretax charges for other
write-downs, reserves and recoveries and $39.4 million in pretax write-offs
and reserves for our investment in, loans to and net estimated exposure
under letters of credit issued on behalf of National Airlines, Inc. 2000
also includes the financial results of Players International, Inc. from its
March 22, 2000, date of acquisition.
(2) Our 1999 results include $2.2 million in pretax charges for write-downs,
reserves and recoveries and $59.8 million of gains from sales of our equity
interests in nonconsolidated affiliates. Our results for 1999 also include
the financial results of Rio Hotel & Casino, Inc., from January 1, 1999, the
date of its acquisition.
(3) Our 1998 results include $7.5 million in pretax charges for write-downs and
reserves and a $13.2 million gain on the sale of our equity interest in a
nonconsolidated restaurant subsidiary. Our results for 1998 also include the
financial results of Showboat, Inc., from June 1, 1998, the date of its
acquisition.
(4) Our 1997 results include $13.8 million in pretax charges for write-downs and
reserves and a $37.4 million gain on the sale of our equity interest in a
New Zealand subsidiary.
(5) Our 1996 results include $52.2 million in pretax charges for write-downs and
reserves, primarily related to write-downs of impaired long-lived assets and
reserves for contingent liability exposure.
(6) EBITDA consists of earnings before interest, taxes, depreciation and
amortization. Property EBITDA consists of operating profit before
depreciation and amortization, write-downs, reserves and recoveries and
project opening costs. See Exhibit 12 to our 2000 Form 10-K for the
computation of Property EBITDA. Property
23
EBITDA is a supplemental financial measure used by management, as well as
industry analysts, to evaluate our operations. However, Property EBITDA
should not be construed as an alternative to Income from operations (as an
indicator of our operating performance) or to Cash flows from operating
activities (as a measure of liquidity) as determined in accordance with
generally accepted accounting principles and presented in our Consolidated
Financial Statements. All companies do not calculate EBITDA in the same
manner. As a result, Property EBITDA as presented by our Company may not be
comparable to similarly titled measures presented by other companies.
(7) Ratio computed based on Income before extraordinary items and cumulative
effect of change in accounting policy.
24
REGULATION AND LICENSING
The ownership and operation of casino gaming facilities are subject to
extensive governmental regulation. Each of the jurisdictions in which we operate
gaming facilities requires us to hold various licenses, findings of suitability,
registrations, permits, and approvals (collectively, "Gaming Licenses"). Under
the gaming laws of Nevada, New Jersey, Mississippi, Missouri, Louisiana,
Illinois, Indiana, Arizona, Kansas and North Carolina, and our corporate
charter, holders of our securities may be required, under certain circumstances,
to dispose of the securities. If the holder refuses to do so, we may be required
to repurchase the security. In addition, the management contracts and the
operation of gaming and casinos on Indian land in the United States are subject
to tribal ordinances and the Indian Gaming Regulatory Act, which is administered
by the National Indian Gaming Commission.
Consequently, each holder of notes, by accepting any notes, will be deemed
to have agreed to be bound by the requirements imposed by the gaming authority
in any jurisdiction we, or any of our subsidiaries, conduct or propose to
conduct gaming activities. See "Description of Notes--Mandatory Disposition
Pursuant to Gaming Laws." In addition, under the indenture governing the notes,
each holder and beneficial owner of notes, by accepting or otherwise acquiring
an interest in any notes, will be deemed to have agreed to apply for a license,
qualification, or finding of suitability as required by the gaming authorities
in any jurisdiction in which we, or any of our subsidiaries, conduct or propose
to conduct gaming activities. If a holder of notes fails to apply or become
licensed or qualified or is found unsuitable, we shall have the right, at our
option:
- to require the holder to dispose of its notes or beneficial interest
therein within 30 days of receiving notice of our election or such earlier
date as may be requested or prescribed by a gaming authority; or
- to redeem the notes at a redemption price equal to the lesser of (1) the
holder's cost or (2) 100% of the principal amount thereof, plus accrued
and unpaid interest to the earlier of the redemption date and the date of
the finding of unsuitability, which may be less than 30 days following the
notice of redemption if so requested or prescribed by the gaming
authority.
We will not be responsible for any costs or expenses incurred by any such
holder or beneficial owner in connection with its application for a license,
qualification or finding of suitability. Harrah's Operating's charter also
expressly provides that debt securities issued by Harrah's Operating may be
redeemed if a holder of such securities is found unsuitable by any governmental
agency.
The Nevada Gaming Commission, the New Jersey Casino Control Commission, the
Mississippi Gaming Commission, the Missouri Gaming Commission, the Louisiana
Gaming Control Board, the Illinois Gaming Board and the Indiana Gaming
Commission may also, among other things, limit, condition, suspend or revoke a
Gaming License or approval to own the stock or joint venture interests of any of
our operations in such licensing authority's jurisdiction, for any cause deemed
reasonable by such licensing authority. Substantial fines or forfeiture of
assets for violations of gaming laws or regulations may be levied against us,
such subsidiaries and joint ventures and the persons involved. The suspension or
revocation of any of our Gaming Licenses or the levy on us of substantial fines
or forfeiture of assets could have a material adverse effect on our business.
Additionally, Indiana requires approval of any debt transaction involving more
than $1,000,000.
Under Nevada and Mississippi law, we may not make a public offering of our
securities without the prior approval of the applicable gaming commission if we
intend to use the offering proceeds to construct, acquire or finance a gaming
facility, or retire or extend existing obligations incurred for such purposes.
On November 20, 2000, the Nevada Gaming Commission granted Harrah's
Entertainment and Harrah's Operating prior approval to make offerings for a
period of two years, subject to certain conditions. The Chairman of the Nevada
State Gaming Control Board may rescind its approval for good cause without prior
notice upon the issuance of an interlocutory stop order. These prior approvals
25
do not constitute a finding, recommendation or approval by the Nevada Gaming
Commission or the Nevada State Gaming Control Board as to the accuracy or
adequacy of this prospectus, or the investment merits of the notes. Any
representation to the contrary is unlawful. The Company received a similar
two-year approval from the Mississippi Gaming Commission on August 19, 1999.
To date, we have obtained all Gaming Licenses necessary for the operation of
our gaming activities. Gaming Licenses and related approvals, however, are
deemed to be privileges under the laws of the jurisdictions in which we conduct
gaming activities, and no assurances can be given that any new Gaming Licenses
that may be required in the future will be granted or that existing Gaming
Licenses will not be revoked or suspended.
The foregoing is only a summary of the applicable regulatory requirements.
For a more detailed description of the applicable regulatory requirements,
including requirements under gaming laws and our corporate charter, see
"Governmental Regulation" in Harrah's Entertainment's Annual Report on
Form 10-K for the year ended December 31, 2000, incorporated by reference
herein.
26
DESCRIPTION OF NOTES
GENERAL
The notes will be issued pursuant to an indenture among Harrah's Operating,
Harrah's Entertainment and Bank One Trust Company, N.A., as trustee. The notes
will mature on February 1, 2011, referred to as the "Maturity Date." Harrah's
Operating will issue the notes in fully registered book-entry form only, without
coupons, in denominations of $1,000 and integral multiples thereof. Each note
will bear interest at the rate of 8.00% from January 29, 2001 or from the most
recent interest payment date to which interest has been paid or provided for,
payable semiannually on February 1 and August 1 of each year (each, an "Interest
Payment Date"), commencing August 1, 2001, to the persons in whose names such
notes are registered at the close of business on the date fifteen days prior to
such Interest Payment Date.
If any Interest Payment Date, date of redemption (the "Redemption Date") or
Maturity Date of any of the notes is not a business day, then payment of
principal, premium, if any, and interest will be made on the next succeeding
business day. No interest will accrue on the amount so payable for the period
from such Interest Payment Date, Redemption Date or Maturity Date, as the case
may be, to the date payment is made. Interest on the notes will be computed on
the basis of a 360-day year of twelve 30-day months.
The notes will not be entitled to the benefit of any sinking fund.
The notes will be unsecured senior Obligations of Harrah's Operating that
will rank on a parity with all other unsecured senior Indebtedness of Harrah's
Operating from time to time outstanding.
We may from time to time without notice to, or the consent of, the holders
of a series of senior securities, create and issue additional notes, equal in
rank to the notes offered hereby in all respects (or in all respects except for
the payment of interest accruing prior to the issue date of the new notes or
except for the first payment of interest following the issue date of the new
notes) so that the new notes may be consolidated and form a single series of
notes with the notes offered hereby and have the same terms as to status,
redemption or otherwise as the notes offered hereby. In the event that we issue
additional senior notes, we will prepare a new offering memorandum or
prospectus.
OPTIONAL REDEMPTION
The notes are redeemable, in whole or in part, at any time, and at our
option, at a redemption price equal to the greater of:
- 100% of the principal amount of notes then outstanding, or
- the sum of the present values of the remaining scheduled payments of
principal and interest thereon (not including any portion of such payments
of interest accrued as of the Redemption Date) discounted to the
Redemption Date on a semiannual basis (assuming a 360-day year consisting
of twelve 30-day months) at the Adjusted Treasury Rate, plus 25 basis
points, as calculated by an Independent Investment Banker.
plus, in either of the above cases, accrued and unpaid interest thereon to the
Redemption Date.
"Adjusted Treasury Rate" means, with respect to any Redemption Date:
- the yield, under the heading which represents the average for the
immediately preceding week, appearing in the most recently published
statistical release designated "H.15(519)" or any successor publication
which is published weekly by the Board of Governors of the Federal Reserve
System and which establishes yields on actively traded United States
Treasury securities adjusted to constant maturity under the caption
"Treasury Constant Maturities," for the maturity corresponding to the
Comparable Treasury Issue (if no maturity is within three months before or
27
after the Remaining Life, yields for the two published maturities most
closely corresponding to the Comparable Treasury Issue shall be determined
and the Adjusted Treasury Rate shall be interpolated or extrapolated from
such yields on a straight-line basis, rounding to the nearest month); or
- if such release (or any successor release) is not published during the
week preceding the calculation date or does not contain such yields, the
rate per annum equal to the semi-annual equivalent yield to maturity of
the Comparable Treasury Issue, calculated using a price for the Comparable
Treasury Issue (expressed as a percentage of its principal amount) equal
to the Comparable Treasury Price for such Redemption Date.
The Adjusted Treasury Rate shall be calculated on the third business day
preceding the Redemption Date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the notes to be redeemed that would be utilized, at the
time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of such securities ("Remaining Life").
"Comparable Treasury Price" means (1) the average of five Reference Treasury
Dealer Quotations for such Redemption Date, after excluding the highest and
lowest Reference Treasury Dealer Quotations, or (2) if the Independent
Investment Banker obtains fewer than five such Reference Treasury Dealer
Quotations, the average of all such quotations.
"Independent Investment Banker" means one of the Reference Treasury Dealers
appointed by us.
"Reference Treasury Dealer" means:
- each of Salomon Smith Barney and the other initial purchasers and their
respective successors; provided that, if any of the foregoing ceases to be
a primary U.S. Government securities dealer in New York City (a "Primary
Treasury Dealer"), we will substitute another Primary Treasury Dealer; and
- any other Primary Treasury Dealer selected by us.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any Redemption Date, the average, as determined by the
Independent Investment Banker, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Independent Investment Banker at 5:00 p.m., New York
City time, on the third business day preceding such Redemption Date.
We will mail a notice of redemption at least 30 days but not more than
60 days before the Redemption Date to each holder of notes to be redeemed. If we
elect to partially redeem the notes, the trustee will select in a fair and
appropriate manner the notes to be redeemed.
Unless we default in payment of the redemption price, on and after the
Redemption Date, interest will cease to accrue on the notes or portions thereof
called for redemption.
MERGER, CONSOLIDATION OR SALE OF ASSETS
Neither Harrah's Operating nor Harrah's Entertainment may consolidate with
or merge with or into, or convey, transfer or lease all or substantially all of
its properties and assets to another corporation, person or entity unless:
- in the case of a merger or consolidation, Harrah's Operating or Harrah's
Entertainment, as the case may be, is the surviving person, or
28
- the successor or transferee is a corporation organized under the laws of
any U.S. domestic jurisdiction and expressly assumes, by supplemental
indenture, our obligations under the debt securities and the indenture;
and
immediately after giving effect to the transaction, no default or Event of
Default shall exist under the indenture.
EVENTS OF DEFAULT
"Event of Default" means with respect to the notes, any of the following:
- failure to pay principal of any notes when due and payable at maturity,
upon redemption or otherwise or failure to deposit a sinking fund payment
when and as due in respect of any notes;
- failure to pay any interest on any notes when due, and such default
continues for 30 days;
- default in the performance or breach of any other covenant or warranty of
Harrah's Operating or Harrah's Entertainment in the indenture, which
default continues uncured for a period of 60 days after Harrah's Operating
receives written notice from the trustee or Harrah's Operating and the
trustee receive written notice from the holders of at least 25% in
principal amount of the outstanding notes as provided in the indenture;
- certain events of bankruptcy, insolvency or reorganization; and
- the acceleration of the maturity of any Indebtedness of Harrah's Operating
(other than Non-recourse Indebtedness), at any one time, in an amount in
excess of the greater of (1) $25 million and (2) 5% of the Consolidated
Net Tangible Assets, if such acceleration is not annulled within 30 days
after Harrah's Operating receives written notice from the trustee and the
holders of at least 25% in principal amount of the outstanding notes.
"Non-recourse Indebtedness" means indebtedness with terms providing that the
lender's claim for repayment of that indebtedness is limited solely to a claim
against the property that secures the indebtedness.
"Consolidated Net Tangible Assets" means the total amount of assets
(including investments in joint ventures) of Harrah's Operating and its
subsidiaries (less applicable depreciation, amortization and other valuation
reserves) after deducting therefrom:
- all of Harrah's Operating's and its subsidiaries' current liabilities,
excluding (1) the current portion of long-term indebtedness,
(2) intercompany liabilities and (3) any liabilities which are by their
terms renewable or extendable at the option of the obligor to a time more
than 12 months from the time as of which the amount thereof is being
computed; and
- all goodwill, trade names, trademarks, patents, unamortized debt discount
and any other like intangibles, all as set forth on the consolidated
balance sheet of Harrah's Operating for the most recently completed fiscal
quarter for which financial statements are available and computed in
accordance with generally accepted accounting principles.
If an Event of Default with respect to notes (other than an Event or Default
relating to certain events of bankruptcy, insolvency or reorganization) occurs
and is continuing, either the trustee or the holders of at least 25% in
principal amount of the outstanding notes may, by a notice as provided in the
indenture, declare the unpaid principal amount of, and any accrued and unpaid
interest on, all notes to be due and payable immediately. However, at any time
after a declaration of acceleration with respect to notes has been made, but
before the trustee obtains a judgment or decree based on that acceleration, the
holders of a majority in principal amount of the outstanding notes may, under
certain circumstances, rescind and annul that acceleration. For information
regarding waiver of defaults, see "Modification and Waiver" below.
29
The indenture will provide that, subject to the trustee's duty to act with
the required standard of care during an Event of Default, the trustee will be
under no obligation to exercise any of its rights or powers under the indenture
at the request of any of the holders, unless such holders offer the trustee
reasonable security or indemnity. Subject to certain provisions of the
indenture, including those entitling the trustee to receive security and
indemnification, the holders of a majority in principal amount of the
outstanding notes will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the trustee or exercising
any trust or power conferred on the trustee with respect to the notes.
The indenture requires that we furnish annually to the trustee a statement
as to our performance of our obligations under the indenture and as to any
default in such performance.
MODIFICATION AND WAIVER
We generally may amend the indenture or the notes with the written consent
of the holders of a majority in principal amount of the outstanding notes. The
holders of a majority in principal amount of the outstanding notes may also
waive our compliance in a particular instance with any provision of the
indenture with respect to the notes. We must obtain the consent of each holder
of notes affected by a particular amendment or waiver, however, if such
amendment or waiver:
- reduces the percentage of the principal amount of notes whose holders must
consent to an amendment or waiver;
- reduces the rate of or changes the time for payment of interest, including
default interest, on the notes;
- reduces the principal of or premium on, or changes the fixed maturity of,
any notes or reduces the amount of, or postpones the date fixed for,
redemption or the payment of any sinking fund or analogous obligation with
respect to any notes;
- reduces the principal amount of discount securities payable upon
acceleration of maturity;
- makes the principal of or premium or interest on any notes payable in
currency other than that stated in the notes;
- makes any change to provisions of the indenture concerning waivers of
defaults or Events of Default by holders or the rights of holders of notes
to recover the principal of, premium or interest on those notes; or
- waives a default in the payment of the principal of or interest on any
notes, except as otherwise provided in the indenture.
We may amend the indenture or the notes without notice to or the consent of
any holder of a debt security:
- to cure any ambiguity, defect or inconsistency;
- to comply with the indenture's provisions with respect to successor
corporations;
- to comply with any requirements of the SEC in connection with the
qualification of the indenture under the Trust Indenture Act of 1939, as
amended;
- to provide for certificated or unregistered notes and to make all
appropriate changes for such purpose;
- to add to, change or eliminate any of the provisions of the indenture in
respect of one of more series of notes, provided, however, that any such
addition, change or elimination (A) (1) does not apply to any notes
created prior to the execution of such amendment and entitled to the
30
benefit of such provision, and (2) does not modify the rights of a holder
of any such notes with respect to such provision, or (B) becomes effective
only when there are no outstanding notes created prior to such amendment
and entitled to the benefit of such provision;
- to make any change that does not adversely affect in any material respect
the interest of any holder of notes; or
- to issue additional notes as permitted by the indenture.
The holders of a majority in principal amount of the outstanding notes, by
notice to the trustee, may waive any existing default or Event of Default and
its consequences with respect to the notes other than a default or Event of
Default in the payment of the principal of or any interest on any notes;
PROVIDED, HOWEVER, that the holders of a majority in principal amount of the
outstanding notes may rescind an acceleration and its consequences, including
any related payment default that resulted from the acceleration.
ADDITIONAL COVENANTS OF HARRAH'S OPERATING
LIMITATION ON LIENS
Neither Harrah's Operating nor any of its Subsidiaries may issue, assume or
guarantee any Indebtedness secured by a Lien upon any Consolidated Property or
on any Indebtedness or shares of capital stock of, or other ownership interests
in, any Subsidiaries (regardless of whether the Consolidated Property,
Indebtedness, capital stock or ownership interests were acquired before or after
the date of the Indenture) without effectively providing that the notes shall be
secured equally and ratably with (or prior to) such Indebtedness so long as such
Indebtedness shall be so secured, except that this restriction will not apply
to:
(1) Liens existing on the date of original issuance of the notes;
(2) Liens affecting property of a corporation or other entity existing at
the time it becomes a Subsidiary of Harrah's Operating or at the time it is
merged into or consolidated with Harrah's Operating or a Subsidiary of Harrah's
Operating;
(3) Liens on property existing at the time of acquisition thereof or to
secure Indebtedness incurred prior to, at the time of, or within 24 months after
the acquisition for the purpose of financing all or part of the purchase price
thereof;
(4) Liens on any property to secure all or part of the cost of improvements
or construction thereon or Indebtedness incurred to provide funds for such
purpose in a principal amount not exceeding the cost of such improvements or
construction;
(5) Liens which secure Indebtedness owing by a Subsidiary of Harrah's
Operating to Harrah's Operating or to a Subsidiary of Harrah's Operating;
(6) Liens securing Indebtedness of Harrah's Operating the proceeds of which
are used substantially simultaneously with the incurrence of such Indebtedness
to retire Funded Debt;
(7) purchase money security Liens on personal property;
(8) Liens securing Indebtedness of Harrah's Operating or any of its
Subsidiaries the proceeds of which are used within 24 months of the incurrence
of such Indebtedness for the cost of the construction and development or
improvement of property of Harrah's Operating or any of its Subsidiaries;
(9) Liens on the stock, partnership or other equity interest of Harrah's
Operating or any of its Subsidiaries in any Joint Venture or any such Subsidiary
which owns an equity interest in such Joint
31
Venture to secure Indebtedness, provided the amount of such Indebtedness is
contributed and /or advanced solely to such Joint Venture;
(10) Liens to government entities, including pollution control or industrial
revenue bond financing;
(11) Liens required by any contract or statute in order to permit Harrah's
Operating or a Subsidiary of Harrah's Operating to perform any contract or
subcontract made by it with or at the request of a governmental entity;
(12) mechanic's, materialman's, carrier's or other like Liens, arising in
the ordinary course of business;
(13) Liens for taxes or assessments and similar charges;
(14) zoning restrictions, easements, licenses, covenants, reservations,
restrictions on the use of real property and certain other minor irregularities
of title; and
(15) any extension, renewal, replacement or refinancing of any Indebtedness
secured by a Lien permitted by any of the foregoing clauses (1) through (14).
Notwithstanding the foregoing, Harrah's Operating and any one or more of its
Subsidiaries may, without securing the notes, issue, assume or guarantee
Indebtedness which would otherwise be subject to the foregoing restrictions in
an aggregate principal amount which, together with all other such Indebtedness
of Harrah's Operating and its Subsidiaries which would otherwise be subject to
the foregoing restrictions (not including Indebtedness permitted by the
preceding paragraph) and the aggregate Value of Sale and Lease-Back Transactions
(other than those in connection with which Harrah's Operating has voluntarily
retired Funded Debt) does not at any one time exceed 15% of Consolidated Net
Tangible Assets of Harrah's Operating and its consolidated Subsidiaries.
LIMITATION ON SALE AND LEASE-BACK TRANSACTIONS
Neither Harrah's Operating nor any of its Subsidiaries will enter into any
Sale and Lease-Back Transaction unless either (1) Harrah's Operating or such
Subsidiary would be entitled, pursuant to the above provisions, to incur
Indebtedness in a principal amount equal to or exceeding the Value of such Sale
and Lease-Back Transaction, secured by a Lien on the property to be leased,
without equally and ratably securing the notes or (2) Harrah's Operating within
120 days after the effective date of such Sale and Lease-Back Transaction
applies to the voluntary retirement of its Funded Debt an amount equal to the
Value of the Sale and Lease-Back Transaction (subject to credits for certain
voluntary retirements of Funded Debt).
GUARANTEE OF NOTES
Harrah's Entertainment will irrevocably and unconditionally guarantee, on an
unsecured senior basis, the payment of all obligations of Harrah's Operating
under the notes. If Harrah's Operating defaults in the payment of the principal
of, premium, if any, or interest on such notes when and as the same shall become
due, whether upon maturity, acceleration, call for redemption or otherwise,
without the necessity of action by the trustee or any holder of such notes,
Harrah's Entertainment shall be required promptly and fully to make such
payment. The indenture provides for the release of Harrah's Entertainment as
guarantor of the notes in certain circumstances, including circumstances in
which:
- Harrah's Operating ceases to be a wholly owned subsidiary of Harrah's
Entertainment; or
- Harrah's Operating transfers all or substantially all of its assets to, or
merges with, another entity in a transaction governed by the "Merger,
Consolidation or Sale of Assets" covenant in the indenture, and (1) such
transferee entity assumes Harrah's Operating's obligations under the
32
indenture and (2) such transfer or merger otherwise complies with the
requirements of such covenant.
Harrah's Entertainment conducts substantially all of its business through
Harrah's Operating and its subsidiaries and does not own any material assets
other than the common stock of Harrah's Operating. As such, Harrah's
Entertainment is dependent on the receipt of dividends or other payments from
Harrah's Operating to make payments on the guarantee of the notes. Our credit
facility imposes restrictions on Harrah's Operating's ability to pay dividends
to Harrah's Entertainment.
LIMITED LIABILITY OF CERTAIN PERSONS
None of the past, present or future stockholders, incorporators, employee
officers or directors, as such, of Harrah's Operating, Harrah's Entertainment or
any of our affiliates or successor corporations shall have any personal
liability in respect of our obligations under the indenture or the debt
securities by reason of his, her or its status as such stockholder,
incorporator, employee officer or director.
MANDATORY DISPOSITION PURSUANT TO GAMING LAWS
Federal, state and local authorities in several jurisdictions regulate
extensively our casino entertainment operations. The nature of such regulation
is described in detail in "Business and Properties--Governmental Regulation" in
the 1999 Form 10-K of Harrah's Entertainment, which we have incorporated by
reference herein. The gaming authority of any jurisdiction in which we or any of
our subsidiaries conduct or propose to conduct gaming may require that a holder
of the notes or the beneficial owner of the notes of a holder be licensed,
qualified or found suitable under applicable gaming laws. Under the indenture,
each person that holds or acquires beneficial ownership of any of the notes
shall be deemed to have agreed, by accepting such notes, that if any such gaming
authority requires such person to be licensed, qualified or found suitable under
applicable gaming laws, such holder or beneficial owner, as the case may be,
shall apply for a license, qualification or a finding of suitability within the
required time period.
If a person required to apply or become licensed or qualified or be found
suitable fails to do so, we shall have the right, at our election, (1) to
require such person to dispose of its notes or beneficial interest therein
within 30 days of receipt of notice of such election or such earlier date as may
be requested or prescribed by such gaming authority or (2) to redeem such notes
at a redemption price equal to the lesser of:
- such person's cost, or
- 100% of the principal amount thereof, plus accrued and unpaid interest, if
any, to the earlier of (1) the redemption date or (2) the date of the
finding of unsuitability, which may be less than 30 days following the
notice of redemption if so requested or prescribed by the applicable
gaming authority. We will notify the trustee in writing of any such
redemption as soon as practicable. We will not be responsible for any
costs or expenses any such holder may incur in connection with its
application for a license, qualification or a finding of suitability.
Under the indenture, the trustee must report the names of the record
holders of the notes to any gaming authority when required by law.
NO PROTECTION IN THE EVENT OF A CHANGE OF CONTROL
The notes do not contain any provisions which may afford holders of the
notes protection in the event either Harrah's Operating or Harrah's
Entertainment has a change of control or in the event of a highly leveraged
transaction (whether or not such transaction results in a change in control)
which could adversely affect holders of the notes.
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DEFEASANCE OF DEBT SECURITIES AND CERTAIN COVENANTS IN CERTAIN CIRCUMSTANCES
DEFEASANCE AND DISCHARGE
The indenture provides that we may be discharged from any and all
obligations in respect of the notes, except for certain obligations to pay
additional amounts, if any, upon the occurrence of certain tax, assessment or
governmental charge events with respect to payments on such notes, to register
the transfer or exchange of notes, to replace stolen, lost or mutilated notes,
to maintain paying agencies and to hold money for payment in trust. We will be
so discharged when we:
- deposit with the trustee money and/or government obligations that, through
the payment of interest and principal in accordance with their terms, will
provide money in an amount sufficient in the opinion of a nationally
recognized firm of independent public accountants to pay each installment
of principal, premium and interest on, and any mandatory sinking fund
payments in respect of, the notes on the dates such payments are due; and
- deliver to the trustee an opinion of counsel or a ruling from the United
States Internal Revenue Service (an "IRS Ruling"), in either case to the
effect that holders of the notes will not recognize income, gain or loss
for United States federal income tax purposes as a result of the deposit,
defeasance and discharge.
DEFEASANCE OF CERTAIN COVENANTS
The indenture provides that, unless otherwise provided by the terms of the
notes, upon compliance with certain conditions:
- we may omit to comply with certain restrictive covenants contained in the
indenture, and
- any omission to comply with such obligations will not constitute a default
or Event of Default with respect to the notes ("covenant defeasance").
The conditions require, among others, that we:
- deposit with the trustee money and/or government obligations that, through
the payment of interest and principal in respect thereof in accordance
with their terms, will provide money in an amount sufficient in the
opinion of a nationally recognized firm of independent public accountants
to pay each installment of principal, premium and interest on, and any
mandatory sinking fund payments in respect of, the notes on the dates such
payments are due; and
- deliver to the trustee an opinion of counsel or an IRS Ruling, in either
case to the effect that holders of the notes will not recognize income,
gain or loss for United States federal income tax purposes as a result of
the deposit, defeasance and discharge.
CERTAIN DEFINITIONS
"Affiliate" of any specified person means any other person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control," including, with correlative meanings, the terms "controlled by" and
"under common control with," as used with respect to any person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such person, whether through the
ownership of voting securities or by agreement or otherwise.
"Consolidated Property" means any property of Harrah's Operating or any of
its Subsidiaries.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement.
"Funded Debt" means all Indebtedness of Harrah's Operating which
(1) matures by its terms on, or is renewable at the option of any obligor
thereon to, a date more than one year after the date of original issuance of
such Indebtedness and (2) ranks at least PARI PASSU with the notes.
34
"Indebtedness" of any person means (1) any indebtedness of such person,
contingent or otherwise, in respect of borrowed money (whether or not the
recourse of the lender is to the whole of the assets of such person or only to a
portion thereof), or evidenced by notes, bonds, debentures or similar
instruments or letters of credit, or representing the balance deferred and
unpaid of the purchase price of any property, including any such indebtedness
incurred in connection with the acquisition by such person or any of its
Subsidiaries of any other business or entity, if and to the extent such
indebtedness would appear as a liability upon a balance sheet of such person
prepared in accordance with generally accepted accounting principles, including
for such purpose obligations under capitalized leases, and (2) any guarantee,
endorsement (other than for collection or deposit in the ordinary course of
business), discount with recourse, agreement (contingent or otherwise) to
purchase, repurchase or otherwise acquire or to supply or advance funds with
respect to, or to become liable with respect to (directly or indirectly) any
indebtedness, obligation, liability or dividend of any person, but shall not
include indebtedness or amounts owed for compensation to employees, or for goods
or materials purchased, or services utilized, in the ordinary course of business
of such person. Notwithstanding anything to the contrary in the foregoing,
"Indebtedness" shall not include (1) any contracts providing for the completion
of construction or other payment or performance with respect to the
construction, maintenance or improvement of, or payment of taxes, revenue share
payments or other fees to governmental entities with respect to, property or
equipment of Harrah's Operating or its Affiliates or (2) any contracts providing
for the obligation to advance funds, property or services on behalf of an
Affiliate of Harrah's Operating in order to maintain the financial condition of
such Affiliate. For purposes of this definition of Indebtedness, a "capitalized
lease" shall be deemed to mean a lease of real or personal property which, in
accordance with generally accepted accounting principles, is required to be
capitalized, and an Affiliate shall be deemed to include Jazz Holding Company, a
Delaware corporation in which Harrah's Operating indirectly owns a minority
interest, and each of its Affiliates.
"Interest Rate Agreement" means any interest rate protection agreement,
interest rate future agreement, interest rate option agreement, interest rate
swap agreement, interest rate cap agreement, interest rate collar agreement,
interest rate hedge agreement, option or future contract or other similar
agreement or arrangement.
"Joint Venture" means any partnership, corporation or other entity, in which
up to and including 50% of the partnership interests, outstanding voting stock
or other equity interests is owned, directly or indirectly, by Harrah's
Operating and/or one or more of its Subsidiaries.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit,
arrangement, encumbrance, security interest, lien (statutory or otherwise), or
preference, priority or other security or similar agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement having substantially the
same economic effect as any of the foregoing).
"Obligations" means any principal, interest, premium, if any, penalties,
fees, indemnifications, reimbursements, damages or other liabilities or amounts
payable under the documentation governing or otherwise in respect of any
Indebtedness.
"Sale and Lease-Back Transaction" means any arrangement with a person (other
than Harrah's Operating or any of its Subsidiaries), or to which any such person
is a party, providing for the leasing to Harrah's Operating or any of its
Subsidiaries for a period of more than three years of any Consolidated Property
which has been or is to be sold or transferred by Harrah's Operating or any of
its Subsidiaries to such person or to any other person (other than Harrah's
Operating of any of its Subsidiaries), to which funds have been or are to be
advanced by such person on the security of the leased property.
35
"Stated Maturity" means, when used with respect to any security or any
installment of principal thereof or interest thereon, the date specified in such
security as the fixed date on which the principal of such security or such
installment of principal or interest is due and payable.
"Subsidiary" of any specified person means any corporation of which at least
a majority of the outstanding stock having by the terms thereof ordinary voting
power for the election of directors of such corporation (irrespective of whether
or not at the time stock of any other class or classes of such corporation shall
have or might have voting power by reason of the happening of any contingency)
is at the time directly or indirectly owned by such person, or by one or more
other Subsidiaries, or by such person and one or more other Subsidiaries.
"Value" means, with respect to a Sale and Lease-Back Transaction, as of any
particular time, the amount equal to the greater of (1) the net proceeds of the
sale or transfer of property leased pursuant to such Sale and Lease-Back
Transaction or (2) the fair value, in the opinion of Harrah's Operating's Board
of Directors as evidenced by a board resolution, of such property at the time of
entering into such Sale and Lease-Back Transaction.
BOOK-ENTRY, DELIVERY AND FORM
The notes are being offered and sold within the United States to qualified
institutional buyers in reliance on Rule 144A ("Rule 144A Notes") and to
institutional "accredited investors" within the meaning of Rule 501(a)(1), (2),
(3) or (7) of Regulation D of the Securities Act. Notes also may be offered and
sold in offshore transactions in reliance on Regulation S ("Regulation S
Notes"). Except as set forth below, notes will be issued in registered, global
form in minimum denominations of $1,000 and integral multiples of $1,000 in
excess thereof. Notes will be issued at the closing of this offering only
against payment in immediately available funds.
Rule 144A Notes initially will be represented by one or more notes in
registered, global form without interest coupons (collectively, the "Rule 144A
Global Notes"). Notes purchased by institutional "accredited investors" (as
defined in "Notice to Investors" below) that are not qualified institutional
buyers will be represented by notes in definitive form registered in the names
of such institutional accredited investors. Such institutional accredited
investors may not elect to hold the Notes through the The Depository Trust
Company ("DTC"). Regulation S Notes initially will be represented by one or more
notes in registered, global form without interest coupons (collectively, the
"Regulation S Global Notes" and, together with the Rule 144A Global Notes, the
"Global Notes"). The Global Notes will be deposited upon issuance with the
Trustee as custodian for DTC, in New York, New York, and registered in the name
of DTC or its nominee, in each case for credit to an account of a direct or
indirect participant in DTC as described below. Through and including the 40th
day after the later of the commencement of this offering and the closing of this
offering (such period through and including such 40th day, the "Restricted
Period"), beneficial interests in the Regulation S Global Notes may be held only
through the Euroclear System ("Euroclear") and Clearstream, Luxembourg
("Clearstream") (as indirect participants in DTC), unless transferred to a
person that takes delivery through a Rule 144A Global Note in accordance with
the certification requirements described below. Beneficial interests in the
Rule 144A Global Notes may not be exchanged for beneficial interests in the
Regulation S Global Notes at any time except in the limited circumstances
described below. See "--Exchanges Between Regulation S Notes and Rule 144A
Notes."
Except as set forth below, the Global Notes may be transferred, in whole and
not in part, only to another nominee of DTC or to a successor of DTC or its
nominee. Beneficial interests in the Global Notes may not be exchanged for notes
in certificated form except in the limited circumstances described below. See
"--Exchange of Global Notes for Certificated Notes." Except in the limited
circumstances described below, owners of beneficial interests in the Global
Notes will not be entitled to receive physical delivery of notes in certificated
form.
36
Rule 144A Notes (including beneficial interests in the Rule 144A Global
Notes) will be subject to certain restrictions on transfer and will bear a
restrictive legend as described under "Notice to Investors." Regulation S Notes
will also bear the legend as described under "Notice to Investors." In addition,
transfers of beneficial interests in the Global Notes will be subject to the
applicable rules and procedures of DTC and its direct or indirect participants
(including, if applicable, those of Euroclear and Clearstream), which may change
from time to time.
DEPOSITORY PROCEDURES
The following description of the operations and procedures of DTC, Euroclear
and Clearstream are provided solely as a matter of convenience. These operations
and procedures are solely within the control of the respective settlement
systems and are subject to changes by them. We take no responsibility for these
operations and procedures and urge investors to contact the system or their
participants directly to discuss these matters.
DTC has advised the us that it is a limited-purpose trust company created to
hold securities for its participating organizations (collectively, the
"Participants") and to facilitate the clearance and settlement of transactions
in those securities between Participants through electronic book-entry changes
in accounts of its Participants. The Participants include securities brokers and
dealers (including the Initial Purchaser), banks, trust companies, clearing
corporations and certain other organizations. Access to DTC's system is also
available to other entities such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a Participant,
either directly or indirectly (collectively, the "Indirect Participants").
Persons who are not Participants may beneficially own securities held by or on
behalf of DTC only through the Participants or the Indirect Participants. The
ownership interests in, and transfers of ownership interests in, each security
held by or on behalf of DTC are recorded on the records of the Participants and
Indirect Participants.
DTC has also advised us that, pursuant to procedures established by it: upon
deposit of the Global Notes, DTC will credit the accounts of Participants
designated by the initial purchasers with portions of the principal amount of
the Global Notes; and ownership of these interests in the Global Notes will be
shown on, and the transfer of ownership thereof will be effected only through,
records maintained by DTC (with respect to the Participants) or by the
Participants and the Indirect Participants (with respect to other owners of
beneficial interest in the Global Notes).
Investors in the Rule 144A Global Notes who are Participants in DTC's system
may hold their interests therein directly through DTC. Investors in the
Rule 144A Global Notes who are not Participants may hold their interests therein
indirectly through organizations (including Euroclear and Clearstream) which are
Participants in this system. Investors in the Regulation S Global Notes must
initially hold their interests therein through Euroclear or Clearstream, if they
are participants in these systems, or indirectly through organizations that are
participants in those systems. After the expiration of the Restricted Period
(but not earlier), investors may also hold interests in the Regulation S Global
Notes through Participants in the DTC system other than Euroclear and
Clearstream. Euroclear and Clearstream will hold interests in the Regulation S
Global Notes on behalf of their participants through customers' securities
accounts in their respective names on the books of their respective
depositories, which are Morgan Guaranty Trust Company of New York, Brussels
office, as operator of Euroclear, and Citibank, N.A., and Chase Manhattan Bank,
N.A., as operators of Clearstream. All interests in a Global Note, including
those held through Euroclear or Clearstream, may be subject to the procedures
and requirements of DTC. Those interests held through Euroclear or Clearstream
may also be subject to the procedures and requirements of these systems. The
laws of some states require that certain Persons take physical delivery in
definitive form of securities that they own. Consequently, the ability to
transfer beneficial interests in a Global Note to these Persons will be limited
to that extent. Because DTC can act only on behalf of Participants, which in
turn act on behalf of Indirect Participants, the ability of a Person having
beneficial interests in a Global Note to pledge interests to Persons that do
37
not participate in the DTC system, or otherwise take actions in respect of these
interests, may be affected by the lack of a physical certificate evidencing
these interests.
EXCEPT AS DESCRIBED BELOW, OWNERS OF INTERESTS IN THE GLOBAL NOTES WILL NOT
HAVE NOTES REGISTERED IN THEIR NAMES, WILL NOT RECEIVE PHYSICAL DELIVERY OF
NOTES IN CERTIFICATED FORM AND WILL NOT BE CONSIDERED THE REGISTERED OWNERS OR
HOLDERS THEREOF UNDER THE INDENTURE FOR ANY PURPOSE.
Payments in respect of the principal of, and interest and premium and
liquidated damages, if any, on a Global Note registered in the name of DTC or
its nominee will be payable to DTC in its capacity as the registered holder
under the indenture. Under the terms of the indenture, Harrah's Operating,
Harrah's Entertainment and the Trustee will treat the persons in whose names the
notes, including the Global Notes, are registered as the owners thereof for the
purpose of receiving payments and for all other purposes. Consequently, none of
Harrah's Operating, Harrah's Entertainment, the Trustee or any of the their
respective agents has or will have any responsibility or liability for:
- any aspect of DTC's records or any Participant's or Indirect Participant's
records relating to or payments made on account of beneficial ownership
interest in the Global Notes or for maintaining, supervising or reviewing
any of DTC's records or any Participant's or Indirect Participant's
records relating to the beneficial ownership interests in the Global
Notes; or
- any other matter relating to the actions and practices of DTC or any of
its Participants or Indirect Participants.
DTC has advised us that its current practice, upon receipt of any payment in
respect of securities such as the notes (including principal and interest), is
to credit the accounts of the relevant Participants with the payment on the
payment date unless DTC has reason to believe it will not receive payment on the
payment date. Each relevant Participant is credited with an amount proportionate
to its beneficial ownership of an interest in the principal amount of the
relevant security as shown on the records of DTC. Payments by the Participants
and the Indirect Participants to the beneficial owners of notes will be governed
by standing instructions and customary practices and will be the responsibility
of the Participants or the Indirect Participants and will not be the
responsibility of DTC, the Trustee or the Issuers. Neither Harrah's Operating
and Harrah's Entertainment nor the Trustee will be liable for any delay by DTC
or any of its Participants in identifying the beneficial owners of the notes,
and Harrah's Operating, Harrah's Entertainment and the Trustee may conclusively
rely on and will be protected in relying on instructions from DTC or its nominee
for all purposes.
Subject to the transfer restrictions set forth under "Notice to Investors,"
transfers between Participants in DTC will be effected in accordance with DTC's
procedures, and will be settled in same-day funds, and transfers between
participants in Euroclear and Clearstream will be effected in accordance with
their respective rules and operating procedures.
Subject to compliance with the transfer restrictions applicable to the notes
described herein, cross-market transfers between the Participants in DTC, on the
one hand, and Euroclear or Clearstream participants, on the other hand, will be
effected through DTC in accordance with DTC's rules on behalf of Euroclear or
Clearstream, as the case may be, by its respective depositary; however, these
cross-market transactions will require delivery of instructions to Euroclear or
Clearstream, as the case may be, by the counterparty in the system in accordance
with the rules and procedures and within the established deadlines (Brussels
time) of that system. Euroclear or Clearstream, as the case may be, will, if the
transaction meets its settlement requirements, deliver instructions to its
respective depositary to take action to effect final settlement on its behalf by
delivering or receiving interests in the relevant Global Note in DTC, and making
or receiving payment in accordance with normal procedures for same-day funds
settlement applicable to DTC. Euroclear participants and Clearstream
participants may not deliver instructions directly to the depositories for
Euroclear or Clearstream.
DTC has advised the Issuers that it will take any action permitted to be
taken by a holder of notes only at the direction of one or more Participants to
whose account DTC has credited the interests in
38
the Global Notes and only in respect of such portion of the aggregate principal
amount of the notes as to which the Participant or Participants has or have
given such direction. However, if there is an Event of Default under the notes,
DTC reserves the right to exchange the Global Notes for legended notes in
certificated form, and to distribute these notes to its Participants.
Although DTC, Euroclear and Clearstream have agreed to the foregoing
procedures to facilitate transfers of interests in the Rule 144A Global Notes
and the Regulation S Global Notes among participants in DTC, Euroclear and
Clearstream, they are under no obligation to perform or to continue to perform
those procedures, and may discontinue those procedures at any time. Neither the
Issuer nor the Trustee nor any of their respective agents will have any
responsibility for the performance by DTC, Euroclear or Clearstream or their
respective participants or indirect participants of their respective obligations
under the rules and procedures governing their operations.
EXCHANGE OF GLOBAL NOTES FOR CERTIFICATED NOTES
A Global Note is exchangeable for definitive notes in registered
certificated form ("Certificated Notes") if:
- DTC (1) notifies the Issuer that it is unwilling or unable to continue as
depositary for the Global Notes and the Issuers fail to appoint a
successor depositary or (2) has ceased to be a clearing agency registered
under the Exchange Act;
- the Issuers, at their option, notify the Trustee in writing that they
elect to cause the issuance of the Certificated Notes; or
- there has occurred and is continuing a Default or Event of Default with
respect to the notes.
In addition, beneficial interests in a Global Note may be exchanged for
Certificated Notes upon prior written notice given to the Trustee by or on
behalf of DTC in accordance with the indenture. In all cases, Certificated Notes
delivered in exchange for any Global Note or beneficial interests in Global
Notes will be registered in the names, and issued in any approved denominations,
requested by or on behalf of the depositary (in accordance with its customary
procedures) and will bear the applicable restrictive legend referred to in
"Notice to Investors," unless that legend is not required by applicable law.
EXCHANGE OF CERTIFICATED NOTES FOR GLOBAL NOTES
Certificated Notes may not be exchanged for beneficial interests in any
Global Note unless the transferor first delivers to the Trustee a written
certificate (in the form provided in the indenture) to the effect that the
transfer will comply with the appropriate transfer restrictions applicable to
these notes. See "Notice to Investors."
EXCHANGES BETWEEN REGULATION S NOTES AND RULE 144A NOTES
Prior to the expiration of the Restricted Period, beneficial interests in
the Regulation S Global Note may be exchanged for beneficial interests in the
Rule 144A Global Note only if:
- the exchange occurs in connection with a transfer of the notes pursuant to
Rule 144A; and
- the transferor first delivers to the Trustee a written certificate (in the
form provided in the indenture) to the effect that the notes are being
transferred to a person:
- who the transferor reasonably believes to be a qualified institutional
buyer within the meaning of Rule 144A;
- purchasing for its own account or the account of a qualified institutional
buyer in a transaction meeting the requirements of Rule 144A; and
39
- in accordance with all applicable securities laws of the states of the
United States and other jurisdictions.
Beneficial interests in a Rule 144A Global Note may be transferred to a
person who takes delivery in the form of an interest in the Regulation S Global
Note, whether before or after the expiration of the Restricted Period, only if
the transferor first delivers to the Trustee a written certificate (in the form
provided in the Indenture) to the effect that the transfer is being made in
accordance with Rule 903 or 904 of Regulation S or Rule 144 (if available) and
that, if the transfer occurs prior to the expiration of the Restricted Period,
the interest transferred will be held immediately thereafter through Euroclear
or Clearstream.
Transfers involving exchanges of beneficial interests between the
Regulation S Global Notes and the Rule 144A Global Notes will be effected in DTC
by means of an instruction originated by the Trustee through the DTC
Deposit/Withdraw at Custodian system. Accordingly, in connection with any
transfer of this nature, appropriate adjustments will be made to reflect a
decrease in the principal amount of the Regulation S Global Note and a
corresponding increase in the principal amount of the Rule 144A Global Note or
vice versa, as applicable. Any beneficial interest in one of the Global Notes
that is transferred to a person who takes delivery in the form of an interest in
the other Global Note will, upon transfer, cease to be an interest in such
Global Note and will become an interest in the other Global Note and,
accordingly, will thereafter be subject to all transfer restrictions and other
procedures applicable to beneficial interest in the other Global Note for so
long as it remains such an interest. The policies and practices of DTC may
prohibit transfers of beneficial interests in the Regulation S Global Note prior
to the expiration of the Restricted Period.
SAME DAY SETTLEMENT AND PAYMENT
We will make payments in respect of the notes represented by the Global
Notes (including principal, premium, if any, interest and liquidated damages, if
any) by wire transfer of immediately available funds to the accounts specified
by the Global Note Holder. We will make all payments of principal, interest and
premium and liquidated damages, if any, with respect to Certificated Notes by
wire transfer of immediately available funds to the accounts specified by the
holders thereof or, if no account is specified, by mailing a check to that
holder's registered address. The notes represented by the Global Notes are
expected to trade in DTC's Same-Day Funds Settlement System, and any permitted
secondary market trading activity in the notes will, therefore, be required by
DTC to be settled in immediately available funds. We expect that secondary
trading in any Certificated Notes will also be settled in immediately available
funds.
Because of time zone differences, the securities account of a Euroclear or
Clearstream participant purchasing an interest in a Global Note from a
Participant in DTC will be credited, and any crediting of this type will be
reported to the relevant Euroclear or Clearstream participant, during the
securities settlement processing day (which must be a business day for Euroclear
and Clearstream) immediately following the settlement date of DTC. DTC has
advised us that cash received in Euroclear or Clearstream as a result of sales
of interests in a Global Note by or through a Euroclear or Clearstream
participant to a Participant in DTC will be received with value on the
settlement date of DTC but will be available in the relevant Euroclear or
Clearstream cash account only as of the business day for Euroclear or
Clearstream following DTC's settlement date.
THE TRUSTEE
The trustee under the indenture is Bank One Trust Company, N.A.
GOVERNING LAW
The indenture and the notes will be governed by, and construed in accordance
with, the internal laws of the state of New York.
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PLAN OF DISTRIBUTION
Each broker-dealer that receives exchange notes for its own account pursuant
to the exchange offer must acknowledge that it will deliver a prospectus in
connection with any resale of such exchange notes. This prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of exchange notes received in exchange for private notes
where such private notes were acquired as a result of market-making activities
or other trading activities. We have agreed that, starting on the expiration
date and ending on the close of business one year after the expiration date, it
will make this prospectus, as amended or supplemented, available to any broker-
dealer for use in connection with any such resale. In addition, until at least
May 25, 2002, all dealers effecting transactions in the exchange notes may be
required to deliver a prospectus.
We will not receive any proceeds from any sale of exchange notes by
brokers-dealers. Exchange notes received by broker-dealers for their own account
pursuant to the exchange offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions, through
the writing of options on the exchange notes or a combination of such methods of
resale, at market prices prevailing at the time of resale, at prices related to
such prevailing market prices or negotiated prices. Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such exchange notes. Any
broker-dealer that resells exchange notes that were received by it for its own
account pursuant to the exchange offer and any broker or dealer that
participates in a distribution of such exchange notes may be deemed to be an
"underwriter" within the meaning of the Securities Act of 1933, as amended, and
any profit of any such resale of exchange notes and any commissions or
concessions received by any such persons may be deemed to be underwriting
compensation under the Securities Act. The Letter of Transmittal states that by
acknowledging that it will deliver and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
For a period of one year after the expiration date, we will promptly send
additional copies of this prospectus and any amendment or supplement to this
prospectus to any broker-dealer that requests such documents in the Letter of
Transmittal. We have agreed to pay all expenses incident to the exchange offer
(including the expenses of one counsel for the holder of the private notes)
other than commissions or concessions of any brokers or dealers and will
indemnify the holders of the private notes (including any broker-dealers)
against certain liabilities, including liabilities under the Securities Act.
LEGAL MATTERS
Latham & Watkins, Los Angeles, California, will issue opinions about certain
legal matters with respect to the notes for Harrah's.
EXPERTS
The audited financial statements of Harrah's Entertainment appearing in
Harrah's Entertainment's Annual Report on Form 10-K for the year ended
December 31, 2000, have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
incorporated herein by reference in reliance upon the authority of such firm
experts in giving said reports.
41
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements, and other
documents with the SEC under the Securities Exchange Act of 1934. Our SEC
filings are available to the public at the SEC's website at http://www.sec.gov.
You may also read and copy any document we file at the following SEC public
reference rooms:
Judiciary Plaza Citicorp Center 7 World Trade Center
450 Fifth Street, N.W. 500 West Madison Street Suite 1300
Washington, D.C. 20549 Chicago, Illinois 60661 New York, New York 10048
202-942-7040 312-353-7390 212-748-8000
You may obtain information regarding the operation of the public reference
rooms by calling the SEC at 1-800-SEC-0330 (1-800-732-0330).
In addition, because our common stock is listed on the New York Stock
Exchange, you may read our reports, proxy statements, and other documents at the
offices of the New York Stock Exchange at 20 Broad Street, New York, New York
10005.
As long as any of the notes remain outstanding and during any period in
which we are not subject to Section 13 or 15(d) of the Exchange Act, we will
furnish you, as a holder of the notes, the following:
- all quarterly and annual financial information that would be required to
be contained in a filing with the SEC on Forms 10-Q and 10-K;
- a report with respect to annual information by our independent public
accountants; and
- all reports that would be required to be filed with the SEC on Form 8-K.
As long as any of the notes remain outstanding and during any period in
which we are subject to Section 13 or 15(d) of the Exchange Act, we will provide
holder of the notes, security analysts and prospective purchasers with the
information required by Rule 144A(d)(4) under the Securities Act at their
request.
42
DOCUMENTS INCORPORATED BY REFERENCE
The SEC allows us to "incorporate by reference" the information Harrah's
Entertainment files with it, which means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is an important part of this prospectus, and
information that we file later with the SEC will automatically update and
supersede this information. Any statement contained in a document incorporated
by reference shall be deemed to be modified or superseded for purposes of this
prospectus to the extent that a statement contained in this prospectus modifies
or replaces that statement. We incorporate by reference the documents of
Harrah's Entertainment listed below and any future filings made with the SEC
under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"):
- Annual Report on Form 10-K and on Form 10-K/A for the year ended
December 31, 2000;
- Proxy Statement on Schedule 14A dated March 30, 2001; and
- Current Report on Form 8-K dated April 3, 2001.
You may request a free copy of these filings by writing or telephoning us at
the following address:
Attention: Corporate Secretary
Harrah's Entertainment, Inc.
One Harrah's Court
Las Vegas, Nevada 89119
(702) 407-6000
43
HARRAH'S OPERATING COMPANY, INC.
OFFER TO EXCHANGE UP TO $500,000,000 OF ITS
8.00% SENIOR NOTES DUE 2011
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT,
FOR UP TO $500,000,000 OF ITS OUTSTANDING
8.00% SENIOR NOTES DUE 2011
---------------------
PROSPECTUS
------------------------
APRIL 17, 2001
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of Delaware empowers the Company
to indemnify, subject to the standards set forth therein, any person who is a
party in any action in connection with any action, suit or proceeding brought or
threatened by reason of the fact that the person was a director, officer,
employee or agent of such company, or is or was serving as such with respect to
another entity at the request of such company. The General Corporation Law of
Delaware also provides that the Company may purchase insurance on behalf of any
such director, officer, employee or agent.
Article Tenth of the Certificate of Incorporation of Harrah's Entertainment
provides for indemnification of the officers and directors of Harrah's
Entertainment to the full extent permitted by the Delaware General Corporation
Law.
Harrah's Entertainment has entered into Indemnification Agreements with its
directors, executive officers and certain other officers. Generally, the
Indemnification Agreements provide that Harrah's Entertainment will indemnify
such persons against any and all expenses, judgments, fines, penalties and
amounts paid in settlement (including all interest, assessments and other
charges paid or payable in connection with or in respect to such expenses,
judgments, fines, penalties or amounts paid in settlement) of any Claim by
reason of (or arising in part out of) an Indemnifiable Event. "Claim" is defined
as any threatened, pending or completed action, suit or proceeding or any
inquiry or investigation, whether conducted by Harrah's Entertainment or any
other party, that the indemnitee in good faith believes might lead to the
institution of any such action, suit or proceeding, whether civil, criminal,
administrative, investigative or other. "Indemnifiable Event" is defined as any
event or occurrence related to the fact that indemnitee is or was a director,
officer, employee, trustee, agent or fiduciary of Harrah's Entertainment, or is
or was serving at the request of Harrah's Entertainment or a director, officer,
employee, trustee, agent or fiduciary of another corporation, partnership, joint
venture, employee benefit plan, trust or other enterprise, or by reason of
anything done or not done by indemnitee in any such capacity. Notwithstanding
the foregoing, (i) the obligations of Harrah's Entertainment shall be subject to
the condition that the reviewing party (as defined) shall not have determined
(in a written opinion, in any case in which special, independent counsel is
involved) that indemnitee would not be permitted to be indemnified under
applicable law, and (ii) the obligation of Harrah's Entertainment to make an
expense advance shall be subject to the condition that, if, when and to the
extent that the reviewing party determines that indemnitee would not be
permitted to be so indemnified under applicable law, Harrah's Entertainment
shall be entitled to be reimbursed by indemnitee (who has agreed to reimburse
Harrah's Entertainment, for any amounts theretofore paid; provided, that if
indemnitee has commenced legal proceedings in a court of competent jurisdiction
to secure a determination that indemnitee should be indemnified under applicable
law, any determination made by the reviewing party that indemnitee would not be
permitted to be indemnified under applicable law shall not be binding and
indemnitee shall not be required to reimburse Harrah's Entertainment for any
expense advance until a final judicial determination is made with respect
thereto as to which all rights of appeal therefrom have been exhausted or
lapsed).
Section 102(b)(7) of the Delaware General Corporation Law enables a Delaware
corporation to provide in its certificate of incorporation for the elimination
or limitation of the personal liability of a director to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director.
Any such provision cannot eliminate or limit a director's liability (1) for any
breach of the director's duty of loyalty to the corporation or its stockholders;
(2) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law; (3) under Section 174 of the Delaware
General Corporation Law (which imposes liability on directors for unlawful
payment of
II-1
dividends or unlawful stock purchase or redemption); or (4) for any transaction
from which the director derived an improper personal benefit. Article Thirteenth
of the Harrah's Entertainment Certificate eliminates the liability of a director
of Harrah's Entertainment to Harrah's Entertainment or its stockholders for
monetary damages for breach of fiduciary duty as a director to the full extent
permitted by the Delaware General Corporation Law.
ITEM 21. EXHIBITS
EXHIBITS DESCRIPTION
--------------------- -----------
4.1+ Indenture, dated as of January 29, 2001, by and among
Harrah's Operating Company, Inc., Harrah's Entertainment,
Inc. and Bank One Trust Company, N.A.
4.2+ Registration Rights Agreement, dated as of January 29, 2001,
by and among Harrah's Operating Company, Inc., Harrah's
Entertainment, Inc. and the initial purchasers named
therein.
4.3+ Form of Exchange Note (included in Exhibit 4.1).
5.1+ Opinion of Latham & Watkins.
10.1+ Purchase Agreement, dated as of January 24, 2001, by and
among Harrah's Operating Company, Inc., Harrah's
Entertainment, Inc. and the initial purchasers named
therein.
12.1 Computation of Ratio of Earnings to Fixed Charges.
23.1+ Consent of Latham & Watkins (included in Exhibit 5.1).
23.2 Consent of Arthur Andersen LLP.
24.1+ Power of Attorney (included on the signature page of this
registration statement).
25.1+ Statement of Eligibility of Bank One Trust Company, N.A., as
trustee, on Form T-1.
99.1+ Form of Letter of Transmittal.
99.2+ Form of Notice of Guaranteed Delivery.
99.3+ Form of Letter to DTC Participants.
99.4+ Form of Letter to Beneficial Holders.
99.5+ Form of Letter to Clients.
99.6+ Form of Guidelines for Certification.
------------------------
+ Previously filed.
ITEM 22. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or
II-2
decrease in volume of securities offered (if the total dollar value
of securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of a prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregated,
the changes in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration is on Form S-3, Form S-8 or Form F-3, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by the registrant
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be
the initial BONA FIDE offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination
of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial BONA FIDE offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to our directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
The undersigned registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the trustee to act under Subsection
(a) of Section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of the Act.
The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-3
HARRAH'S OPERATING SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Harrah's Operating Company, Inc. has duly caused this Amendment No. 1 to
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized at Las Vegas, Nevada, on April 16, 2001.
HARRAH'S OPERATING COMPANY, INC.
By /s/ STEPHEN H. BRAMMELL
-----------------------------------------
Stephen H. Brammell
SENIOR VICE PRESIDENT
AND GENERAL COUNSEL
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment No. 1 to Registration Statement has been signed below by the following
persons in their capacities with Harrah's Operating Company, Inc., and on the
dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
* Chairman, Chief Executive
------------------------------------------- Officer, and Office of the April 16, 2001
Philip G. Satre President
* Director, Chief Financial
------------------------------------------- Officer, and Office of the April 16, 2001
Colin V. Reed President
* Director, Chief Operating
------------------------------------------- Officer, and Office of the April 16, 2001
Gary W. Loveman President
*
------------------------------------------- Controller and Principal April 16, 2001
Judy T. Wormser Accounting Officer
*By /s/ STEPHEN H. BRAMMELL
--------------------------------------
Stephen H. Brammell
ATTORNEY-IN-FACT
II-4
HARRAH'S ENTERTAINMENT SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Harrah's Entertainment, Inc. has duly caused this Amendment No. 1 to
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized at Las Vegas, Nevada, on April 16, 2001.
HARRAH'S ENTERTAINMENT, INC.
By /s/ STEPHEN H. BRAMMELL
-----------------------------------------
Stephen H. Brammell
SENIOR VICE PRESIDENT
AND GENERAL COUNSEL
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment No. 1 to Registration Statement has been signed below by the following
persons in their capacities with Harrah's Entertainment, Inc., and on the dates
indicated.
SIGNATURE TITLE DATE
--------- ----- ----
------------------------------------------- Director
James B. Farley
*
------------------------------------------- Director April 16, 2001
Joe M. Henson
*
------------------------------------------- Director April 16, 2001
Ralph Horn
*
------------------------------------------- Director April 16, 2001
J. Kell Houssels III
* Director, Chief Operating
------------------------------------------- Officer, and Office of the April 16, 2001
Gary W. Loveman President
*
------------------------------------------- Director April 16, 2001
R. Brad Martin
*
------------------------------------------- Director April 16, 2001
Robert G. Miller
II-5
SIGNATURE TITLE DATE
--------- ----- ----
* Director, Chief Financial
------------------------------------------- Officer, and Office of the April 16, 2001
Colin V. Reed President
------------------------------------------- Director
Walter J. Salmon
* Director, Chairman, Chief
------------------------------------------- Executive Officer, and April 16, 2001
Philip G. Satre Office of the President
*
------------------------------------------- Director April 16, 2001
Boake A. Sells
*
------------------------------------------- Director April 16, 2001
Eddie N. Williams
*
------------------------------------------- Controller and Principal April 16, 2001
Judy T. Wormser Accounting Officer
*By /s/ STEPHEN H. BRAMMELL
--------------------------------------
Stephen H. Brammell
ATTORNEY-IN-FACT
II-6
INDEX TO EXHIBITS
EXHIBITS DESCRIPTION
--------------------- -----------
4.1+ Indenture, dated as of January 29, 2001, by and among
Harrah's Operating Company, Inc., Harrah's Entertainment,
Inc. and Bank One Trust Company, N.A.
4.2+ Registration Rights Agreement, dated as of January 29, 2001,
by and among Harrah's Operating Company, Inc., Harrah's
Entertainment, Inc. and the initial purchasers named
therein.
4.3+ Form of Exchange Note (included in Exhibit 4.1).
5.1+ Opinion of Latham & Watkins.
10.1+ Purchase Agreement, dated as of January 24, 2001, by and
among Harrah's Operating Company, Inc., Harrah's
Entertainment, Inc. and the initial purchasers named
therein.
12.1 Computation of Ratio of Earnings to Fixed Charges.
23.1+ Consent of Latham & Watkins (included in Exhibit 5.1).
23.2 Consent of Arthur Andersen LLP.
24.1+ Power of Attorney (included on the signature page of this
registration statement).
25.1+ Statement of Eligibility of Bank One Trust Company, N.A., as
trustee, on Form T-1.
99.1+ Form of Letter of Transmittal.
99.2+ Form of Notice of Guaranteed Delivery.
99.3+ Form of Letter to DTC Participants.
99.4+ Form of Letter to Beneficial Holders.
99.5+ Form of Letter to Clients.
99.6+ Form of Guidelines for Certification.
------------------------
+ Previously filed.