<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 21, 1998
REGISTRATION NO. 333-
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
GUITAR CENTER, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 95-4600862
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5155 CLARETON DRIVE
AGOURA HILLS, CALIFORNIA 91301
(818) 735-8800
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
------------------------
BRUCE ROSS
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
GUITAR CENTER, INC.
5155 CLARETON DRIVE
AGOURA HILLS, CALIFORNIA 91301
(818) 735-8800
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------
COPIES TO:
ANTHONY J. RICHMOND
LATHAM & WATKINS
633 WEST FIFTH STREET, SUITE 4000
LOS ANGELES, CALIFORNIA 90071
(213) 485-1234
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the Registration Statement is declared effective.
------------------------
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / / ______________
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / ______________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER SHARE(2) PRICE(2) REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock Purchase Warrants(1)............ 676,566 warrants $27.875 $18,859,277.25 $5563.49
</TABLE>
(1) Also includes the 676,566 shares of Common Stock initially issuable upon
exercise of the Warrants and such indeterminate number of additional shares
of Common Stock as may become issuable upon exercise of the Warrants in
accordance with the terms thereof to prevent dilution.
(2) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457 based on the average of the high and low sales prices of the
Common Stock on the Nasdaq National Market on May 18, 1998, because the
Warrants are exercisable for Common Stock at a price of $0.01 per share.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE>
SUBJECT TO COMPLETION, DATED MAY 21, 1998
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
PROSPECTUS
MAY , 1998
676,566 SHARES
GUITAR CENTER, INC.
COMMON STOCK
($.01 PAR VALUE PER SHARE)
(WARRANTS TO PURCHASE 676,566 SHARES OF COMMON STOCK)
---------------------
This Prospectus relates to the offering for resale of warrants (the
"Warrants") to purchase 676,566 shares of common stock, par value $.01 per share
(the "Common Stock"), of Guitar Center, Inc. ("Guitar Center" or the "Company")
and the 676,566 shares of Common Stock underlying the Warrants. All of the
Warrants and shares of Common Stock (collectively, the "Securities") being
registered may be offered for sale and sold from time to time by certain
stockholders of the Company identified herein (the "Selling Stockholders"). The
Company will not receive any of the proceeds from the sale of Securities by the
Selling Stockholders. See "Selling Stockholders" and "Plan of Distribution"
concerning information about the Selling Stockholders and the manner of offering
of the Securities.
The Company's Common Stock is traded on the Nasdaq National Market under the
symbol "GTRC." On May 18, 1998, the last reported sales price of the Common
Stock on the Nasdaq National Market was $27.375 per share. The Warrants are not
and will not be listed on any national securities exchange or on the Nasdaq
system.
SEE "RISK FACTORS" ON PAGE 3 FOR CERTAIN CONSIDERATIONS RELEVANT TO AN
INVESTMENT IN THE SECURITIES.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The Securities will be sold either directly by the Selling Stockholders or
through underwriters, brokers, dealers, or agents. At the time any particular
offer of Securities is made, if and to the extent required, the specific number
of Securities offered, the offering price, and the other terms of the offering,
including the names of any underwriters, brokers, dealers or agents involved in
the offering and the compensation, if any, of such underwriters, brokers,
dealers or agents, will, to the extent required, be set forth in a supplement to
this Prospectus (a "Prospectus Supplement"). Any statement contained in this
Prospectus will be deemed to be modified or superseded by any inconsistent
statement contained in any Prospectus Supplement delivered herewith.
THE DATE OF THIS PROSPECTUS IS MAY , 1998
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK.
UNDERWRITERS MAY OVERALLOT IN CONNECTION WITH THE OFFERING AND MAY BID FOR AND
PURCHASE SHARES OF COMMON STOCK IN THE OPEN MARKET. FOR A DESCRIPTION OF THESE
ACTIVITIES, SEE "PLAN OF DISTRIBUTION."
------------------------
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements and other information
filed by the Company with the Commission can be inspected and copied at the
public reference facilities maintained by the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549 and at the following Regional Offices of the
Commission: 7 World Trade Center, New York, New York 10048; and Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material can be obtained from the Public Reference Section of the Commission,
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The
Commission maintains an Internet web site at http://www.sec.gov that contains
such reports, proxy statements and other information. Such reports, proxy
statements and other information of the Company should also be available for
inspection at the offices of the National Association of Securities Dealers,
Inc., 1735 K Street N.W., Washington, D.C. 20006.
The Company has filed with the Commission a Registration Statement on Form
S-3 (including all amendments thereto, the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
Securities offered hereby. As permitted by the rules and regulations of the
Commission, this Prospectus does not contain all the information set forth in
the Registration Statement and the exhibits thereto. For further information
about the Company and the Securities offered hereby, reference is made to the
Registration Statement and the exhibits thereto. Any statements contained herein
concerning the provisions of any document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission are not
necessarily complete, and in each instance reference is made to the copy of such
document so filed. Each such statement is qualified in its entirety by such
reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed by the Company with the Commission
pursuant to the Exchange Act and are incorporated by reference herein: (i)
Annual Report on Form 10-K for the year ended December 31, 1997 (the "1997 Form
10-K"); (ii) Proxy Statement dated April 2, 1998; (iii) Current Report on Form
8-K dated April 23, 1998; (iv) Quarterly Report on Form 10-Q for the quarter
ended March 31, 1998; and (v) the description of the Company's Common Stock
contained in the Company's Report on Form 8-A filed on March 6, 1997.
All reports and other documents filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus
and prior to the termination of the offering of the Common Stock shall be deemed
to be incorporated by reference in this Prospectus and to be part hereof from
the date of filing of such documents. Any statement contained herein or in a
document incorporated or deemed to be incorporated by reference herein shall be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein, modifies or
supersedes such statement. Any statement so modified or superseded shall not be
so deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
A copy of the documents incorporated herein by reference (other than
exhibits thereto) will be forwarded without charge to each person to whom this
Prospectus is delivered, upon such person's written or oral request to Guitar
Center, Inc., 5155 Clareton Drive, Agoura Hills, California 91301, telephone
number (818) 735-8800; Attention: Bruce Ross.
1
<PAGE>
THE COMPANY
The Company was founded in 1964 in Hollywood, California. In 1972, the
Company opened its second store in San Francisco to capitalize on the emerging
San Francisco rock 'n roll scene. By this time, Guitar Center's inventory had
been expanded to include drums, keyboards, accessories and pro audio and
recording equipment. Throughout the 1980s, Guitar Center expanded by opening
nine stores in five major markets including Chicago, Dallas and Minneapolis.
Since 1990, the Company has continued its new store expansion and has focused on
building the infrastructure necessary to manage the Company's strategically
planned growth. Current executive officers and key managers have been with the
Company for an average of 13 years and two of such executive officers (Mr. Larry
Thomas, the Company's President and Chief Executive Officer, and Mr. Marty
Albertson, the Company's Executive Vice President and Chief Operating Officer)
effectively assumed full operating control in 1992. Since then, management has
focused on developing and realizing its long-term goal of expanding its position
as the leading music products retailer throughout the United States.
Guitar Center's flagship Hollywood store currently is one of the nation's
largest and best-known retail stores of its kind with approximately 30,600
square feet of retail space. The Hollywood store features one of the largest
used and vintage guitar collections in the United States, attracting buyers and
collectors from around the world. In front of the Hollywood store is the Rock
Walk which memorializes over 70 famous musicians and music pioneers. The Rock
Walk attracts several tour buses daily and has helped to create international
recognition of the Guitar Center name.
As of March 31, 1998, Guitar Center operated 38 stores in 20 major U.S.
markets, including, among others, areas in or near Los Angeles, San Francisco,
Chicago, Miami, Houston, Dallas, Detroit, Boston, Minneapolis, Seattle, Phoenix,
Atlanta and Cleveland. From fiscal 1993 through fiscal 1997, the Company's net
sales and operating income before deferred compensation expense grew at compound
annual growth rates of 32.1% and 38.6%, respectively. This growth was
principally the result of strong and consistent comparable store sales growth
and the opening of 21 new stores.
The Guitar Center prototype store generally averages 15,000 square feet (as
compared to a typical music products retail store which averages approximately
3,200 square feet) and is designed to encourage customers to hold and play
instruments. Each store carries an average of 7,000 core SKUs, which management
believes is significantly greater than a typical music products retail store,
and is organized into five departments, each focused on one product category.
These departments cater to a musician's specific product needs and are staffed
by specialized salespeople, many of whom are practicing musicians.
The Company's growth strategy is to continue to increase its presence in its
existing markets and to open new stores in strategically selected markets. The
Company will continue to pursue its strategy of clustering stores in major
markets to take advantage of operating and advertising efficiencies and to build
awareness of the Guitar Center name in new markets. The Company opened a total
of eight stores in fiscal 1997, two of which the Company acquired in Atlanta in
April 1997. The Company has opened four stores in 1998 and presently expects to
open an additional six stores during the remainder of the year.
For fiscal years ended December 31, 1995, 1996 and 1997, the Company had net
income (loss) of $10.9 million, ($72.4) million and $16.3 million respectively.
The results for fiscal 1997 reflect an extraordinary charge of $4.4 million, net
of tax benefit of $1.7 million, related to the extinguishment of long-term debt.
The results for fiscal 1996 reflect $11.6 million for transaction costs and
financing fees incurred in connection with a recapitalization pursuant to which
the ownership of the Company transferred from a sole stockholder to members of
management and certain investors (the "Recapitalization") and non-recurring
deferred compensation expense of $71.8 million, substantially all of which
related to the Recapitalization.
The principal executive offices of the Company are located at 5155 Clareton
Drive, Agoura Hills, California 91301. The telephone number is (818) 735-8800.
2
<PAGE>
RISK FACTORS
GENERAL. In addition to the other information incorporated by reference
herein, prospective investors are urged to review carefully the information
provided under the caption "Risks Related to the Business" in the 1997 Form
10-K.
RECENT SALES TRENDS NOT EXPECTED TO CONTINUE. For the fiscal quarter ended
March 31, 1998, the Company's net sales totaled $85.2 million, an increase of
42.5% from 1997 levels, including an increase of 17.5% in comparable store
sales. In the opinion of management, this strong sales performance reflects an
extraordinarily successful promotional period, the introduction of the Company's
Preferred Player credit card, and the effect of the Easter holiday falling into
the second quarter of 1998 versus the first quarter in 1997. Management does not
expect this comparable store sales trend to continue at this high level.
FORWARD-LOOKING STATEMENTS
This Prospectus contains and incorporates by reference certain
forward-looking statements relating to the Company's growth plans, strategy and
expected store openings for fiscal 1998. These forward-looking statements are
based largely on the Company's current expectations and are subject to a number
of risks and uncertainties. Actual results could differ materially from these
forward-looking statements. In addition to the other risks described in the 1997
Form 10-K, important factors to consider in evaluating such forward-looking
statements include changes in external competitive market factors, the
effectiveness of the Company's promotion and merchandising strategies, changes
in the Company's business strategy or an inability to execute its strategy due
to unanticipated changes in the music products industry or the economy in
general, the emergence of new or growing specialty retailers of music products
and various other competitive factors that may prevent the Company from
competing successfully in existing or future markets. In light of these risks
and uncertainties, there can be no assurance that the forward-looking statements
contained in this Prospectus, or in any of the documents incorporated by
reference herein, will in fact be realized.
DESCRIPTION OF SECURITIES
The following summary description does not purport to be complete. Reference
is made to the Company's Restated Certificate of Incorporation (the "Certificate
of Incorporation") and the Amended and Restated Bylaws, which are filed as
exhibits to the Registration Statement of which this Prospectus forms a part,
for a detailed description of the provisions thereof summarized below.
COMMON STOCK
Holders of Common Stock are entitled to receive such dividends, if any, as
may from time to time be declared by the Board of Directors of the Company out
of funds legally available therefor. Pursuant to the Certificate of
Incorporation, holders of Common Stock are entitled to one vote per share on all
matters on which the holders of Common Stock are entitled to vote and do not
have cumulative voting rights. Holders of Common Stock have no preemptive,
conversion, redemption or sinking fund rights. In the event of a liquidation,
dissolution or winding-up of the Company, holders of Common Stock are entitled
to share equally and ratably in the assets of the Company, if any, remaining
after the payment of all debts and liabilities of the Company and the
liquidation preference of any outstanding preferred stock. The outstanding
shares of Common Stock are, and the shares of Common Stock offered by the
Selling Stockholders hereby when issued in accordance with the Warrants will be,
fully paid and nonassessable. The rights, preferences and privileges of holders
of Common Stock are subject to any series of preferred stock which the Company
may issue in the future.
3
<PAGE>
WARRANTS
The Warrants are exercisable into an aggregate of 676,566 shares of Common
Stock at an exercise price of $0.01 per share and expire on June 5, 2006. So
long as any of the Warrants are outstanding, the amount of Common Stock
obtainable pursuant to the Warrants shall be subject to change or adjustment
according to the anti-dilution provisions of the Warrants. In the case of any
capital reorganization or any reclassification of the capital stock of the
Company the Warrants shall thereafter be exercisable for the number of shares of
stock or other securities or property receivable upon such capital
reorganization or reclassification equal to the number of shares of Common Stock
into which the Warrants would have been exercisable immediately prior to such
reorganization or reclassification.
SELLING STOCKHOLDERS
The following table sets forth certain information, as of May 18, 1998, with
respect to the Securities beneficially owned and to be offered hereby from time
to time by DLJ Merchant Banking Partners, L.P., DLJ International Partners,
C.V., DLJ Merchant Banking Funding, Inc., DLJ First ESC L.P. and DLJ Offshore
Partners, C.V. or their respective assignees and their successors or assigns, if
any, including Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ") as
set forth below (each a "Selling Stockholder" and, collectively, the "Selling
Stockholders"). The Securities offered pursuant to this Prospectus as set forth
below are all owned in the form of Warrants and equal all Securities owned by
such persons named below as of the date of this Prospectus. The address for each
of the Selling Stockholders is c/o DLJ Merchant Banking, Inc., 277 Park Avenue,
New York, New York 10172.
<TABLE>
<CAPTION>
COMMON STOCK
PURCHASE WARRANTS COMMON STOCK
BENEFICIALLY PURCHASE WARRANTS
OWNED OFFERED HEREBY
----------------- -----------------
<S> <C> <C>
DLJ Merchant Banking Partners, L.P......................................... 314,217 314,217
DLJ International Partners, C.V............................................ 151,962 151,962
DLJ Merchant Banking Funding, Inc.......................................... 121,386 121,386
DLJ First ESC L.P.......................................................... 80,921 80,921
DLJ Offshore Partners, C.V................................................. 8,080 8,080
</TABLE>
The Warrants are currently exercisable at an exercise price of $.01 per
share. The Selling Stockholders have advised the Company that some or all of the
Warrants may be sold prior to the sale of the Common Stock offered hereby to DLJ
for exercise by DLJ and sale by DLJ of the shares of Common Stock received upon
exercise of such Warrants. The Selling Stockholders have advised the Company
that the Warrants will be exercised on a "cashless basis" by paying the $6,766
aggregate exercise price in the form of shares of Common Stock of equal value
(based on the average of the closing sales prices of the Common Stock on the
Nasdaq National Market for the thirty trading days immediately prior to the date
of exercise). Accordingly, assuming that the closing sales price of the Common
Stock on the Nasdaq National Market on such date is $27.375, 676,319 shares of
Common Stock would be issuable upon exercise of all outstanding Warrants.
Pursuant to an agreement between the Company and the Selling Stockholders
(the "Registration Agreement"), the Company has agreed to file the Registration
Statement to register the potential resale of the Securities by the Selling
Stockholders.
PLAN OF DISTRIBUTION
Sales of the Securities offered hereby may be made from time to time by the
Selling Stockholders in one or more transactions on the Nasdaq National Market
or any other national securities exchange on which the Common Stock is traded
(which, subject to applicable law, may involve transactions solely between a
broker-dealer and its customers which are not traded across an open market and
block trades),
4
<PAGE>
in the over-the-counter market, in privately negotiated transactions, for
purposes of covering short positions or otherwise or in any combination of such
transactions at market prices then prevailing, at prices related to the then
current market price, at negotiated prices or at fixed prices. In addition, any
Securities covered by this Prospectus which qualify for sale pursuant to Section
4(1) of the Securities Act or Rule 144 promulgated thereunder may be sold under
such provisions rather than pursuant to this Prospectus. The Securities offered
hereby may be offered in any manner permitted by law, including through
underwriters, brokers, dealers or agents, and directly to one or more
purchasers. Without limiting the generality of the foregoing, the Securities
offered hereby may be sold in one or more of the following types of
transactions: (a) sales to underwriters who will acquire the Securities for
their own account and resell them in one or more transactions at fixed prices or
at varying prices determined at the time of sale; (b) a block trade in which the
broker-dealer so engaged will attempt to sell the Securities as agent but may
position and resell a portion of the block as principal to facilitate the
transaction; (c) purchases by a broker or dealer as principal and resale by such
broker or dealer for its account; (d) ordinary brokerage transactions and
transactions in which the broker solicits purchasers; (e) an exchange
distribution in accordance with the rules of such exchange; and (f) transactions
between sellers and purchasers without a broker-dealer. In effecting sales,
brokers or dealers engaged by the Selling Stockholders may arrange for other
brokers or dealers to participate in the resales.
Brokers, dealers or agents may receive compensation in the form of
commissions, underwriting discounts or concessions from the Selling Stockholders
in amounts to be negotiated in connection with the sale. Such brokers or dealers
and any other participating brokers or dealers may be deemed to be
"underwriters" within the meaning of the Securities Act in connection with such
sales and any such commission, discount or concession may be deemed to be
underwriting discounts or commissions under the Securities Act.
In the event the Selling Stockholders or DLJ, as applicable, engage an
underwriter in connection with the sale of the Securities, if and to the extent
required, the specific number of Securities offered, the offering price, and the
other terms of the offering, including the names of any underwriters, brokers,
dealers or agents involved in the offering and the compensation, if any, of such
underwriters, brokers, dealers or agents, will, to the extent required, be set
forth in a Prospectus Supplement.
Pursuant to the Registration Agreement, the Company has, subject to certain
limitations, agreed to keep the Registration Statement effective for the sale of
Securities until all Securities offered hereunder have been sold. All costs,
expenses and fees in connection with the registration and sale of the Securities
offered hereby shall be borne by the Company. Commissions and discounts, if any,
attributable to the sale of Securities hereunder will be borne by the Selling
Stockholders. The Selling Stockholders and the Company have agreed to indemnify
each other against certain civil liabilities, including certain liabilities
under the Securities Act.
Certain persons participating in the distribution of the Securities offered
hereby may engage in transactions that stabilize the price of the Common Stock.
LEGAL MATTERS
Certain legal matters with respect to the Securities offered hereby have
been passed upon for the Company by Latham & Watkins, Los Angeles, California.
EXPERTS
The consolidated financial statements of the Company for the year ended
December 31, 1995 appearing in the Company's Annual Report on Form 10-K for the
year ended December 31, 1997, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon included therein and
incorporated herein by reference. The consolidated financial statements for the
year ended
5
<PAGE>
December 31, 1995 are included in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
The consolidated financial statements and schedule of Guitar Center, Inc. as
of December 31, 1997 and 1996, and for each of the years in the two year period
ending December 31, 1997 have been incorporated by reference herein and in the
registration statement in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing.
6
<PAGE>
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NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE SELLING
STOCKHOLDERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF ANY OFFER TO BUY, THE SECURITIES IN ANY JURISDICTION WHERE, OR
TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN
IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information..................................................... 1
Incorporation of Certain Documents by Reference........................... 1
The Company............................................................... 2
Risk Factors.............................................................. 3
Forward-Looking Statements................................................ 3
Description of Securities................................................. 3
Selling Stockholders...................................................... 4
Plan of Distribution...................................................... 4
Legal Matters............................................................. 5
Experts................................................................... 5
</TABLE>
GUITAR CENTER, INC.
676,566 SHARES OF
COMMON STOCK
WARRANTS TO PURCHASE 676,566 SHARES OF COMMON STOCK
---------------------
PROSPECTUS
---------------------
MAY , 1998
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following expenses (other than the Securities and Exchange Commission
Registration Fee) are estimated.
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee............ $ 5,563.49
Printing....................................................... 40,000.00
Accountants' Fees and Expenses................................. 50,000.00
Legal Fees and Expenses........................................ 30,000.00
Miscellaneous.................................................. 4,436.51
----------
Total...................................................... $130,000.00
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----------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Certificate of Incorporation of Guitar Center, Inc. (the "Company")
provides that, to the extent permitted by the Delaware General Corporation Law,
a director or officer shall not be personally liable to the Company or its
stockholders for monetary damages arising from a breach of their fiduciary
duties to the Company and its stockholders, to the extent permitted by the
Delaware General Corporation Law. Such limitation of liability does not affect
the availability of equitable remedies such as injunctive relief or rescission.
The Company's Amended and Restated Bylaws (the "Bylaws") provide that the
Company shall indemnify its directors and officers to the fullest extent
permitted by applicable law. The Company has entered into indemnification
agreements with its directors and executive officers containing provisions which
are in some respects broader than the specific indemnification provisions
contained in the Delaware General Corporation Law. Such agreements require the
Company, among other things, (i) to indemnify its officers and directors against
certain liabilities that may arise by reason of their status or service as
directors or officers provided such persons acted in good faith and in a manner
reasonably believed to be in the best interests of the Company and, with respect
to any criminal action, had no cause to believe their conduct was unlawful; (ii)
to advance the expenses actually and reasonable incurred by its officers and
directors as a result of any proceeding against them as to which they could be
indemnified; and (iii) to obtain directors' and officers' insurance if available
on reasonable terms. There is no action or proceeding pending or, to the
knowledge of the Company, threatened which may result in a claim for
indemnification by any director, officer, employee or agent of the Company.
Policies of insurance may be obtained and maintained by the Company under
which its directors and officers will be insured, within the limits and subject
to the limitations of the policies, against certain expenses in connection with
the defense of, and certain liabilities which might be imposed as a result of,
actions, suits or proceedings to which they are parties by reason of being or
having been such directors or officers.
The form of Underwriting Agreement, referred to in Exhibit 1.1. to this
Registration Statement, provides for the indemnification of the Company, its
controlling persons, its directors and certain of its officers by the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended (the "Securities Act"). Pursuant to the
Registration Agreement filed as Exhibit 4.3 to this Registration Statement, the
Selling Stockholders and the Company have agreed to indemnify each other against
certain civil liabilities, including certain liabilities under the Securities
Act.
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<PAGE>
ITEM 16. EXHIBITS.
<TABLE>
<C> <S>
1.1 Form of Underwriting Agreement (to be filed as an exhibit to a Report on
Form 8-K).
4.1 Warrants (1-4) dated June 5, 1996, for the purchase of shares of Common
Stock and Junior Preferred Stock issued to certain investors
(incorporated by reference to Exhibit 4.3 of the Company's Registration
Statement on Form S-1, File No. 333-10491).
4.2 Form of Stock Certificate (incorporated by reference to Exhibit 4.4 of the
Company's Registration Statement on Form S-1, File No. 333-10491).
4.3 Registration Agreement dated June 5, 1996 by and among the Company, DLJ
Merchant Banking Partners, L.P., DLJ International Partners, C.V., DLJ
Offshore Partners, C.V. and DLJ Merchant Banking Funding, Inc.
(incorporated by reference to Exhibit 10.11 of the Company's Registration
Statement on Form S-1, File No. 333-10491).
5.1 Opinion of Latham & Watkins as to the validity of the shares of Common
Stock offered hereby
23.1 Consent of KPMG Peat Marwick LLP, independent auditors
23.2 Consent of Ernst & Young LLP, independent auditors
23.4 Consent of Latham & Watkins (included in Exhibit 5.1)
24.1 Power of Attorney (included on signature page to this Registration
Statement on Form S-3).
</TABLE>
ITEM 17. 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;
(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
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Securities and
Exchange Commission (the "Commission") pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20
percent change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective Registration
Statement;
(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;
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof;
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering;
II-2
<PAGE>
(4) That, for purposes of determining any liability under the Securities
Act, each filing of the registrant's annual report pursuant to section 13(a) or
section 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") (and, where, applicable, each filing of an employee benefit plan's annual
report pursuant to section 15(d) of the Exchange Act) 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;
(5) To deliver or to cause to be delivered with the prospectus, to each
person to whom the prospectus is sent or given, the latest annual report to
security holders that is incorporated by reference in the prospectus and
furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3
under the Exchange Act; and, where interim financial information required to be
presented by Article 3 of Regulation S-X are not set forth in the prospectus, to
deliver, or cause to be delivered to each person to whom the prospectus is sent
or given, the latest quarterly report that is specifically incorporated by
reference in the prospectus to provide such interim financial information; and
(6) That, for purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(b)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities 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 Securities Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Agoura Hills, State of California, on this 21st day
of May, 1998.
GUITAR CENTER, INC.
By: /s/ LARRY THOMAS
----------------------------------------
Larry Thomas
PRESIDENT AND CHIEF EXECUTIVE OFFICER
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Larry Thomas, Marty Albertson and Bruce
Ross and each of them his true and lawful attorney-in-fact and agent, each with
full power of substitution and resubstitution, for him in his true name, place
and stead, in any and all capacities, to sign any and all amendments to this
Registration Statement, and to file any registration statement pursuant to Rule
462(b) and to file the same, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as they might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities indicated on the dates indicated.
<TABLE>
<CAPTION>
NAME TITLE DATE
- ----------------------------------------------- ----------------------------------------------- ---------------
<C> <S> <C>
/s/ LARRY THOMAS President, Chief Executive Officer and Director
------------------------------------- (Principal Executive Officer) May 21, 1998
Larry Thomas
/s/ MARTY ALBERTSON Executive Vice President, Chief Operating
------------------------------------- Officer and Director May 21, 1998
Marty Albertson
/s/ BRUCE ROSS Executive Vice President, Chief Financial
------------------------------------- Officer and Secretary (Principal Financial May 21, 1998
Bruce Ross and Accounting Officer)
/s/ STEVEN BURGE
------------------------------------- Director May 21, 1998
Steven Burge
/s/ DAVID FERGUSON
------------------------------------- Director May 21, 1998
David Ferguson
/s/ HARVEY KIBEL
------------------------------------- Director May 21, 1998
Harvey Kibel
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
NAME TITLE DATE
- ----------------------------------------------- ----------------------------------------------- ---------------
<C> <S> <C>
/s/ MICHAEL LAZARUS
------------------------------------- Director May 21, 1998
Michael Lazarus
/s/ PETER STARRETT
------------------------------------- Director May 21, 1998
Peter Starrett
/s/ JEFFREY WALKER
------------------------------------- Director May 21, 1998
Jeffrey Walker
</TABLE>
II-5
<PAGE>
Exhibit 5.1
LATHAM & WATKINS
Attorneys at Law
633 West Fifth Street, Suite 4000
Los Angeles, California 90071-2007
Telephone (213) 485-1234
Fax (213) 891-8763
May 21, 1998
Guitar Center, Inc.
5155 Clareton Drive
Agoura Hills, CA 91301
Re: Guitar Center, Inc.
Registration Statement on Form S-3
----------------------------------
Ladies and Gentlemen:
At your request, we have examined the Registration Statement on
Form S-3 (the "Registration Statement"), which Guitar Center, Inc., a
Delaware corporation (the "Company"), is filing on the date hereof with the
Securities and Exchange Commission in connection with the registration under
the Securities Act of 1933, as amended, of warrants (the "Warrants") to
purchase 676,566 shares of Common Stock of the Company, par value $0.01, and
the 676,566 shares (the "Shares") of Common Stock underlying the Warrants.
In our capacity as your counsel, we have made such legal and
factual examinations and inquiries as we have deemed necessary or appropriate
for purposes of this opinion. In our examination, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to
us as originals, and the conformity to authentic original documents of all
documents submitted to us as copies. As to facts material to the opinions,
statements and assumptions expressed herein, we have, with your consent,
relied upon statements and representations of officers and other
representatives of the Company and others. In addition, we have obtained and
relied upon such certificates and assurances from public officials as we have
deemed necessary.
We are opining herein as to the effect on the subject transaction
only of the internal laws of the State of New York and the General
Corporation Law of the State of Delaware, and we express no opinion with
respect to the applicability thereto, or the effect thereon, of the laws of
any other jurisdiction or, in the case of Delaware, any other laws, as to any
matters of federal law, municipal law or the laws of any other local agencies
within the state.
<PAGE>
Guitar Center, Inc.
May 21, 1998
Page 2
Subject to the foregoing, we are of the opinion that, as of the
date hereof:
1. The Warrants have been duly authorized and validly issued and
are legally valid and binding obligations of the Company, enforceable against
the Company in accordance with their terms.
2. The Shares issuable upon the exercise of the Warrants have
been duly authorized.
3. Upon the exercise of the Warrants, the Shares, when delivered
against payment of the exercise price therefor, will be validly issued, fully
paid and nonassessable.
The opinion expressed in paragraph 1 above is subject to the
following limitations, qualifications and exceptions: (i) the effect of
bankruptcy, insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to or affecting the rights or remedies of
creditors; (ii) the effect of general principles of equity, whether
enforcement is considered in a proceeding in equity or at law, and the
discretion of the court before which any proceeding therefor may be brought;
and (iii) the unenforceability under certain circumstances under law or court
decisions of provisions providing for the indemnification of or contribution
to a party with respect to a liability where such indemnification or
contribution is contrary to public policy.
This opinion is rendered only to you and is solely for your
benefit in connection with the transactions covered hereby. This opinion may
not be relied upon by you for any other purpose, or furnished to, quoted to,
or relied upon by any other person, firm or corporation for any purpose,
without our prior written consent.
We consent to your filing this opinion as an exhibit to the
Registration Statement and to the reference to our firm contained under the
heading "Legal Matters."
Very truly yours,
/s/ LATHAM & WATKINS
<PAGE>
EXHIBIT 23.1
ACCOUNTANTS' CONSENT
The Board of Directors
Guitar Center, Inc.:
The audits referred to in our report dated February 11, 1998, included the
related consolidated financial statement schedule as of December 31, 1997,
and for each of the years in the two-year period ended December 31, 1997,
incorporated by reference in the registration statement. This consolidated
financial statement schedule is the responsibility of the Company's
management. Our responsibility is to express an opinion on the financial
statement schedule based on our audits. In our opinion, such financial
statement schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.
We consent to the use of our report incorporated herein by reference and to
the reference to our firm under the heading "Experts" in the prospectus.
/s/ KPMG Peat Marwick LLP
Los Angeles, California
May 18, 1998
<PAGE>
EXHIBIT 23.2
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on Form S-3 and related Prospectus of Guitar Center,
Inc. for the registration of 676,566 shares of its common stock and to the
incorporation by reference therein of our report dated March 6, 1996, with
respect to the consolidated financial statements for the year ended December
31, 1995 of Guitar Center Inc. included in its Annual Report (Form 10-K) for
the year ended December 31, 1997, filed with the Securities and Exchange
Commission.
Ernst & Young LLP
Los Angeles, California
May 18, 1998
