<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 5, 1999
REGISTRATION STATEMENT 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
----------------
AMF BOWLING, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
----------------
DELAWARE 13-3873268
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
8100 AMF DRIVE
RICHMOND, VIRGINIA 23111
(804) 730-4000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
ROLAND C. SMITH
PRESIDENT AND CHIEF EXECUTIVE OFFICER
8100 AMF DRIVE
RICHMOND, VIRGINIA 23111
(804) 730-4000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPIES OF ALL CORRESPONDENCE TO:
JOSEPH C. CARTER, III, ESQ. MITCHELL S. PRESSER, ESQ.
MCGUIRE, WOODS, BATTLE & BOOTHE LLP WACHTELL, LIPTON, ROSEN & KATZ
ONE JAMES CENTER 51 WEST 52ND STREET
901 EAST CARY STREET NEW YORK, NEW YORK 10019
RICHMOND, VIRGINIA 23219
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities 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. [_]
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
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<TABLE>
<CAPTION>
PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED OFFERING PRICE (2) FEE
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<S> <C> <C>
Subscription Rights(1).......... $0 $0
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Common Stock.................... $140,000,000 $38,920
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</TABLE>
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(1) Evidencing the rights to subscribe for Common Stock of the Registrant.
Pursuant to Rule 457(g), no separate registration fee is required for the
rights since they are being registered in the same registration statement
as the Common Stock underlying the rights.
(2) Calculated in accordance with Rule 457(o) based on the estimated maximum
offering price of the Common Stock.
----------------
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>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY +
+NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN +
+OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE +
+SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PROSPECTUS (NOT COMPLETE)
ISSUED MAY 5 , 1999
SHARES
AMF BOWLING, INC.
-----------
COMMON STOCK
AMF is distributing to each of its stockholders transferable rights to
purchase AMF common stock. Each right entitles the holder to purchase one share
of AMF common stock, plus a portion of any shares remaining if not all of the
rights are exercised.
This rights offering is part of AMF's recapitalization plan. The plan
includes a concurrent tender offer by us for $ principal amount at maturity
of our zero coupon convertible debentures. We will complete this rights
offering only if we obtain subscriptions for at least 90% of the shares (or
shares) offered in this rights offering and succeed in completing the tender
offer.
AMF common stock trades on the New York Stock Exchange under the symbol
"PIN." We will apply to list the rights on the NYSE under the symbol "PINRT."
We cannot assure you that an active trading market will develop or be
maintained for the rights.
Certain members of our original investor group have indicated that they
currently expect to fully exercise their basic subscription privileges in the
rights offering, subject to market conditions and the final terms and
conditions of the rights offering. However, they are not obligated to do so.
-----------
INVESTING IN AMF COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 9.
-----------
SUBSCRIPTION PRICE $ PER SHARE
-----------
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<TABLE>
- -------------------------------------------------------------------------------
<CAPTION>
PER SHARE TOTAL
- -------------------------------------------------------------------------------
<S> <C> <C>
Public offering price....................................... $ $
- -------------------------------------------------------------------------------
Proceeds, before expenses, to AMF........................... $ $
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- -------------------------------------------------------------------------------
</TABLE>
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
-----------
<PAGE>
QUESTIONS AND ANSWERS ABOUT THE RIGHTS OFFERING
WHAT IS A RIGHTS OFFERING?
A rights offering is a distribution of rights on a pro rata basis to all of
our stockholders. We are distributing rights for each share of AMF common
stock held on , 1999.
WHAT IS A RIGHT?
Each right entitles the stockholder to purchase one share of AMF common stock
at a subscription price of $ per share. Each right carries with it a basic
subscription privilege and an over-subscription privilege.
WHAT IS THE BASIC SUBSCRIPTION PRIVILEGE?
The basic subscription privilege of each right entitles you to purchase one
share of AMF common stock for $ , the subscription price.
WHAT IS THE OVER-SUBSCRIPTION PRIVILEGE?
The over-subscription privilege of each right entitles you, if you fully
exercise your basic subscription privilege, to subscribe for additional shares
of AMF common stock at the same subscription price of $ per share.
WHAT ARE THE LIMITATIONS ON THE OVER-SUBSCRIPTION PRIVILEGE?
We will be able to satisfy your exercise of the over-subscription privilege
only if rights holders subscribe for less than all of the shares issuable on
exercise of the rights. If sufficient shares are available, we will honor the
over-subscription requests in full. If over-subscription requests exceed the
shares available, we will allocate the available shares pro rata among those
who over-subscribed in proportion to the number of shares each such rights
holder purchases pursuant to his basic subscription privilege.
WHY ARE WE CONDUCTING A RIGHTS OFFERING?
We are proceeding with the rights offering to raise capital as part of a
comprehensive recapitalization plan. The plan is designed to reduce our overall
debt burden, provide additional financial flexibility and allow us to increase
the pace of our acquisition program on a selective basis.
WHEN WILL THE RIGHTS OFFERING EXPIRE?
The rights offering will expire at 5:00 p.m. on , 1999, unless we
extend it.
WHAT ARE THE CONDITIONS TO COMPLETION OF THE RIGHTS OFFERING?
We will complete the rights offering only if
. we obtain subscriptions for at least 90% of the shares (or shares)
issuable on exercise of the rights; and
. we succeed in completing our concurrent tender offer for a portion of
our outstanding zero coupon convertible debentures on the terms
described under "The Rights Offering--Conditions to the Completion of
the Rights Offering, including Completion of the Tender Offer" on page
24.
However, these conditions may be waived by us.
WHAT SHOULD I DO IF I WANT TO PARTICIPATE IN THE RIGHTS OFFERING BUT MY SHARES
ARE HELD IN THE NAME OF MY BROKER OR A CUSTODIAN BANK?
If you hold shares of AMF common stock through a broker, dealer or other
nominee, we will ask your broker, dealer or nominee to notify you of the rights
offering. If you wish to sell or exercise your rights, you
2
<PAGE>
will need to have your broker, dealer or nominee act for you. To indicate your
decision with respect to your rights, you should complete and return to your
broker, dealer or nominee the form entitled "Beneficial Owner Election Form."
You should receive this form from your broker, dealer or nominee with the other
rights offering materials.
WILL I BE CHARGED A COMMISSION OR FEE IF I EXERCISE MY RIGHTS?
No. We will not charge a brokerage commission or a fee to rights holders for
exercising their rights. However, if you exercise your rights through a broker,
dealer or nominee, you will be responsible for any fees charged by your broker,
dealer or nominee. If you sell your rights through , the subscription agent
for the rights offering, as described beginning on page 30, it will not charge
you any fees. If you sell your rights through other means, you will be
responsible for any fees arising from the sale.
MAY I TRANSFER MY RIGHTS IF I DO NOT WANT TO PURCHASE ANY SHARES?
Yes. The rights are transferable and we will apply to list the rights for
trading on the New York Stock Exchange until the close of business on the last
trading day before the rights offering expires.
HOW MAY I SELL MY RIGHTS?
You may contact the subscription agent if you would like it to sell your
rights for you, as described beginning on page 30. Otherwise, you may try to
sell your rights through normal investment channels. We cannot assure you that
the subscription agent or others will be able to sell any of your rights for
you.
AM I REQUIRED TO SUBSCRIBE IN THE RIGHTS OFFERING?
No. If you do not subscribe fully, however, your percentage ownership
interest in AMF common stock will be reduced.
IF I EXERCISE RIGHTS IN THE RIGHTS OFFERING, MAY I CANCEL OR CHANGE MY
DECISION?
No. All exercises of rights are irrevocable unless the conditions to
completion of this rights offering are not satisfied or waived before the
subscription period ends. In that case, we may extend the subscription period
and you will be able to change your decision.
IF THE RIGHTS OFFERING IS NOT COMPLETED, WILL MY SUBSCRIPTION PAYMENT BE
REFUNDED TO ME?
Yes. The subscription agent will hold all funds it receives in escrow until
the rights offering is completed or terminated. If the rights offering is not
completed, the subscription agent will return all subscription payments
promptly, without interest.
WHAT SHOULD I DO IF I HAVE OTHER QUESTIONS?
If you have questions or need assistance, please contact , the
information agent for the rights offering, at:
[INSERT NAME, ADDRESS, TELEPHONE NUMBER OF INFORMATION AGENT]
Banks and Brokerage Firms please call (800) ______ .
For further assistance on how to subscribe for shares, you may also contact
, the subscription agent for the rights offering, by mail or telephone
at:
[INSERT NAME, ADDRESS AND PHONE NUMBER OF SUBSCRIPTION AGENT]
For a more complete description of this offering, see "The Rights Offering"
beginning on page 23.
3
<PAGE>
PROSPECTUS SUMMARY
Summary..................... This summary highlights information contained
elsewhere in this prospectus. This summary does
not contain all of the important information that
you should consider before exercising the rights
and investing in AMF common stock. You should
read the entire prospectus carefully.
Information about AMF....... AMF is the largest owner and operator of bowling
centers in the world. On April 30, 1999, we owned
and operated 545 bowling centers throughout the
world, with 422 centers in the United States and
123 centers in 10 other countries. We are also a
world leader in the manufacture and sale of
bowling and other recreational products.
AMF was acquired in 1996 by an investor group led
by an affiliate of Goldman, Sachs & Co. The
original investor group currently owns
approximately 73.6% of our outstanding common
stock.
Our principal executive offices are located at
8100 AMF Drive, Richmond, Virginia 23111. Our
telephone number is (804) 730-4000.
Risk Factors................ A purchase of AMF common stock involves a high
degree of risk. You should read and carefully
consider the information set forth under "Risk
Factors" beginning on page 9 and the information
contained elsewhere in this prospectus.
No Recommendation to Rights
Holders.....................
We and the subscription agent are not making any
recommendations as to whether or not you should
subscribe for AMF common stock. You should decide
whether to subscribe for AMF common stock based
upon your own assessment of your best interests.
THE RIGHTS OFFERING
Reasons for the Rights We are proceeding with the rights offering to
Offering.................... raise capital as part of a comprehensive
recapitalization plan. The plan is designed to
reduce our overall debt burden, provide
additional financial flexibility and allow us to
increase the pace of our acquisition program on a
selective basis.
Rights...................... We will distribute to each stockholder of record
on , 1999, at no charge, transferable
subscription rights for every share of AMF common
stock then owned. Because we will not issue
fractional rights, we will round up to the
nearest whole number the number of rights we
distribute to each stockholder. For example, if
you own shares of AMF common stock, you will
receive rights instead of rights. The
rights will be evidenced by a transferable rights
certificate and will entitle the holder to
subscribe for shares of AMF common stock at
per share pursuant to the basic subscription
privilege and over-subscription privilege
described on page 24.
4
<PAGE>
Participation by Certain
Members of the Original
Investor Group..............
Some members of the original investor group who
own, in the aggregate, approximately 43,221,048
outstanding shares of common stock, have
indicated that they currently expect to fully
exercise their basic subscription privileges,
subject to market conditions and the final terms
and conditions of the rights offering. However,
none of these persons is obligated to do so.
Record Date................. You will receive rights for each share of
common stock you held on the record date, which
is , 1999, at 5:00 p.m., New York City time.
Expiration Date............. The rights will expire at 5:00 p.m., New York
City time, on , 1999. We may extend the
expiration date for any reason.
Termination of the Rights We may terminate the rights offering for any
Offering.................... reason before the rights expire. If we terminate
the rights offering, we will promptly return all
subscription payments. We will not pay interest
on, or deduct any amounts from, subscription
payments if we terminate the rights offering. If
you do not exercise your rights before the
expiration time, they will expire and will no
longer be exercisable.
Procedure for Exercising You may exercise rights by properly completing
Rights...................... and signing your rights certificate. You must
deliver to the subscription agent your rights
certificate with payment of the subscription
price for each share of AMF common stock
subscribed for (both pursuant to the basic
subscription privilege and the over-subscription
privilege) before 5:00 p.m., New York City time,
on , 1999. If you use the United States
mail to send your rights certificate, we
recommend that you use insured, registered mail.
If you cannot deliver your rights certificate to
the subscription agent on time, you may use the
procedures for guaranteed delivery described
under "The Rights Offering--Guaranteed Delivery
Procedures" on page 28. We will not pay interest
on subscription payments. We have provided more
detailed instructions on how to exercise your
rights under "The Rights Offering" beginning with
the section "--Exercise of Rights" on page 26 and
with the rights certificate and "Instructions for
Use of AMF Bowling, Inc. Rights Certificates"
that may accompany this prospectus.
How Foreign Stockholders
Can Exercise Rights.........
We will not mail rights certificates to you if
you are a stockholder with an address outside the
United States. Instead, the subscription agent
will hold rights certificates for your account.
To exercise those rights, you must notify the
subscription agent on or before 11:00 a.m., New
York City time, on , 1999, and establish to
the satisfaction of the subscription agent that
you are permitted to exercise your rights under
applicable law. If you do not notify the
subscription agent and provide acceptable
instructions to it by such time (if no contrary
instructions are received), the subscription
agent will try to sell your rights, if feasible,
and will pay the estimated net proceeds, if any,
to you.
5
<PAGE>
Issuance of Common Stock.... We will issue certificates representing shares of
AMF common stock purchased pursuant to the
exercise of rights as soon as practicable after
the rights offering expires.
Certain Federal Income Tax
Consequences................
Holders of AMF common stock who receive rights
will not recognize taxable income in connection
with the distribution or exercise of rights. You
may recognize a gain or loss if you sell your
rights or if you sell the shares of AMF common
stock that you acquire by exercising your rights.
Use of Proceeds............. If all rights are exercised, we will receive
approximately $ million from the rights
offering, after paying estimated expenses. We
will use the net proceeds from the rights
offering primarily to purchase our zero coupon
convertible debentures in the tender offer, to
make an equity contribution to our principal
operating subsidiary, to repay a portion of its
revolving credit facility under the bank credit
agreement and for general corporate purposes.
Common Stock Outstanding.... As of April 29, 1999, we had outstanding
59,597,550 shares of AMF common stock. After the
rights offering, if all rights are exercised, we
will have outstanding approximately shares of
AMF common stock. These numbers do not include
11,213,305 shares issuable upon exercise of
outstanding stock options or warrants or
conversion of convertible securities (as of April
29, 1999), which may be subject to adjustments
due to this rights offering.
FORWARD-LOOKING STATEMENTS
Parts of the information contained or referred to in this prospectus,
including information with respect to the recapitalization plan and the
benefits of that plan, the related business restructuring and restructuring and
other charges, are forward-looking statements. For a discussion of important
factors that could cause actual results to differ materially from the forward-
looking statements, see "Risk Factors" beginning on page 9 and "Cautionary
Statement Regarding Forward-Looking Statements" beginning on page 15.
6
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL DATA
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
In the table below, we provide you with selected historical consolidated
financial data of AMF and AMF's predecessor company. We prepared this
information using the consolidated financial statements of AMF and the combined
financial statements of AMF's predecessor company as of the dates indicated and
for each of the fiscal years in the five-year period ended December 31, 1998.
The selected financial data includes operating results expressed in terms of
EBITDA. EBITDA represents earnings before net interest expense, income taxes,
depreciation and amortization, and other income and expenses. We have included
EBITDA information because we understand that this information is a standard
measure commonly reported and widely used by some investors and analysts.
EBITDA is not intended to represent and you should not consider it more
meaningful than, or an alternative to, other measures of performance determined
in accordance with generally accepted accounting principles.
<TABLE>
<CAPTION>
FOUR MONTHS
ENDED
FOR THE YEAR ENDED DECEMBER 31, APRIL 30,
------------------------------------------------- -----------
PREDECESSOR PREDECESSOR
COMPANY (A) AMF BOWLING, INC. COMPANY (A)
-------------- --------------------------------- -----------
AS
ADJUSTED
1994 1995 1996 (B) 1996 (C) 1997 1998 1996 (D)
------ ------ -------- -------- ------ ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Operating revenue....... $517.8 $564.9 $548.9 $384.8 $713.7 $ 738.1 $164.9
------ ------ ------ ------ ------ ------- ------
Cost of goods sold...... 196.0 184.1 173.6 130.5 212.6 202.2 43.1
Bowling center operating
expenses............... 115.2 166.5 178.8 123.7 251.2 335.7 80.2
Selling, general and
administrative
expenses............... 57.1 50.8 51.0 35.1 64.5 70.0 35.5
Depreciation and
amortization........... 24.8 39.1 73.5 49.4 102.5 120.6 15.1
------ ------ ------ ------ ------ ------- ------
Operating income
(loss)................. 124.7 124.4 72.0 46.1 82.9 9.6 (9.0)
Interest expense,
gross.................. 7.4 15.7 106.2 78.0 118.4 114.7 4.5
Other income (expense),
net.................... (1.5) 0.2 3.8 3.9 (8.1) (5.3) (0.1)
------ ------ ------ ------ ------ ------- ------
Income (loss) before
income taxes........... 115.8 108.9 (30.4) (28.0) (43.6) (110.4) (13.6)
Provision (benefit) for
income taxes........... 16.5 12.1 (8.9) (8.5) (12.8) 7.3 (1.7)
------ ------ ------ ------ ------ ------- ------
Net income (loss) before
equity in loss of joint
ventures and
extraordinary items.... 99.3 96.8 (21.5) (19.5) (30.8) (117.7) (11.9)
Equity in loss of joint
ventures, net of tax... -- -- -- -- (1.4) (8.2) --
------ ------ ------ ------ ------ ------- ------
Net income (loss) before
extraordinary items.... 99.3 96.8 (21.5) (19.5) (32.2) (125.9) (11.9)
Extraordinary items, net
of tax................. -- -- -- -- (23.4) -- --
------ ------ ------ ------ ------ ------- ------
Net income (loss)....... $ 99.3 $ 96.8 $(21.5) $(19.5) $(55.6) $(125.9) $(11.9)
====== ====== ====== ====== ====== ======= ======
Basic and diluted net
loss per share before
extraordinary items.... $(0.55) $(0.49) $(0.71) $ (2.11)
Basic and diluted per
share effect of
extraordinary items.... -- -- (0.52) --
------ ------ ------ -------
Basic and diluted net
loss per share......... $(0.55) $(0.49) $(1.23) $ (2.11)
====== ====== ====== =======
SELECTED DATA:
EBITDA.................. $149.5 $163.5 $145.5 $ 95.5 $185.4 $ 130.2 $ 6.1
EBITDA margin........... 28.9% 28.9% 26.5% 24.8% 26.0% 17.6% 3.7%
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
-----------------------------------
PREDECESSOR
COMPANY(A) AMF BOWLING, INC.
----------- -----------------------
1994 1995 1996 1997 1998
----- ----- ------- ------- -------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital (e)......................... $16.9 $29.2 $ 7.8 $ 43.9 $ 70.6
Goodwill.................................... -- -- 771.1 772.3 772.7
Total assets................................ 410.2 400.4 1,594.0 1,832.1 1,980.0
Total debt.................................. 186.1 167.4 1,091.3 1,060.6 1,344.0
Stockholders' equity........................ 132.4 161.5 408.8 654.0 529.6
Total capital............................... 318.5 328.9 1,500.1 1,714.6 1,873.6
</TABLE>
- --------
(a) Predecessor Company amounts represent the results of AMF Bowling Group
(former owners).
(b) Represents results of operations from January 1, 1996 through December 31,
1996 on a basis assuming the Predecessor Company had been acquired on
January 1, 1996.
(c) For the period from the inception date of January 12, 1996 through December
31, 1996, which includes the results of operations of the acquired business
from May 1, 1996 through December 31, 1996.
(d) Represents results of operations from January 1, 1996 through April 30,
1996.
(e) Predecessor Company amounts reflect elimination of affiliate receivables
and payables.
8
<PAGE>
RISK FACTORS
You should carefully consider the following factors, together with the other
information contained in this prospectus, before subscribing for AMF common
stock we are offering. An investment in AMF common stock involves a high degree
of risk and may not be appropriate for investors who cannot afford to lose
their entire investment.
OUR BOWLING PRODUCTS BUSINESS HAS EXPERIENCED SIGNIFICANT PROBLEMS,
PARTICULARLY IN OUR MARKETS IN THE ASIA PACIFIC REGION.
In recent years, most of our new center package sales have been to
international markets, primarily Asia Pacific countries such as China, Taiwan
and South Korea. New center package sales to China, Japan and other markets in
the Asia Pacific region represented 52.8% of our new center package sales for
1998, compared to 72.7% for 1997. Recent economic difficulties in the Asia
Pacific region have had and will continue to have an adverse impact on our new
center package sales, shipments and order backlog. One of the reasons for the
decline in new center package sales is the limited availability of financing
for customers desiring to build new bowling centers, especially in the Asia
Pacific region. In addition, a low cost Chinese manufacturer of bowling
equipment has become a significant competitor in China. At the end of 1998, our
new center package backlog was 1,078 which was 37.5% lower than at the end of
1997. As of March 31, 1999, our new center package backlog was 755 units, which
is 30% lower than it was at December 31, 1998. It is customary for a certain
portion of the backlog to be cancelled before the expected shipping date. We
have experienced a greater number of order cancellations recently because of
economic difficulties in the Asia Pacific region. We cannot assure you that
economic conditions in the Asia Pacific region and other regions will improve
or that our new center package sales will not decrease any further.
Due to the decline in new center package sales, shipments and order backlog,
in the near term, we plan to concentrate on sales of products designed to
enable bowling center operators to modernize their facilities and on sales of
consumer products such as bowling pins, parts, balls and supplies.
China has recently strengthened its import restrictions by requiring the
payment of full customs duties and value added taxes on the importation of new
and used capital goods. The Chinese government has also begun to prohibit
importation of used capital equipment without permits. Permits for the
importation of used bowling equipment are very difficult to obtain. Local
Chinese companies, however, are not subject to the same restrictions. For
example, a Chinese competitor recently began producing locally and selling
bowling equipment which is not subject to the customs duties or permit
requirements that affect AMF's imported equipment. The Chinese manufacturer has
experienced significant acceptance by local customers. These Chinese import
restrictions have had, and for the foreseeable future we believe will continue
to have, an adverse effect on our bowling products business. The Chinese
competitor does not currently sell bowling equipment outside China. There can
be no assurance, however, that this competitor will not be able to compete with
us outside China in the future.
OUR BOWLING CENTERS BUSINESS HAS EXPERIENCED RECENT DECLINES IN CONSTANT CENTER
REVENUE AND EBITDA MARGIN.
Our bowling centers have experienced a decline in constant center revenue and
EBITDA margin primarily related to our rapid growth through acquisitions. Such
growth led to significant problems in integrating new bowling centers and
managing our expanded base of centers.
In response to this recent decline in operating results, we curtailed the
pace of acquisitions, assembled an experienced management team for U.S. bowling
center operations, and are in the process of putting in place management
infrastructure to support integration of new centers. We are also increasing
the focus on training and recruiting center managers and implementing marketing
and other customer satisfaction initiatives to increase revenue.
9
<PAGE>
Despite these efforts to improve center performance, we cannot assure you
that we will be able to reverse the decline in constant center revenue and
EBITDA margins.
WE MAY HAVE DIFFICULTIES IN CONTINUING OUR STRATEGY TO GROW THROUGH
ACQUISITIONS.
Our principal strategy for growth has been to acquire bowling centers. In the
past, we have had difficulties integrating acquired centers into our operations
on an efficient basis. We recently curtailed the pace of our acquisition
program so that we could focus on improving the financial performance of our
existing centers. When we increase the pace of our acquisition program, we will
consider acquisitions on a selective basis. We cannot assure that funding will
be available for acquisitions or that our existing debt will permit us to make
acquisitions, that bowling centers will be available for acquisition or that we
will be able to successfully integrate acquired centers into our operations.
OUR BOWLING CENTERS BUSINESS HAS EXPERIENCED RECENT DECLINES IN THE DAILY
NUMBER OF GAMES BOWLED PER LANE.
Our bowling centers business has recently experienced a decline in the number
of games bowled per lane per day (also known as "lineage"). This decline has
been primarily caused by a decrease in the number of league bowlers. While more
people are bowling at our bowling centers, they are bowling less often. As part
of our recent efforts to focus on improving the financial performance of our
existing centers as described herein, we are seeking to improve lineage at our
bowling centers; however, there can be no assurances that our lineage will
increase or that the lineage will not further decline.
WE HAVE A NEW EXECUTIVE MANAGEMENT TEAM AND WE DEPEND ON EXPERIENCED CENTER
LEVEL MANAGEMENT.
Over the last six months, our executive management team has undergone
significant change. Our former chief executive officer, Douglas J. Stanard, who
had significant bowling center experience, resigned effective January 1, 1999.
He was replaced on an interim basis by Stephen E. Hare, our chief financial
officer, who served as acting chief executive officer. We have hired a new
chief executive officer, Roland C. Smith, who has experience in managing multi-
unit chains but does not have bowling industry experience. Mr. Hare will remain
as our chief financial officer. In addition, we hired a new president of our
bowling center operations from outside the bowling industry and reorganized
management of our bowling center operations. We also named a new president of
our bowling products operations from within the company and reorganized our
bowling products management team. While we believe that our current management
team gives us significant executive strength, there can be no assurance that it
will be able to successfully execute our business strategies.
Our future success depends on our ability to develop, motivate, retain and
attract experienced and innovative bowling center managers. The loss of the
services of our key personnel, or the inability to attract additional qualified
personnel, could have a material adverse affect on our business, results of
operations and financial condition.
WE EXPERIENCE INTENSE COMPETITION IN BOTH OF OUR SIGNIFICANT LINES OF BUSINESS.
The United States bowling center industry is very competitive and fragmented.
It consists of two large bowling center operators, AMF and Brunswick
Corporation, three medium-sized chains, and over 5,000 bowling centers owned by
single-center and small chain operators. The international bowling center
industry is also extremely competitive and fragmented. There are typically few
chain operators and a large number of single-center operators in any one
country, which results in intense international competition.
Bowling, as both a competitive sport and a recreational activity, also faces
competition from other entertainment and athletic activities. The success of
our bowling center operations depends on, among other things:
. customers' continued interest in bowling;
. the availability and affordability of recreational and entertainment
alternatives;
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. the amount of leisure time our customers enjoy; and
. other social and economic factors over which we have no control.
The bowling products industry is also extremely competitive. AMF and
Brunswick are also the two largest manufacturers of bowling center equipment.
However, we also compete with smaller, often regionally-focused companies in
certain product lines. For example, as described above, a Chinese manufacturer
of bowling equipment has become a significant source of competition for us in
China.
OUR BUSINESS IS SOMEWHAT SEASONAL AND SUBJECT TO MARKET CYCLES.
The financial performance of our bowling center operations is seasonal. Cash
flows typically peak in the winter and reach their lows in the summer. While
the geographic diversity of our bowling centers operations has helped to reduce
this seasonality in the past, the increase in U.S. centers resulting from our
acquisitions has increased the seasonality of that business.
Our bowling products business is also seasonal. The U.S. market, which is the
largest market for modernization and consumer products, is driven by the
beginning of league play in the fall of each year. While operators purchase
consumer products throughout the year, they often place larger orders during
the summer in preparation for the start of league play in the fall. Summer is
also generally the peak period for installation of modernization equipment.
Operators typically sign purchase orders for modernization equipment during the
first four months of the year after they receive winter league revenue
indications. Equipment is then shipped and installed during the summer when
leagues are generally less active. However, sales of some major modernization
equipment, such as automatic scoring and synthetic lanes, are less predictable
and fluctuate from year to year because of the longer life cycle of those major
products. Sales of new center packages can fluctuate dramatically as a result
of economic fluctuations in international markets, as seen in the reduction of
sales of new center packages to markets in the Asia Pacific region following
economic difficulties in that region.
WE HAVE A SIGNIFICANT AMOUNT OF DEBT THAT COULD ADVERSELY AFFECT OUR ABILITY TO
RAISE ADDITIONAL EQUITY CAPITAL, IMPLEMENT OUR GROWTH STRATEGIES AND MEET OUR
STRATEGIC GOALS.
We had total debt of approximately $1.3 billion at December 31, 1998.
Our EBITDA in 1997 was $185.4 million and in 1998 was $130.2 million, a
decrease of $55.2 million, or 29.8%. We had interest expense of $118.4 million
in 1997 and $114.7 million for 1998. Our cash interest expense was $83.0
million, or 44.8% of EBITDA, in 1997 and $76.5 million, or 58.8% of EBITDA, in
1998. We cannot assure you that we will be able to generate enough EBITDA to
pay our fixed charges (interest expense, amortization of debt issuance costs,
and the portion of rent expense considered to represent interest expense) or
that we will have enough cash to make interest payments on our debt when it
becomes due. In addition, some of our borrowings are at variable rates of
interest and could require us to pay more interest on our debt if interest
rates rise.
Our debt service obligations could make us more vulnerable to industry
downturns and competitive pressures. Our substantial debt could also have other
important consequences. For example, it could adversely affect our ability to,
among other things:
. obtain additional financing or refinancing on terms and conditions
acceptable to us;
. pursue our acquisition strategy;
. maintain our facilities;
. use our cash flows from operations for other purposes, such as working
capital or capital expenditures; or
. achieve our other business goals.
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Some of our debt agreements require that we meet financial tests. Our
substantial debt could adversely affect our ability to meet those financial
tests. Our debt agreements also impose substantial operating and financial
restrictions on our operating subsidiaries. These restrictions limit the
ability of those subsidiaries to incur some types of additional debt and make
capital expenditures. Failure to comply with these restrictions could result in
an event of default under the debt agreements, which could have a material
adverse effect on our operations.
We amended our principal subsidiary's bank credit agreement in September 1998
to give us financial flexibility through 1999. The September 1998 amendment
waived certain financial covenants, but also placed certain restrictions on our
ability to make capital expenditures, investments and acquisitions. The
financial covenants that applied to us before the amendment will be reinstated
on January 1, 2000. Based on our current performance, we will not meet the
requirements of those reinstated financial covenants. We have requested
amendments to our principal subsidiary's bank credit agreement as part of our
recapitalization plan. While these amendments, if approved, would give us added
financial flexibility and the ability to make more acquisitions, we cannot
assure that we will meet the requirements of the amendments.
WE HAVE HAD SIGNIFICANT NET LOSSES AND WE ANTICIPATE FUTURE NET LOSSES.
We have not reported net income since we were acquired by the investor group
in 1996. We recorded a net loss of $125.9 million in 1998. We recorded a net
loss of $32.2 million before extraordinary items in 1997 and a net loss on an
as adjusted basis of $21.5 million in 1996 (after giving effect to the
acquisition of AMF by the investor group). We expect to continue to incur
significant net losses for the foreseeable future because of our significant
interest, depreciation and amortization expense related to the acquisition.
OUR INTERNATIONAL OPERATIONS ARE SUBJECT TO SIGNIFICANT PERIODIC ECONOMIC
DOWNTURNS, FLUCTUATIONS IN CURRENCY EXCHANGE RATES AND MARKET DISRUPTIONS.
We have a history of operating in a number of international markets, in some
cases for over 30 years. Our international operations are subject to the risks
inherent in operating abroad, including:
. currency exchange rate fluctuations;
. economic and political fluctuations and destabilization;
. restrictive laws, tariffs and other actions by foreign governments, such
as those taken by China;
. difficulty in obtaining distribution and support for our products;
. the risk of nationalization;
. the laws and policies of the United States affecting trade,
international investment and loans; and
. foreign tax law changes.
These factors have contributed to our decrease in international revenue
between the first quarter of 1998 and the first quarter of 1999, and may have a
further material adverse effect on our results of operations.
WE ARE A HOLDING COMPANY AND HAVE NO SIGNIFICANT OPERATIONS; OUR BUSINESS IS
CONDUCTED THROUGH OUR SUBSIDIARIES.
We are a holding company with no direct operations except providing some
management services to our subsidiaries. We have no significant assets other
than the stock of our subsidiaries. We conduct our business through our
subsidiaries. As a result, we depend on capital contributions or financing to
meet our obligations. Our subsidiaries are separate legal entities that have no
obligation to make any funds available to us for any purpose. The debt
agreements of our principal operating subsidiary generally prohibit our
subsidiaries from paying dividends or making certain other cash payments to us.
WE HAVE NOT PAID AND, FOR THE FORESEEABLE FUTURE, WILL NOT PAY CASH DIVIDENDS.
We have not paid cash dividends on our common stock and do not anticipate
paying dividends in the foreseeable future. As a holding company, our ability
to pay dividends depends on the ability of our
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subsidiaries to pay cash dividends or to make cash distributions to us. Our
debt agreements effectively prohibit our subsidiaries from paying cash to us
to pay dividends or make other distributions.
MOST OF OUR ASSETS ARE SUBJECT TO LIENS IN FAVOR OF OUR LENDERS.
The lenders under our principal subsidiary's bank credit agreement have
liens on all of the capital stock of our primary operating subsidiary and on
substantially all of its current and future assets. This includes a pledge of
all of the issued and outstanding shares of capital stock of some of our other
indirect subsidiaries. In addition, some of our subsidiaries have also granted
the lenders liens on all of their current and future assets. If there is a
default under our principal subsidiary's bank credit agreement, the lenders
will have a prior secured claim on the capital stock and the assets of our
primary operating subsidiary and other subsidiaries. Our financial condition
will be materially adversely affected if the lenders attempt to foreclose on
their collateral.
WE ARE CONTROLLED BY AN INVESTOR GROUP WITH A MAJORITY INTEREST IN AMF.
We are controlled by an investor group led by an affiliate of Goldman, Sachs
& Co. Three of our directors are affiliated with Goldman Sachs. As a result of
their ownership of a majority of our common stock, their representation on our
board of directors and the terms of a stockholders agreement binding AMF and
many of our significant stockholders, affiliates of Goldman Sachs are able to:
. control the election of a majority of our board of directors;
. appoint new management; and
. approve or block any action requiring shareholder approval, including
the adoption of amendments to our certificate of incorporation and
approval of mergers or sales of substantially all of our assets.
The stockholders agreement also provides that three of the other investment
funds which are members of our original investor group may each nominate a
director to our board of directors. In addition, the executive committee of
our board of directors consists of two directors nominated by affiliates of
Goldman Sachs and our president and chief executive officer. We cannot assure
you that the interests of our significant stockholders will not conflict with
your interests.
OUR STOCK PRICE HAS FALLEN DRAMATICALLY.
The market price of our common stock has been volatile and has fallen
dramatically over the past year. In the future, our stock price may be
materially affected by, among other things:
. the rights offering and the number of shares offered and the price at
which shares may be purchased pursuant to the rights;
. the actual results of our recapitalization plan and related operating
improvements;
. actual or anticipated fluctuations in our operating results;
. our bowling center acquisition activity;
. the impact of international markets;
. changes in financial estimates by securities analysts; or
. general market conditions.
We cannot assure you that the market price of the common stock will not
decline below the levels prevailing at the time of the rights offering or
below the price offered pursuant to the rights.
The public trading price of AMF common stock may decline after you exercise
your rights and before the rights offering expires. You will not be able to
revoke your exercise of the rights, even if this occurs. Also, we
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cannot assure you that after you exercise your rights, you will be able to sell
the shares of common stock you purchase at a price equal to or greater than the
subscription price you paid.
WE WOULD BE REQUIRED TO REPAY MOST OF OUR DEBT IF ANYONE OTHER THAN GOLDMAN
SACHS ACQUIRES A MAJORITY OF OUR SHARES AND WE MAY NOT BE ABLE TO DO SO.
If anyone other than Goldman Sachs acquires a majority of our shares, the
holders of our zero coupon convertible debentures would be able to require us
to repurchase those debentures at a premium. In that event, holders of our
principal operating subsidiary's senior subordinated notes would also be able
to require us to repurchase those notes at a premium, and we would have to
repay our outstanding bank debt. We cannot assure you that, in those
circumstances, we or our principal operating subsidiary would be able to obtain
the financing necessary to make the required payments.
THE SALE OF A SUBSTANTIAL AMOUNT OF COMMON STOCK MAY MATERIALLY ADVERSELY
AFFECT THE MARKET PRICE.
Sales of a substantial amount of our common stock in the public market, by
our significant stockholders or otherwise, or the perception that these sales
may occur, could materially adversely affect the market price of our common
stock and impair our ability to raise funds in additional stock offerings.
YOU MAY NOT REVOKE YOUR EXERCISE OF RIGHTS; THE RIGHTS OFFERING MAY NOT BE
COMPLETED.
Once you exercise your rights, you may not revoke the exercise unless the
conditions to our obligations to complete the rights offering are not satisfied
or waived before the subscription period ends. In that case, we may extend the
date the rights expire in which case you will be able to change your decision.
If we elect to withdraw or terminate the rights offering, neither we nor the
subscription agent will have any obligation with respect to the rights except
to return any subscription payments, without interest.
THE SUBSCRIPTION PRICE MAY NOT REFLECT THE VALUE OF AMF.
The subscription price does not necessarily bear any relationship to the book
value of our assets, historic or future cash flows, financial condition, recent
or historic prices for our common stock or other established criteria for
valuation. The special committee of the board of directors set the subscription
price at $ . You should not consider the subscription price as an
indication of the value of AMF. See "The Rights Offering--Approval of the
Rights Offering and Determination of Subscription Price" beginning on page 23
for further detail regarding the way in which the subscription price was
determined.
STOCKHOLDERS WHO DO NOT EXERCISE THEIR RIGHTS WILL EXPERIENCE DILUTION.
If you do not exercise your basic subscription privilege in full, you will
experience a decrease in your proportionate interest in the equity ownership of
AMF. The sale of rights may not compensate you for all or any part of the
reduction in the market value of AMF common stock that may result from the
rights offering. If you do not exercise or sell your rights you will relinquish
any value inherent in the rights.
OUR CERTIFICATE OF INCORPORATION AND BYLAWS CONTAIN ANTI-TAKEOVER PROVISIONS
THAT MAY AFFECT YOUR RIGHTS AS A STOCKHOLDER.
Our certificate of incorporation and bylaws contain provisions that may have
the effect of delaying, deterring or preventing a sale or change of control of
AMF. These provisions may also make the removal of directors and management
more difficult. For example, our bylaws restrict who may call a special meeting
of stockholders, making it difficult for stockholders to call meetings for
special purposes. Also, our certificate of incorporation authorizes us to issue
preferred stock and rights or options entitling the holders to purchase
securities of AMF or of any other corporation, without stockholder approval and
upon terms the board of directors determines. The rights of our common
stockholders will be subject to, and may be adversely affected by, the rights
of holders of our preferred stock that may be issued in the future.
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
The following statements are or may be forward-looking statements:
. statements set forth in this prospectus or statements incorporated by
reference from documents we have filed with the SEC, including possible or
assumed future results of our operations, including but not limited to any
statements contained in this prospectus or those documents concerning:
. the manner, timing and expected results of our recapitalization plan and
related activities and charges;
. the expected success of our plans to improve our bowling centers
operations, including revenue enhancement and cost management programs;
. the ability of our new management to execute our strategies;
. the success of the recent management reorganization of our bowling
centers and bowling products businesses;
. the ability to increase the pace of our bowling center acquisition
program;
. the expected success of changes contemplated in our bowling products
business;
. our expectations concerning the Asia Pacific region;
. the success of our employee incentive efforts;
. the outcome of existing or potential litigation;
. the timing or amount of any changes in the interest expense of our debt;
. our ability to generate cash flow to service our debt and meet our debt
payment obligations;
. the amounts of capital expenditures needed to maintain or improve our
bowling centers;
. any statements preceded by, followed by or including the words
"believes," "expects," "predicts," "anticipates," "intends,"
"estimates," "should," "may" or similar expressions; and
. other statements contained or incorporated by reference in this
prospectus regarding matters that are not historical facts.
Because these statements are subject to risks and uncertainties, actual
results may differ materially from those expressed or implied by such forward-
looking statements. Factors that could cause actual results to differ
materially include, but are not limited to:
. our ability, and the ability of our new management team, to carry out
our long-term business strategies, including increasing the pace of our
acquisition program;
. our ability to integrate acquired operations into our business;
. our ability to identify and develop new bowling markets to assist our
growth;
. the continuation of adverse financial results and substantial
competition in our bowling products business;
. our ability to retain and attract experienced bowling center management;
. our ability to generate cash flow to pay our substantial debt;
. the continuation or worsening of economic difficulties in overseas
markets, including the Asia Pacific region;
. the risk of adverse political acts or developments in our existing and
proposed international markets;
. fluctuations in foreign currency exchange rates affecting our
translation of operating results;
. adverse judgments in pending or future litigation;
. continued or increased competition;
. the popularity of bowling;
. a decline in general economic conditions;
. the status or effectiveness of our Year 2000 efforts;
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. changes in interest and exchange rates; and
. the other factors discussed above under "Risk Factors" beginning on page
9.
You should not place undue reliance on such statements, which speak only as
of the date that they were made. Our independent public accountants have not
examined any forward-looking statements and, accordingly, do not provide any
assurance with respect to those statements. These cautionary statements should
also be considered in connection with any written or oral forward-looking
statements that we may issue in the future. We do not undertake any obligation
to release publicly any revisions to our forward-looking statements after the
rights offering to reflect later events or circumstances or to reflect the
occurrence of unanticipated events.
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RECENT DEVELOPMENTS
FIRST QUARTER 1999 RESULTS
On May 5, 1999, AMF announced its first quarter financial results.
Consolidated revenue for the quarter ended March 31, 1999 was $202.6 million,
an increase of 8.2% compared with $187.3 million for the same period in 1998.
The increase in revenue for the period reflects inclusion of new centers which
were acquired since the first quarter of 1998. Consolidated EBITDA was $55.0
million, an increase of 3.6% compared with $53.1 million for the first quarter
of 1998.
For the quarter ended March 31, 1999, Bowling Centers revenue increased
14.9%, from $150.2 million in 1998 to $172.6 million in 1999. Revenue was
favorably impacted by the inclusion of 51 centers acquired and one new center
constructed since April 1, 1998. In the U.S., constant center revenue in the
first quarter of 1999 declined 1.1% compared with the first quarter of 1998.
Bowling Centers EBITDA for the first quarter of 1999 was $60.5 million, an
increase of 6.5% compared with $56.8 million for the first quarter of 1998.
Bowling Centers EBITDA margin was 35.1% compared with 37.8% for 1998. The lower
EBITDA margin in 1999 was caused primarily by an increase in expenses related
to maintenance and supplies, food, advertising and payroll.
For the quarter ended March 31, 1999, Bowling Products reported revenue of
$32.0 million, a decrease of 22.1% compared with revenue of $44.1 million for
1998. Bowling Products EBITDA for the first quarter of 1999 was $(0.6) million
compared with $0.1 million for 1998.
New center package shipments for the first quarter of 1999 totaled 269 units
compared with 504 units for the comparable quarter in the prior year. As of
March 31, 1999, the new center package backlog was 755 units, a 30.0% decrease
compared with December 31, 1998 and a 53.2% decrease compared with March 31,
1998.
NEW CHIEF EXECUTIVE OFFICER
We appointed Roland C. Smith as our president and chief executive officer
effective April 28, 1999. Mr. Smith replaces Stephen E. Hare, our chief
financial officer, who was acting chief executive officer for the past six
months. Mr. Hare will continue as chief financial officer. Mr. Smith has also
been appointed to our board of directors and the executive committee of the
board of directors.
Mr. Smith was most recently president and chief executive officer of the
Triarc Restaurant Group where, among other things, he oversaw the restructuring
and expansion of the Arby's Restaurants. Mr. Smith was formerly associated with
Procter & Gamble, Pepsi, Schering-Plough and KFC International.
For a description of Mr. Smith's employment agreement and stock option grant
agreement, you should refer to the information under the heading "Certain
Relationships and Related Party Transactions--Transactions with Management and
Others; Certain Business Relationships" beginning at page 35.
RECENT LITIGATION
On April 22, 1999, a putative class action was filed in the United States
District Court for the Southern District of New York by Vulcan International
Corporation ("Vulcan") against AMF, The Goldman Sachs Group, L.P., Goldman,
Sachs & Co., Morgan Stanley & Co. Incorporated, Cowen & Company, Schroder & Co.
Inc., Richard A. Friedman and Douglas J. Stanard. Vulcan, as putative class
representative for itself and all persons who purchased the common stock of AMF
Bowling in its 1997 initial public offering, seeks, among other things, damages
and/or rescission against all defendants jointly and severally pursuant to
Sections 11, 12 and/or 15 of the Securities Act of 1933 based on allegedly
inaccurate and misleading disclosures in connection with and following the
initial public offering. Management believes that the litigation is without
merit and intends to defend it vigorously.
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OUR BUSINESS, RECAPITALIZATION PLAN AND
ON-GOING BUSINESS STRATEGIES
OUR PRIMARY BUSINESS SEGMENTS AND STRATEGIES
We principally operate in two business segments in the United States and
international markets: (1) the ownership and operation of bowling centers and
(2) the manufacture and sale of bowling equipment and bowling products.
We are the largest owner and operator of bowling centers in the U.S. and
worldwide. As of April 30, 1999, we owned and operated 422 bowling centers in
the U.S. and 123 international bowling centers. We are also one of the world's
largest manufacturers and sellers of bowling equipment.
Our business strategy is designed to:
. consolidate the bowling center industry through an acquisition program;
. build a nationally recognized AMF brand of bowling centers; and
. manufacture, market and distribute bowling products in global markets.
While we believe that our long-term business strategy is sound, we
experienced difficulties in our bowling centers and bowling products businesses
in 1998 as more fully discussed below. In response to these difficulties, we
carefully reviewed our businesses, with the assistance of management, other
employees and independent consultants, to identify the critical operating
issues and key action steps required to reinvigorate our businesses. In
addition, we have recently appointed a new Chief Executive Officer and
assembled an experienced management team to execute our business plan.
OUR BOWLING CENTERS BUSINESS
In 1998, our bowling centers operation produced revenue of $541 million and
EBITDA of $142 million, up from $429 million and $130 million, respectively, in
1997. The 1998 EBITDA margin of 26.3% has declined from 30.4% in 1997. The
deterioration of EBITDA margin was related primarily to our rapid growth
through acquisition, which led to significant problems in integrating new
bowling centers and managing our expanded base of centers. We experienced
declines in constant center revenue of 1.9% in 1998 on a constant currency
basis, compared to an increase of 0.4% in 1997. Additionally, operating
expenses as a percentage of revenue were increased primarily as a result of
nationally branded chain development activities.
We have taken several steps to address operating issues in our bowling
centers business. These include:
Assembled an Experienced Management Team. In addition to hiring Roland C.
Smith, we also recently hired John P. Watkins as President, U.S. Bowling
Centers, and five new regional vice presidents with substantial multi-unit
retail experience to manage U.S. bowling centers operations. We also appointed
senior executives with bowling industry experience to key operating and staff
vice president positions.
Focus on Existing Centers. Beginning in September 1998, we curtailed the pace
of our acquisition program and began evaluating acquisition opportunities on a
more selective basis. We have been focusing on improving the performance of our
existing centers to reinvigorate constant center revenue growth, as well as
league and open play lineage and to attract new customers, which, if
successful, can have a significant impact on improving operating performance.
Focus on Training and Retaining Center Managers. We believe that performance
of our centers depends heavily on our center managers. We intend to implement a
new stock-based incentive plan to reward our center managers. We are also
designing programs to more effectively train our center managers and staff
based upon the most successful practices of field managers. In addition, we
have hired a new vice president of training for U.S. bowling center operations
with multi-unit retail experience and created a training and human resources
position in each of the six regions to implement these programs.
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Focus on Marketing and Customer Satisfaction. We are implementing several
programs which are designed to attract and retain league and open play bowlers.
These include:
. Marketing initiatives to leverage the influence of key league bowlers in
our existing customer base to help us grow and retain league
participation. These marketing initiatives include our "League
Development Leader" and "Friends Bowl with Friends" programs.
. Capital spending on certain of our centers to improve customer
satisfaction and generate incremental revenue. For example, we have been
installing Xtreme(TM) (glow-in-the-dark) bowling in many of our centers
as part of an overall upgrading of certain of our facilities.
. Upgrading our food and beverage menu selection and service to enhance
our customers' bowling experience and to increase revenue per visit.
OUR BOWLING PRODUCTS BUSINESS
Our bowling products business experienced significant difficulties in 1998.
It produced revenue of $213 million, a decrease of 29.0% from 1997, and EBITDA
of $11 million, a decrease of 84.5% from 1997. This business, the growth of
which was driven primarily by international sales of new center packages, was
severely and adversely affected by economic difficulties in the Asia Pacific
region. In addition, competitive global pricing and a strong U.S. dollar
reduced the profitability of our products business.
We are taking steps to address operating issues in this side of our business.
These include:
New Management Infrastructure. We recently appointed a president of bowling
products. We have also consolidated our international sales force under one
senior vice president and consolidated responsibility for customer service in
the U.S. to the vice president of U.S. sales.
Cost Reduction Program. We are implementing a comprehensive cost reduction
program to align our cost structure with reduced bowling products revenue. The
program includes closure of a manufacturing facility, production and material
cost reductions, reduction of worldwide overhead and downsizing of our
international sales force. In 1998, we were successful in reducing our bowling
products costs by approximately $6 million. We are continuing our cost
reduction efforts and are considering possible strategic alliances and other
product development and sales initiatives in an effort to further reduce costs.
Focus on Modernization and Consumer Products. During this period of weakness
in international sales of new center packages, we plan to concentrate our
selling efforts on our products designed to enable bowling center operators to
modernize their facilities and on consumer products such as bowling pins,
parts, balls and supplies. Unlike our new center packages, these products are
not as dependent on our emerging markets and produce more stable sales and
profits. However, we intend to remain in a position to participate in any
significant growth of demand for new center packages in emerging markets.
OUR RECAPITALIZATION PLAN
We are implementing a recapitalization plan to enable us to pursue our three-
part business strategy. The plan is designed to reduce leverage and restore
financial flexibility so that we can resume our strategy of growing through
acquisitions, building a nationally recognized brand and successfully
manufacturing, marketing and distributing bowling products. The
recapitalization plan has three primary components:
The Rights Offering. We expect to raise approximately $140 million of equity
capital in this rights offering. The net proceeds of the offering will
primarily be used to reduce our leverage by repurchasing outstanding zero
coupon convertible debentures through the tender offer described below and
repaying certain bank debt. Subject to market conditions and the final terms
and conditions of the rights offering, certain members of the original investor
group, who hold approximately 72.5% of our common stock, have indicated that
they currently expect to fully exercise their basic subscription privileges in
the offering, although they are not obligated to do so.
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The Tender Offer. Concurrent with the rights offering, we will conduct a
tender offer to repurchase a portion of our outstanding zero coupon convertible
debentures. We currently intend to tender for a minimum of 45% and up to 60% of
the outstanding debentures at an indicated price not to exceed 14% of face
value. Affiliates of Goldman Sachs and Kelso & Company, which own approximately
44% of the outstanding debentures, have indicated that they currently expect to
tender their debentures in the tender offer subject to market conditions and
the final terms and conditions of the tender offer, although they are not
obligated to do so.
Amendments to Bank Agreement. We are also seeking to amend certain provisions
of our principal operating subsidiary's bank credit agreement. The amendments
are subject to the required approval of the senior lenders. The following are
the key provisions of the bank agreement amendment:
. Allowing the Company to use a portion of the net proceeds of the rights
offering to repurchase the zero coupon convertible debentures;
. Renewing access to the bank revolver for acquisitions, subject to
certain conditions;
. Relaxing financial covenants through the end of fiscal year 2001; and
. Excluding certain restructuring and other charges from covenant
calculations.
RESTRUCTURING AND OTHER CHARGES
We are likely to record certain restructuring charges, which may range from
$5 million to $10 million. In addition, under the proposed amendment to our
principal subsidiary's bank credit agreement, the restructuring charges and an
amount up to $25 million of other nonrecurring charges may be excluded from the
calculation of the financial covenants relating to EBITDA. We could in the
future take some or all of such additional other nonrecurring charges.
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USE OF PROCEEDS
If all the rights are exercised, we will receive approximately $140 million
upon completion of this rights offering, before deducting the fees and expenses
of the special committee's financial advisor and our other offering expenses.
These expenses are estimated to be $ . We will use the net proceeds from
the rights offering as follows:
. $ to repurchase a portion of our zero coupon convertible debentures
through the tender offer;
. $ to repay a portion of the revolving credit facility of our principal
subsidiary's bank credit agreement which we expect to be treated by the
bank lenders as a pre-funding of a portion of future acquisition costs
using equity capital;
. $ to be retained by us for general corporate purposes; and
. $ to be paid to the bank lenders in connection with the amendment of
our principal subsidiary's bank credit agreement.
Goldman Sachs will not receive any fees in connection with the
recapitalization plan except for its share of fees payable to the bank lenders
pursuant to the amendment of our principal subsidiary's bank credit agreement.
DIVIDEND POLICY
We have never paid cash dividends on AMF common stock and do not plan to do
so for the foreseeable future. Because we are a holding company, our ability to
pay dividends depends on the ability of our subsidiaries to pay cash dividends
or make other cash distributions to us. The agreements governing our debt
generally prohibit our subsidiaries from paying dividends or making other cash
distributions to us. See "Risk Factors." Our board of directors has sole
discretion over the declaration and payment of future dividends. Any future
dividends will depend upon our profitability, financial condition, cash
requirements, future prospects, general business conditions, the terms of any
of our debt agreements and other factors our board of directors believes are
relevant.
PRICE RANGE OF COMMON STOCK
You can find AMF common stock traded on the NYSE under the symbol "PIN." The
following table shows the high and low sales prices of AMF common stock over
recent periods.
<TABLE>
<CAPTION>
High Low
---- ----
<S> <C> <C>
1997
Fourth Quarter (from November 7, 1997).................... $25 1/8 $21 1/2
1998
First Quarter............................................. 27 3/8 20 1/2
Second Quarter............................................ 31 22 5/8
Third Quarter............................................. 28 3/8 7 1/2
Fourth Quarter............................................ 9 3 7/8
1999
First Quarter............................................. 6 4
Second Quarter (through May 4, 1999)...................... 6 7/8 3 1/2
</TABLE>
On April 29, 1999, we had 4,880 stockholders of record. AMF common stock's
price closed at $6 1/2 on May 4, 1999, the last full trading day before we
publicly announced the rights offering.
21
<PAGE>
CAPITALIZATION
The following table shows our debt and capitalization as of December 31,
1998. The table also shows our debt and capitalization as adjusted for the
completion of the rights offering (including application of the net proceeds
from that transaction as described above on page 21 under the heading "Use of
Proceeds") at the assumed subscription price of $ per share and assuming that
all subscription rights are exercised.
<TABLE>
<CAPTION>
DECEMBER 31, 1998
---------------------------
ACTUAL AS ADJUSTED
------------ -------------
(DOLLARS IN MILLIONS)
<S> <C> <C>
Short-term borrowings:
Current maturities, long-term debt................. $ 32.4 $
------------ --------
Long-term debt:
Bank debt.......................................... 549.5
Subsidiary senior subordinated notes............... 250.0
Subsidiary senior subordinated discount notes...... 213.2
Zero coupon convertible debentures................. 296.9
Mortgage and equipment notes....................... 2.0
------------ --------
Total debt....................................... 1,344.0
Stockholders' equity:
Preferred stock, par value $.01, and 50,000,000
shares authorized, no shares issued and outstand-
ing............................................... --
Common stock, par value $.01, 200,000,000 shares
authorized, 59,747,550 shares issued and outstand-
ing before the rights offering and shares is-
sued and outstanding after the rights offering.... 0.6
Paid-in capital.................................... 749.3
Retained deficit................................... (201.0)
Equity adjustment from foreign currency transla-
tion.............................................. (19.3)
------------
Total stockholders' equity....................... 529.6
------------
Total capitalization............................. $ 1,873.6 $
============ ========
</TABLE>
22
<PAGE>
THE RIGHTS OFFERING
On , 1999, we will distribute to each holder of AMF common stock, at no
charge, transferable subscription rights for each share of AMF common stock
owned. We will distribute the rights to you only if you are a record holder of
AMF common stock on the record date, which is 5:00 p.m., New York City time, on
, 1999. We will round up, to the nearest whole number, the number of
rights we distribute to each stockholder.
BEFORE EXERCISING OR SELLING ANY RIGHTS, YOU SHOULD READ CAREFULLY THE
INFORMATION SET FORTH UNDER "RISK FACTORS" BEGINNING ON PAGE 9.
The following describes the rights offering in general and assumes (unless
specifically provided otherwise) that you are a record holder of AMF common
stock. If you hold your shares in a brokerage account or through a dealer or
other nominee, please see "--Beneficial Owners" on page 27 below.
APPROVAL OF THE RIGHTS OFFERING AND DETERMINATION OF SUBSCRIPTION PRICE
As a result of matters discussed under the heading "Our Business,
Recapitalization Plan and On-Going Business Strategies," our board of
directors, at a meeting on May 4, 1999, approved a proposal to raise up to $140
million in equity capital. Our board appointed Messrs. Charles Diker, Paul
Edgerley and Howard Lipson, directors who are not employees of AMF or
affiliated with Goldman Sachs or Kelso & Company (whose affiliates together own
more than a majority of AMF common stock and approximately 44% of the
outstanding principal amount of our zero coupon convertible debentures), as a
special committee. The special committee will consider the proposed
recapitalization plan and the use of proceeds of the rights offering, including
the proposed tender offer.
The special committee retained Morgan Stanley & Co. ("Morgan Stanley") as its
financial advisor. On May 4, 1999, after receiving advice from Morgan Stanley
and considering various factors, the special committee approved pursuing this
rights offering and the related recapitalization plan, subject to the approval
by the full board of directors and subject to the special committee approving
the specific terms of the rights offering and the other contemplated
transactions. The full board of directors approved the rights offering and the
recapitalization plan on , 1999. The special committee approved the
specific terms of the rights offering and the other contemplated transactions
on , 1999.
Some of the factors considered by the special committee and the board of
directors include:
. our capital requirements;
. the advice of Morgan Stanley, as financial advisor to the special
committee;
. the strategic alternatives available to us for the raising of capital;
. the market price of AMF common stock;
. the market price of our zero coupon convertible debentures;
. the added flexibility that could be achieved by improving our capital
structure and amending our existing credit agreement;
. our business prospects;
. our desire to reinvigorate our acquisition program;
. our need for further flexibility in our debt agreements; and
. the general condition of the securities markets.
Based on the factors considered, the special committee recommended and the
board of directors approved the subscription price for the rights offering.
23
<PAGE>
PRINCIPAL STOCKHOLDERS' PARTICIPATION IN THE RIGHTS OFFERING
Our significant stockholders, including affiliates of our original investor
group, will receive rights to purchase AMF common stock in this rights offering
on the same terms and conditions as all other stockholders. As of April 29,
1999, affiliates of Goldman Sachs, Kelso, The Blackstone Group and Bain Capital
(members of the original investor group) owned a total of 43,221,048 shares, or
approximately 72.5%, of the outstanding AMF common stock (without giving effect
to outstanding options or warrants to acquire stock or the conversion of
securities convertible into AMF common stock). These significant stockholders
have indicated that they currently expect to fully exercise their basic
subscription privileges in the rights offering, subject to market conditions
and the final terms and conditions of the rights offering, although they are
not obligated to so exercise. For a description of significant relationships
between some of these stockholders and us, please review the matters discussed
under the heading "Certain Relationships and Related Party Transactions"
beginning on page 34.
CONDITIONS TO THE COMPLETION OF THE RIGHTS OFFERING, INCLUDING COMPLETION OF
THE TENDER OFFER
Completion of the rights offering depends upon subscriptions being obtained
for at least 90% of the shares issuable upon exercise of the rights being
offered in the rights offering and the consummation of the concurrent tender
offer. We currently intend to tender for a minimum of 45% and up to 60% of the
outstanding debentures at an indicated price not to exceed 14% of face value.
Goldman Sachs and Kelso have indicated that they currently expect to tender
their zero coupon convertible debentures in the tender offer, subject to market
conditions and the final terms and conditions of the tender offer, although
they are not obligated to do so.
NO FRACTIONAL RIGHTS
We will not issue fractional rights. Instead, we will round up any fractional
rights to the nearest whole right. For example, if you own shares of AMF
common stock, you will receive rights, instead of rights you would have
received without rounding.
You may request that the subscription agent divide your rights certificate
into transferable parts, for instance, if you are the record holder for a
number of beneficial holders of AMF common stock. However, the subscription
agent will not divide your rights certificate so that (through rounding or
otherwise) you would receive a greater number of rights than those to which you
would be entitled if you had not divided your certificates.
EXPIRATION DATE OF THE RIGHTS OFFERING
You may exercise the basic subscription privilege and the over-subscription
privilege at any time before 5:00 p.m., New York City time, on , 1999.
If you do not exercise your rights before the time they expire, then your
rights will be null and void. We will not be obligated to honor your exercise
of rights if the subscription agent receives the documents relating to your
exercise after the rights expire, regardless of when you transmitted the
documents, except if you have timely transmitted the documents pursuant to the
guaranteed delivery procedures described below.
We may extend the expiration date of the rights offering for any reason.
If we elect to extend the date the rights expire, we will issue a press
release announcing the extension before 9:00 a.m. on the first New York Stock
Exchange trading day after the most recently announced expiration date. If we
extend the date the rights will expire by more than 14 calendar days, we will
send prompt written notice of the extension to you and all rights holders of
record. See "--Extensions and Termination" on page 31.
SUBSCRIPTION PRIVILEGES
Your rights entitle you to the basic subscription privilege and the over-
subscription privilege.
24
<PAGE>
Basic Subscription Privilege. With the basic subscription privilege, you may
purchase shares of AMF common stock per right, upon delivery of the
required documents and payment of the subscription price of $ per share,
before the time the rights expire. You are not required to exercise all of your
rights unless you wish to purchase shares under your over-subscription
privilege described below.
Over-Subscription Privilege. In addition to your basic subscription
privilege, you may subscribe for additional shares of AMF common stock upon
delivery of the required documents and payment of the subscription price of
$ per share before the time the rights expire. You may exercise your over-
subscription privilege only if you exercised your basic subscription privilege
in full. You will receive common stock pursuant to your over-subscription
privilege only if other holders of rights do not exercise their basic
subscription privileges in full.
Pro Rata Allocation. If there are not enough shares to satisfy all
subscriptions pursuant to the exercise of the over-subscription privilege, we
will allocate the remaining shares pro rata (subject to the elimination of
fractional shares) among those over-subscribing. Pro rata means in proportion
to the number of shares you and the other holders have purchased pursuant to
the exercise of the basic subscription privilege. If there is a pro rata
distribution of the remaining shares and the pro ration results in the
allocation to you of a greater number of shares than you subscribed for
pursuant to the over-subscription privilege, then we will allocate to you only
the number of shares for which you subscribed. We will allocate the remaining
shares among all other holders exercising their over-subscription privilege.
Full Exercise of Basic Subscription Privilege. You may exercise the over-
subscription privilege only if you exercise your basic subscription privilege
in full. To determine if you have fully exercised your basic subscription
privilege, we will consider only the basic subscription privileges held by you
in the same capacity. For example, suppose you were granted rights for shares
of AMF common stock you own individually and for shares of AMF common stock you
own jointly with your spouse. You only need to fully exercise your basic
subscription right with respect to your individually owned rights in order to
exercise your over-subscription privilege with respect to your individually
owned rights. You do not have to subscribe for any shares under the basic
subscription privilege owned jointly with your spouse to exercise your
individual over-subscription privilege.
When you complete the portion of the rights certificate to exercise the over-
subscription privilege, you will be representing and certifying that you have
fully exercised your basic subscription privilege received in respect of shares
of AMF common stock you hold in that capacity. You must exercise your over-
subscription privilege at the same time you exercise your basic subscription
privilege in full.
If you own your shares of AMF common stock through your broker, dealer or
other nominee holder who will exercise your over-subscription privilege on your
behalf, the nominee holder will be required to certify to us and the
subscription agent:
. the number of shares held on , 1999, the record date, on your
behalf;
. the number of rights you exercised under your basic subscription
privilege;
. that your entire basic subscription privilege held in the same capacity
has been exercised in full; and
. the number of shares of AMF common stock you subscribed for pursuant to
the over-subscription privilege.
Your nominee holder must also disclose to us certain other information
received from you.
Return of Excess Payment. If you exercised your over-subscription privilege
and are allocated less than all of the shares of AMF common stock for which you
wished to subscribe, the excess funds you paid for shares of AMF common stock
that are not allocated to you will be returned by mail, without interest or
deduction, as soon as practicable after the expiration date of the rights.
25
<PAGE>
EXERCISE OF RIGHTS
You may exercise your rights by delivering the following to the subscription
agent before the time the rights expire:
. Your properly completed and executed rights certificate evidencing those
rights with any required signature guarantees or other supplemental
documentation; and
. Your payment in full of the subscription price for each share of AMF
common stock subscribed for pursuant to the basic subscription privilege
and the over-subscription privilege.
METHOD OF PAYMENT
Your payment of the subscription price must be made by either:
. Check or bank draft drawn upon a U.S. bank or postal, telegraphic, or
express money order payable to the subscription agent; or
. Wire transfer of immediately available funds to the account maintained
by the subscription agent for such purpose at Bank (marked: "AMF
Bowling, Inc. Subscription").
RECEIPT OF PAYMENT
Your payment of the subscription price will be deemed to have been received
by the subscription agent only when:
. Any uncertified check clears;
. The subscription agent receives any certified check or bank draft drawn
upon a U.S. bank or any postal, telegraphic or express money order; or
. The subscription agent receives collected funds in its account at
Bank referred to above.
CLEARANCE OF UNCERTIFIED CHECKS
You should note that funds paid by uncertified personal checks may take five
business days or more to clear. If you wish to pay the subscription price by an
uncertified personal check, we urge you to make payment sufficiently in advance
of the time the rights expire to ensure that your payment is received and
clears by that time. We urge you to consider using a certified or cashier's
check, money order or wire transfer of funds to avoid missing the opportunity
to exercise your rights.
DELIVERY OF SUBSCRIPTION MATERIALS AND PAYMENT
You should deliver the rights certificate and payment of the subscription
price, as well as any nominee holder certifications, notices of guaranteed
delivery and DTC participant over-subscription forms,
If by Mail to:
[Name and Address of Subscription Agent]
If By Hand Delivery or Overnight Courier to:
[Name and Address of Subscription Agent]
You may call the subscription agent at ( ) .
CALCULATION OF RIGHTS EXERCISED
If you do not indicate the number of rights being exercised, or do not
forward full payment of the aggregate subscription price for the number of
rights that you indicate are being exercised, then you will be
26
<PAGE>
deemed to have exercised the basic subscription privilege with respect to the
maximum number of rights that may be exercised for the aggregate subscription
price payment you delivered to the subscription agent. If your aggregate
subscription price payment is greater than the amount you owe for your
subscription, you will be deemed to have exercised the over-subscription
privilege to purchase the maximum number of shares available to you pursuant to
your over-subscription privilege that may be purchased with your overpayment.
If we do not apply your full subscription price payment to your purchase of
shares of AMF common stock, we will return the excess amount to you by mail,
without interest or deduction, as soon as practicable after the date the rights
expire.
EXERCISING A PORTION OF YOUR RIGHTS
If you subscribe for fewer than all of the shares of AMF common stock
represented by your rights certificate, you may, under certain circumstances,
either direct the subscription agent to attempt to sell your remaining rights
or receive from the subscription agent a new rights certificate representing
the unused rights. See "--Method of Transferring and Selling Rights" beginning
on page 30.
THE SUBSCRIPTION AGENT WILL HOLD FUNDS IN ESCROW UNTIL THE SHARES OF COMMON
STOCK ARE ISSUED.
The subscription agent will hold your payment of the subscription price in a
segregated escrow account with other payments received from holders of rights
until we issue to you your shares of AMF common stock.
SIGNATURE GUARANTEE MAY BE REQUIRED
Your signature on each rights certificate must be guaranteed by an eligible
institution such as a member firm of a registered national securities exchange,
a member of the National Association of Securities Dealers, Inc. or a
commercial bank or trust company having an office or correspondent in the
United States, subject to standards and procedures adopted by the subscription
agent, unless
. your rights certificate provides that the shares of the AMF common stock
you subscribed for are to be delivered to you; or
. you are an eligible institution.
NOTICE TO BENEFICIAL HOLDERS
If you are a broker, a trustee or a depositary for securities who holds
shares of AMF common stock for the account of others as a nominee holder, you
should notify the respective beneficial owners of such shares of the issuance
of the rights as soon as possible to find out such beneficial owners'
intentions. You should obtain instructions from the beneficial owner with
respect to the rights, as set forth in the instructions we have provided to you
for your distribution to beneficial owners. If the beneficial owner so
instructs, you should complete the appropriate rights certificates and, in the
case of the over-subscription privilege, the related nominee holder
certification, and submit them to the subscription agent with the proper
payment. A nominee holder that holds shares for the account(s) of more than one
beneficial owner may exercise the number of rights to which all such beneficial
owners in the aggregate otherwise would have been entitled if they had been
direct record holders of AMF common stock on the record date, so long as the
nominee submits the appropriate rights certificates and certifications and
proper payment to the subscription agent.
BENEFICIAL OWNERS
If you are a beneficial owner of shares of AMF common stock or rights that
you hold through a nominee holder, we will ask your broker, dealer or other
nominee to notify you of this rights offering. If you wish to sell or exercise
your rights, you will need to have your broker, dealer or other nominee act for
you. To indicate
27
<PAGE>
your decision with respect to your rights, you should complete and return to
your broker, dealer or other nominee the form entitled "Beneficial Owners
Election Form." You should receive this form from your broker, custodian bank
or other nominee with the other rights offering materials.
INSTRUCTIONS FOR COMPLETING THE RIGHTS CERTIFICATE
You should read and follow the instructions accompanying the rights
certificate carefully. If you want to exercise your rights, you must send your
rights certificates to the subscription agent. YOU SHOULD NOT SEND THE RIGHTS
CERTIFICATES TO US. ANY RIGHTS CERTIFICATES RECEIVED BY AMF WILL BE RETURNED TO
THE SENDER AS PROMPTLY AS POSSIBLE.
YOU ARE RESPONSIBLE FOR THE METHOD OF DELIVERY OF RIGHTS CERTIFICATES, ANY
NECESSARY ACCOMPANYING DOCUMENTS AND PAYMENT OF THE SUBSCRIPTION PRICE TO THE
SUBSCRIPTION AGENT. IF YOU SEND THE RIGHTS CERTIFICATES AND PAYMENT OF THE
AGGREGATE SUBSCRIPTION PRICE BY MAIL, WE RECOMMEND THAT YOU SEND THEM BY
REGISTERED MAIL, PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED. YOU SHOULD
ALLOW A SUFFICIENT NUMBER OF DAYS TO ENSURE DELIVERY TO THE SUBSCRIPTION AGENT
AND CLEARANCE OF PAYMENT PRIOR TO THE TIME THE RIGHTS EXPIRE.
DETERMINATIONS REGARDING THE EXERCISE OF RIGHTS
We will decide all questions concerning the timeliness, validity, form and
eligibility of your exercise of rights. Our decisions will be final and
binding. We, in our sole discretion, may waive any defect or irregularity, or
permit a defect or irregularity to be corrected within whatever time we
determine. We may reject the exercise of any of your rights because of any
defect or irregularity. Your subscription will not be deemed to have been
received or accepted until all irregularities have been waived by us or cured
by you within the time we decide, in our sole discretion.
We reserve the right to reject your exercise of rights if your exercise is
not in accordance with the terms of the rights offering or in proper form.
Neither we nor the subscription agent will have any duty to notify you of a
defect or irregularity in your exercise of the rights. We will not be liable
for failing to give you that notice. We will also not accept your exercise of
rights if our issuance of shares of AMF common stock pursuant to your exercise
could be deemed unlawful or materially burdensome. See "--Regulatory
Limitation" on page 32 and "--Compliance with State Regulations Pertaining to
the Rights Offering" on page 33.
GUARANTEED DELIVERY PROCEDURES
If you wish to exercise your rights, but you do not have sufficient time to
deliver the rights certificates evidencing your rights to the subscription
agent before the time the rights expire, you may exercise your rights by the
following guaranteed delivery procedures:
. Make your payment in full of the subscription price for each share of
AMF common stock being subscribed for pursuant to the basic subscription
privilege and the over-subscription privilege to be received (in the
manner set forth in "--Method of Payment on page 26) to the subscription
agent before the time the rights expire;
. Deliver a notice of guaranteed delivery to the subscription agent at or
before the time the rights expire; and
. Deliver the properly completed rights certificate evidencing the rights
being exercised (and, if applicable for a nominee holder, the related
nominee holder certification), with any required signatures guaranteed,
to the subscription agent, within three New York Stock Exchange trading
days following the date the notice of guaranteed delivery was delivered
to the subscription agent.
28
<PAGE>
Your notice of guaranteed delivery must be substantially in the form provided
with the "Instructions For Use of AMF Bowling, Inc. Rights Certificates"
distributed to you with your rights certificate. Your notice of guaranteed
delivery must come from an eligible institution which is a member of, or a
participant in, a signature guarantee program acceptable to the subscription
agent. In your notice of guaranteed delivery you must state:
. Your name;
. The number of rights represented by your rights certificates, the number
of shares of AMF common stock you are subscribing for pursuant to the
basic subscription privilege and the number of shares of AMF common
stock, if any, you are subscribing for pursuant to the over-subscription
privilege; and
. Your guarantee that you will deliver to the subscription agent any
rights certificates evidencing the rights you are exercising within
three New York Stock Exchange trading days following the date the
subscription agent receives your notice of guaranteed delivery.
You may deliver the notice of guaranteed delivery to the subscription agent
in the same manner as the rights certificate at the addresses set forth under
"--Delivery of Subscription Materials and Payment" on page 26. You may also
transmit the notice of guaranteed delivery to the subscription agent by
telegram or facsimile transmission (telecopier no. ). To confirm facsimile
deliveries, you may call .
The subscription agent will send you additional copies of the form of notice
of guaranteed delivery if you need them. Please call the subscription agent at
. Banks and brokerage firms, please call to request any copies of
the form of notice of guaranteed delivery.
SUBSCRIPTION AGENT
We have appointed as subscription agent for the rights offering. We
will pay its fees and expenses related to the rights offering. We also have
agreed to indemnify the subscription agent from some of the liabilities that it
may incur in connection with the rights offering.
QUESTIONS ABOUT EXERCISING RIGHTS--INFORMATION AGENT
You may direct any questions or requests for assistance concerning the method
of exercising your rights, additional copies of this prospectus, the
instructions, the nominee holder certification, the notice of guaranteed
delivery or other subscription documents referred to herein, to the information
agent, at the following telephone number and address:
[Insert name, address and phone number of information agent]
Banks and Brokerage Firms, please call
NO REVOCATION OF EXERCISE OF RIGHTS UNLESS AMF'S CONDITIONS TO THE COMPLETION
OF THE RIGHTS OFFERING ARE NOT MET
Once you have exercised your basic subscription privilege and, should you
choose, your over-subscription privilege, you may not revoke your exercise
unless the conditions to our completion of this rights offering are not
satisfied, waived or amended before the time the rights expire. In that case,
we plan to notify you through a prospectus supplement, you will be able to
change your decision and we may extend the date the rights expire.
NO FRACTIONAL SHARES WILL BE ISSUED
We will not issue any fractional shares of AMF common stock. You may not
exercise a right in part.
29
<PAGE>
METHOD OF TRANSFERRING AND SELLING RIGHTS
We will apply to list the rights on the New York Stock Exchange under the
symbol "PINRT." We also expect that rights may be purchased or sold through
usual investment channels until the close of business on the last trading day
preceding the date the rights expire. However, there has been no prior public
market for the rights. We cannot assure you that a trading market for the
rights will develop or, if a market develops, that the market will remain
available throughout the subscription period. We also cannot assure you of the
price at which the rights will trade, if at all. If you do not exercise or sell
your rights you will lose any value inherent in the rights. See "--General
Considerations Regarding the Partial Exercise, Transfer or Sale of Rights" on
page 31.
Transfer of Rights. You may transfer rights in whole by endorsing the rights
certificate for transfer. Please follow the instructions for transfer included
in the information sent to you with your rights certificate. If you wish to
transfer only a portion of the rights, you should deliver your properly
endorsed rights certificate to the subscription agent. You cannot transfer
fractions of rights. With your rights certificate, you should include
instructions to register such portion of the rights evidenced thereby in the
name of the transferee (and to issue a new rights certificate to the transferee
evidencing such transferred rights). If there is sufficient time before the
expiration of the rights offering, the subscription agent will send you a new
rights certificate evidencing the balance of the rights issued to you but not
transferred to the transferee. You may also instruct the subscription agent to
send the rights certificate to one or more additional transferees. If you do
not wish to receive your remaining rights, you may instruct the subscription
agent to sell your rights for you as described below.
If you wish to transfer all or a portion of your rights (but not fractional
rights), you should allow a sufficient amount of time prior to the time the
rights expire for the subscription agent to:
. Receive and process your transfer instructions; and
. Issue and transmit a new rights certificate to your transferee or
transferees with respect to transferred rights, and to you with respect
to any rights you retained.
If you wish to transfer your rights to any person other than a bank or
broker, the signatures on your rights certificate must be guaranteed by an
eligible institution.
Sales of Rights Through the Subscription Agent. You may also sell your
rights, in whole or in part (but not fractional rights), through the
subscription agent. If you wish to have the subscription agent try to sell your
rights, you must deliver your properly executed rights certificate, with
appropriate instructions, to the subscription agent. If you want the
subscription agent to try to sell only a portion of your rights, you must send
the subscription agent instructions setting forth what you would like done with
the rights, along with your rights certificate.
If the subscription agent sells rights for you, it will send you a check for
the proceeds from the sale of any of your rights as soon as possible after the
date the rights expire. If your rights can be sold, the sale will be deemed to
have been made at the weighted average sale price of all rights sold by the
subscription agent. We will pay the fees charged by the subscription agent for
making your sale. We cannot assure you, however, that a market will develop for
the rights or that the subscription agent will be able to sell your rights.
You must have your order to sell your rights to the subscription agent before
11:00 a.m., New York City time, on , 1999, the fifth business day before
the date the rights are expected to expire. If less than all sales orders
received by the subscription agent are filled, it will prorate the sales
proceeds among you and the other holders based upon the number of rights each
holder has instructed the subscription agent to sell during that period,
irrespective of when during the period the instructions are received by it. The
subscription agent is required to sell your rights only if it is able to find
buyers. If the subscription agent cannot sell your rights by 5:00 p.m., New
York City time, on , 1999, the third business day before the date the
rights are expected to expire, the subscription agent will hold your rights
certificate for pick up by you at the subscription agent's hand delivery
address provided on page 3.
30
<PAGE>
General Considerations Regarding the Partial Exercise, Transfer or Sale of
Rights. You should also allow up to ten business days for your transferee to
exercise or sell the rights evidenced by such new rights certificates. The
amount of time needed by your transferee to exercise or sell its rights depends
upon the method by which the transferor delivers the rights certificates, the
method of payment made by the transferee, and the number of transactions which
the holder instructs the subscription agent to effect. Neither we nor the
subscription agent will be liable to a transferee or transferor of rights if
rights certificates or any other required documents are not received in time
for exercise or sale prior to the time the rights expire.
You will receive a new rights certificate upon a partial exercise, transfer
or sale of rights only if the subscription agent receives your properly
endorsed rights certificate no later than 5:00 p.m., New York City time, five
business days before the date the rights expire. The subscription agent will
not issue a new rights certificate if your rights certificate is received after
that time and date. If your instructions and rights certificate are received by
the subscription agent after that time and date, you will lose your power to
sell or exercise your remaining rights.
Unless you make other arrangements with the subscription agent, a new rights
certificate issued to you after 5:00 p.m., New York City time, five business
days before the date the rights expire, will be held for pick-up by you at the
subscription agent's hand delivery address provided on page 3. You will bear
the responsibility for all newly issued rights certificates.
Except for fees charged by the subscription agent (which we will pay), you
are responsible for all commissions, fees and other expenses (including
brokerage commissions and transfer taxes) incurred in connection with the
purchase, sale or exercise of your rights. Any amounts you owe will be deducted
from your account.
IF YOU DO NOT EXERCISE YOUR RIGHTS BEFORE 5:00 P.M. ON , 1999, YOUR
RIGHTS WILL EXPIRE AND WILL NO LONGER BE EXERCISABLE.
PROCEDURES FOR DTC PARTICIPANTS
We expect that the rights will be eligible for transfer through, and that
your exercise of your basic subscription privilege (but not your over-
subscription privilege) may be made through, the facilities of The Depository
Trust Company (commonly known as DTC). If you exercise your basic subscription
privilege through DTC we refer to your rights as "DTC Exercised Rights." If you
hold DTC Exercised Rights, you may exercise your over-subscription privilege by
properly executing and delivering to the subscription agent, at or prior to the
time the rights expire, a DTC participant over-subscription exercise form and a
nominee holder certification and making payment of the appropriate subscription
price for the number of shares of AMF common stock for which your over-
subscription privilege is to be exercised. Please call the subscription agent
at ( ) to obtain copies of the DTC participant over-subscription
exercise form and the nominee holder certification.
EXTENSIONS AND TERMINATION
We may extend the rights offering and the period for exercising your rights.
We may terminate the rights offering at any time before the time the rights
expire.
NO RECOMMENDATIONS TO RIGHTS HOLDERS
We are not making any recommendation as to whether or not you should exercise
your rights. You should make your decision based on your own assessment of your
best interests. None of the members of our board of directors or the special
committee, our officers or any other person are making any recommendations as
to whether or not you should exercise your rights.
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FOREIGN STOCKHOLDERS
We will not mail rights certificates to holders of AMF common stock on the
record date or to subsequent transferees whose addresses are outside the United
States. Instead, we will have the subscription agent hold those rights
certificates for those holders' accounts. To exercise their rights, foreign
holders must notify the subscription agent before 11:00 a.m., New York City
time, on ,1999, three business days prior to the date the rights are
scheduled to expire, and must establish to the satisfaction of the subscription
agent that such exercise is permitted under applicable law. If a foreign holder
does not notify and provide acceptable instructions to the subscription agent
by such time (if no contrary instructions have been received), the rights will
be sold, subject to the subscription agent's ability to find a purchaser. Any
such sales will be deemed to be effected at the weighted average sale price of
all rights sold by the subscription agent. See "--Method of Transferring and
Selling Rights" beginning on page 30. If the subscription agent sells the
rights, the subscription agent will remit a check for the proceeds from the
sale of any rights to foreign holders by mail. The proceeds, if any, resulting
from sales of rights pursuant to the basic subscription privilege of holders
whose addresses are not known by the subscription agent or to whom delivery
cannot be made will be held in an interest bearing account. Any amount
remaining unclaimed on the second anniversary of the date the rights expire
will be turned over to AMF.
REGULATORY LIMITATION
We will not be required to issue to you shares of AMF common stock pursuant
to the rights offering if, in our opinion, you would be required to obtain
prior clearance or approval from any state or federal regulatory authorities to
own or control such shares and if, at the time the rights expire, you have not
obtained such clearance or approval.
ISSUANCE OF COMMON STOCK
The subscription agent will issue to you certificates representing shares of
AMF common stock you purchase pursuant to the rights offering as soon as
practicable after the time the rights expire.
Your payment of the aggregate subscription price will be retained by the
subscription agent and will not be delivered to us, until your subscription is
accepted and you are issued your stock certificates. We will not pay you any
interest on funds paid to the subscription agent, regardless of whether such
funds are applied to the subscription price or returned to you. You will have
no rights as a stockholder of AMF with respect to shares of AMF common stock
subscribed for until certificates representing such shares are issued to you.
Upon our issuance of such certificates, you will be deemed the owner of the
shares you purchased by exercise of your rights. Unless otherwise instructed in
the rights certificates, your certificates for shares issued pursuant to your
exercise of rights will be registered in your name.
If the rights offering is not completed for any reason, the subscription
agent will promptly return, without interest, all funds received by it.
We will retain any interest earned on the funds held by the subscription
agent prior to the closing or termination of the rights offering.
SHARES OF COMMON STOCK OUTSTANDING AFTER THE RIGHTS OFFERING
Assuming we issue all of the shares of AMF common stock issuable upon
exercise of the rights issued in the rights offering, approximately shares
of AMF common stock will be issued and outstanding after the rights offering is
completed. Based on the shares of AMF common stock outstanding as of
, 1999, our issuance of shares in the rights offering would result (on an as
adjusted basis as of , 1999) in an approximately % increase in the
number of outstanding shares of AMF common stock.
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COMPLIANCE WITH STATE REGULATIONS PERTAINING TO THE RIGHTS OFFERING
We are not making the rights offering in any state or other jurisdiction in
which it is unlawful to do so. We will not sell or accept an offer to purchase
AMF common stock from you if you are a resident of any state or other
jurisdiction in which the sale or offer of the rights would be unlawful. We may
delay the commencement of the rights offering in certain states or other
jurisdictions in order to comply with the laws of such states or other
jurisdictions. We do not expect that there will be any changes in the terms of
the rights offering. However, we may decide, in our sole discretion, not to
modify the terms of the rights offering as may be requested by certain states
or other jurisdictions. If that happens and you are a resident of the state or
jurisdiction that requests the modification, you will not be eligible to
participate in the rights offering.
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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
STOCKHOLDERS AGREEMENT
We have a stockholders agreement which governs the relationship among AMF and
some of our significant and management stockholders. The parties to the
stockholders agreement are AMF, affiliates of Goldman Sachs, Kelso, Bain and
Blackstone, Citicorp North America, Inc., Charles M. Diker, Stephen E. Hare and
a number of current and former members of management. We have summarized the
terms of the stockholders agreement below, but you should refer to our
Registration Statement on Form S-1 (Registration No. 333-34099), declared
effective on November 3, 1997 for the full text of the stockholders agreement.
The stockholders agreement gives the Goldman Sachs affiliates the right to
increase or decrease the size of our board of directors. The Goldman Sachs
affiliates also have the right to nominate five directors and to nominate a
majority of the members of the board, so long as they hold a majority of the
outstanding shares of our common stock. Each of three other investment funds
that are part of the original investor group has the right to nominate one
member of our board subject to some limitations and to the approval of the
Goldman Sachs affiliates. Each member of the investor group (including the
Goldman Sachs affiliates) that nominated one or more directors generally has
the right to recommend removal, with or without cause, of the director or
directors nominated, at which time the director must resign or be subject to
removal by the stockholders. If a director nominated by an investor group
member dies, is removed or resigns, that director may be replaced by the member
that nominated him, subject to the approval of the Goldman Sachs affiliates.
The stockholders agreement requires the board of directors to have an
executive committee, which is made up of two directors named by the Goldman
Sachs affiliates and our president and chief executive officer, Roland C.
Smith. The executive committee may exercise all the powers and authority of the
board of directors except (a) where the stockholders agreement requires a
meeting of the board of directors and (b) for actions which require a special
vote. A "special vote" is required for:
. the issuance of capital stock below fair market value;
. the grant or issuance of options or warrants exercisable or exchangeable
for more than shares;
. entering into transactions with affiliates of Goldman Sachs; and
. amendments to the stockholders agreement, our certificate of
incorporation or our bylaws, which would adversely affect the rights and
obligations of certain members of our investor group.
Matters requiring a special vote must be approved by a majority of the
directors who are nominated by the Goldman Sachs affiliates and who are not our
employees, and at least one director nominated by Blackstone or Kelso. Any
amendment affecting one stockholder differently from any other stockholder
requires that stockholder's approval.
Each stockholder who signed the stockholders agreement has agreed:
. to appear in person or by proxy at any stockholders meeting for purposes
of obtaining a quorum;
. to vote its shares of common stock in favor of the election or removal
of directors in accordance with the board composition provisions of the
stockholders agreement summarized above;
. to otherwise vote its shares of common stock at stockholders meetings in
a manner consistent with the stockholders agreement;
. not to grant any proxy or enter into any voting trust relating to the
common stock it holds or enter into any stockholder agreement
inconsistent with the stockholders agreement; and
. not to act as a group or in concert with others in acquiring, disposing
or voting its shares of common stock in any manner inconsistent with the
stockholders agreement.
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If a stockholder who signed the stockholders agreement decides to sell its
shares of common stock (other than in certain cases, including in a transaction
governed by Rule 144 of the Securities Act), that stockholder must give the
other stockholders party to the Stockholders Agreement notice of its intent to
sell and those other stockholders have the opportunity to sell a pro rata share
of their common stock in that sale. In addition, if stockholders owning 51% or
more of our outstanding common stock propose to sell all of their common stock
in a stock sale, merger, business combination, recapitalization, consolidation,
reorganization, restructuring or similar transaction, those stockholders will
have the right to require other stockholders to sell their AMF common stock in
that sale on the same terms and conditions as the stockholders proposing to
sell.
The stockholders agreement will terminate if:
. the Goldman Sachs affiliates and certain members of the original
investor group no longer hold at least 50% of the shares of AMF common
stock outstanding after giving effect to specified adjustments;
. the Goldman Sachs affiliates and certain members of the investor group
hold in the aggregate less than 40% of the number of shares of common
stock outstanding, on a fully diluted basis; and
. any merger, recapitalization, consolidation, reorganization or other
restructuring of AMF results in the stockholders that signed the
stockholders agreement owning less than a majority of the outstanding
voting power of the entity surviving that transaction.
REGISTRATION RIGHTS AGREEMENT
We are subject to a registration rights agreement with substantially all of
the same parties who signed the Stockholders Agreement. Pursuant to the
registration rights agreement, we granted the Goldman Sachs affiliates the
right to make up to five demands that we register shares of common stock under
the Securities Act and we granted three investment funds that are members of
the original investor group each the right to make one demand that we similarly
register their shares.
If a demand is made for registration, each of the other stockholders that are
parties to the Registration Rights Agreement will have the opportunity to
participate on a pro rata basis in the registration demanded. In addition,
except in some circumstances and subject to some limitations, if we propose to
register any shares of common stock under the Securities Act, the stockholders
will be entitled to require us to include all or a portion of their shares of
common stock in that registration.
We have summarized the terms of the registration rights agreement above, but
you should refer to our Registration Statement on Form S-1 (Registration No.
333-34099), declared effective on November 3, 1997 for the full text of the
registration rights agreement.
TRANSACTIONS WITH MANAGEMENT AND OTHERS; CERTAIN BUSINESS RELATIONSHIPS
Richard A. Friedman, Terence M. O'Toole and Peter M. Sacerdote, each of whom
is affiliated with Goldman Sachs, are directors of AMF and some of our
subsidiaries. Mr. Friedman is also our Chairman. Goldman Sachs and its
affiliates beneficially own a majority of the outstanding shares of our common
stock.
Goldman Sachs acted as lead initial purchaser in the May 1998 sale of our
zero coupon convertible debentures and received commissions and discounts of
$5.4 million.
In 1998, we paid an affiliate of Goldman Sachs $300,000 for services
performed under our principal subsidiary's bank credit agreement. Parties to
the bank credit agreement, which was amended and restated on September 30,
1998, include our principal operating subsidiary, affiliates of several of our
stockholders, including affiliates of Goldman Sachs and certain other banks,
financial institutions and institutional lenders. Affiliates of Goldman Sachs
and Citicorp North America, Inc. have acted as arrangers of the bank debt
agreement. Citibank, N.A. is currently acting as administrative agent and
Citicorp USA, Inc. is
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acting as collateral agent for a revolving credit and term loan facility
extended to our principal operating subsidiary under the bank debt agreement in
an amount up to $810.3 million. We would expect to pay an affiliate of Goldman
Sachs a portion of the $ fee payable to the banks in connection with the
1999 amendment of our principal subsidiary's bank credit agreement, subject to
approval of the amendment by the lenders and subject to consummation of the
amendment.
Our principal operating subsidiary has retained Goldman Sachs as its
financial adviser to provide it investment banking and financial advisory
services, including services in connection with acquisitions, dispositions or
financings. Pursuant to this engagement, the subsidiary has agreed to reimburse
Goldman Sachs for its out-of-pocket expenses and to indemnify Goldman Sachs in
connection with its services rendered.
We have also entered into three interest rate cap agreements with an
affiliate of Goldman Sachs to hedge our exposure to fluctuations in the
interest rates applicable to our borrowings under our principal subsidiary's
bank credit agreement through March, 2000. We paid fees of $50,000 in
connection with a transaction on March 31, 1998, $40,000 in connection with a
transaction executed on October 30, 1998 and $65,000 in connection with a
transaction executed on March 23, 1999.
Goldman Sachs holds warrants to purchase 870,000 shares of our common stock.
The warrants were issued to Goldman Sachs at the time of the acquisition of AMF
by the original investor group in 1996. The warrants are exercisable for a
nominal amount. They contain an anti-dilution provision that adjusts the amount
of shares issuable if certain events occur, including a merger, a
recapitalization or a common stock offering at below market prices.
On April 28, 1999, we entered into an employment agreement with Roland C.
Smith. It provides for Mr. Smith's appointment as our President and Chief
Executive Officer and as a member of our board of directors. The agreement has
a three-year term, which is automatically extended for an additional year at
the end of the initial term and on each anniversary of such date, unless 180
days' written notice is given. Under the employment agreement, Mr. Smith will
receive an annual salary of at least $575,000 and is eligible to receive an
annual bonus of 75% of his base salary ($431,250 will be guaranteed as a bonus
for 1999). Half of the bonus will be based on discretionary objectives and half
will be based on operational and financial targets, in each case, as set by the
compensation committee of our board of directors. Mr. Smith will receive a
signing bonus of $500,000 and certain relocation expenses.
In the event of a termination of Mr. Smith's employment by us under certain
circumstances (other than for cause) or by Mr. Smith (for good reason), Mr.
Smith's base salary and welfare benefits are continued through the rest of his
employment period and for 12 months thereafter. Additionally, we are required
to pay accrued compensation and an amount equal to the annual bonus. In the
event of a termination of employment due to a disability, Mr. Smith is entitled
to payment of his accrued compensation, a pro rata bonus and continued welfare
benefits for one year. In the event of death, Mr. Smith's estate is entitled to
his accrued compensation and a pro rata bonus and continued welfare benefits
for his family for one year.
Mr. Smith will have the right to resign within nine months of a change in
control of the company (as defined in the employment agreement) if Mr. Smith's
duties, authority, responsibilities, title or compensation are adversely
altered following such change in control. In such event, Mr. Smith will receive
the severance amounts and benefits described in the first sentence of the
immediately preceding paragraph.
Mr. Smith has agreed to abide by certain non-competition and non-solicitation
restrictions during the term of his employment and, unless terminated by AMF
without cause, for two years thereafter.
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Pursuant to the employment agreement, Mr. Smith entered into a stock option
agreement with us, granting him an option to purchase 1,000,000 shares of our
common stock at an exercise price of $5.2813 per share. The option vests and
becomes exercisable in 20% increments on the date of grant and on each of the
next four anniversaries, and becomes vested and fully exercisable upon a change
of control (as defined in the option agreement). In the event of termination of
Mr. Smith's employment by us under certain circumstances (other than for cause)
or by Mr. Smith (for good reason), the portion of the option that was scheduled
to vest during the two years immediately after the termination will vest, and
the remaining unvested portion will be forfeited. On termination of employment
under certain other circumstances, the unvested portion of the option will be
forfeited. The vested portion of the option is generally exercisable for 90
days (or one year in the event of death) in the event of a termination of
employment for any reason.
We loaned $1.0 million each to Douglas J. Stanard and Stephen E. Hare on a
non-recourse basis to enable them to purchase shares of our common stock. The
common stock they purchased serves as collateral to secure the promissory notes
reflecting the indebtedness. When Mr. Stanard resigned from his positions with
AMF, he transferred all of his common stock back to us in exchange for our
canceling the promissory note.
OWNERSHIP OF ZERO COUPON CONVERTIBLE DEBENTURES
On November 12, 1998, affiliates of Goldman Sachs and Kelso entered into a
Debenture & Note Purchase Agreement, in which Goldman Sachs and Kelso agreed to
make open market purchases of the zero coupon convertible debentures from time
to time in agreed upon proportions. Under the Debenture & Note Purchase
Agreement, affiliates of Goldman Sachs have purchased $415,957,000 in aggregate
principal amount at maturity of zero coupon convertible debentures and
affiliates of Kelso have purchased $79,993,000 in aggregate principal amount at
maturity of zero coupon convertible debentures. Goldman and Kelso have
indicated that they currently expect to tender their debentures in the tender
offer subject to market conditions and the final terms and conditions of the
tender offer, although they are not obligated to so tender.
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CERTAIN FEDERAL INCOME TAX CONSEQUENCES
McGuire, Woods, Battle & Boothe LLP, our special federal tax counsel, has
advised us that the following discussion as to legal matters is its opinion as
to the material United States federal income tax consequences of the rights
offering. Their opinion is based on current provisions of the U.S. Internal
Revenue Code of 1986, as amended, applicable final, temporary and proposed
Treasury Regulations, judicial authority, and current administrative rulings
and pronouncements of the IRS, and upon the facts concerning AMF as of today.
We cannot assure you that the IRS will agree with their opinion, and we are not
requesting a ruling from the IRS. Legislative, judicial or administrative
changes or interpretations may be issued in the future that could alter or
modify their opinion. These changes or interpretations could be retroactive and
therefore affect the tax consequences to you.
Moreover, the opinion of McGuire, Woods, Battle & Boothe LLP does not purport
to fully address all aspects of federal income taxation that may be relevant to
you, especially if you are subject to special treatment under the federal
income tax laws. For example, if you are a bank, a dealer in securities, a
trader in securities that elects to mark to market, a life insurance company, a
tax-exempt organization or a foreign taxpayer (such as a foreign corporation,
foreign partnership or nonresident alien individual), this discussion may not
cover all relevant tax issues. Also this opinion does not address applicable
tax consequences if you hold AMF common stock as part of a hedging, straddle,
constructive sale, conversion or other risk reduction transaction. This opinion
does not address any aspect of state, local or foreign tax laws.
In addition, this opinion assumes that you hold AMF common stock, and will
hold the rights and any shares of AMF common stock you acquire upon the
exercise of rights, as capital assets (generally, property held for investment)
for federal income tax purposes. WE URGE YOU TO CONSULT YOUR OWN TAX ADVISORS
TO DETERMINE THE SPECIFIC TAX CONSEQUENCES OF THE RIGHTS OFFERING TO YOU,
INCLUDING STATE, LOCAL AND FOREIGN TAX CONSEQUENCES.
ISSUANCE OF THE RIGHTS
If you hold AMF common stock on the record date, you will not be required to
recognize taxable income upon the receipt of the rights.
Subject to certain exceptions, a distribution by a corporation to its
stockholders of rights to acquire stock in the distributing corporation is not
taxable. An exception to this general rule applies in the case of a
distribution which constitutes a "disproportionate distribution" with respect
to any class or classes of stock of the corporation. A distribution of stock
rights constitutes a "disproportionate distribution" if it is a part of a
distribution or a series of distributions (including deemed distributions) that
has the effect of the receipt of property (including cash) by some stockholders
and an increase in the proportionate interests of other stockholders in the
assets or earnings and profits of the distributing corporation.
The distribution of the rights to all stockholders will not constitute a
taxable distribution based on representations by AMF that:
. there is a single class of stock outstanding, and
. there has not been nor is there expected to be any property
distributions to any stockholder in connection with the distribution of
rights.
If despite these representations, the IRS were to conclude that there were
other property distributions to stockholders in connection with the
distribution of rights, the IRS could try to treat the distribution of rights
as a taxable distribution. If the IRS were successful in taking such a
position, an AMF stockholder receiving rights would include in gross income
(taxable as ordinary income) the fair market value of the rights received to
the extent of the current and accumulated earnings and profits of AMF. To the
extent the fair market value of the rights exceeded the current and accumulated
earnings and profits of AMF, the excess would be treated first as a nontaxable
recovery of adjusted tax basis in the AMF common stock with respect to which
the rights were
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distributed and then as gain from the sale or exchange of the AMF common stock.
An AMF stockholder's tax basis in rights received in a taxable distribution
would equal the fair market value of the rights as of the date of distribution
of the rights. An AMF stockholder's holding period in those rights would begin
on the day following the date of distribution of the rights.
We intend to treat the distribution of rights as a nontaxable distribution.
Except as provided above, the following discussion assumes that the
distribution of the rights will be treated as a nontaxable distribution.
BASIS AND HOLDING PERIOD OF THE RIGHTS
If you hold AMF common stock on the record date and the fair market value of
the rights on the day we issue the rights is less than 15% of the fair market
value of AMF common stock on that date, your basis in the rights received
generally will be zero. However, you will be permitted to make an election,
under section 307 of the Internal Revenue Code, to allocate your basis in your
shares of AMF common stock between your stock and the rights in proportion to
their relative fair market values on the date we issue the rights.
If the fair market value of the rights on the date we issue the rights is 15%
or more of the fair market value of AMF common stock on that date (which could
occur if an unanticipated market demand for rights develops), you will be
required to allocate your basis in your shares of AMF common stock between your
stock and the rights in proportion to their relative fair market values on the
date we issue the rights.
If you hold AMF common stock on the record date, the holding period of rights
that we distribute to you will include your holding period (as of the date of
issuance) for the AMF common stock with respect to which we distributed the
rights to you.
If you purchase rights, your basis in the rights will be equal to your
purchase price for the rights. Your holding period for those rights will begin
on the date following the date you purchase the rights.
TRANSFER OF THE RIGHTS
If you sell or exchange your rights, you generally will recognize gain or
loss equal to the difference between the amount realized and your basis, if
any, in the rights. Such gain or loss generally will be capital gain or loss
(assuming the rights are held as capital assets at the time of the sale or
exchange). Gain or loss from the sale of an asset held for more than one year
will generally be taxable as long term capital gain or loss. If you are an
individual, any long term capital gain is generally taxed at a maximum federal
income tax rate of 20%.
EXPIRATION OF THE RIGHTS
If your basis in your rights is zero, and you allow your rights to expire
unexercised, you will not recognize any gain or loss.
If you received your rights in a distribution from AMF and you allow your
rights to expire unexercised, you will not be permitted to recognize a taxable
loss. Any basis that would have been allocated to the expired rights will
instead be reallocated to the AMF common stock with respect to which those
rights were distributed.
If you purchase rights from another person and allow those rights to expire
unexercised, you will recognize a taxable loss. Any loss you recognize on the
expiration of your rights will be a capital loss if the AMF common stock that
you would have obtained on exercise of the rights would have been a capital
asset.
EXERCISE OF THE RIGHTS; BASIS AND HOLDING PERIOD OF ACQUIRED SHARES
You will not recognize any gain or loss upon the exercise of your rights.
Your basis in each share of AMF common stock you acquire through exercise of
your rights will equal the sum of the subscription price you paid
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to exercise your rights and your basis, if any, in the rights. Your holding
period for the AMF common stock you acquire through exercise of your rights
will begin on the date you exercise your rights.
SALE OR EXCHANGE OF COMMON STOCK
If you sell or exchange shares of AMF common stock, you will generally
recognize gain or loss on the transaction. The gain or loss you recognize is
equal to the difference between the amount you realize on the transaction and
your basis in the shares you sold. Such gain or loss generally will be capital
gain or loss so long as you held the shares as a capital asset at the time of
the sale or exchange. Gain or loss from an asset held for more than one year
will generally be taxable as long term capital gain or loss. If you are an
individual, any long-term capital gain is generally taxed at a maximum federal
income tax rate of 20%.
INFORMATION REPORTING AND BACKUP WITHHOLDING
Under the backup withholding rules of the Internal Revenue Code, you may be
subject to 31% backup withholding with respect to any reportable payments made
to you pursuant to the rights offering. You will not be subject to backup
withholding if you:
. Are a corporation or fall within certain other exempt categories and,
when required, demonstrate that fact; or
. Provide a correct taxpayer identification number and certify under
penalties of perjury that your taxpayer identification number is correct
and that you are not subject to backup withholding because you
previously failed to report all dividends and interest income.
Any amount withheld under these rules will be credited against your federal
income tax liability, provided that the required information is given to the
IRS. We may require you to establish your exemption from backup withholding or
make other arrangements with respect to the payment of backup withholding.
NON-U.S. HOLDERS
For purposes of the following discussion, you will be considered a "Non-U.S.
Holder" if, for U.S. federal income tax purposes, you are considered to be (i)
a nonresident alien individual, (ii) a foreign corporation, (iii) an estate or
trust that is not subject to U.S. federal income tax on a net income basis, or
(iv) a foreign partnership.
If you are a Non-U.S. Holder of AMF common stock, under the general rules
described above you will not be required to recognize taxable income on the
receipt or exercise of rights. See "Issuance of the Rights" above.
Dividends. In general, if you are a Non-U.S. Holder dividends paid to you on
AMF common stock will be subject to withholding of U.S. federal income tax at a
30% rate unless such rate is reduced by an applicable income tax treaty. If
your dividends are connected with your conduct of a trade or business in the
United States, such dividends generally will be subject to U.S. federal income
tax at regular rates, and will not be subject to the 30% withholding tax if you
file the appropriate IRS form with the payor. If you are a foreign corporation,
dividends may, under certain circumstances, be subject to an additional "branch
profits tax" at a 30% rate or such lower rate as may be applicable under an
income tax treaty.
Under current rules, if dividends are paid to you at an address in a foreign
country you generally are presumed (absent actual knowledge to the contrary) to
be a resident of such country for purposes of the withholding rules discussed
above and for purposes of determining whether you qualify for a favorable tax
treaty rate. Under new regulations, not generally in effect until after
December 31, 2000 (the "Final Regulations"), however, if you wish to claim the
benefit of an applicable treaty rate you will be required to satisfy applicable
certification and other requirements.
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If you are eligible for a reduced rate of U.S. withholding tax pursuant to an
income treaty you may obtain a refund of any amounts currently withheld by
filing an appropriate claim for a refund with the IRS.
Sale or Exchange of Rights or AMF Common Stock. Except as described below and
subject to the discussion concerning backup withholding, any gain realized on
the sale or exchange of rights or on the sale, exchange or redemption of AMF
common stock acquired upon exercise of a right generally will not be subject to
U.S. federal income tax, unless (i) such gain is effectively connected with a
trade on business that you conduct in the U.S. (and, if you are a treaty
resident, is attributable to a fixed base or permanent establishment that you
maintain in the U.S.), (ii) subject to certain exceptions, you are an
individual who holds the AMF common stock as a capital asset and you are
present in the United States for 183 days or more in the taxable year of the
disposition, (iii) you are subject to tax pursuant to the provisions of U.S.
tax law applicable to certain U.S. expatriates (including certain former
citizens or residents of the United States), or (iv) AMF is a "U.S. real
property holding corporation" for federal income tax purposes. AMF does not
believe that it is currently a "U.S. real property holding corporation," or
that it will become one in the future.
Federal Estate Tax. If you are an individual who is neither a citizen nor a
resident of the United States (for federal estate tax purposes) any AMF common
stock that you own at your death will be included in your estate for U.S.
federal income tax purposes unless an applicable estate tax treaty otherwise
applies.
Information Reporting and Backup Withholding. AMF must report annually to the
IRS and to each Non-U.S. Holder any dividend that is subject to withholding or
is exempt from U.S. withholding tax pursuant to a tax treaty. Copies of these
information returns may also be made available under the provisions of a
specific treaty or agreement to the tax authorities of the country in which you
reside.
The payment of the proceeds on the disposition of AMF common stock to or
through the U.S. office of any broker, U.S. or foreign, will be subject to
information reporting and possible backup withholding unless you certify as to
your Non-U.S. Holder status under penalty of perjury or otherwise establish an
exemption, provided that the broker does not have actual knowledge that you are
a U.S. person or that the conditions of any other exemption are not, in fact,
satisfied.
In the case of the payment of proceeds from the disposition of AMF common
stock to or through a non- U.S. office of a broker that is either a U.S. person
or a U.S. related person, information reporting (but not backup withholding)
will apply to the payment unless the broker has documentary evidence in the
files that you are a Non-U.S. Holder and the broker has no actual knowledge to
the contrary. Backup withholding will not apply to payments made through
foreign offices of a broker that is not a U.S. person or a U.S. related person
(absent actual knowledge that you are a U.S. person).
The Final Regulations, which are not currently in effect, make certain
modifications to the withholding, backup withholding and information reporting
rules described above. The Final Regulations generally attempt to unify
certification requirements and modify reliance standards. You should consult
your own tax advisor regarding the Final Regulations.
Any amounts withheld under the backup withholding rules from a payment to you
will be allowed as a refund or a credit against your U.S. federal income tax
liability, provided that the required information is provided to the IRS.
41
<PAGE>
DESCRIPTION OF CAPITAL STOCK
The following is a summary of the terms of our capital stock and highlights
some of the provisions of our certificate of incorporation and bylaws. Since
the terms of our certificate of incorporation and bylaws may differ from the
general information we are providing, you should only rely on the actual
provisions of the certificate of incorporation or the bylaws. If you would like
to read the certificate of incorporation or bylaws, they are on file with the
SEC.
AUTHORIZED SHARES
Our authorized capital stock consists of 200,000,000 shares of common stock,
par value $0.01 per share, and 50,000,000 shares of preferred stock, par value
$0.01 per share. As of April 29, 1999, 59,597,550 shares of AMF common stock
were outstanding. We have reserved a total of 16,394,726 shares of AMF common
stock for issuance upon exercise of outstanding stock options and warrants and
upon conversion of our zero coupon convertible debentures (without giving
effect to debentures tendered to us in the concurrent tender offer and without
giving effect to any adjustments to options, warrants or debentures that may be
due to this rights offering). No shares of preferred stock are outstanding.
COMMON STOCK
As a holder of AMF common stock, you are entitled to one vote for each share
held of record on all matters submitted to a vote of the stockholders. You do
not have cumulative voting rights. Therefore, holders of a majority of shares
of AMF common stock entitled to vote in any election of our directors may elect
all directors standing for election. Affiliates of Goldman Sachs own a majority
of the outstanding AMF common stock. As a result of that ownership and the
provisions of the stockholders agreement discussed under the heading "Certain
Relationships and Related Party Transactions," Goldman Sachs affiliates
generally have the ability to:
. control the election of a majority of our board of directors;
. appoint new management; and
. approve or block any action requiring stockholders approval, including
amendments to our certificate of incorporation and mergers or sales of
substantially all of our assets.
The stockholders agreement also provides for three of the investment funds
which are our stockholders each to nominate a director. Each of these nominees
is subject to approval of affiliates of Goldman Sachs.
Holders of AMF common stock are entitled to receive dividends declared by our
board of directors. The ability of our board of directors to declare dividends,
however, is subject to the rights of any holders of our preferred stock and the
availability of sufficient funds to pay the dividends. See "Dividend Policy" on
page 21 for a description of substantial restrictions on our ability to pay
dividends. If we liquidate AMF, you will be entitled to share ratably with the
other stockholders in the distribution of all assets that we have left after we
pay all of our liabilities and all of our obligations to the holders of
preferred stock. You have no preemptive rights to subscribe for additional
shares of AMF and no right to convert your AMF common stock into any other
securities. In addition, you do not have the benefit of a sinking fund for your
shares of AMF common stock. Your AMF common stock is not redeemable by us.
PREFERRED STOCK
Your rights as a holder of AMF common stock may be affected by any preferred
stock that we may issue. As of the date of this prospectus, we have not issued
any preferred stock and we do not have any plans to issue any preferred stock
in the future. However, our board of directors is authorized to issue up to
50,000,000 shares of preferred stock. The issuance of preferred stock could
adversely affect your voting power as a holder of AMF common stock and could
have the effect of delaying, deferring or impeding a change in control of AMF.
42
<PAGE>
If we authorize the issuance of preferred stock, our board of directors has
the authority to determine whether any or all shares of authorized preferred
stock should be issued as a class without series or in one or more series and
to fix the rights, preferences, privileges and restrictions of the preferred
stock. The rights and restrictions on the preferred stock may include dividend
rights, conversion rights, voting rights, terms of redemption and liquidation
preferences.
PROVISIONS OF THE CERTIFICATE OF INCORPORATION AND BYLAWS THAT MAY HAVE ANTI-
TAKEOVER EFFECTS
Our certificate of incorporation and bylaws contain provisions that may have
the effect of delaying, deterring or preventing a sale or change of control of
AMF. These provisions may also make the removal of directors and management
more difficult. For example, our bylaws restrict who may call a special meeting
of stockholders, making it difficult for stockholders to call meetings for
special purposes. Also, our certificate of incorporation authorizes us to issue
preferred stock and rights or options entitling the holders to purchase
securities of AMF or of any other corporation, without stockholder approval and
upon terms the board of directors determines. However, because the parties to
the stockholders agreement can currently (and after the rights offering will
continue to be able to) elect all members of our board of directors and control
the outcome of most matters submitted to a vote of stockholders, such
provisions currently have limited significance to you.
LIMITATION OF LIABILITY OF DIRECTORS
The certificate of incorporation and bylaws limit the directors' liability to
stockholders and AMF. Specifically, a director is not liable to AMF or you, as
one of its stockholders, for monetary damages for breach of fiduciary duty as a
director, except for liability for a director's
. breach of his or her duty of loyalty to AMF or our stockholders;
. acts or omissions that are either not in good faith or which involve his
or her intentional misconduct or a knowing violation of law;
. unlawful dividend payments or stock redemptions or repurchases pursuant
to Section 174 of the Delaware General Corporation Law; and
. participation in a transaction from which he or she received an improper
personal benefit.
These provisions do not limit liability under federal or state securities
laws. We believe these provisions will help us attract and retain qualified
individuals to serve as directors.
SECTION 203 OF DELAWARE GENERAL CORPORATION LAW
We have elected in the certificate of incorporation not to be subject to
Section 203 of the Delaware General Corporation Law, which restricts certain
business combinations between a Delaware corporation and an "interested
stockholder" (generally, a holder of 15% or more of a corporation's voting
stock).
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for AMF common stock and the rights is
ChaseMellon Shareholder Services, LLC.
43
<PAGE>
PLAN OF DISTRIBUTION
We are making this rights offering directly to you, the holders of AMF common
stock.
We will pay , the information agent, a fee of approximately $ and
, the subscription agent, a fee of approximately $ .
We estimate that our total expenses in connection with the rights offering,
including fees to the information agent and the subscription agent, will be
$ .
We have not employed any brokers, dealers or underwriters in connection with
the solicitation of exercise of rights. Except as described in this section, we
are not paying any other commissions, fees or discounts in connection with the
rights offering. Some of our employees may solicit responses from you as a
holder of rights, but we will not pay our employees any commissions or
compensation for such services other than their normal employment compensation.
Morgan Stanley is acting as financial advisor to the special committee of the
board of directors in connection with the rights offering and the related
recapitalization plan. It is advising the special committee about the size,
pricing and structure of the rights offering and on the pricing of the tender
offer. Morgan Stanley's advice has included assistance in determining the
subscription price and the impact of the rights offering on us and our
stockholders from a financial point of view. It has also discussed with
management, the board of directors and the special committee the possible
effects of the rights offering and the recapitalization plan, including the
concurrent tender offer for our zero coupon convertible debentures. Morgan
Stanley also performed analyses to assist the special committee in determining
the appropriate and desirable pricing terms for the rights offering. Please
refer to "Our Business, Recapitalization Plan and On-Going Business Strategies"
on page 18 and "The Rights Offering--Approval of the Rights Offering and
Determination of the Subscription Price" on page 23 for more information about
the background of the rights offering. Morgan Stanley is not making a
recommendation as to whether or not you should exercise your rights. You should
make your decision based on your own assessment as to whether to exercise your
rights. Morgan Stanley is also acting as dealer manager in the concurrent
tender offer for our zero coupon convertible debentures. We have agreed to pay
Morgan Stanley a fee of $ for serving in both of these capacities. We
have also agreed to reimburse its reasonable expenses and to indemnify it
against certain liabilities, including under the securities laws.
The financial advisor to the special committee or some of its affiliates have
performed in the past and may perform in the future other financial advisory
and investment banking services for us. We have paid, and may in the future
pay, such parties compensation for their services.
44
<PAGE>
LAWYERS
McGuire, Woods, Battle & Boothe LLP, Richmond, Virginia, and Wachtell,
Lipton, Rosen & Katz, New York, New York, represented AMF in connection with
the validity of the AMF common stock and the rights offered by this prospectus.
Potter, Anderson & Corroon LLP represented the special committee of the board
of directors in considering the rights offering and other related matters.
EXPERTS
The financial statements and schedules as of December 31, 1998, 1997 and
1996, for each of the two years ended December 31, 1998 and for the period from
inception (January 12, 1996) through December 31, 1996 incorporated by
reference in this prospectus and elsewhere in the registration statement have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their reports with respect thereto, and are included herein in
reliance upon the authority of said firm as experts in accounting and auditing
in giving said reports.
The combined financial statements, as of April 30, 1996 and for the four
months then ended, of AMF Bowling Group, the predecessor company to AMF
Bowling, Inc., incorporated in this prospectus by reference to the AMF Bowling,
Inc. Annual Report on Form 10-K for the year ended December 31, 1998, have been
so incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
We have agreed to indemnify PricewaterhouseCoopers LLP for the payment of all
legal costs and expenses incurred in their successful defense of any legal
action or proceeding that arises as a result of their audit reports on the
combined financial statements of AMF Bowling Group being included or
incorporated by reference in this prospectus.
45
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on Form S-3 under the
Securities Act of 1933 covering the rights and the shares of AMF common stock
to be issued when the rights are exercised. As allowed by SEC rules, this
prospectus does not contain all of the information set forth in the
registration statement. Our descriptions in this prospectus concerning the
contents of any contract, agreement or document are not necessarily complete.
For those contracts, agreements or documents that we filed as exhibits to the
registration statement, you should read the exhibit for a more complete
understanding of the document or subject matter involved.
Because we are subject to the informational requirements of the Securities
Exchange Act of 1934, we file reports, proxy statements and other information
with the SEC. You may read and copy the registration statement, including the
attached exhibits and schedules, and any reports, proxy statements or other
information that we file at the SEC's public reference room in Washington, D.C.
at 450 Fifth Street, NW 20549. You can request copies of these documents by
writing to the SEC and paying a duplicating charge. Please call the SEC at 1-
800-SEC-0330 for further information on the operation of its public reference
rooms in other cities. The SEC makes our filings available to the public on its
Internet site (http://www.sec.gov). In addition, you may inspect such reports
and other information at the offices of the New York Stock Exchange, 20 Broad
Street, New York, New York 10005.
The SEC allows us to "incorporate by reference" information into this
prospectus, which means that we can disclose important information to you by
referring you to other documents that we filed separately with the SEC. You
should consider the incorporated information as if we reproduced it in this
prospectus, except for any information directly superseded by information
contained in this prospectus.
We incorporate by reference into this prospectus the following documents (SEC
File No. 001-13539), which contain important information about us and our
business and financial results:
. our Annual Report on Form 10-K for the year ended December 31, 1998; and
. the description of the AMF common stock contained in our Registration
Statement on Form 8-A filed with the SEC on October 27, 1997.
We may file additional documents with the SEC pursuant to Section 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 on or after the date
of this prospectus and before the expiration of the rights offering. The SEC
allows us to incorporate by reference into this prospectus such documents. You
should consider any statement contained in this prospectus (or in a document
incorporated into this prospectus) to be modified or superseded to the extent
that a statement in a subsequently filed document modifies or supersedes such
statement.
YOU MAY GET COPIES OF ANY OF THE INCORPORATED DOCUMENTS (EXCLUDING EXHIBITS,
UNLESS THE EXHIBITS ARE SPECIFICALLY INCORPORATED) AT NO CHARGE TO YOU BY
WRITING OR CALLING RENEE D. ANTOLIK, AMF BOWLING, INC., DIRECTOR, INVESTOR
RELATIONS AND FINANCIAL REPORTING (TELEPHONE: (804) 730-4402).
46
<PAGE>
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AMF BOWLING, INC. HAS NOT AUTHORIZED ANY PERSON TO GIVE YOU INFORMATION THAT
DIFFERS FROM THE INFORMATION IN THIS PROSPECTUS. YOU SHOULD RELY SOLELY ON THE
INFORMATION CONTAINED IN THIS PROSPECTUS. THIS PROSPECTUS IS NOT AN OFFER TO
SELL THESE SECURITIES, AND WE ARE NOT SOLICITING OFFERS TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE OF THESE SECURITIES IS NOT
PERMITTED. THE INFORMATION IN THIS PROSPECTUS IS ACCURATE ONLY AS OF THE DATE
OF THIS PROSPECTUS, EVEN IF THE PROSPECTUS IS DELIVERED TO YOU AFTER THE
PROSPECTUS DATE, OR YOU BUY AMF COMMON STOCK AFTER THE PROSPECTUS DATE.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Questions and Answers About the Rights Offering........................... 2
Prospectus Summary........................................................ 4
Summary Consolidated Financial Data....................................... 7
Risk Factors.............................................................. 9
Cautionary Statement Regarding Forward-Looking Statements ................ 15
Recent Developments....................................................... 17
Our Business, Recapitalization Plan and On-Going Business Strategies...... 18
Use of Proceeds........................................................... 21
Dividend Policy........................................................... 21
Price Range of Common Stock............................................... 21
Capitalization............................................................ 22
The Rights Offering....................................................... 23
Certain Relationships and Related Party Transactions...................... 34
Certain Federal Income Tax Consequences................................... 38
Description of Capital Stock.............................................. 42
Plan of Distribution...................................................... 44
Lawyers................................................................... 45
Experts................................................................... 45
Where You Can Find More Information....................................... 46
</TABLE>
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SHARES
AMF BOWLING, INC.
COMMON STOCK
----------------
PROSPECTUS
----------------
, 1999
- -------------------------------------------------------------------------------
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the estimated expenses in connection with the
issuance and distribution of the securities offered hereby.
<TABLE>
<S> <C>
SEC Registration Fee................................................ $38,920
NYSE Listing Fee.................................................... *
Subscription Agent Fee.............................................. *
Information Agent Fee............................................... *
Printing and Engraving Expenses..................................... *
Legal Fees and Expenses............................................. *
Accounting Fees and Expenses........................................ *
Miscellaneous....................................................... *
-------
Total............................................................. *
=======
</TABLE>
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* To be provided in an amendment to the Registration Statement.
Item 15. Indemnification of Directors and Officers
Section 102(b)(7) of the Delaware General Corporation Law (the "DGCL")
provides that a corporation may eliminate or limit the personal liability of a
director (or certain persons who, pursuant to the provisions of the certificate
of incorporation, exercise or perform duties conferred or imposed upon
directors by the DGCL) to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, provided that such
provisions may not eliminate or limit the liability of a director (i) for any
breach of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174
of the DGCL (which provides for liability of directors for unlawful payments of
dividends or unlawful stock purchases or redemptions) or (iv) for any
transaction from which the director derived an improper personal benefit.
Article VIII, Section 1 of the registrant's Restated Certificate of
Incorporation limits the liability of directors thereof to the full extent
permitted by Section 102(b)(7) of the DGCL.
Under Section 145 of the DGCL, in general, a corporation may indemnify its
directors, officers, employees or agents against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by them in connection with any action, suit or proceeding brought by
third parties to which they may be made parties by reason of their being or
having been directors, officers, employees or agents of the corporation, if
such persons acted in good faith and in a manner they reasonably believed to be
in or not opposed to the best interest of the corporation and, with respect to
any criminal action or proceeding, had no reasonable cause to believe their
conduct was unlawful. In addition, a corporation may indemnify any such person
for expenses (including attorneys' fees) actually and reasonably incurred by
the person in connection with the defense or settlement of any such action or
suit by or in the right of the corporation if the person acted in good faith
and in a manner that the person reasonably believed to be in or not opposed to
the best interests of the corporation; however, the corporation may not
indemnify the person for such expenses in a suit or action by or on behalf of
the corporation unless the Delaware Court of Chancery or the court hearing the
action or proceeding determines that the person is fairly and reasonably
entitled to indemnity for such expenses. A corporation is required to provide
the foregoing indemnity to a director if the director is successful (on the
merits or otherwise) in his or her defense of the claim or proceeding. Article
VIII, Section 2(a) of the Restated Certificate of Incorporation of the
registrant provides that the registrant shall indemnify its officers and
directors to the full extent permitted by Delaware law.
II-1
<PAGE>
Article VIII, Section 2(a) of the registrant's Restated Certificate of
Incorporation also provides that the registrant shall indemnify any such person
seeking indemnification in connection with a proceeding initiated by such
person only if such proceeding was authorized by the board of directors, except
as otherwise provided in the Restated Certificate of Incorporation. Any rights
to indemnification conferred in Section 2 are contract rights, and include the
right to be paid by the registrant the expenses incurred in defending any such
proceeding in advance of its final disposition, except that, if the DGCL
requires, the payment of such expenses incurred by a director or officer in
such capacity in advance of final disposition shall be made only upon delivery
to the registrant of an undertaking by or on behalf of such director or
officer, to repay all amounts so advanced, if it is ultimately determined that
such director or officer is not entitled to be indemnified under Section 2 or
otherwise. By action of the board of directors, the registrant may extend such
indemnification to employees and agents of the registrant.
An insurance policy obtained by the registrant provides for indemnification
of officers and directors of the registrant and certain other persons against
liabilities and expenses incurred by any of them in certain stated proceedings
and under certain stated conditions.
Item 16. Exhibits
See Index to Exhibits.
Item 17. Undertakings
(a) 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 this registration statement (or the most recent post-
effective amendment hereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the SEC pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price represent
no more than a 20 percent change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee" table in the effective
registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or any
material change to such information in this registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the SEC
by the registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
II-2
<PAGE>
(b) 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 Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the SEC 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.
(d) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirement of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Richmond, Virginia, on May 4, 1999.
AMF Bowling, Inc.
By: /s/ Roland C. Smith
----------------------------------
Name: Roland C. Smith
Title: President and Chief
Executive Officer
KNOW ALL MEN BY THESE PRESENTS that each individual whose signature appears
below constitutes and appoints Stephen E. Hare, his true and lawful attorney-
in-fact and agent with full power of substitution, for him and in his name,
place and stead, in any and all capacities, to sign and to file the same with
the SEC, (i) any and all amendments (including post-effective amendments) to
this registration statement, with all exhibits thereto, and all documents in
connection therewith and (ii) a registration statement, and any and all
amendments thereto, and all documents in connection therewith relating to the
offering covered hereby filed pursuant to Rule 462(b) under the Securities Act
of 1933, granting unto said attorney-in-fact and agent full power and authority
to do and perform each and every act and thing requisite and necessary or
desirable to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorney-in-fact and agent, or his substitute, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities on the
dates indicated.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Richard A. Friedman Chairman of the Board
______________________________________
Richard A. Friedman
/s/ Roland C. Smith Director/President and Chief Executive Officer
______________________________________ (Principal Executive Officer)
Roland C. Smith
/s/ Terence M. O'Toole Director
______________________________________
Terence M. O'Toole
/s/ Peter M. Sacerdote Director
______________________________________
Peter M. Sacerdote
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Charles M. Diker Director
______________________________________
Charles M. Diker
/s/ Paul B. Edgerley Director
______________________________________
Paul B. Edgerley
Director
______________________________________
Howard A. Lipson
/s/ Thomas R. Wall, IV Director
______________________________________
Thomas R. Wall, IV
/s/ Stephen E. Hare Director/Executive Vice President/Chief Financial
______________________________________ Officer/Treasurer (Principal Financial Officer)
Stephen E. Hare
/s/ Michael P. Bardaro Senior Vice President/Corporate
______________________________________ Controller/Assistant Secretary/Chief Accounting
Michael P. Bardaro Officer (Principal Accounting Officer)
</TABLE>
II-5
<PAGE>
LIST OF EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
4.1 Form of Rights Certificate.
4.2 Specimen of Common Stock Certificate. (1)
4.3 Restated Certificate of Incorporation of AMF Bowling, Inc. (2)
4.4 By-Laws of AMF Bowling, Inc. (3)
5.1* Opinion of McGuire, Woods, Battle & Boothe LLP.
5.2* Opinion of Wachtell, Lipton, Rosen & Katz.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of PricewaterhouseCoopers LLP.
23.3* Consent of McGuire, Woods, Battle & Boothe LLP (contained in Exhibit
5.1).
23.4* Consent of Wachtell, Lipton, Rosen & Katz (contained in Exhibit 5.2).
24.1 Power of Attorney (included on signature page).
99.1 Form of Instructions to Stockholders.
99.2 Form of Notice of Guaranteed Delivery.
99.3 Form of DTC Participant Over-Subscription Exercise Form.
99.4 Form of Letter to Stockholders who are Record Holders.
99.5 Form of Letter to Stockholders who are Beneficial Holders.
99.6 Form of Letter to Clients of Stockholders.
99.7 Form of Nominee Holder Certificate Form.
99.8 Substitute Form W-9 for Use with Rights Offering.
99.9 Form of Beneficial Owner Election Form.
</TABLE>
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* To be filed by amendment.
Notes to Exhibits:
(1) Incorporated by reference to Exhibit 4.1 to the Annual Report on Form 10-K
of AMF Bowling, Inc. for the fiscal year ended December 31, 1997 (File No.
001-13539).
(2) Incorporated by reference to Exhibit 3.1 to the Registration Statement on
Form S-1 of AMF Bowling, Inc. (File No. 333-34099).
(3) Incorporated by reference to Exhibit 3.2 to the Registration Statement on
Form S-1 of AMF Bowling, Inc. (File No. 333-34099).
<PAGE>
Exhibit 4.1
[______________]
CUSIP NUMBER
[______________]
RIGHTS CERTIFICATE NUMBER
[______________]
NUMBER OF RIGHTS REPRESENTED
SUBSCRIPTION PRICE: $___ PER SHARE
[Name of Rights holder]
[Address Line 1]
[Address Line 2]
[Address Line 3]
AMF BOWLING, INC.
RIGHTS CERTIFICATE TO SUBSCRIBE FOR SHARES OF COMMON STOCK
FOR HOLDERS OF RECORD ON ________________, 1999
---------------------------------------
EXERCISABLE ON OR BEFORE 5:00 P.M., NEW YORK CITY TIME, ON _______________,
1999, UNLESS EXTENDED BY THE COMPANY.
AMF Bowling, Inc., a Delaware corporation (the "Company"), is conducting a
rights offering (the "Rights Offering") which entitles the holders of the
Company's common stock, $0.01 par value per share (the "Common Stock"), as of
the close of business on _____, 1999 (the "Record Date") to receive _________
transferable rights (each, a "Right") for each share of Common Stock held of
record on the Record Date. Each Right entitles the holder thereof to subscribe
for and purchase one share of Common Stock (the "Basic Subscription
Privilege") at a subscription price of $ __ per share (the "Subscription
Price"). If any shares of Common Stock are not purchased by the Rights holders
pursuant to such Rights holders' Basic Subscription Privileges (the "Excess
Shares"), any Rights holder fully exercising such Rights holder's Basic
Subscription Privilege may purchase an additional number of the Excess Shares,
if so specified by such Rights holder on Form 1 or on separate instructions
accompanying this Rights Certificate delivered to the Subscription Agent
pursuant to the terms and conditions of the Rights Offering (or if the aggregate
subscription price delivered or transmitted by such Rights holder exceeds the
aggregate subscription price for all shares for which such Rights holder would
be entitled to subscribe pursuant to such Rights Holder's Basic Subscription
Privilege), subject to proration (the "Over-Subscription Privilege") as
described in the prospectus (the "Prospectus") dated _______________, 1999. No
fractional Rights or cash in lieu thereof will be issued or paid. Set forth
above is the number of Rights evidenced by this Rights Certificate that the
Rights holder is entitled to exercise pursuant to such Rights holder's Basic
Subscription Privilege. The completion of the Rights Offering is conditioned
upon (i) at least 90% of the Rights being exercised and (ii) consummation of
the tender offer by the Company for its Zero Coupon Convertible Debentures. The
Rights are governed by the substantive law of the State of Delaware.
<PAGE>
AMF BOWLING, INC.
By:
-----------------------------
President
- -------------------------------------
Secretary
Countersigned:
[Name of Subscription Agent]
By:
----------------------------------
Authorized Signature
FOR A MORE COMPLETE DESCRIPTION OF THE TERMS AND CONDITIONS OF THE RIGHTS
OFFERING, PLEASE REFER TO THE PROSPECTUS, WHICH IS INCORPORATED HEREIN BY
REFERENCE. COPIES OF THE PROSPECTUS ARE AVAILABLE UPON REQUEST FROM THE
INFORMATION AGENT, [NAME OF INFORMATION AGENT], AT (800) __________.
CAPITALIZED TERMS USED BUT NOT DEFINED HEREIN SHALL HAVE THE RESPECTIVE MEANINGS
ASCRIBED TO SUCH TERMS IN THE PROSPECTUS.
THIS RIGHTS CERTIFICATE MUST BE RECEIVED BY THE SUBSCRIPTION AGENT, [NAME OF
SUBSCRIPTION AGENT], OR GUARANTEED DELIVERY REQUIREMENTS MUST BE COMPLIED WITH,
WITH PAYMENT IN FULL BY 5:00 P.M., NEW YORK CITY TIME, ON ________, 1999 (UNLESS
EXTENDED IN THE SOLE DISCRETION OF THE COMPANY) (AS IT MAY BE EXTENDED, THE
"EXPIRATION DATE"). ANY RIGHTS NOT EXERCISED PRIOR TO THE EXPIRATION DATE WILL
BE NULL AND VOID. ANY SUBSCRIPTION FOR SHARES OF COMMON STOCK IN THE RIGHTS
OFFERING MADE HEREBY IS IRREVOCABLE, EXCEPT AS DESCRIBED IN THE PROSPECTUS.
THE SUBSCRIPTION AGENT WILL ISSUE CERTIFICATES REPRESENTING SHARES OF
COMMON STOCK PURCHASED PURSUANT TO THE RIGHTS OFFERING AS SOON AS PRACTICABLE
FOLLOWING THE EXPIRATION DATE.
Some or all of the Rights represented by this Rights Certificate may be
exercised by duly completing Form 1; and may be transferred to a designated
transferee or assigned to a bank or broker to sell for you by duly completing
Form 2; and may be transferred to the Subscription Agent to sell for you by duly
completing Form 3. Rights holders are advised to review the Prospectus and
instructions, copies of which are available from the Information Agent, before
exercising, assigning, transferring or selling their Rights.
The registered owner whose name is inscribed hereon or its assigns, is
entitled to subscribe for shares of Common Stock upon the terms and subject to
the conditions set forth in the Prospectus and instructions relating to the use
hereof.
THE RIGHTS CERTIFICATE IS TRANSFERABLE, AND MAY BE COMBINED OR DIVIDED (BUT ONLY
INTO RIGHTS CERTIFICATES EVIDENCING FULL RIGHTS) AT THE OFFICE OF THE
SUBSCRIPTION AGENT.
RIGHTS HOLDERS SHOULD BE AWARE THAT IF THEY CHOOSE TO EXERCISE, ASSIGN, TRANSFER
2
<PAGE>
OR SELL ONLY PART OF THEIR RIGHTS, THEY MAY NOT RECEIVE A NEW RIGHTS CERTIFICATE
IN SUFFICIENT TIME TO EXERCISE THE REMAINING RIGHTS EVIDENCED THEREBY.
3
<PAGE>
FORM 1
EXERCISE AND SUBSCRIPTION: The undersigned hereby irrevocably exercises one or
more Rights to subscribe for shares of Common Stock as indicated below, on the
terms and subject to the conditions specified in the Prospectus, receipt of
which is hereby acknowledged.*
(a) Number of shares subscribed for pursuant to the Basic Subscription
Privilege
_______ X $___.__ = $________ payment. (One Right needed to subscribe
for one share.)
(b) Number of shares subscribed for pursuant to the Over-Subscription
Privilege
_______ X $___.__ = $________ payment.
By exercising this Over-Subscription Privilege, the undersigned Rights
holder hereby represents and certifies that the undersigned has fully exercised
its Basic Subscription Privilege received in respect of shares of Common Stock
held in the capacity described on the face of the Rights Certificate.
(c) Total Subscription (total number of shares on lines (a) and (b)
multiplied by the Subscription Price) = $__________ payment.
METHOD OF PAYMENT (CHECK AND COMPLETE APPROPRIATE BOX(ES)):
[ ] Check, bank draft, or money order payable to "[Name of
Subscription Agent], as Subscription Agent": or
[ ] Wire transfer of immediately available funds directed to ________
___________________________
ABA No.: ____________________
Account: _____________________
(marked: AMF Bowling, Inc. Subscription).
(d) If the Rights being exercised pursuant to the Basic Subscription
Privilege do not account for all of the Rights represented by the
Rights Certificate (check only one):
[ ] Deliver to the undersigned a new Rights Certificate evidencing
the remaining unexercised Rights to which the undersigned is
entitled.
[ ] Deliver one or more Rights Certificates in accordance with the
undersigned's Form 2 instructions (which include any required
signature guarantees).
[ ] Sell the remaining unexercised Rights in accordance with the
undersigned's Form 3 instructions (which include any required
signature guarantees).
[ ] Do not deliver any new Rights Certificates to me; instead,
deliver such Rights Certificates in accordance with the
undersigned's Form 4 instructions (which include any required
signature guarantees).
4
<PAGE>
(e) If Notice of Guaranteed Delivery procedures are being utilized:
[ ] Check here if Rights are being exercised pursuant to the Notice
of Guaranteed Delivery delivered to the Subscription Agent prior
to the date hereof and complete the following:
Name(s) of Registered Holder(s)
-----------------------------------------------------
Window Ticket Number (if any)
-----------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery
-----------------------------------------------------
Name of Institution Which Guaranteed Delivery
-----------------------------------------------------
* If the aggregate Subscription Price enclosed or transmitted is insufficient to
purchase the total number of shares of Common Stock included in lines (a) and
(b), or if the number of shares being subscribed for is not specified, the
Rights holder exercising this Right Certificate shall be deemed to have
subscribed for the maximum amount of shares of Common Stock that could be
subscribed for with the aggregate Subscription Price received. If the number of
shares of Common Stock to be subscribed for pursuant to the Over-Subscription
Privilege is not specified and the amount enclosed or transmitted exceeds the
aggregate Subscription Price for all shares which may be purchased pursuant to
the Basic Subscription Privilege represented by this Rights Certificate (the
"Subscription Excess"), the Rights holder exercising this Rights Certificate
shall be deemed to have exercised the Over-Subscription Privilege to purchase,
to the extent available, that number of whole shares of Common Stock equal to
the quotient obtained by dividing the Subscription Excess by the Subscription
Price, subject to the limit on the number of shares a Rights holder may purchase
pursuant to the Over-Subscription Privilege. To the extent any portion of the
aggregate Subscription Price enclosed or transmitted remains after the foregoing
procedures, such funds shall be mailed to the Rights holder without interest or
deduction as soon thereafter as practicable.
Rights holder's Signature(s) ____________________________________
Rights holder's Signature(s) ____________________________________
(If held jointly)
Telephone No. (___)___________
5
<PAGE>
FORM 2
TO TRANSFER SOME OR ALL OF YOUR UNEXERCISED RIGHTS TO A DESIGNATED TRANSFEREE,
OR TO ASSIGN SOME OR ALL OF YOUR UNEXERCISED RIGHTS (BUT NO FRACTIONAL RIGHTS)
TO A BANK OR BROKER TO SELL FOR YOU:
For value received, ______ Rights represented by this Rights Certificate are
hereby assigned to (please print name and address and Taxpayer Identification
Number (see "Instructions For Use of AMF Bowling, Inc. Rights Certificates"
accompanying this Rights Certificate) of transferee in full (see instructions
below regarding the transfer of all or a portion of your unexercised Rights (but
no fractional Rights) to more than one person):
Name: ______________________________________________________________________
Address: ______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
Taxpayer Identification Number: ________________________________________
Signatures of Transferor(s): __________________________________________________
Signature(s) of Transferor(s): ________________________________________________
(If held jointly)
Signatures Guaranteed By:______________________________________________________
Eligible Institution
Proceeds from the sale of Rights may be subject to withholding of U.S. taxes
unless the seller's certified U.S. taxpayer identification number (or
certificate regarding foreign status) is on file with the Subscription Agent and
the seller is not otherwise subject to U.S. backup withholding.
If you desire to transfer or assign all or a portion of the unexercised Rights
(but no fractional Rights) represented by this Rights Certificate to more than
one person, attach separate instructions for the Subscription Agent regarding
such transfer(s) in accordance with Paragraph 4(d) of the "Instructions For Use
of AMF Bowling, Inc. Rights Certificates." Note that any such request will
require a signature guarantee from an Eligible Institution (as defined in the
"Instructions For Use of AMF Bowling, Inc. Rights Certificates"), unless such
requirement is waived by the Subscription Agent in its sole and absolute
discretion.
If not all of the Rights represented by this Rights Certificate are exercised
pursuant to Form 1, transferred to a designated transferee or assigned to a bank
or broker to sell for you pursuant to Form 2 or transferred to the Subscription
Agent to sell for you pursuant to Form 3, and there is sufficient time before
the expiration of the Rights Offering, the Subscription Agent will issue a new
Rights Certificate to the transferor for the remaining Rights not so exercised,
transferred, assigned or sold unless otherwise separately instructed, subject to
the terms of the Rights Offering, as described in the Prospectus.
6
<PAGE>
FORM 3
TO SELL SOME OR ALL OF YOUR UNEXERCISED RIGHTS THROUGH THE SUBSCRIPTION AGENT:
The undersigned hereby authorizes the Subscription Agent to sell _______ Rights
represented by the Rights Certificate but not exercised on Form 1, upon the
terms and conditions described in the Prospectus, and to deliver to the
undersigned a check for the proceeds, if any, from the sale thereof, less any
applicable brokerage commissions, taxes or other direct expenses of sale (see
instructions below regarding the sale of only a portion of your unexercised
Rights). The Subscription Agent's obligation to execute orders is subject to its
ability to find buyers for the Rights.
Proceeds from the sale of Rights may be subject to withholding of U.S. taxes
unless the seller's certified U.S. taxpayer identification number (or
certificate regarding foreign status) is on file with the Subscription Agent and
the seller is not otherwise subject to U.S. backup withholding.
In order to sell Rights through the Subscription Agent, you must complete and
sign the substitute Form W-9, as provided in Section 9 of the "Instructions For
Use of AMF Bowling, Inc. Rights Certificates."
Rights holder's Signature(s): ________________________________________
Rights holder's Signature(s): ________________________________________
(If held jointly)
Signatures Guaranteed by: ________________________________________
Eligible Institution
If you desire to sell only a portion of the unexercised Rights (but no
fractional Rights) represented by this Rights Certificate, attach separate
instructions to the Subscription Agent regarding such sale(s) in accordance with
Paragraph 4(f) of the "Instructions For Use of AMF Bowling, Inc. Rights
Certificate." Note that any such request will require a signature guarantee from
an Eligible Institution (as defined in the "Instructions For Use of AMF Bowling,
Inc. Rights Certificate"), unless such requirement is waived by the Subscription
Agent in its sole and absolute discretion.
If not all of the Rights represented by this Rights Certificate are exercised
pursuant to Form 1, transferred to a designated transferee or assigned to a bank
or broker to sell for you pursuant to Form 2 or sold by the Subscription Agent
pursuant to Form 3, and there is sufficient time before the expiration of the
Rights Offering, the Subscription Agent will issue a new Rights Certificate to
the transferor for the remaining Rights not so exercised, transferred, assigned
or sold unless otherwise instructed, subject to the terms of the Rights
Offering, as described in the Prospectus.
7
<PAGE>
FORM 4
DELIVERY INSTRUCTIONS: Address for mailing of Common Stock or new Rights
Certificate or any cash payment in accordance with the Prospectus if other than
shown on this reverse hereof:
Name: _______________________________________________________
Address: _____________________________________________________
_____________________________________________________
_____________________________________________________
Rights holder's Signature(s): _________________________________________________
Rights holder's Signature(s): _________________________________________________
(If held jointly)
Signatures Guaranteed by: _____________________________________________________
Eligible Institution
If the addressee above is not an Eligible Institution (as defined in the
"Instructions For Use of AMF Bowling, Inc. Rights Certificates") or the Rights
holder named on this Rights Certificate, then the Rights holder completing this
Form 4 must have an Eligible Institution guarantee such Rights holder's
signature.
8
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated February 19, 1999,
included in AMF Bowling, Inc.'s Form 10-K for the year ended December 31, 1998
and to all references to our Firm included in this registration statement.
Arthur Andersen LLP
Richmond, Virginia
May 3, 1999
<PAGE>
Exhibit 23.2
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
June 28, 1996 on the April 30, 1996 combined financial statements of AMF
Bowling Group appearing on page 65 of AMF Bowling, Inc.'s Annual Report on Form
10-K for the year ended December 31, 1998. We also consent to the reference to
us under the heading "Experts."
PricewaterhouseCoopers LLP
Virginia Beach, Virginia
May 3, 1999
<PAGE>
Exhibit 99.1
INSTRUCTIONS FOR USE OF AMF BOWLING, INC.
RIGHTS CERTIFICATES
CONSULT [INFORMATION AGENT] OR YOUR BANK OR BROKER
AS TO ANY QUESTIONS
The following instructions relate to a rights offering (the "Rights
Offering") by AMF Bowling, Inc., a Delaware corporation (the "Company"), to the
holders of its common stock, par value $0.01 per share (the "Common Stock"), as
described in the Company's prospectus dated ______________, 1999 (the
"Prospectus"). Holders of record of shares of the Common Stock at the close of
business on ___________, 1999 (the "Record Date") are receiving ______________
transferable subscription rights (collectively, the "Rights") for each share of
the Common Stock held by them on the Record Date. An aggregate of approximately
_____ Right exercisable to purchase an aggregate of approximately ______ shares
of the Common Stock are being distributed in connection with the Rights
Offering. Each whole Right is exercisable, upon payment of $____ in cash (the
"Subscription Price"), to purchase one share of the Common Stock (the "Basic
Subscription Privilege"). In addition, subject to the proration described below,
each Rights holder who fully exercises the Basic Subscription Privilege also has
the right to subscribe at the Subscription Price for additional shares of Common
Stock (the "Over-Subscription Privilege"). The shares of Common Stock will be
available for purchase pursuant to the Over-Subscription Privilege only to the
extent that all the shares of Common Stock are not subscribed for through the
exercise of the Basic Subscription Privilege by the Expiration Date, as defined
below. If the shares of Common Stock so available (the "Excess Shares") are
not sufficient to satisfy all subscriptions pursuant to the Over-Subscription
Privilege, the available shares will be allocated pro rata among Rights holders
exercising their Over-Subscription Privileges in proportion to the number of
shares each such Rights holder has purchased pursuant to his or her respective
Basic Subscription Privilege; provided, however, that if such pro rata
allocation results in any Rights holder being allocated a greater number of
Excess Shares than such Rights holder subscribed for pursuant to the exercise of
such Rights holder's Over-Subscription Privileges, then such Rights holder will
be allocated only such number of Excess Shares as such Rights holder subscribed
for, and the remaining Excess Shares will be allocated among all other Rights
holders exercising Over-Subscription Privileges.
No fractional Rights or cash in lieu thereof will be issued or paid. The
number of Rights distributed by the Company has been rounded up to the nearest
whole number in order to avoid issuing fractional Rights. Nominee holders of
Common Stock that hold, on the Record Date, shares for the account(s) of more
than one beneficial owner may exercise the number of Rights to which all such
beneficial owners in the aggregate would otherwise have been entitled if they
had been direct record holders of Common Stock on the Record Date; provided such
nominee holder makes a proper showing to the Subscription Agent, as determined
in the Subscription Agent's sole and absolute discretion.
The Rights will expire at 5:00 p.m., New York City time, on ____________,
1999, unless such time or date is extended as described in the Prospectus (the
"Expiration Date"). Application will be made to list the Rights for trading on
the New York Stock Exchange under the symbol "PINRT."
The number of Rights to which you are entitled is printed on the face of
your Rights Certificate. You should indicate your wishes with regard to the
exercise, assignment, transfer or sale of your Rights by completing the
appropriate form or forms on your Rights Certificate and returning it to the
Subscription Agent in the envelope provided.
YOUR RIGHTS CERTIFICATE MUST BE RECEIVED BY THE SUBSCRIPTION AGENT, OR
GUARANTEED DELIVERY REQUIREMENTS WITH RESPECT TO YOUR RIGHTS CERTIFICATE MUST BE
COMPLIED WITH, AND PAYMENT OF THE SUBSCRIPTION PRICE, INCLUDING FINAL CLEARANCE
<PAGE>
OF ANY CHECKS, MUST BE RECEIVED BY THE SUBSCRIPTION AGENT, ON OR BEFORE 5:00
P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE. YOU MAY NOT REVOKE ANY
EXERCISE OF A RIGHT, EXCEPT UNDER THE CIRCUMSTANCES DESCRIBED IN THE PROSPECTUS.
1. Subscription Privilege.
-----------------------
To exercise Rights, complete Form 1 and deliver your properly completed and
executed Rights Certificate, together with payments in full of the Subscription
Price for each share of Common Stock subscribed for pursuant to the Basic
Subscription Privilege and the Over-Subscription Privilege, to the Subscription
Agent.
Payment of the Subscription Price must be made in U.S. dollars for the full
number of shares of Common Stock being subscribed for by (a) certified or
personal check or bank draft drawn upon a U.S. bank, or postal, telegraphic or
express money order payable to: _____________________________, as Subscription
Agent, or (b) wire transfer of same day funds to the account maintained by the
Subscription Agent for such purpose at _________________________________, ABA
No. ___________, Account: _______________: (marked "AMF Bowling, Inc.
Subscription"). The Subscription Price will be deemed to have been received by
the Subscription Agent only upon (i) the clearance of any uncertified check,
(ii) the receipt by the Subscription Agent of any certified check or bank draft
drawn upon a U.S. bank or of any postal, telegraphic or express money order or
(iii) the receipt of collected funds in the Subscription Agent's account
referred to above.
If paying by uncertified personal check, please note that the funds paid
thereby may take five business days or more to clear. Accordingly, Rights
holders who wish to pay the Subscription Price by means of an uncertified
personal check are urged to make payment sufficiently in advance of the
Expiration Date to ensure that such payment is received and clears by such date
and are urged to consider payment by means of certified or cashier's check,
money order or wire transfer of funds.
Alternatively, you may cause a written guarantee substantially in the form
enclosed herewith (the "Notice of Guaranteed Delivery") from a commercial bank,
trust company, securities broker or dealer, credit union, savings association or
other eligible guarantor institution which is a member of or a participant in a
signature guarantee program acceptable to the Subscription Agent (each of the
foregoing being an "Eligible Institution"), to be received by the Subscription
Agent at or prior to the Expiration Date, together with payment in full of the
applicable Subscription Price. Such Notice of Guaranteed Delivery must state
your name, the number of Rights represented by your Rights Certificate, the
number of Rights being exercised pursuant to the Basic Subscription Privilege
and the number of shares of Common Stock, if any, being subscribed for pursuant
to the Over-Subscription Privilege, and will guarantee the delivery to the
Subscription Agent of your properly completed and executed Rights Certificate
within three New York Stock Exchange trading days following the date of the
Notice of Guaranteed Delivery. If this procedure is followed, your Rights
Certificate must be received by the Subscription Agent within three New York
Stock Exchange trading days of the Notice of Guaranteed Delivery. Additional
copies of the Notice of Guaranteed Delivery may be obtained upon request from
the Subscription Agent, at the address, or by calling the telephone number,
indicated below.
Banks, brokers, trusts, depositaries or other nominee holders of the Rights
who exercise the Rights and the Over-Subscription Privilege on behalf of
beneficial owners of Rights will be required to certify to the Subscription
Agent and the Company on a Nominee Holder Certification Form, in connection with
the exercise of the Over-Subscription Privilege, as to the aggregate number of
Rights that have been exercised, and the number of shares of Common Stock that
are being subscribed for pursuant to the Over-Subscription Privilege, by each
beneficial owner of Rights on whose behalf such nominee holder is acting. If
more shares of the Common Stock are subscribed for pursuant to the Over-
Subscription Privilege than are available for sale, such shares will be
allocated, as described above, among persons exercising the Over-Subscription
Privilege in proportion to such persons' exercise of Rights pursuant to the
Basic Subscription Privilege.
2
<PAGE>
The address and telecopier numbers of the Subscription Agent are as
follows:
Facsimile Transmission By Hand or
By Mail: (Eligible Institutions only): Overnight Courier:
( )
- ---------------- --- --------------- -------------------
- ---------------- -------------------
- ---------------- To confirm receipt of -------------------
- ---------------- facsimile only: -------------------
( )
--- ----------------
The address and telephone numbers of the Information Agent, for inquiries,
information or requests for additional documentation are as follows:
-----------------------------
-----------------------------
-----------------------------
-----------------------------
Toll Free (800)
-------------
Banks and Brokerage Firms
Please call (800)
-----------
If you exercise less than all of the Rights evidenced by your Rights
Certificate by so indicating on Form 1 of your Rights Certificate, you may
either (a) use Form 2 to transfer your remaining unexercised Rights (but no
fractional Rights) to a designated transferee or to assign them to a bank or
broker to sell for you, (b) use Form 3 to direct the Subscription Agent to
attempt to sell the unexercised Rights (but no fractional Rights) , (c) attach
separate instructions for the Subscription Agent directing an alternate
disposition of your unexercised Rights (which instructions must be guaranteed by
an Eligible Institution) or (d) the Subscription Agent will issue you a new
Rights Certificate evidencing the unexercised Rights (see Paragraph 4 of these
Instructions For Use of AMF Bowling, Inc. Rights Certificate). However, if you
choose to have a new Rights Certificate sent to you, you may not receive any
such new Rights Certificate in sufficient time to permit you to exercise,
assign, transfer or sell the Rights evidenced thereby. If you have not indicated
the number of Rights being exercised, or if you have not forwarded full payment
of the Subscription Price for the number of Rights that you have indicated are
being exercised, you will be deemed to have exercised the Basic Subscription
Privilege with respect to the maximum number of whole Rights which may be
exercised for the Subscription Price payment transmitted or delivered by you,
and to the extent that the Subscription Price payment transmitted or delivered
by you exceeds the product of the Subscription Price multiplied by the number of
Rights evidenced by the Rights Certificate(s) transmitted or delivered by you
(such excess being the "Subscription Excess"), you will be deemed to have
exercised your Over-Subscription Privilege to purchase, to the extent available,
that number of whole shares of the Common Stock equal to the quotient obtained
by dividing the Subscription Excess by the Subscription Price, subject to the
limit on the number of shares a Rights holder may purchase pursuant to the Over-
Subscription Privilege.
2. Conditions to Completion of the Rights Offering.
------------------------------------------------
The completion of the Rights Offering is conditioned upon (i) at least
90% of the Rights being exercised and (ii) consummation of the Company's
tender offer for its Zero Coupon Convertible Debentures due 2018.
3
<PAGE>
3. Delivery of Common Stock.
-------------------------
The following deliveries and payments will be made to the address shown on
the face of your Rights Certificate unless you provide instructions to the
contrary on Form 4.
(a) Basic Subscription Privilege. As soon as practicable after the
valid exercise of the Rights, the Subscription Agent will mail to each
exercising Rights holder certificates representing shares of Common Stock
purchased pursuant to the Basic Subscription Privilege.
(b) Over-Subscription Privilege. As soon as practicable after the
Expiration Date, the Subscription Agent will mail to each Rights holder who
validly exercises the Over-Subscription Privilege the number of shares of Common
Stock allocated to such Rights holder pursuant to the Over-Subscription
Privilege. See "The Rights Offering--Subscription Privileges--Over-Subscription
Privilege" in the Prospectus.
(c) Cash Payments. As soon as practicable after the Expiration Date,
the Subscription Agent will mail to each Rights holder who exercises the Over-
Subscription Privilege any excess funds, without interest or deduction, received
in payment of the Subscription Price for each share of the Common Stock that is
subscribed for by, but not allocated to, such Rights holder pursuant to the
Over-Subscription Privilege.
4. To Sell or Transfer Rights.
---------------------------
(a) Sale of All Rights through a Broker, Dealer or Nominee. To have a
broker, dealer or nominee sell all the unexercised Rights (but no fractional
Rights) evidenced by a Rights Certificate for you, so indicate on Form 2 and
deliver your properly completed and executed Rights Certificate to your broker,
dealer or nominee. Your Rights Certificate should be delivered to your broker,
dealer or nominee in ample time for it to be processed by the Subscription
Agent. If Form 2 is completed without designating a transferee, the Subscription
Agent may thereafter treat the bearer of the Rights Certificate as the absolute
owner of all of the Rights evidenced by such Rights Certificate for all
purposes, and neither the Subscription Agent nor the Company shall be affected
by any notice to the contrary.
(b) Sale of Less than All Unexercised Rights through a Broker, Dealer
or Nominee. Because your broker, dealer or nominee cannot issue Rights
Certificates, if you wish to sell less than all of the unexercised Rights (but
no fractional Rights) evidenced by a Rights Certificate, so indicate on Form 2,
and either you or your broker, dealer or nominee must separately instruct the
Subscription Agent as to the action to be taken with respect to the unexercised
Rights (but no fractional Rights) not sold. Such instructions should be
accompanied by a stock power authorizing such transfer and should be guaranteed
by an Eligible Institution. Alternatively, you or your broker, dealer or nominee
must first have your Rights Certificate divided into Rights Certificates of
appropriate denominations by following the instructions in Paragraph 5 of these
instructions. Each Rights Certificate evidencing the number of Rights you intend
to sell can then be transferred by your broker, dealer or nominee in accordance
with the instructions in Paragraph 4(a).
(c) Transfer of All or Less than All Unexercised Rights to One
Designated Transferee. To transfer all of your unexercised Rights to a
designated transferee other than a broker, dealer or nominee you must complete
Form 2 in its entirety, execute the Rights Certificate and have your signature
guaranteed by an Eligible Institution. A Rights Certificate that has been
properly transferred in its entirety may be exercised by a new holder without
having a new Rights Certificate issued. If you wish to transfer less than all of
your unexercised Rights (but no fractional Rights) to one designated transferee,
execute the Rights Certificate and separately instruct the Subscription Agent as
to the action to be taken with respect to the unexercised Rights not
transferred. Such instructions should be accompanied by stock power(s)
authorizing such transfer(s) and should be guaranteed by an Eligible
Institution. If no such instructions are received, the Subscription Agent will
issue you a new Rights Certificate evidencing the unexercised Rights. If Form 2
is completed without designating a transferee, the Subscription Agent may
thereafter treat the bearer of the Rights Certificate as the absolute owner of
all of the Rights evidenced by such Rights Certificate for all purposes, and
neither the Subscription Agent nor the Company shall be affected by any notice
to the contrary.
4
<PAGE>
(d) Transfer of All or Less than All Unexercised Rights to More than
One Designated Transferee. Because only the Subscription Agent can issue Rights
Certificates, if you wish to transfer all or less than all of the unexercised
Rights (but no fractional Rights) evidenced by your Rights Certificate to more
than one designated transferee, so indicate one such transfer on Form 2 and
separately instruct the Subscription Agent as to the action to be taken with
respect to the remaining unexercised Rights. Such instructions should be
accompanied by stock power(s) authorizing such transfer(s) and should be
guaranteed by an Eligible Institution. Alternatively, you can divide your Rights
Certificate into Rights Certificates of appropriate smaller denominations by
following the instructions in Paragraph 5 below. Each Rights Certificate
evidencing the number of Rights you intend to transfer can then be transferred
by following the instructions in Paragraph 4(c).
(e) Sale of All Unexercised Rights Through the Subscription Agent. To
sell all unexercised Rights (but no fractional Rights) evidenced by a Rights
Certificate through the Subscription Agent, so indicate on Form 3 and deliver
your properly completed and executed Rights Certificate to the Subscription
Agent. The Subscription Agent's obligation to execute sell orders is subject to
its ability to find buyers for the Rights. NO ASSURANCE CAN BE GIVEN THAT A
MARKET WILL DEVELOP FOR THE RIGHTS OR THAT THE SUBSCRIPTION AGENT WILL BE ABLE
TO SELL ANY RIGHTS.
(f) Sale of Less than All Unexercised Rights Through the Subscription
Agent. If you wish to sell less than all of the unexercised Rights (but no
fractional Rights) evidenced by a Rights Certificate, so indicate on Form 3 and
separately instruct the Subscription Agent as to the action to be taken with
respect to the unexercised Rights not sold. Such instructions should be
accompanied by stock power(s) authorizing such transfer(s) and should be
guaranteed by an Eligible Institution. Alternatively, you may have your Rights
Certificate divided into Rights Certificates of appropriate denominations by
following the instructions in Paragraph 5 below. The Rights Certificate
evidencing the number of unexercised Rights you intend to transfer can then be
transferred by following the instructions in Paragraph 4(e). If the Subscription
Agent sells any of your Rights, such Rights will be deemed to have been sold at
the weighted average sale price of all Rights sold by the Subscription Agent,
less your pro rata portion of any applicable brokerage commissions, taxes and
other expenses. Promptly following the Expiration Date, the Subscription Agent
will send the holder a check for the net proceeds from the sale of any Rights
sold. The Subscription Agent's obligation to execute sell orders is subject to
its ability to find buyers for the Rights. NO ASSURANCE CAN BE GIVEN THAT A
MARKET WILL DEVELOP FOR THE RIGHTS OR THAT THE SUBSCRIPTION AGENT WILL BE ABLE
TO SELL ANY RIGHTS.
5. To Have a Rights Certificate Divided into Smaller Denominations.
----------------------------------------------------------------
Send your Rights Certificate, together with complete separate instructions
(including specification of the denominations into which you wish your Rights to
be divided), signed by you, to the Subscription Agent, allowing a sufficient
amount of time for new Rights Certificates to be issued and returned so that
they can be used prior to the Expiration Date. Alternatively, you may assign
your unexercised Rights to a bank or broker to effect such actions on your
behalf. YOUR SIGNATURE MUST BE GUARANTEED BY AN ELIGIBLE INSTITUTION IF ANY OF
THE NEW RIGHTS CERTIFICATES ARE TO BE ISSUED IN A NAME OTHER THAN THAT IN WHICH
THE OLD RIGHTS CERTIFICATE WAS ISSUED. Rights Certificates may not be divided
into fractional Rights, and any instruction to do so will be rejected. As a
result of delays in the mail, the time of the transmittal, the necessary
processing time and other factors, you or your transferee may not receive such
new Rights Certificate(s) in time to enable the Rights holder to complete a
sale, exercise or transfer by the Expiration Date. Neither the Company nor the
Subscription Agent will be liable to either a transferor or transferee for any
such delays.
Nominee holders of Common Stock that hold, on the Record Date, shares for
the account(s) of more than one beneficial owner may exercise the number of
Rights to which all such beneficial owners in the aggregate would otherwise have
been entitled if they had been direct record holders of Common Stock on the
Record Date, provided such nominee holder makes a proper showing to the
Subscription Agent, as determined in the Subscription Agent's sole and absolute
discretion.
5
<PAGE>
6. Execution.
----------
(a) Execution by Registered Holder(s). The signature on the reverse
of the Rights Certificate must correspond with the name of the registered holder
exactly as it appears on the Rights Certificate without any alteration or change
whatsoever. If the Rights Certificate is registered in the names of two or more
joint owners, all of such owners must sign. Persons who sign the Rights
Certificate in a representative or other fiduciary capacity must indicate their
capacity when signing and, unless waived by the Subscription Agent in its sole
and absolute discretion, must present to the Subscription Agent satisfactory
evidence of their authority to so act.
(b) Execution by Person Other than Registered Holder. If the Rights
Certificate is executed by a person other than the holder named on the face of
the Rights Certificate, proper evidence of authority of the person executing the
Rights Certificate must accompany the same unless, for good cause, the
Subscription Agent dispenses with proof of authority.
(c) Signature Guarantees. Your signature must be guaranteed by an
Eligible Institution if you wish to have a broker, dealer or nominee or the
Subscription Agent sell less than all of your unexercised Rights, as specified
in Paragraphs 4(b) and/or 4(f), or to transfer all or less than all of your
Rights to any designated transferee(s) other than a broker, dealer or nominee as
specified in Paragraphs 4(c) or 4(d) above, or if you specify special payment or
delivery instructions pursuant to Form 4.
7. Method of Delivery.
-------------------
The method of delivery of Rights Certificates and payment of the
Subscription Price to the Subscription Agent will be at the election and risk of
the Rights holder, but, if sent by mail, it is recommended that they be sent by
registered mail, properly insured, with return receipt requested, and that a
sufficient number of days be allowed to ensure delivery to the Subscription
Agent and the clearance of any checks sent in payment of the Subscription Price
prior to 5:00 p.m., New York City time, on the Expiration Date.
8. Special Provisions Relating to the Delivery of Rights Through the
-----------------------------------------------------------------
Depository Trust Company.
------------------------
In the case of holders of Rights that are held of record through The
Depository Trust Company ("DTC"), exercises of the Basic Subscription Privilege
(but not the Over-Subscription Privilege) may be effected by instructing DTC to
transfer Rights (such Rights being "DTC Exercised Rights") from the DTC account
of such holder to the DTC account of the Subscription Agent, together with
payment of the Subscription Price for each share of Common Stock subscribed for
pursuant to the Basic Subscription Privilege. The Over-Subscription Privilege in
respect of DTC Exercised Rights may not be exercised through DTC. The holder of
a DTC Exercised Right may exercise the Over-Subscription Privilege in respect of
such DTC Exercised Right by properly executing and delivering to the
Subscription Agent at or prior to 5:00 p.m., New York City time, on the
Expiration Date, a DTC Participant Over-Subscription Exercise Form and a Nominee
Holder Certification Form, available from the Subscription Agent, together with
payment of the appropriate Subscription Price for the number of shares of Common
Stock for which the Over-Subscription Privilege is to be exercised.
If a Notice of Guaranteed Delivery relates to Rights with respect to which
exercise of the Basic Subscription Privilege will be made through DTC and such
Notice of Guaranteed Delivery also relates to the exercise of the Over-
Subscription Privilege, a DTC Participant Over-Subscription Exercise Form and a
Nominee Holder Certification Form must also be received by the Subscription
Agent in respect of such exercise of the Over-Subscription Privilege on or prior
to the Expiration Date.
6
<PAGE>
9. Substitute Form W-9.
--------------------
Each Rights holder who elects to exercise, sell or transfer the Rights
through the Subscription Agent should provide the Subscription Agent with a
correct Taxpayer Identification Number ("TIN") and, where applicable,
certification of such Rights holder's exemption from backup withholding on
Substitute Form W-9. Each foreign Rights holder who elects to exercise, sell or
transfer the Rights through the Subscription Agent should provide the
Subscription Agent with certification of foreign status on Substitute Form W-8.
Copies of Substitute Form W-8 and additional copies of Form W-9 may be obtained
upon request from the Subscription Agent at the address, or by calling the
telephone number indicated above. Failure to provide the information on the form
may subject such holder to 31% federal income tax withholding with respect to
(i) dividends that may be paid by the Company on shares of Common Stock
purchased upon the exercise of Rights (for those holders exercising Rights) or
(ii) funds to be remitted to Rights holders in respect of Rights sold by the
Subscription Agent (for those holders electing to have the Subscription Agent
sell their Rights for them).
7
<PAGE>
Exhibit 99.2
NOTICE OF GUARANTEED DELIVERY
FOR
RIGHTS CERTIFICATES
ISSUED BY
AMF BOWLING, INC.
This form, or one substantially equivalent hereto, must be used to exercise
Rights pursuant to the Rights Offering described in the prospectus dated
____________, 1999 (the "Prospectus") of AMF Bowling, Inc., a Delaware
corporation (the "Company"), if a holder of Rights cannot deliver the rights
certificates evidencing the Rights (the "Rights Certificate(s)"), to the
Subscription Agent listed below (the "Subscription Agent") at or prior to 5:00
p.m., New York City time, on ___________, 1999, unless extended (the "Expiration
Date"). Such form must be delivered by hand or sent by facsimile transmission or
mail to the Subscription Agent, and must be received by the Subscription Agent
on or prior to the Expiration Date. See the discussion set forth under "The
Rights Offering" in the Prospectus.
Payment of the Subscription Price of $____ per share for each share of
common stock, $0.01 par value per share (the "Common Stock"), of the Company
subscribed for upon exercise of such Rights must be received by the Subscription
Agent in the manner specified in the Prospectus at or prior to 5:00 p.m., New
York City time, on the Expiration Date if the Rights Certificate evidencing such
Rights is being delivered pursuant to the procedure for guaranteed delivery
thereof. See the discussion set forth under "The Rights Offering--Guaranteed
Delivery Procedures" in the Prospectus. All undefined capitalized terms used
herein have the definition ascribed to them in the Prospectus.
The Subscription Agent is:
_____________________
Facsimile Transmission
(Eligible Institutions only): By Hand or
By Mail: Overnight Courier:
______________ (___) ____________ _______________________
______________ _______________________
______________ To confirm receipt of _______________________
______________ facsimile only: _______________________
(___) ____________
<PAGE>
The address and telephone numbers of the information agent, for inquiries,
information or requests for additional documentation are as follows:
___________________________
___________________________
___________________________
(___) ___________________
Toll Free (800) ___________
Banks and Brokerage Firms
Please call (800) _________
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION VIA A FACSIMILE MACHINE OTHER THAN AS SET FORTH ABOVE DOES NOT
CONSTITUTE A VALID DELIVERY.
Ladies and Gentlemen:
The undersigned hereby represents that he or she is the holder of Rights
Certificate(s) representing ___________ Rights and that such Rights
Certificate(s) cannot be delivered to the Subscription Agent at or before 5:00
p.m., New York City time, on the Expiration Date. Upon the terms and subject to
the conditions set forth in the Prospectus, receipt of which is hereby
acknowledged, the undersigned hereby elects to exercise (i) the Basic
Subscription Privilege to subscribe for one share of Common Stock per Right with
respect to _______ of the Rights represented by such Rights Certificate and (ii)
the Over-Subscription Privilege relating to each such Right to subscribe, to the
extent that shares ("Excess Shares") are not subscribed for pursuant to
exercises under the Basic Subscription Privilege, for an aggregate of up to
_______ Excess Shares. The undersigned understands that payment of the
Subscription Price of $_____ per share for each share of the Common Stock
subscribed for pursuant to the Basic Subscription Privilege and Over-
Subscription Privilege must be received by the Subscription Agent at or before
5:00 p.m., New York City time, on the Expiration Date and represents that such
payment, in the aggregate amount of $_________, either (check appropriate box):
[ ] is being delivered to the Subscription Agent herewith
or
[ ] has been delivered separately to the Subscription Agent;
and is or was delivered in the manner set forth below (check appropriate box and
complete information relating thereto);
[ ] wire transfer of funds
-name of transferor institution
_______________________________________
-date of transfer
_______________________________________
-confirmation number (if available)
_______________________________________
[ ] uncertified check (Payment by uncertified check will not be deemed to have
been received by the
2
<PAGE>
Subscription Agent until such check has cleared. Holders paying by such
means are urged to make payment sufficiently in advance of the Expiration
Date to ensure that such payment clears by such date).
[ ] certified check
[ ] bank draft (cashier's check)
[ ] money order
- -name of maker_________________________________________________________________
- -date of check, draft or money order number____________________________________
- -bank on which check is drawn or issuer of money order_________________________
Signature(s) ___________________________________________________________
Name(s) ___________________________________________________________
___________________________________________________________
___________________________________________________________
(PLEASE TYPE OR PRINT)
___________________________________________________________
Address(es) ___________________________________________________________
(ZIP CODE)
Area Code and Tel. No(s).______________________________________________________
Rights Certificate No(s). (if available)_______________________________________
3
<PAGE>
GUARANTEE OF DELIVERY
(NOT TO BE USED FOR RIGHTS CERTIFICATE SIGNATURE GUARANTEE)
The undersigned, a member firm of a registered national securities exchange or
member of the National Association of Securities Dealers, Inc., commercial bank
or trust company having an office or correspondent in the United States, or
other eligible guarantor institution which is a member of or a participant in a
signature guarantee program acceptable to the Subscription Agent, guarantees
that the undersigned will deliver to the Subscription Agent the certificates
representing the Rights being exercised hereby, with any required signature
guarantees and any other required documents, all within three New York Stock
Exchange trading days after the date hereof.
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(ADDRESS)
________________________________________________________________________________
(AREA CODE AND TELEPHONE NUMBER)
Dated:____________________________________________________________________, 1999
________________________________________________________________________________
(NAME OF FIRM)
________________________________________________________________________________
(AUTHORIZED SIGNATURE)
The institution which completes this form must communicate the guarantee to the
Subscription Agent and must deliver the Rights Certificates to the Subscription
Agent within the time period shown herein. Failure to do so could result in a
financial loss to such institution.
4
<PAGE>
Exhibit 99.3
AMF BOWLING, INC.
RIGHTS OFFERING
DTC PARTICIPANT OVER-SUBSCRIPTION EXERCISE FORM
THIS FORM IS TO BE USED ONLY BY THE DEPOSITORY TRUST COMPANY PARTICIPANTS TO
EXERCISE THE OVER-SUBSCRIPTION PRIVILEGE IN RESPECT OF AMF BOWLING, INC. RIGHTS
WITH RESPECT TO WHICH THE BASIC SUBSCRIPTION PRIVILEGE WAS EXERCISED AND
DELIVERED IN FULL THROUGH THE FACILITIES OF THE DEPOSITORY TRUST COMPANY. ALL
OTHER EXERCISES OF OVER-SUBSCRIPTION PRIVILEGES MUST BE EFFECTED BY THE DELIVERY
OF RIGHTS CERTIFICATES.
THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING ARE SET FORTH IN THE COMPANY'S
PROSPECTUS DATED ____________, 1999 (THE "PROSPECTUS") AND ARE INCORPORATED
HEREIN BY REFERENCE. COPIES OF THE PROSPECTUS ARE AVAILABLE UPON REQUEST FROM
THE COMPANY AND THE SUBSCRIPTION AGENT.
VOID UNLESS RECEIVED BY THE SUBSCRIPTION AGENT WITH PAYMENT IN FULL BY 5:00
P.M., NEW YORK CITY TIME, ON ____________________, 1999 UNLESS EXTENDED.
1. The undersigned hereby certifies to AMF Bowling, Inc. (the "Company") and
_________________________________________, as the Subscription Agent, that
it is a participant in The Depository Trust Company ("DTC") and that it has
either (i) exercised in full the Basic Subscription Privilege in respect of
Rights and delivered such exercised Rights to the Subscription Agent by
means of transfer to the DTC account of the Subscription Agent designated
in the Prospectus or (ii) delivered to the Subscription Agent a Notice of
Guaranteed Delivery in respect of the exercise in full of the Basic
Subscription Privilege and will deliver the Rights called for in such
Notice of Guaranteed Delivery to the Subscription Agent by means of
transfer to such DTC account of the Subscription Agent.
2. The undersigned hereby exercises the Over-Subscription Privilege to
purchase, to the extent available, ________ shares of Common Stock and
certifies to the Company and the Subscription Agent that such Over-
Subscription Privilege is being exercised for the account or accounts of
persons (which may include the undersigned) on whose behalf the Basic
Subscription Privilege was exercised in full.
3. The undersigned understands that payment of the Subscription Price of $____
per share for each share of Common Stock subscribed for pursuant to the
Over-Subscription Privilege must be received by the Subscription Agent at
or before 5:00 p.m., New York City time, on the Expiration Date and
represents that such payment, in the aggregate amount of $_____________
(check appropriate box)
<PAGE>
[ ] has been or is being delivered to the Subscription Agent pursuant to
the Notice of Guaranteed Delivery referred to above;
[ ] is being delivered to the Subscription Agent herewith;
or
[ ] has been delivered separately to the Subscription agent;
and, in the case of funds not delivered pursuant to a Notice of Guaranteed
Delivery, is or was delivered in the manner set forth below (check appropriate
box and complete information relating thereto):
[ ] wire transfer funds;
Name of transferor institution___________________________________________
Date of transfer_________________________________________________________
Confirmation number (if available)_______________________________________
[ ] uncertified check (Payment by uncertified check will not be deemed to
have been received by the Subscription Agent until such check has
cleared. Holders paying by such means are urged to make payment
sufficiently in advance of the Expiration Date to ensure that such
payment clears by such date).
[ ] certified check
[ ] bank draft (cashier's check)
[ ] money order
--name of maker______________________________________________________
--date of check, draft or money order number_________________________
--bank on which check is drawn or issuer of money order______________
________________________________________________
Basic Subscription Confirmation Number
________________________________________________
DTC Participant Number
________________________________________________
Name of DTC Participant
By:
_____________________________________________
Name:
2
<PAGE>
Title:
Date: _________________, 1999
PARTICIPANTS EXERCISING THE OVER-SUBSCRIPTION PRIVILEGE PURSUANT HERETO MUST
SEPARATELY SUBMIT A NOMINEE HOLDER CERTIFICATION FORM TO THE SUBSCRIPTION AGENT.
3
<PAGE>
Exhibit 99.4
AMF BOWLING, INC.
Dear Stockholders:
We are sending you this letter as a holder of our common stock, in
connection with our distribution of transferable rights to acquire our common
stock as described in the enclosed prospectus.
Enclosed are copies of the following documents:
1. The Prospectus;
2. The Rights Certificate;
3. The "Instructions for Use of AMF Bowling, Inc. Rights Certificates"
(including Guidelines For Certification of Taxpayer Identification
Number on Substitute Form W-9);
4. A Notice of Guaranteed Delivery for Rights Certificates issued by AMF
Bowling, Inc.; and
5. A return envelope addressed to ______________________, the
Subscription Agent.
To participate in the rights offering, we suggest that you act promptly.
Very truly yours,
AMF BOWLING, INC.
<PAGE>
Exhibit 99.5
AMF BOWLING, INC.
To Securities Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We are sending you this letter in connection with our offering to our
stockholders of transferable rights to purchase our common stock. We have
described the rights and the rights offering in the enclosed prospectus and
evidenced the rights by a rights certificate registered in your name or the name
of your nominee.
The completion of the rights offering is conditioned upon (i) at least
90% of the rights being exercised and (ii) consummation of the tender offer for
the Zero Coupon Convertible Debentures of AMF Bowling, Inc.
We are asking you to contact your clients for whom you hold our common
stock registered in your name or in the name of your nominee to obtain
instructions with respect to the rights. We have enclosed several copies of the
following documents for you to use:
1. The Prospectus;
2. The "Instructions for Use of AMF Bowling, Inc. Rights Certificates"
(including Guidelines For Certification of Taxpayer Identification Number
on Substitute Form W-9);
3. A form letter which may be sent to your clients for whose accounts you hold
Common Stock registered in your name or the name of your nominee;
4. A Beneficial Owner Election Form, on which you may obtain your clients'
instructions with regard to the Rights;
5. A Nominee Holder Certification Form;
6. A Notice of Guaranteed Delivery for Rights Certificates issued by AMF
Bowling, Inc.;
7. A DTC Participant Over-Subscription Exercise Form; and
8. A return envelope addressed to , the Subscription
--------------------
Agent.
We request that you act promptly. You may obtain additional copies of the
enclosed materials and may request assistance or information from the
Information Agent, ______________. Their toll-free telephone number is (800)
__________. Banks and brokerage firms, please call (800) __________.
Very truly yours,
AMF BOWLING, INC.
YOU ARE NOT AN AGENT OF [NAME OF SUBSCRIPTION AGENT], NOR OF ANY OTHER PERSON
(INCLUDING AMF BOWLING, INC.) WHO IS DEEMED TO BE MAKING OR WHO IS MAKING OFFERS
OF OUR COMMON STOCK IN THE RIGHTS OFFERING, AND YOU ARE NOT AUTHORIZED TO MAKE
ANY STATEMENTS ON THEIR OR OUR BEHALF, EXCEPT FOR STATEMENTS MADE IN THE
PROSPECTUS.
<PAGE>
Exhibit 99.6
To Our Clients:
We are sending this letter because we hold shares of AMF Bowling, Inc.
common stock for you. AMF Bowling, Inc. has commenced an offering of
transferable rights to purchase its common stock, as described in the enclosed
prospectus.
We have enclosed your copy of the following documents:
1. The Prospectus; and
2. The Beneficial Owner Election Form.
We urge you to read these documents carefully before instructing us to
exercise, sell or otherwise transfer your rights. WE WILL ACT ON YOUR BEHALF
ACCORDING TO YOUR INSTRUCTIONS.
<PAGE>
Exhibit 99.7
AMF BOWLING, INC.
NOMINEE HOLDER CERTIFICATION
The undersigned, a bank, broker, trustee, depositary or other nominee of Rights
("Rights") to purchase shares of Common Stock ("Common Stock") of AMF Bowling,
Inc. (the "Company") pursuant to the Rights Offering described and provided for
in the Company's prospectus dated _________, 1999 (the "Prospectus"), hereby
certifies to the Company and to ______________, as Subscription Agent for such
Rights Offering, that (1) the undersigned has exercised, on behalf of the
beneficial owners thereof (which may include the undersigned), the number of
Rights specified below pursuant to the Basic Subscription Privilege (as defined
in the Prospectus) on behalf of beneficial owners of Rights who have subscribed
for the purchase of additional shares of Common Stock pursuant to the Over-
Subscription Privilege (as defined in the Prospectus), listing separately below
each such exercised Basic Subscription Privilege and the corresponding Over-
Subscription Privilege (without identifying any such beneficial owner) and (2)
each such beneficial owner's Basic Subscription Privilege has been exercised in
full (if it is exercising its Over-Subscription Privilege):
NUMBER OF SHARES
NUMBER OF SHARES OWNED RIGHTS EXERCISED SUBSCRIBED FOR PURSUANT
ON THE PURSUANT TO BASIC TO OVER-SUBSCRIPTION
RECORD DATE SUBSCRIPTION PRIVILEGE PRIVILEGE
----------- ---------------------- ---------
1.
---------------------- ------------------------ -----------------------
2.
---------------------- ------------------------ -----------------------
3.
---------------------- ------------------------ -----------------------
4.
---------------------- ------------------------ -----------------------
5.
---------------------- ------------------------ -----------------------
6.
---------------------- ------------------------ -----------------------
7.
---------------------- ------------------------ -----------------------
8.
---------------------- ------------------------ -----------------------
9.
---------------------- ------------------------ -----------------------
<PAGE>
Provide the following information if applicable:
- -----------------------------------------------
Depository Trust Company ("DTC")
Participant Number
[PARTICIPANT]
By:
--------------------------------------------
Name:
Title:
- -----------------------------------------------
DTC Basic Subscription Confirmation
Number(s)
2
<PAGE>
Exhibit 99.8
IMPORTANT TAX INFORMATION
Under United States federal income tax law, dividend payments and other
distributions that may be made by the Company on shares of Common Stock issued
upon the exercise of Rights may be subject to backup withholding and each Rights
holder who either exercises or sells Rights should provide the Subscription
Agent (as the Company's agent) with such Rights holder's correct Taxpayer
Identification Number ("TIN") on Substitute Form W-9 below. If such Rights
holder is an individual, the TIN is his or her Social Security Number ("SSN").
If the Subscription Agent is not provided with the correct TIN in connection
with such payments, the Rights holder may be subject to a $50.00 penalty imposed
by the Internal Revenue Service (the "IRS").
Exempt Rights holders (including, among others, all corporations and
certain foreign individuals) are not subject to these backup withholding and
reporting requirements. In general, in order for a foreign individual to
qualify as an exempt recipient, such Rights holder must submit a statement,
signed under the penalties of perjury, attesting to that individual's exempt
status. Such statements can be obtained from the Subscription Agent. See the
enclosed Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 for additional instructions.
If backup withholding applies, the Company or the Subscription Agent, as
the case may be, will be required to withhold 31% of any such payments made to
the Rights holder. Backup withholding is not an additional tax. Rather, the
tax liability of persons subject to backup withholding will be reduced by the
amount of tax withheld. If withholding results in an overpayment of taxes, a
refund may be obtained.
Purpose of Substitute Form W-9
- ------------------------------
A person who is required to file an information return with the IRS must
get your TIN to report, for example, income paid to you. Use Form W-9 to give
your correct TIN to the payer (the person requesting your TIN) and, when
applicable, (1) to certify that the TIN you are using is correct (or that you
are waiting for a number to be issued), (2) to certify that you are not subject
to backup withholding or (3) to claim exemption from backup withholding if you
are an exempt payee. To prevent backup withholding, a Rights holder is required
to notify the Subscription Agent of such Rights holder's correct TIN by
completing the form below certifying that the TIN provided on Substitute Form W-
9 is correct (or that such Rights holder is awaiting a TIN).
NOTE: If a payer gives you a form other than a W-9 to request your TIN,
you must use the payer's form if it is substantially similar to Form W-9.
What Is Backup Withholding?
- ---------------------------
Persons making certain payments to you must withhold and pay to the IRS 31%
of such payments under certain conditions. This is called "backup withholding."
Payments that may be subject to backup withholding include interest, dividends,
broker and barter exchange transactions, rents, royalties, nonemployee pay, and
certain payments from fishing boat operators. Real estate transactions are not
subject to backup withholding.
If you give the payer your correct TIN, make proper certifications, and
report all your taxable interest and dividends on your tax return, payments you
receive will not be subject to backup withholding. Payments you receive WILL be
subject to backup withholding if:
1
<PAGE>
1. You do not furnish your TIN to the payer, or
2. The IRS tells the payer that you furnished an incorrect TIN, or
3. The IRS tells you that you are subject to backup withholding because you
did not report all your interest and dividends on your tax return (for
reportable interest and dividends only), or
4. You did not certify to the payer that you are not subject to backup
withholding under 3 above (for reportable interest and dividend accounts
opened after 1983 only), or
5. You did not certify your TIN when required. See the chart below for
details.
Certain payees and payments are exempt from backup withholding and
information reporting. See below.
What Number to Give the Subscription Agent?
- -------------------------------------------
Each Rights holder is required to give the Subscription Agent the SSN or
Employer Identification Number ("EIN") of the record owner of the Rights. If
the Rights are in more than one name or are not in the name of the actual owner,
consult the enclosed Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9 for additional guidelines on which number to
report.
NOTE: All references herein to sections are to the indicated sections of the
Internal Revenue Code of 1986, as amended.
2
<PAGE>
PAYER'S NAME: [____________________]
SUBSTITUTE FORM W-9
REQUEST FOR TAXPAYER IDENTIFICATION NUMBER AND CERTIFICATION
Name:
-----------------------------------------------------------------------
Business name, if different from above:
-------------------------------------
Address (number, street and apt. or suite no.):
------------------------------
City, state and ZIP code:
----------------------------------------------------
Check appropriate box: ___ Individual/Sole Proprietor ___ Corporation _______
Partnership ___ Other (Specify) _________
Requester's name and address (optional)
PART I: Taxpayer Identification Number (TIN)
Social Security Number: ________________________________
OR
Employer Identification Number: _________________________
OR
If awaiting TIN write "Applied For" and Complete Parts III and IV:
-------------
List Account Number(s)
(Optional):
------------------------------------------------------------------
PART II : For Payees Exempt from Backup Withholding
For Payees Exempt from Backup Withholding, see the enclosed Guidelines and
complete as instructed therein.
PART III : CERTIFICATION
Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number
(or I am waiting for a number to be issued to me) and
(2) I am not subject to backup withholding because (a) I am exempt from backup
withholding, or (b) I have not been notified by the Internal Revenue
Service (IRS) that I am subject to backup withholding as a result of
failure to report all interest or dividends, or (c) the IRS has notified me
that I am no longer subject to backup withholding.
CERTIFICATION INSTRUCTIONS -- You must cross out item (2) above if you have been
notified by the IRS that you are subject to backup withholding because you have
failed to report all interest or dividends on your tax return. For real estate
transactions, item (2) does not apply. For mortgage interest paid, acquisition
or abandonment of secured property, cancellation of debt, contributions to an
individual retirement arrangement (IRA), and generally payments other than
interest and dividends, you are not required to sign the Certification, but you
must provide your correct TIN.
,1999
- ---------------------------------------- -------------------
Signature Date
3
<PAGE>
4
<PAGE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATION IF YOU WROTE "APPLIED FOR" IN
THE APPROPRIATE LINE IN PART I OF SUBSTITUTE FORM W-9
PART IV : CERTIFICATE OF TAXPAYER AWAITING IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration or (b) I
intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number within 60 days, 31 percent
of all reportable payments made to me thereafter will be withheld until I
provide a number.
,1999
- ----------------------------------- ------------------------
Signature Date
5
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYER
Social Security numbers have nine digits separated by two hyphens: i.e., 000-00-
0000. Employer Identification numbers have nine digits separated by only one
hyphen: i.e., 00-0000000. The table below will help determine the number to
give the Payer.
<TABLE>
<CAPTION>
GIVE THE
FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY NUMBER OF:
- ------------------------ -------------------------
- -----------------------------------------------------------------------------------------------
<S> <C>
1. Individual The individual.
- -----------------------------------------------------------------------------------------------
2. Two or more individuals (joint account) The actual owner of the account, or, if
combined funds, any one of the individuals
/(1)/
- -----------------------------------------------------------------------------------------------
3. Custodian account of a minor (Uniform The minor /(2)/
Gift to Minors Act)
- -----------------------------------------------------------------------------------------------
4. (a) The usual revocable savings trust The grantor-trustee /(1)/
(grantor is also trustee)
(b) So-called trust account that is not a The actual owner /(1)/
legal or valid trust under state law
- -----------------------------------------------------------------------------------------------
5. Sole proprietorship The owner /(3)/
- -----------------------------------------------------------------------------------------------
6. A valid trust, estate, or pension trust The legal entity (Do not furnish the
identifying number of the personal
representative or trustee unless the
legal entity itself is not designated in
the account title.) /(4)/
- -----------------------------------------------------------------------------------------------
7. Corporation The corporation
- -----------------------------------------------------------------------------------------------
8. Association, club, religious, charitable, The organization
educational or other tax-exempt
organization
- -----------------------------------------------------------------------------------------------
9. Partnership The partnership
- -----------------------------------------------------------------------------------------------
10. A broker or registered nominee The broker or nominee
- -----------------------------------------------------------------------------------------------
11. Account with the Department of The public entity
Agriculture in the name of a public
entity (such as State or local
government, school district, or prison)
that receives agricultural program
payments
- -----------------------------------------------------------------------------------------------
</TABLE>
____________________
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
6
<PAGE>
(3) Show the name of the owner.
(4) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
7
<PAGE>
Section references are to the Internal Revenue Code.
Obtaining a Number. If you don't have a taxpayer identification number or you
- -------------------
don't know your number, obtain Form SS-5, Application for a Social Security
Number Card, or Form SS-4, Application for Employer Identification Number, at
the local office of the Social Security Administration or the Internal Revenue
Service (the "IRS") and apply for a number.
Payees Exempt from Backup Withholding. The following is a list of payees exempt
- --------------------------------------
from backup withholding and for which no information reporting is required. For
interest and dividends, all listed payees are exempt except item (9). For broker
transactions, payees listed in (1) through (13) and a person registered under
the Investment Advisers Act of 1940 who regularly acts as a broker are exempt.
Payments subject to reporting under sections 6041 and 6041A are generally exempt
from backup withholding only if made to payees described in items (1) through
(7), except that the following payments made to a corporation and reportable on
Form 1099-MISC are not exempt from backup withholding or information reporting:
medical and health care payments, attorneys' fees and payments for services
paid by a federal executive agency. Only payees described in items (2) through
(6) are exempt from backup withholding for barter exchange transactions and
patronage dividends.
(1) A corporation.
(2) An organization exempt from tax under section 501(a), or an individual
retirement plan ("IRA"), or a custodial account under 403(b)(7) if the
account satisfies the requirements of section 400(F)(2).
(3) The United States or any of its agencies or instrumentalities.
(4) A State, the District of Columbia, a possession of the United States, or
any of their political subdivisions or instrumentalities.
(5) A foreign government or any of its political subdivisions, agencies or
instrumentalities.
(6) An international organization or any of its agencies or instrumentalities.
(7) A foreign central bank of issue.
(8) A dealer in securities or commodities required to register in the United
States or a possession of the United States.
(9) A futures commission merchant registered with the Commodity Futures Trading
Commission.
(10) A real estate investment trust.
(11) An entity registered at all times during the tax year under the Investment
Company Act of 1940.
(12) A common trust fund operated by a bank under section 584(a).
(13) A financial institution.
(14) A middleman known in the investment community as a nominee or listed in the
most recent publication of the American Society of Corporate Secretaries,
Inc., Nominee List.
(15) A trust exempt from tax under section 664 or described in section 4947.
Payments of dividends and patronage dividends generally not subject to backup
withholding also include the following:
. Payments to nonresident aliens subject to withholding under section 1441.
. Payments to partnerships not engaged in a trade or business in the United
States and that have at least one nonresident partner.
. Payments of patronage dividends not paid in money.
. Payments made by certain foreign organizations.
. Section 401(k) distributions made by an ESOP.
Payments of interest generally not subject to backup withholding include the
following:
. Payments of interest on obligations issued by individuals. NOTE: You may
be subject to backup withholding if this interest is $600 or more and is
paid in the course of the payer's trade or business and you have not
provided your correct taxpayer identification number to the payer.
. Payments of tax-exempt interest (including exempt interest dividends
under section 852).
. Payments described in section 6049(b)(5) to nonresident aliens.
. Payments on tax-free covenant bonds under section 1451.
8
<PAGE>
. Payments made by certain foreign organizations.
. Mortgage interest paid to you.
Payments that are not subject to information reporting are also not subject to
backup withholding. For details see sections 6041, 6041(A)(a), 6042, 6044, 6045,
6049, 6050A and 6050N, and the regulations under such sections.
Privacy Act Notice. Section 6109 requires you to give your correct taxpayer
- -------------------
identification number to persons who must file information returns with the IRS
to report interest, dividends, and certain other income paid to you, mortgage
interest you paid, the acquisition or abandonment of secured property,
cancellation of debt, or contributions you made to an IRA. The IRS uses the
numbers for identification purposes and to help verify the accuracy of your tax
return. You must provide your taxpayer identification number whether or not you
are qualified to file a tax return. Payers must generally withhold 31% of
taxable interest, dividend, and certain other payments to a payee who does not
furnish a taxpayer identification number to a payer. Certain penalties may also
apply.
Penalties.
- ----------
(1) Penalty for Failure to Furnish Taxpayer Identification Number. If you
fail to furnish your taxpayer identification number to a payer, you are
subject to a penalty of $50 for each such failure unless your failure is
due to reasonable cause and not to willful neglect.
(2) Civil Penalty for False Information with Respect to Withholding. If you
make a false statement with no reasonable basis that results in no backup
withholding, you are subject to a $500 penalty.
(3) Criminal Penalty for Falsifying Information. Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR
TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE
9
<PAGE>
Exhibit 99.9
BENEFICIAL OWNER ELECTION FORM
I (we) acknowledge receipt of your letter and the enclosed materials
relating to the offering of shares of common stock, par value $0.01 per share
(the "Common Stock"), of AMF Bowling, Inc. (the "Company").
In this form, I (we) instruct you whether to exercise, sell or transfer
rights to purchase the Common Stock distributed with respect to the Company's
Common Stock held by you for my (our) account, pursuant to the terms and subject
to the conditions set forth in the prospectus dated ____, 1999 (the
"Prospectus").
BOX 1. [_] Please do not exercise rights for shares of the Common Stock.
BOX 2. [_] Please exercise rights for shares of the Common Stock as set
forth below:
Number Subscription
of Rights Price Payment
-------------- ------------------ -----------------
- --------------------------------------------------------------------------
Basic Subscription
Privilege: _________ X $_________ = $________(Line 1)
- --------------------------------------------------------------------------
Over-Subscription
Privilege: _________ X $__________ = $________(Line 2)
- --------------------------------------------------------------------------
By exercising this Over-Subscription Privilege, I (we) hereby represent and
certify that I (we) have fully exercised my (our) Basic Subscription Privilege
received in respect of shares of Common Stock held in the below-described
capacity.
Total Payment Required = $_______ (Sum of Lines 1 and 2; must equal total
of amounts in Boxes 3 and 4).
BOX 3. [_] Payment in the following amount is enclosed: ____________
BOX 4. [_] Please deduct payment from the following account maintained by
you as follows:
_________________________ ___________________________
Type of Account Account No.
Amount to be deducted: $ ____________________
Date: __________________, 1999 _______________________________
Signature
BOX 5. [_] Please sell _____ of my Rights.
BOX 6. [_] Please have [Name of Subscription Agent] effect my specific
instructions that I have attached hereto and for which I have had an Eligible
Institution guarantee my signature.
<PAGE>
Signature(s):__________________________________
Signature(s):__________________________________
(If held jointly)
Please type or print name(s) below:
____________________________
____________________________
Signature(s) Guaranteed by: _________________________________
Eligible Institution
