<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 31, 1995
REGISTRATION NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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THE ACTAVA GROUP INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 58-0971455
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
945 EAST PACES FERRY ROAD
SUITE 2210
ATLANTA, GEORGIA 30326
(404) 261-6190
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
FREDERICK B. BEILSTEIN, III
SENIOR VICE PRESIDENT -- FINANCE
THE ACTAVA GROUP INC.
945 EAST PACES FERRY ROAD
SUITE 2210
ATLANTA, GEORGIA 30326
(404) 261-6190
(Name, address, including zip code, and telephone number, including area code of
agent for service)
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COPIES OF COMMUNICATIONS TO:
<TABLE>
<S> <C>
WALTER M. GRANT, ESQ. LEONARD A. SILVERSTEIN, ESQ.
SENIOR VICE PRESIDENT AND LONG, ALDRIDGE & NORMAN
GENERAL COUNSEL ONE PEACHTREE CENTER, SUITE 5300
THE ACTAVA GROUP INC. 303 PEACHTREE STREET
945 EAST PACES FERRY ROAD ATLANTA, GEORGIA 30308-3201
SUITE 2210 (404) 527-4000
ATLANTA, GEORGIA 30326
(404) 261-6190
</TABLE>
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the Registration Statement becomes effective.
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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. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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TITLE OF SHARES AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE TO BE OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
REGISTERED REGISTERED SHARE(1) PRICE(1) FEE(1)
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<S> <C> <C> <C> <C>
Common Stock, $1.00 par value per
share............................... 752,708 $17.188 $12,937,545 $4,461.22
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</TABLE>
(1) Pursuant to Rule 457(c), the proposed offering price and registration fee
are based upon the average of the high and low prices of the Registrant's
Common Stock on October 27, 1995 as reported on the New York Stock Exchange.
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The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this 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> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
PROSPECTUS
752,708 SHARES
THE ACTAVA GROUP INC.
COMMON STOCK
The 752,708 shares (the "Shares") of Common Stock, par value $1.00 per
share (the "Common Stock"), of The Actava Group Inc. (the "Company") offered
hereby are being offered for the account of certain Selling Stockholders (the
"Selling Stockholders"). The Company will not receive any proceeds from the sale
of such securities. See "Selling Stockholders."
The Selling Stockholders may sell the Shares offered hereby from time to
time on the New York and The Pacific Stock Exchanges or such other national
securities exchange or automated interdealer quotation system on which shares of
the Company's Common Stock are then listed, through negotiated transactions or
otherwise at market prices prevailing at the time of the sale or at negotiated
prices. The Selling Stockholders directly, or through agents designated from
time to time, or through underwriters, brokers or dealers also to be designated,
may sell the Shares from time to time on terms to be determined at the time of
sale. Such underwriters, brokers or dealers may receive compensation in the form
of commissions or otherwise in such amounts as may be negotiated by them. As of
the date of this Prospectus, no agreements have been reached for the sale of the
Shares or the amount of any compensation to be paid to underwriters, brokers or
dealers in connection therewith. In the event that a Selling Stockholder does
not intend to effect the sale of the Shares through an underwriter, broker or
dealer, the Selling Stockholder must effect such transactions by notifying the
Company in advance of any intended transaction in order for the Company to
determine compliance with applicable federal and state securities laws, and then
upon receipt of notice from the Company that such transaction may proceed, the
Selling Stockholder may sell the Shares. The Company will bear all expenses in
connection with the registration and sale of the Shares being offered by the
Selling Stockholders, other than commissions, concessions or discounts to
underwriters, brokers or dealers and fees and expenses of counsel or other
advisors to the Selling Stockholders. See "Plan of Distribution."
The Common Stock of the Company is listed on the New York and The Pacific
Stock Exchanges under the trading symbol "ACT." On October 27, 1995, the last
reported sale price of the Company's Common Stock on the New York Stock Exchange
was $17.625 per share.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus is October , 1995.
<PAGE> 3
No person has been authorized in connection with this offering to give any
information or to make any representation not contained or incorporated by
reference in this Prospectus, and, if given or made, such information or
representation must not be relied upon as having been authorized by the Company.
Neither the delivery of this Prospectus nor any sales hereunder shall under any
circumstances create any implication that the information contained herein is
correct as of any time subsequent to the date hereof or the dates as of which
information is otherwise set forth or incorporated by reference herein. This
Prospectus does not constitute an offer to sell or a solicitation of an offer to
purchase any securities other than those to which it relates or an offer to any
person in any jurisdiction where such offer or solicitation would be unlawful.
AVAILABLE INFORMATION
Additional information regarding the Company and the Shares offered hereby
is contained in the Registration Statement on Form S-3 (of which this Prospectus
forms a part) and the exhibits relating thereto (the "Form S-3 Registration
Statement") filed by the Company with the Securities and Exchange Commission
(the "Commission") under the Securities Act of 1933, as amended (the "1933
Act"). The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and in accordance
therewith files reports, proxy statements, information statements and other
information with the Commission. Such reports, proxy statements, information
statements and other information can be inspected and copied at the public
reference facilities of the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's regional offices at CitiCorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and 7
World Trade Center, 13th Floor, New York, New York 10048. Copies of such
material can be obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. Such
reports, proxy statements and other information also may be inspected at the
offices of the New York Stock Exchange, 20 Broad Street, New York, New York
10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company with the Commission
pursuant to the 1934 Act hereby are incorporated by reference into this
Prospectus as of their respective dates:
(1) The Company's Annual Report on Form 10-K for the year ended
December 31, 1994, Form 10-K/A Amendment No. 1 filed on April 28, 1995 and
Form 10-K/A Amendment No. 2 filed July 13, 1995 amending the Company's Form
10-K for the year ended December 31, 1994;
(2) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1995;
(3) The Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1995;
(4) The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1995;
(5) The Company's Current Report on Form 8-K dated April 12, 1995 and
Form 8-K/A Amendment No. 1 dated April 28, 1995 amending the Company's
Current Report on Form 8-K dated April 12, 1995;
(6) The Company's Current Report on Form 8-K dated September 27, 1995;
and
(7) The description of the Common Stock as contained in the Company's
Registration Statement on Form 8-A (Registration No.1-5706) as filed with
the Commission on October 30, 1995.
Also incorporated by reference into this Prospectus is the following
document filed by the Company with the Commission:
Registration Statement on Form S-4 (Registration No. 33-63003)
declared effective by the Commission on September 28, 1995, which includes
the Joint Proxy Statement/Prospectus (the "Form S-4 Registration
Statement") with respect to a Special Meeting of Stockholders of the
Company
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<PAGE> 4
to be held on November 1, 1995, and all subsequent amendments thereof, but
excluding the material set forth under the following captions:
"Summary Information -- Opinion of Actava's Financial Advisor,"
"-- Opinion of Orion's Financial Advisor," "Opinion of MITI's Financial
Adviser," and "-- Opinion of Sterling's Financial Advisor."
"Proposal No. 1 -- The Proposed Mergers -- Opinions of Financial
Advisors"
"Appendix B -- Fairness Opinion of CS First Boston Corporation"
"Appendix C -- Fairness Opinion of Alex. Brown & Sons Incorporated"
"Appendix D -- Fairness Opinion of Gerard Klauer Mattison & Co.,
L.L.C."
"Appendix E -- Fairness Opinion of Houlihan, Lokey, Howard & Zukin,
Inc."
In addition, all reports and documents filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act subsequent to the date hereof
and prior to the filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference herein
and made a part hereof from the date of the filing of such documents.
The Company will provide without charge to each person to whom this
Prospectus is delivered, at the written or oral request of such person, a copy
of any or all of the foregoing documents incorporated herein by reference, other
than exhibits to such documents (unless such exhibits are specifically
incorporated by reference into the foregoing documents). The Company also will
provide without charge upon request a copy of the Company's latest Annual
Report. Written or telephonic requests should be directed to Walter M. Grant,
Esq., Senior Vice President and General Counsel, The Actava Group Inc., 945 East
Paces Ferry Road, Suite 2210, Atlanta, Georgia 30326; (404) 261-6190.
3
<PAGE> 5
THE COMPANY
GENERAL
The Company was organized in 1929 under Pennsylvania law and was
reincorporated in 1968 under Delaware law. On July 19, 1993, the Company changed
its name from Fuqua Industries, Inc. to The Actava Group Inc. The Company's
principal executive offices are located at 945 East Paces Ferry Road, Suite 210,
Atlanta, Georgia 30326, and its telephone number is (404) 261-6190.
Since the late 1960's, the Company has owned, operated and sold dozens of
companies in many diverse industries, including photofinishing, recreation,
sporting goods, yacht and sailboat manufacturing, outdoor power equipment,
manufactured housing, petroleum distribution, movie theaters, retailing,
broadcasting, trucking, food and beverages, grain storage bins, taxicabs,
seating and banking. At the beginning of 1994, the Company owned and operated
businesses in three industries: photofinishing, lawn and garden equipment, and
sporting goods. The Company sold its photofinishing subsidiary and its four
sporting goods subsidiaries during 1994. As a result of these transactions, the
Company presently operates only one business, Snapper Power Equipment Company
("Snapper"), which is a division of the Company and is engaged in the
manufacture and sale of lawn and garden equipment. In addition to operating
Snapper, the Company owns at the date of this Prospectus 19,169,000 shares or
approximately 39% of the outstanding common stock of Roadmaster Industries, Inc.
("Roadmaster"). These shares were issued to the Company in connection with the
sale of the Company's four sporting goods subsidiaries to Roadmaster. The
Company is presently evaluating new opportunities and strategies for enhancing
stockholder value, including the proposed business combination with three other
companies as discussed below.
RECENT DEVELOPMENTS
On September 27, 1995, the Company, Orion Pictures Corporation ("Orion"),
MCEG Sterling Incorporated ("Sterling") and Metromedia International
Telecommunications, Inc. ("MITI") entered into an Amended and Restated Agreement
and Plan of Merger (the "Merger Agreement"), which amends and restates in its
entirety an Agreement and Plan of Merger dated as of April 12, 1995 among the
Company, Orion, Sterling and MITI (the "Initial Merger Agreement"). Pursuant to
the Merger Agreement, on the date on which the Mergers (as defined below) are
effective (the "Effective Time"), (i) Orion will merge with and into OPC Merger
Corp. ("OPC Mergerco"), a newly formed, wholly-owned subsidiary of the Company
(the "Orion Merger"), with OPC Mergerco being the surviving corporation of the
Orion Merger, (ii) MITI will merge with and into MITI Merger Corp. ("MITI
Mergerco"), a newly formed, wholly-owned subsidiary of the Company (the "MITI
Merger"), with MITI Mergerco being the surviving corporation of the MITI Merger,
and (iii) Sterling will merge with and into the Company (the "Sterling Merger"
and together with the Orion Merger and the MITI Merger, the "Mergers") with the
Company being the surviving corporation of the Sterling Merger. OPC Mergerco, as
the surviving corporation of the Orion Merger (referred to herein as "New
Orion"), will be renamed "Orion Pictures Corporation" and will continue the
business and operations of Orion and Sterling (see below). MITI Mergerco, as the
surviving corporation of the MITI Merger, will be renamed "Metromedia
International Telecommunications, Inc." and will continue the business and
operations of MITI. The Company, as the surviving corporation of the Sterling
Merger, will be renamed "Metromedia International Group, Inc. and will then
transfer the operating assets of Sterling to New Orion. The terms of the Initial
Merger Agreement were approved by the Board of Directors of the Company by a
vote of five to four at a meeting held on April 12, 1995 and, following the
resignations of two members of the Board of Directors, the Board of Directors
unanimously approved the Merger Agreement on September 15, 1995.
The consummation of the Mergers is subject to, among other things, the
approval of the stockholders of each of the Company, Orion, MITI and Sterling.
As of October 27, 1995, there were 17,490,901 shares of Common Stock
outstanding.
The Mergers are described more fully in the Company's Current Report on
Form 8-K dated April 12, 1995, as amended, the Company's Current Report on Form
8-K dated September 27, 1995, and the Joint Proxy Statement/Prospectus, included
in the Form S-4 Registration Statement, and any subsequent
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<PAGE> 6
amendment thereto, regarding the Special Meeting of the Shareholders of the
Company to be held with respect to the Mergers. All or a portion of such
documents are incorporated by reference into this Prospectus, and copies are
available upon request to the Company. See "Incorporation of Certain Documents
By Reference."
Certain pro forma financial information of the Company, as the surviving
parent corporation in the Mergers, is set forth in Appendix A hereto under the
caption "Pro Forma Combining Financial Statements." Such information is
incorporated by reference herein, and should be read in conjunction with the
other financial statements incorporated by reference herein.
SELLING STOCKHOLDERS
RENAISSANCE PARTNERS
Of the 752,708 Shares offered hereby, 700,000 Shares (approximately 4% of
the outstanding Common Stock as of October 24, 1995) are beneficially owned by
and offered for the account of Renaissance Partners, a partnership for which
John D. Phillips, the President and Chief Executive Officer of the Company, and
Buck Creek Ventures, Inc., a corporation wholly owned by W. Tod Chmar, a Senior
Vice President of the Company, serve as general partners. Renaissance Partners
purchased the 700,000 Shares on April 19, 1994 for $4,462,500 in cash. If all of
the Shares offered by Renaissance Partners are sold, Renaissance Partners will
have no beneficial ownership of any shares of the Company's Common Stock.
LONG, ALDRIDGE & NORMAN
Of the 752,708 Shares offered hereby, 52,708 Shares (approximately .003% of
the outstanding Common Stock as of October 24, 1995) are beneficially owned by
and offered for the account of Long, Aldridge & Norman ("LAN"). LAN has served
as legal counsel to the Company since 1994 and was issued the 52,708 Shares in
payment of certain legal fees. If all of the Shares offered by LAN are sold, LAN
will have no beneficial ownership of any shares of the Company's Common Stock.
PLAN OF DISTRIBUTION
The Shares may be sold from time to time by the Selling Stockholders, or by
pledgees, donees, transferees or other successors in interest, including without
limitation John D. Phillips, Buck Creek Ventures, Inc. and Michael P. Marshall.
Mr. Marshall also serves as a general partner of Renaissance Partners. Such
sales may be made on the New York or The Pacific Stock Exchanges or such other
national securities exchange or automated interdealer quotation system on which
shares of Common Stock are then listed, through negotiated transactions or
otherwise at prices and at terms then prevailing or at prices related to the
then current market price or in negotiated transactions. The Shares may be sold
pursuant to one or more of the following: (a) ordinary brokerage transactions
and transactions in which the broker solicits purchasers; (b) purchases by an
underwriter, a broker or a dealer as principal and resale by such underwriter,
broker or dealer for its account pursuant to this Prospectus; (c) a block trade
in which the broker or dealer so engaged will attempt to sell the Shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction; (d) an exchange distribution in accordance with the
rules of such exchange; and (e) through the writing of options on the Shares. In
the event that a Selling Stockholder does not intend to effect the sale of the
Shares through an underwriter, a broker or a dealer, the Selling Stockholder
must effect such transactions by notifying the Company in advance of any
intended transaction in order for the Company to determine compliance with
applicable federal and state securities laws, and then upon receipt of notice
from the Company that such transaction may proceed, the Selling Stockholder may
sell the Shares. If necessary, a supplemental prospectus which describes the
method of sale in greater detail may be filed by the Company with the Commission
pursuant to Rule 424(c) under the 1933 Act under certain circumstances. In
effecting sales, underwriters, brokers or dealers engaged by the Selling
Stockholders and/or purchasers of the Shares may arrange for other underwriters,
brokers or dealers to participate. Underwriters, brokers or dealers will
5
<PAGE> 7
receive commissions, concessions or discounts from the Selling Stockholders
and/or the purchasers of the Shares in amounts to be negotiated prior to the
sale. In addition, any Shares covered by this Prospectus which qualify for sale
pursuant to Rule 144 under the 1933 Act may be sold under Rule 144 rather than
pursuant to this Prospectus.
The Company will bear all expenses in connection with the registration and
sale of the Shares, other than commissions, concessions or discounts to
underwriters, brokers or dealers and fees and expenses of counsel or other
advisors to the Selling Stockholders.
The Selling Stockholders and any underwriter, broker or dealer who acts in
connection with the sale of the Shares hereunder may be deemed to be
"underwriters" within the meaning of Section 2(11) of the 1933 Act, and any
compensation received by them and any profit on any resale of the Shares as
principals might be deemed to be underwriting discounts and commissions under
the 1933 Act. Pursuant to a registration rights agreement, the Company has
agreed to indemnify the Selling Stockholders against certain liabilities,
including liabilities under the 1933 Act as underwriters or otherwise.
LEGAL MATTERS
The legality of the Shares offered hereby has been passed upon for the
Company by Long, Aldridge & Norman, Atlanta, Georgia, counsel to the Company.
LAN is the beneficial owner of approximately 52,708 shares of Common Stock as of
the date hereof. See "Selling Stockholders."
EXPERTS
The consolidated financial statements and related schedule of Orion as of
February 28, 1995 and 1994 and for each of the years in the three-year period
ended February 28, 1995, have been incorporated by reference herein and in the
Form S-3 Registration Statement in reliance upon the report of KPMG Peat Marwick
LLP, independent certified public accountants, incorporated by reference herein,
and upon the authority of said firm as experts in accounting and auditing.
The report of KPMG Peat Marwick LLP on the February 28, 1995, 1994 and 1993
consolidated financial statements of Orion contains an explanatory paragraph
that states that Orion is a defendant in certain litigation which alleges
various breaches of agreements by Orion, and seeks certain damages. It is not
possible to assess the ultimate damages, if any, at this time.
The report of KPMG Peat Marwick LLP on the February 28, 1995 consolidated
financial statements of Orion contains an explanatory paragraph that states that
based upon Orion's inability to meet required debt payments that are due within
the next year under the terms of its Indentures (as defined in Note 6 of the
Notes to Consolidated Financial Statements) there exists substantial doubt about
the entity's ability to continue as a going concern. The consolidated financial
statements do not include any adjustments that might result from the outcome of
that uncertainty.
The report of KPMG Peat Marwick LLP on the February 28, 1994 consolidated
financial statements of Orion includes an explanatory paragraph on the Company's
change in method of accounting for income taxes.
The consolidated financial statements of the Company appearing in the
Company's Annual Report on Form 10-K for the year ended December 31, 1994, have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
The consolidated financial statements of MITI as of December 31, 1994 and
1993 and for each of the years in the two-year period ended December 31, 1994,
have been incorporated by reference herein and in the Form S-3 Registration
Statement in reliance upon the report of KPMG Peat Marwick LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
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<PAGE> 8
The report of KPMG Peat Marwick LLP on the December 31, 1994 and 1993,
consolidated financial statements of MITI contains an explanatory paragraph that
states that MITI's significant recurring losses and negative operating and
investing cash flows raise substantial doubt about MITI's ability to continue as
a going concern. The consolidated financial statements do not include any
adjustments that might result from the outcome of that uncertainty.
The independent auditor's report for the years ended December 31, 1994 and
1993, refers to a change in policy of accounting for investments in Joint
Ventures in 1994.
The combined financial statements of International Telcell, Inc. (ITI) and
International Telcell Group Limited Partnership (ITGLP) (predecessor entities of
MITI) as of December 31, 1992 and for the year then ended have been incorporated
by reference herein and in the Form S-3 Registration Statement in reliance upon
the report of Arthur Andersen LLP, independent certified public accountants,
incorporated by reference herein, and upon the authority of said firm as experts
in accounting and auditing in giving said reports.
The report of Arthur Andersen LLP covering the December 31, 1992 combined
financial statements of ITI and ITGLP contains an explanatory paragraph that
states that MITI's significant recurring losses and negative operating and
investing cash flows raise substantial doubt about MITI's ability to continue as
a going concern. The combined financial statements do not include any
adjustments that might result from the outcome of that uncertainty.
The financial statements of Kosmos TV as of December 31, 1993 and September
30, 1994, and for the year ended December 31, 1994 and for the nine months ended
September 30, 1994 have been incorporated by reference herein and in the Form
S-3 Registration Statement in reliance upon the report of KPMG, independent
auditors, incorporated by reference herein, and upon the authority of said firm
as experts in accounting and auditing.
The report of KPMG on the December 31, 1993 and September 30, 1994
financial statements of Kosmos TV contains an explanatory paragraph that states
that Kosmos TV's recurring losses from operations and net capital deficiency
raise substantial doubt about Kosmos TV's ability to continue as a going
concern. The financial statements do not include any adjustments that might
result from the outcome of that uncertainty.
The audited consolidated financial statements and related schedules of
Sterling as of March 31, 1995 and 1994 and for each of the fiscal years ended
March 31, 1995, 1994 and 1993, incorporated by reference herein and in the Form
S-3 Registration Statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports with respect thereto, and are
incorporated herein in reliance upon the authority of said firm as experts in
giving said reports.
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APPENDIX A
PRO FORMA COMBINING FINANCIAL STATEMENTS
The information set forth below should be read in conjunction with the
information set forth in the Form S-4 Registration Statement, portions of which
are incorporated herein by reference. Capitalized terms used but not otherwise
defined herein shall have the meanings ascribed to such terms in the Form S-4
Registration Statement.
The following unaudited Pro Forma Combining Balance Sheet of Orion (the
acquiror for accounting purposes only) as of August 31, 1995 and unaudited Pro
Forma Combining Statement of Operations of the Orion for the six months ended
August 31, 1995 and the year ended February 28, 1995, illustrate the effect of
the Mergers (see "Accounting Treatment" below), the associated refinancing of
the Orion Senior Indebtedness and the Orion Subordinated Indebtedness, the
contribution for equity of inventory by MetProductions, the conversion to equity
of certain amounts owed to Met International, the settlement of certain Orion
liabilities and accounting for the results of the Company's sporting goods
subsidiaries for the period from January 1, 1994 through December 6, 1994 on the
equity method as a result of the exchange of such subsidiaries for approximately
39% of Roadmaster's outstanding common stock on December 6, 1994. The unaudited
Pro Forma Combining Balance Sheet assumes that the Mergers and other
aforementioned transactions occurred on August 31, 1995 and the unaudited Pro
Forma Combining Statements of Operations assumes that the Mergers and other
aforementioned transactions occurred at the beginning of the periods presented.
Pursuant to the terms of the Merger Agreement, each holder of Orion Common
Stock, MITI Common Stock and Sterling Common Stock will be entitled to receive
the number of whole shares of Common Stock equal to the number of shares of
Orion Common Stock, MITI Common Stock and Sterling Common Stock, as the case may
be, owned immediately prior to the Effective Time multiplied by the Orion
Exchange Ratio, the MITI Exchange Ratio and the Sterling Exchange Ratio,
respectively, plus cash in lieu of fractional shares and cash issued in respect
of dissenters rights of appraisal, if any (which is expected to be immaterial).
The Orion Exchange Ratio will be based upon the Actava Average Closing Price and
the number of shares of Orion Common Stock outstanding immediately prior to the
Determination Date. The MITI Exchange Ratio will be based upon the Actava
Average Closing Price and the number of shares of MITI Common Stock outstanding
immediately prior to the Determination Date. The Sterling Exchange Ratio will be
based upon the Actava Average Closing Price and the number of shares of Sterling
Common Stock outstanding immediately prior to the Determination Date. These pro
forma combining financial statements have been prepared assuming: an Actava
Average Closing Price of $17.6875, 20.0 million shares of Orion Common Stock
outstanding and an Orion Exchange Ratio of .57143, 1.7 million shares of MITI
Common Stock outstanding and a MITI Exchange Ratio of 5.54937, and 11.2 million
shares of Sterling Common Stock outstanding and a Sterling Exchange Ratio of
.04627. The actual Orion Exchange Ratio, MITI Exchange Ratio and Sterling
Exchange Ratio will be determined on the Determination Date in accordance with
the formulas set forth in the Merger Agreement. The Actava Options will remain
outstanding after the Effective Time with the same terms and subject to the same
conditions as in effect prior to the Effective Time. The MITI Options will be
converted into options to purchase shares of Common Stock, with a proportional
adjustment being made to the exercise price of and the number of shares issuable
upon exercise of each such option to reflect the MITI Exchange Ratio in the
Mergers.
ACCOUNTING TREATMENT
At the Effective time, the Metromedia Holders will (through their majority
ownership of the Orion Common Stock and through their control, with a member of
Orion's management, of the Board of Directors of Orion) control the direction
and operations of the Surviving Corporation as a result of their ability to
appoint a majority of the members of the Board of Directors of the Surviving
Corporation at the Effective Time and will be the Surviving Corporation's single
largest stockholder. Due to the existence of common control of Orion and MITI,
their combination pursuant to the Mergers will be accounted for as a combination
A-1
<PAGE> 10
of entities under common control. As a result, the combination of Orion and MITI
will be effected utilizing historical costs for the ownership interests of the
Metromedia Holders. The remaining ownership interests of MITI other than those
of the Metromedia Holders will be accounted for based on fair value, as
determined by the value of shares received by such holders at the Effective
Time, in accordance with the purchase method of accounting. For accounting
purposes only, Orion and MITI have been deemed to be the joint acquiror of the
Company and Sterling. The acquisition of the Company and Sterling will be
accounted for as a purchase. As a result of the reverse acquisition of the
Company by Orion, the historical financial statements of the Surviving
Corporation for periods prior to the Mergers will be those of Orion rather than
the Company.
The pro forma adjustments are based upon currently available information
and upon certain assumptions that management of each of the Company, Orion, MITI
and Sterling (collectively "Management") believes are reasonable. The mergers of
the Company and Sterling will be recorded based upon the estimated fair market
value of the net tangible assets acquired at the date of acquisition. The
adjustments included in the unaudited pro forma combining financial statements
represent Management s preliminary determination of these adjustments based upon
available information. There can be no assurance that the actual adjustments
will not differ significantly from the pro forma adjustments reflected in the
pro forma financial information.
The unaudited pro forma combining financial statements are not necessarily
indicative of either future results of operations or results that might have
been achieved if the foregoing transactions had been consummated as of the
indicated dates. The unaudited pro forma combining financial statements should
be read in conjunction with the historical financial statements of the Company,
Orion, MITI and Sterling, together with the related notes thereto, incorporated
by reference herein.
A-2
<PAGE> 11
METROMEDIA INTERNATIONAL GROUP, INC.
UNAUDITED PRO FORMA COMBINING BALANCE SHEET
<TABLE>
<CAPTION>
AUGUST 31,
1995
------------
METROMEDIA
AUGUST 31, INTERNATIONAL
1995 JUNE 30, 1995 GROUP
------------ ---------------------------------------- PRO FORMA PRO FORMA
ORION MITI ACTAVA STERLING MERGER FOR MERGER
HISTORICAL HISTORICAL HISTORICAL HISTORICAL ADJUSTMENTS COMBINED
------------ ------------ ------------ ------------ ------------ ------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Cash and marketable securities..... $ 18,504 $ 1,840 $ 38,851 $ 613 $ 1,907(25) $ 61,715
Accounts receivable................ 33,749 1,439 109,938 3,140 -- 148,266
Notes receivable................... -- -- 108,177 -- -- 108,177
Other current assets............... 60,131 410 50,255 -- 15,323(1) 136,371
10,252(2)
------------ ------------ ------------ ------ ----------- ------------
Current assets..................... 112,384 3,689 307,221 3,753 27,482 454,529
Film inventories................... 149,648 -- -- 2,891 558(3) 153,097
Property and equipment, net........ 2,314 2,891 32,871 -- -- 38,076
Intangibles........................ -- 9,507 955 -- 314,730(4) 320,054
(955)(5)
(4,183)(6)
Other assets....................... 42,759 34,586 85,792 430 (15,236)(7) 147,331
(1,000)(8)
------------ ------------ ------------ ------ ----------- ------------
Total assets............... $ 307,105 $ 50,673 $ 426,839 $ 7,074 $ 321,395 $ 1,113,086
======== ======== ========= ======== ========== ==========
Accrued expenses................... $ 25,341 $ 8,056 $ 75,519 $ 398 $ 6,500(9) $ 137,738
7,423(10)
15,356(11)
(855)(12)
Short-term debt.................... 79,697 46,294 69,816 495 (11,994)(12) 184,308
Other current liabilities.......... 53,541 3,269 6,383 2,183 -- 65,376
------------ ------------ ------------ ------ ----------- ------------
Current liabilities................ 158,579 57,619 151,718 3,076 16,430 387,422
Deferred income taxes.............. -- -- 6,709 -- -- 6,709
Deferred revenues.................. 29,385 -- -- 232 -- 29,617
Long-term debt..................... 117,839 628 156,674 -- (14,661)(8) 260,480
Other liabilities.................. 28,640 160 3,752 -- -- 32,552
Stockholders' equity:
Common stock..................... 5,000 2 22,768 11 (4,808)(4) 41,124
15,950(4)
976(2)
1,224(12)
Additional paid-in capital....... 265,811 35,794 34,705 1,989 339,454(4) 677,612
(15,950)(4)
9,276(2)
11,625(12)
(4,183)(6)
(909)(25)
Retained earnings (accumulated
deficit)....................... (298,149) (43,530) 156,385 1,766 (1,766)(4) (322,430)
(156,385)(4)
19,249(4)
Treasury stock................... -- -- (105,872) -- 103,056(4) 0
2,816(25)
------------ ------------ ------------ ------ ----------- ------------
Total stockholders' equity
(deficiency)............. (27,338) (7,734) 107,986 3,766 319,626 396,306
------------ ------------ ------------ ------ ----------- ------------
Total liabilities and
stockholders' equity
(deficiency)............. $ 307,105 $ 50,673 $ 426,839 $ 7,074 $ 321,395 $ 1,113,086
======== ======== ========= ======== ========== ==========
<CAPTION>
AUGUST 31, 1995
------------------------------
METROMEDIA
INTERNATIONAL
PRO FORMA GROUP
REFINANCING PRO FORMA
ADJUSTMENTS COMBINED
------------ -------------
<S> <C> <C>
Cash and marketable securities..... $ (39,782)(13) $ 14,051
(7,882)(24)
Accounts receivable................ -- 148,266
Notes receivable................... (53,795)(14) 54,382
Other current assets............... -- 136,371
----------- ------------
Current assets..................... (101,459) 353,070
Film inventories................... -- 153,097
Property and equipment, net........ -- 38,076
Intangibles........................ -- 320,054
Other assets....................... 6,727(13) 149,589
(4,469)(13)
----------- ------------
Total assets............... $ (99,200) $ 1,013,886
========== ==========
Accrued expenses................... $ (4,882) $ 132,856
Short-term debt.................... (78,269)(13) 131,907
(33,839)(14)
59,707(13)
Other current liabilities.......... -- 65,376
----------- ------------
Current liabilities................ (57,283) 330,139
Deferred income taxes.............. -- 6,709
Deferred revenues.................. (3,000)(24) 26,617
Long-term debt..................... (90,993)(13) 257,531
108,000(13)
(19,956)(14)
Other liabilities.................. -- 32,552
Stockholders' equity:
Common stock..................... -- 41,124
Additional paid-in capital....... -- 677,612
Retained earnings (accumulated
deficit)....................... (35,969)(13) (358,399)
Treasury stock................... -- 0
----------- ------------
Total stockholders' equity
(deficiency)............. (35,969) 360,337
----------- ------------
Total liabilities and
stockholders' equity
(deficiency)............. $ (99,200) $ 1,013,886
========== ==========
</TABLE>
A-3
<PAGE> 12
METROMEDIA INTERNATIONAL GROUP, INC.
PRO FORMA COMBINING STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
AUGUST 31,
SIX MONTHS 1995
ENDED -------------
AUGUST 31, SIX MONTHS ENDED METROMEDIA
1995 JUNE 30, 1995 PRO FORMA INTERNATIONAL
---------- ------------------------------------ MERGER AND GROUP
ORION MITI ACTAVA STERLING REFINANCING PRO FORMA
HISTORICAL HISTORICAL HISTORICAL HISTORICAL ADJUSTMENTS COMBINED
---------- ---------- ---------- ---------- ----------- -------------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
Revenues............................... $ 73,419 $ 3,316 $ 98,848 $4,364 $ -- $ 179,947
Cost of revenues....................... 66,532 -- 78,426 2,049 22(15) 147,029
Operating expenses..................... 11,468 12,635 25,984 1,890 (101)(16) 51,876
Depreciation and amortization.......... 319 725 3,804 44 6,192(17) 11,084
---------- ---------- ---------- ---------- ----------- -------------
Operating income (loss)................ (4,900) (10,044) (9,366) 381 (6,112) (30,041)
Other income (expense):
Interest expense..................... (13,671) (926) (10,903) -- 12,992(18) (19,919)
1,131(19)
(5,948)(20)
(1,278)(21)
(1,316)(22)
Other................................ -- (2,152) 1,411 -- -- (741)
---------- ---------- ---------- ---------- ----------- -------------
Income (loss) before tax............... (18,571) (13,122) (18,858) 381 (531) (50,701)
Provision for income taxes............. 300 -- -- 166 -- 466
---------- ---------- ---------- ---------- ----------- -------------
Net income (loss) from continuing
operations........................... $(18,871) $ (13,122) $ (18,858) $ 215 $ (531) $ (51,167)
========= ========= ========= ======== ========== ==========
Number of shares issued and
outstanding.......................... 41,124
Loss per share......................... $ (1.24)
==========
</TABLE>
A-4
<PAGE> 13
METROMEDIA INTERNATIONAL GROUP, INC.
PRO FORMA COMBINING STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED
FEBRUARY 28,
1995
YEAR ENDED YEAR ENDED YEAR ENDED -------------
FEBRUARY 28, DECEMBER 31, 1994 MARCH 31, METROMEDIA
1995 ------------------------------------------ 1995 PRO FORMA INTERNATIONAL
------------ ACTAVA SPORTING ---------- MERGER AND GROUP
ORION MITI ACTAVA GOODS STERLING REFINANCING PRO FORMA
HISTORICAL HISTORICAL HISTORICAL SUBSIDIARIES(23) HISTORICAL ADJUSTMENTS COMBINED
------------ ---------- ---------- ---------------- ---------- ----------- -------------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues................ $191,244 $ 3,545 $ 551,828 $ (302,326) $8,443 $ -- $ 452,734
Cost of revenues........ 187,477 -- 461,175 (265,707) 4,656 43(15) 387,644
Operating expenses...... 21,278 19,312 77,638 (36,565) 3,240 (204)(16) 84,699
Depreciation and
amortization.......... 767 1,149 13,336 (4,900) 90 12,384(17) 22,826
------------ ---------- ---------- ---------------- ---------- ----------- -------------
Operating income
(loss)................ (18,278) (16,916) (321) 4,846 457 (12,223) (42,435)
Other income (expense):
Interest expense...... (29,082) (213) (28,434) 5,299 -- 29,884(18) (36,762)
2,867(19)
(11,897)(20)
(2,555)(21)
(2,631)(22)
Other................. (1,610) (2,012) 5,299 82 -- -- 1,759
------------ ---------- ---------- ---------------- ---------- ----------- -------------
Income (loss) before
tax................... (48,970) (19,141) (23,456) 10,227 457 3,445 (77,438)
Provision for income
taxes................. 1,300 -- -- (417) 198 -- 1,081
------------ ---------- ---------- ---------------- ---------- ----------- -------------
(50,270) (19,141) (23,456) 10,644 259 3,445 (78,519)
Equity in loss of Actava
Sporting Goods
Subsidiaries.......... -- -- -- (10,644) -- -- (10,644)
------------ ---------- ---------- ---------------- ---------- ----------- -------------
Net income (loss) from
continuing
operations............ $(50,270) $ (19,141) $ (23,456) $ -- $ 259 $ 3,445 $ (89,163)
========== ========= ========= ============= ========= ========== ==========
Number of shares issued
and outstanding....... 41,124
==========
Loss per share.......... $ (2.17)
==========
</TABLE>
A-5
<PAGE> 14
FOOTNOTES
(1) Reflects Actava's inventory at estimated fair market value.
(2) Reflects contribution of film inventory and the conversion of indebtedness
by certain affiliates of Metromedia in exchange for 976,373 shares of
Common Stock.
(3) Reflects Sterling's film inventory at estimated fair market value.
(4) Reflects the excess of cost over the estimated fair value of net tangible
assets acquired in the Mergers, the elimination of Actava's and Sterling's
historical additional paid-in capital and retained earnings (accumulated
deficit), the elimination of MITI's accumulated deficit attributable to the
minority stockholders, the retirement of Actava's treasury stock and the
value of the Common Stock issued to the Actava and Sterling stockholders
and MITI minority stockholders in the Mergers.
<TABLE>
<CAPTION>
(IN THOUSANDS
EXCEPT SHARE
AND PER SHARE
SHARE DATA)
-------------
<S> <C>
Actava shares outstanding at October 24, 1995................. 17,490,901
Common Stock to be owned by MITI minority stockholders........ 4,221,432
Common Stock to be owned by Sterling stockholders............. 480,451
-------------
Number of shares issued to acquire Actava, MITI minority and
Sterling.................................................... 22,182,783
Per share price at closing (assumed at October 24, 1995 for
illustrative purposes)...................................... $ 18 1/4
-------------
Value of stock................................................ $ 404,836
Value of Actava options....................................... 7,423
Value of MITI options......................................... 18,922
Transaction costs............................................. 6,500
-------------
Purchase price of Actava, MITI minority and Sterling.......... 437,681
Less -- Estimated fair value of net tangible assets
acquired.................................................... 122,952
Excess of cost over fair value of the net tangible assets
acquired.................................................... $ 314,730
==========
</TABLE>
These adjustments reflect the conversion of each outstanding share of
Orion Common Stock and MITI Common Stock into 0.57143 and 5.54937 shares
of Common Stock, respectively. Based on the number of shares of Orion
Common Stock and MITI Common Stock outstanding October 24, 1995 and
assuming an Actava Average Closing Price of $17.68750, the MITI Common
Stock owned by the Metromedia Holders and all of the Orion Common Stock
will be converted into an aggregate of 16,740,986 shares of Common
Stock, excluding shares issued in connection with the conversion of
certain amounts owed to Met Productions and Met International as
described in footnotes (2) and (12) to the Pro Forma Financial
Statements, respectively. Excess of cost over fair value of the net
tangible assets acquired is presented in the pro forma balance sheet
utilizing estimated amounts at October 24, 1995 and will be determined
at the Effective Time. Such amount will also be allocated according to
the estimated fair values of assets at the Effective Time.
(5) Reflects elimination of historical goodwill at Actava.
(6) Reflects elimination of historical goodwill of MITI attributable to MITI
minority stockholders.
(7) Reflects Actava's equity investment in Roadmaster at fair market value at
October 24, 1995.
(8) Reflects fair market value of Actava's debentures based on trading quotes
as of October 24, 1995 and the elimination of $1.0 million of historical
debt issuance cost.
(9) Reflects transaction costs incurred in connection with the Mergers.
(10) Reflects estimated fair market value of Actava's stock options at October
24, 1995.
(11) Reflects excess of estimated fair market value at October 24, 1995 of
MITI's stock options over amounts accrued at June 30, 1995.
(12) Reflects conversion of $7.3 million of indebtedness owed to certain
affiliates of Metromedia and $5.5 million of indebtedness as of June 30,
1995 to be refinanced by certain affiliates of Metromedia into 1,223,733
shares of Common Stock. In addition, $12.1 million borrowed from certain
affiliates of
A-6
<PAGE> 15
FOOTNOTES -- (CONTINUED)
Metromedia subsequent to June 30, 1995 and outstanding as of October 24,
1995 will be converted into 1,152,382 shares of Common Stock at the
Effective Time.
(13) Reflects refinancing of Orion Senior Indebtedness (including unamortized
discount) and the Orion Subordinated Indebtedness with the Term Loan and
the MIG Credit Facility (as described elsewhere herein). Debt issuance
costs are assumed to be paid in cash. A loss of $36.0 million on the
retirement of this debt will be reflected as an extraordinary loss in the
fiscal period following the consummation of the Mergers and this financing.
<TABLE>
<CAPTION>
IN THOUSANDS
DR. (CR.)
------------
<S> <C>
Elimination of the current portion of Orion Existing
Indebtedness (comprised of the Orion Senior Indebtedness and
the current portion of the Orion Subordinated
Indebtedness)............................................... $ 78,269
Elimination of the non-current portion of the Orion
Subordinated Indebtedness................................... 90,993
Capitalization of financing fees.............................. 6,727
Loss on refinancing of debt................................... 35,969
Refinancing with current portion of Term Loan ($27,000) and
the MIG Credit Facility ($32,707)........................... (59,707)
Refinancing with non-current portion of Term Loan............. (108,000)
Reduction of Surviving Corporation's cash needed to effect
refinancing................................................. (39,782)
Reduction of Other Assets due to write off of deferred
financing fees related to the Existing Orion Indebtedness... (4,469)
------------
Net................................................. $ 0
==========
</TABLE>
(14) Reflects the settlement of amounts due to and from the participants in the
Mergers and Metromedia.
(15) Reflects additional amortization expense associated with the purchase price
allocation to film inventories.
(16) Reflects elimination of Plan distribution costs as a result of Mergers and
refinancing.
(17) Reflects amortization of the excess of cost over the fair value of net
tangible assets acquired in the Mergers by use of the straight-line method
over 25 years.
(18) Reflects elimination of interest expense attributable to Orion Senior
Indebtedness and Orion Subordinated Indebtedness as a result of the
refinancing.
(19) Reflects reduction in interest expense due to the repayment of Actava's
Swiss Franc Senior Subordinated Debentures, net of a reduction in interest
income (assumed interest rate of 4.5%) related to cash equivalents utilized
to retire redeemable common stock on February 17, 1995.
(20) Reflects interest expense on the Term Loan (assumed interest rate of 8.8%).
(21) Reflects interest on the MIG Credit Facility (assumed interest rate of
8.8%).
(22) Reflects amortization of debt issuance costs related to the Term Loan and
the MIG Credit Facility.
(23) Reflects the results of Actava's Sporting Goods subsidiaries on the equity
method for the period from January 1, 1994 through December 6, 1994. The
Actava Sporting Goods subsidiaries were combined with Roadmaster in
exchange for approximately 19.2 million shares of Roadmaster Common Stock.
Actava consolidated the results of operations of the Sporting Goods
subsidiaries with the results of Actava for periods ending prior to
December 6, 1994. Actava's investment in Roadmaster is accounted for by the
equity method.
(24) Reflects the settlement of certain Orion liabilities at the Effective Time.
(25) Reflects the exercise of 144,175 Actava options subsequent to June 30,
1995.
A-7
<PAGE> 16
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee................................ $ 4,462
NYSE Additional Listing Fee........................................................ -0-
Accountant's Fees and Expenses..................................................... 20,000
Legal Fees and Expenses............................................................ 10,000
Blue Sky Fees and Expenses......................................................... 2,500
Printing and Engraving Expenses.................................................... 5,000
Miscellaneous Expenses............................................................. 2,500
-------
Total.................................................................... $44,462
=======
</TABLE>
The foregoing items, except for the Securities and Exchange Commission
registration fee, are estimated. The Company will pay all of the above expenses.
The Selling Stockholders will pay their own expenses, including expenses of
their own counsel, broker or dealer fees, discounts and expenses, and all
transfer and other taxes on the sale of the Shares.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of the State of Delaware (the
"Delaware Law") empowers a Delaware Corporation to indemnify any persons who
are, or are threatened to be made, parties to any threatened, pending or
completed legal action, suit or proceedings, whether civil, criminal,
administrative or investigative (other than an action by or in the right of such
corporation), by reason of the fact that such person was an officer or director
of such corporation, or is or was serving at the request of such corporation as
a director, officer, employee or agent of another corporation or enterprise. The
indemnity may include expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding, provided that such officer or
director acted in good faith and in a manner he reasonably believed to be in or
not opposed to the corporation's best interests, and, for criminal proceedings,
had no reasonable cause to believe his conduct was illegal. A Delaware
corporation may indemnify officers and directors in an action by or in the right
of the corporation under the same conditions, except that no indemnification is
permitted without judicial approval if the officer or director is adjudged to be
liable to the corporation in the performance of his duty. Where an officer or
director is successful on the merits or otherwise in the defense of any action
referred to above, the corporation must indemnify him against the expenses which
such officer or director actually and reasonably incurred.
In accordance with Delaware Law, the Restated Certificate of Incorporation
of the Registrant (listed as Exhibit 4(a) to this Registration Statement)
contains a provision to limit the personal liability of the directors of the
Registrant for violations of their fiduciary duty. This provision eliminates
each director's liability to the Registrant or its stockholders for monetary
damages except (i) for any breach of the director's duty of loyalty to the
Registrant 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 Delaware General Corporation Law, or (iv) for any transaction
from which a director derived an improper personal benefit. The effect of this
provision is to eliminate the personal liability of directors for monetary
damages for actions involving a breach of their fiduciary duty of care,
including any such actions involving gross negligence.
Article XII of the Amended and Restated By-laws of the Registrant provides
for indemnification of the officers and directors of the Registrant to the
fullest extent permitted by Delaware Law.
II-1
<PAGE> 17
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
DESIGNATION OF
EXHIBIT DOCUMENT WITH WHICH EXHIBIT WAS SUCH EXHIBIT IN
NO. DESCRIPTION PREVIOUSLY FILED WITH COMMISSION THAT DOCUMENT
- -------- ------------------------------------ ------------------------------------ ---------------
<S> <C> <C> <C>
2(a)(i) Agreement and Plan of Merger dated Current Report on Form 8-K for event 99(a)
as of April 12, 1995 by and among occurring on April 12, 1995
The Actava Group Inc., Orion
Pictures Corporation, MCEG Sterling
Incorporated and Metromedia
International Telecommunications,
Inc.
2(a)(ii) Amended and Restated Agreement and Current Report on Form 8-K for event 99(a)
Plan of Merger dated as of September occurring on September 27, 1995
27, 1995 by and among The Actava
Group Inc., Orion Pictures
Corporation, MCEG Sterling
Incorporated and Metromedia
International Telecommunications,
Inc.
2(b)(i) Credit Agreement dated as of October Current Report on Form 8-K for event 10(a)
11, 1994 by and between The Actava occurring on October 11, 1994
Group Inc. and Metromedia Company.
The following exhibits are omitted:
Exhibit A -- Form of Note; Exhibit
B -- Form of Pledge Agreement;
Exhibit C -- Form of Guaranty; and
Exhibit D -- Form of Opinion by
Paul, Weiss, Rifkind, Wharton &
Garrison. Registrant agrees to
furnish copies of such exhibits upon
request.
2(b)(ii) Amendment No. 1 dated as of April Amendment No. 1 to Current Report on 99(c)
12, 1995 to the Credit Agreement Form 8-K/A for event occurring on
dated as of October 11, 1994 between April 12, 1995, filed on April 28,
The Actava Group Inc. and Metromedia 1995
Company
2(b)(iii) Amendment No. 2 dated as of October Registration Statement on Form S-3 2(b)(iii)
10, 1995 to the Credit Agreement (Registration No. 33-63401)
dated as of October 11, 1994 by and
between The Actava Group Inc. and
Metromedia Company
4(a) Restated Certificate of Annual Report on Form 10-K for the 3(a)(i)
Incorporation of The Actava Group year ended December 31, 1993
Inc.
4(b)(i) Finance and Security Agreement dated Annual Report on Form 10-K for the 4(g)(i)
as of October 30, 1992 with respect year ended December 31, 1994
to a revolving credit facility of up
to $100 million, between The Actava
Group Inc. and ITT Commercial
Finance Corp.
4(b)(ii) Amendment dated as of September 27, Annual Report on Form 10-K for the 4(g)(ii)
1993 to Finance and Security year ended December 31, 1994
Agreement dated as of October 30,
1992 with respect to a revolving
credit facility of up to $100
million between The Actava Group
Inc. and ITT Commercial Finance
Corp.
4(b)(iii) Amendment dated as of March 29, 1994 Annual Report on Form 10-K for the 4(g)(iii)
to Finance and Security Agreement year ended December 31, 1994
dated as of October 30, 1992 with
respect to a revolving credit
facility of up to $100 million
between The Actava Group Inc. and
ITT Commercial Finance Corp.
</TABLE>
II-2
<PAGE> 18
<TABLE>
<CAPTION>
DESIGNATION OF
EXHIBIT DOCUMENT WITH WHICH EXHIBIT WAS SUCH EXHIBIT IN
NO. DESCRIPTION PREVIOUSLY FILED WITH COMMISSION THAT DOCUMENT
- -------- ------------------------------------ ------------------------------------ ---------------
<S> <C> <C> <C>
4(b)(iv) Amendment dated as of April 15, 1994 Annual Report on Form 10-K for the 4(g)(iv)
to Finance and Security Agreement year ended December 31, 1994
dated as of October 30, 1992 with
respect to a revolving credit
facility of up to $10 million
between The Actava Group Inc. and
ITT Commercial Finance Corp.
4(b)(v) Amendment dated as of September 23, Annual Report on Form 10-K for the 4(g)(v)
1994 to Finance and Security year ended December 31, 1994
Agreement dated as of October 30,
1992 with respect to a revolving
credit facility of up to $100
million between The Actava Group
Inc. and ITT Commercial Finance
Corp.
4(b)(vi) Amendment dated as of March 3, 1995, Quarterly Report on Form 10-Q for 4
to Finance and Security Agreement, the quarter ended June 30, 1995
dated as of October 30, 1992, with
respect to a revolving credit
facility of up to $100 million,
between Actava and ITT Commercial
Finance Corp.
4(c) Letter Agreement dated October 12, Registration Statement on Form S-3 4(d)(i)
1995 between Triton Group Ltd. and (Registration No. 33-63401)
The Actava Group Inc.
5 Opinion of Long, Aldridge & Norman
10(a) Registration Rights Agreement among Current Report on Form 8-K dated 99(c)
The Actava Group Inc., Renaissance April 19, 1994
Partners and John D. Phillips dated
April 19, 1994
10(b)(i) Lease Agreement dated October 21, Annual Report on Form 10-K for the 10(s)
1994 between JDP Aircraft II, Inc. year ended December 31, 1994
and The Actava Group Inc.
10(b)(ii) Lease Agreement dated as of October Quarterly Report on Form 10-Q for 10
4, 1995 between JDP Aircraft II, the quarter ended September 30, 1995
Inc. and The Actava Group Inc.
23(a) Consent of Ernst & Young LLP
regarding The Actava Group Inc.
23(b) Consent of KPMG Peat Marwick LLP
regarding Orion Pictures Corporation
23(c) Consent of KPMG Peat Marwick LLP
regarding Metromedia International
Telecommunications, Inc.
23(d) Consent of KPMG Peat Marwick LLP
regarding Kosmos TV
23(e) Consent of Arthur Andersen LLP
regarding Metromedia International
Telecommunications, Inc.'s
predecessor entities
23(f) Consent of Arthur Andersen LLP
regarding MCEG Sterling Incorporated
</TABLE>
II-3
<PAGE> 19
<TABLE>
<CAPTION>
DESIGNATION OF
EXHIBIT DOCUMENT WITH WHICH EXHIBIT WAS SUCH EXHIBIT IN
NO. DESCRIPTION PREVIOUSLY FILED WITH COMMISSION THAT DOCUMENT
- -------- ------------------------------------ ------------------------------------ ---------------
<S> <C> <C> <C>
23(g) Consent of Long, Aldridge & Norman
(included in Exhibit 5)
24 Powers of Attorney. See signature
page to this Registration Statement.
</TABLE>
ITEM 17. UNDERTAKINGS
A. RULE 415 OFFERING.
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 (the "Act");
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
provided, however, that paragraphs (1)(i) and (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 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.
B. SUBSEQUENT DOCUMENTS INCORPORATED BY REFERENCE.
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 the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-4
<PAGE> 20
C. INDEMNIFICATION OF OFFICERS, DIRECTORS AND CONTROLLING PERSONS.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the 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.
II-5
<PAGE> 21
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Atlanta, State of Georgia, as of October 31, 1995.
THE ACTAVA GROUP INC.
By: /s/ JOHN D. PHILLIPS
---------------------------------
John D. Phillips
President and Chief Executive
Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears
below constitutes and appoints W. TOD CHMAR, FREDERICK B. BEILSTEIN, III and
WALTER M. GRANT, and each of them, as his true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or either of them, or their or his substitute or
substitutes, 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 indicated as of October 31, 1995.
<TABLE>
<CAPTION>
SIGNATURES TITLE
- --------------------------------------------- ----------------------------------------------
<C> <S>
/s/ JOHN D. PHILLIPS President and Chief Executive Officer and
- --------------------------------------------- Director (Principal Executive Officer)
John D. Phillips
/s/ FREDERICK B. BEILSTEIN, III Senior Vice President -- Chief Financial
- --------------------------------------------- Officer (Principal Financial and Accounting
Frederick B. Beilstein, III Officer)
/s/ JOHN E. ADERHOLD Director
- ---------------------------------------------
John E. Aderhold
/s/ JOHN P. IMLAY, JR. Director
- ---------------------------------------------
John P. Imlay, Jr.
/s/ CLARK A. JOHNSON Director
- ---------------------------------------------
Clark A. Johnson
/s/ CARL E. SANDERS Director
- ---------------------------------------------
Carl E. Sanders
</TABLE>
II-6
<PAGE> 22
INDEX OF EXHIBITS
<TABLE>
<CAPTION>
DESIGNATION OF
EXHIBIT DOCUMENT WITH WHICH EXHIBIT WAS SUCH EXHIBIT IN
NO. DESCRIPTION PREVIOUSLY FILED WITH COMMISSION THAT DOCUMENT
- -------- ------------------------------------ ------------------------------------ ---------------
<S> <C> <C> <C>
2(a)(i) Agreement and Plan of Merger dated Current Report on Form 8-K for event 99(a)
as of April 12, 1995 by and among on occurring April 12, 1995
The Actava Group Inc., Orion
Pictures Corporation, MCEG Sterling
Incorporated and Metromedia
International Telecommunications,
Inc.
2(a)(ii) Amended and Restated Agreement and Current Report on Form 8-K for event 99(a)
Plan of Merger dated as of September occurring on September 27, 1995
27, 1995 by and among The Actava
Group Inc., Orion Pictures
Corporation, MCEG Sterling
Incorporated and Metromedia
International Telecommunications,
Inc.
2(b)(i) Credit Agreement dated as of October Current Report on Form 8-K for event 10(a)
11, 1994 by and between The Actava occurring on October 11, 1994
Group Inc. and Metromedia Company.
The following exhibits are omitted:
Exhibit A -- Form of Note; Exhibit
B -- Form of Pledge Agreement;
Exhibit C -- Form of Guaranty; and
Exhibit D -- Form of Opinion by
Paul, Weiss, Rifkind, Wharton &
Garrison. Registrant agrees to
furnish copies of such exhibits upon
request.
2(b)(ii) Amendment No. 1 dated as of April Amendment No. 1 to Current Report on 99(c)
12, 1995 to the Credit Agreement Form 8-K/A for event occurring on
dated as of October 11, 1994 between April 12, 1995, filed on April 28,
The Actava Group Inc. and Metromedia 1995
Company
2(b)(iii) Amendment No. 2 dated as of October Registration Statement on Form S-3 2(b)(iii)
10, 1995 to the Credit Agreement (Registration No. 33-63401)
dated as of October 11, 1994 by and
between The Actava Group Inc. and
Metromedia Company
4(a) Restated Certificate of Annual Report on Form 10-K for the 3(a)(i)
Incorporation of The Actava Group year ended December 31, 1993
Inc.
4(b)(i) Finance and Security Agreement dated Annual Report on Form 10-K for the 4(g)(i)
as of October 30, 1992 with respect year ended December 31, 1994
to a revolving credit facility of up
to $100 million, between The Actava
Group Inc. and ITT Commercial
Finance Corp.
4(b)(ii) Amendment dated as of September 27, Annual Report on Form 10-K for the 4(g)(ii)
1993 to Finance and Security year ended December 31, 1994
Agreement dated as of October 30,
1992 with respect to a revolving
credit facility of up to $100
million between The Actava Group
Inc. and ITT Commercial Finance
Corp.
</TABLE>
<PAGE> 23
<TABLE>
<CAPTION>
DESIGNATION OF
EXHIBIT DOCUMENT WITH WHICH EXHIBIT WAS SUCH EXHIBIT IN
NO. DESCRIPTION PREVIOUSLY FILED WITH COMMISSION THAT DOCUMENT
- -------- ------------------------------------ ------------------------------------ ---------------
<S> <C> <C> <C>
4(b)(iii) Amendment dated as of March 29, 1994 Annual Report on Form 10-K for the 4(g)(iii)
to Finance and Security Agreement year ended December 31, 1994
dated as of October 30, 1992 with
respect to a revolving credit
facility of up to $100 million
between The Actava Group Inc. and
ITT Commercial Finance Corp.
4(b)(iv) Amendment dated as of April 15, 1994 Annual Report on Form 10-K for the 4(g)(iv)
to Finance and Security Agreement year ended December 31, 1994
dated as of October 30, 1992 with
respect to a revolving credit
facility of up to $10 million
between The Actava Group Inc. and
ITT Commercial Finance Corp.
4(b)(v) Amendment dated as of September 23, Annual Report on Form 10-K for the 4(g)(v)
1994 to Finance and Security year ended December 31, 1994
Agreement dated as of October 30,
1992 with respect to a revolving
credit facility of up to $100
million between The Actava Group
Inc. and ITT Commercial Finance
Corp.
4(b)(vi) Amendment dated as of March 3, 1995, Quarterly Report on Form 10-Q for 4
to Finance and Security Agreement, the quarter ended June 30, 1995
dated as of October 30, 1992, with
respect to a revolving credit
facility of up to $100 million,
between Actava and ITT Commercial
Finance Corp.
4(c) Letter Agreement dated October 12, Registration Statement on Form S-3 4(d)(i)
1995 between Triton Group Ltd. and (Registration No. 33-63401)
The Actava Group Inc.
5 Opinion of Long, Aldridge & Norman
10(a) Registration Rights Agreement among Current Report on Form 8-K dated 99(c)
The Actava Group Inc., Renaissance April 19, 1994
Partners and John D. Phillips dated
April 19, 1994
10(b)(i) Lease Agreement dated October 21, Annual Report on Form 10-K for the 10(s)
1994 between JDP Aircraft II, Inc. year ended December 31, 1994
and The Actava Group Inc.
10(b)(ii) Lease Agreement dated as of October Quarterly Report on Form 10-Q for 10
4, 1995 between JDP Aircraft II, the quarter ended September 30, 1995
Inc. and The Actava Group Inc.
23(a) Consent of Ernst & Young LLP
regarding The Actava Group Inc.
23(b) Consent of KPMG Peat Marwick LLP
regarding Orion Pictures Corporation
23(c) Consent of KPMG Peat Marwick LLP
regarding Metromedia International
Telecommunications, Inc.
23(d) Consent of KPMG Peat Marwick LLP
regarding Kosmos TV
</TABLE>
<PAGE> 24
<TABLE>
<CAPTION>
DESIGNATION OF
EXHIBIT DOCUMENT WITH WHICH EXHIBIT WAS SUCH EXHIBIT IN
NO. DESCRIPTION PREVIOUSLY FILED WITH COMMISSION THAT DOCUMENT
- -------- ------------------------------------ ------------------------------------ ---------------
<S> <C> <C> <C>
23(e) Consent of Arthur Andersen LLP
regarding Metromedia International
Telecommunications, Inc.'s
predecessor entities
23(f) Consent of Arthur Andersen LLP
regarding MCEG Sterling Incorporated
23(g) Consent of Long, Aldridge & Norman
(included in Exhibit 5)
24 Powers of Attorney. See signature
page to this Registration Statement.
</TABLE>
<PAGE> 1
EXHIBIT 23(A)
CONSENT OF INDEPENDENT AUDITORS
To the Board of Directors
of the Actava Group Inc.:
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3 filed on or about October 30, 1995) and related
Prospectus of The Actava Group Inc. for the registration of 752,708 shares of
its common stock and to the incorporation by reference therein of our report
dated March 10, 1995, with respect to the consolidated financial statements and
schedules of The Actava Group Inc. included in its Annual Report (Form 10-K) for
the year ended December 31, 1994, filed with the Securities and Exchange
Commission.
/s/ Ernst & Young LLP
--------------------------------------
Atlanta, Georgia
October 30, 1995
<PAGE> 1
EXHIBIT 23(B)
INDEPENDENT AUDITOR'S CONSENT
To the Board of Directors and Stockholders
Orion Pictures Corporation:
We consent to the use of our report incorporated herein by reference and to
the reference to our firm under the heading "Experts" in the prospectus.
Our report dated April 12, 1995, contains an explanatory paragraph that
states that the Company is a defendant in certain litigation which alleges
various breaches of agreements by the Company and seeks certain damages. Our
report also includes an explanatory paragraph that states that based upon the
Company's inability to meet required debt payments that are due within the next
year under the terms of its indebtedness (as defined in note 6 of the Notes to
Consolidated Financial Statements) there exists substantial doubt about its
ability to continue as a going concern. The consolidated financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
/s/ KPMG Peat Marwick LLP
--------------------------------------
New York, New York
October 27, 1995
<PAGE> 1
EXHIBIT 23(C)
INDEPENDENT AUDITORS' REPORT AND CONSENT
To the Board of Directors
Metromedia International Telecommunications, Inc.:
The audits referred to in our report dated April 12, 1995, included the
related financial statement schedule as of December 31, 1994, and for the year
then ended incorporated by reference in the registration statement. This
financial statement schedule is the responsibility of the Company's management.
Our responsibility is to express an opinion on this financial statement schedule
based on our audits. In our opinion, such financial statement schedule, when
considered in relation to the basic consolidated financial statements taken as a
whole, presents fairly in all material respects the information set forth
therein.
Our report dated April 12, 1995, contains an explanatory paragraph that
states that the Company has suffered significant recurring losses and negative
operating and investing cash flows as a result of its investments in joint
ventures which have either not commenced operations or have only recently
commenced operations and are experiencing losses that raise substantial doubt
about its ability to continue as a going concern. The consolidated financial
statements and financial statement schedule do not include any adjustments that
might result from the outcome of this uncertainty.
We consent to the use of our reports incorporated herein by reference and
to the reference to our firm under the heading "Experts" in the prospectus.
/s/ KPMG Peat Marwick LLP
--------------------------------------
New York, New York
October 27, 1995
<PAGE> 1
EXHIBIT 23(D)
INDEPENDENT AUDITORS' CONSENT
The Partners
Kosmos TV:
We consent to the use of our report incorporated herein by reference and to
the reference to our firm under the heading "Experts" in the prospectus.
Our report dated March 24, 1995, contains an explanatory paragraph that
states that the Company has suffered recurring losses from operations and has a
net capital deficiency, which raise substantial doubt about its ability to
continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ KPMG
--------------------------------------
Moscow, Russia
October 27, 1995
<PAGE> 1
EXHIBIT 23(E)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of The Actava Group Inc.:
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our report dated April 12, 1995,
relating to the consolidated financial statements of International Telcell, Inc.
and International Telcell Group Limited Partnership (predecessor entities to
Metromedia International Telecommunications, Inc.) incorporated by reference in
this registration statement on Form S-3 and to all references to our Firm
included in this registration statement.
/s/ Arthur Andersen LLP
--------------------------------------
ARTHUR ANDERSEN LLP
Stamford, Connecticut
October 25, 1995
<PAGE> 1
EXHIBIT 23(F)
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of The Actava Group Inc.:
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement of our report dated May 19, 1995
included in the Joint Proxy Statement/Prospectus (File No. 33-63003) as filed
with the Securities and Exchange Commission on September 28, 1995 and to all
references to our Firm included in this Registration Statement.
/s/ Arthur Andersen LLP
--------------------------------------
ARTHUR ANDERSEN LLP
Los Angeles, California
October 27, 1995
