SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)
(Final Amendment)
Discovery Zone, Inc.
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(Name of Issuer)
Common Stock, $.01 par value
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(Title of Class of Securities)
25468B 10 7
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(CUSIP Number)
Gloria Santona, Esq.
Vice President, Associate General Counsel and Secretary
McDonald's Corporation
One McDonald's Plaza
Oak Brook, Illinois 60521
(630) 623-3000
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
December 26, 1996
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(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the subject of
this Schedule 13D, and is filing this Schedule because of Rule
13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the
statement [ ].
Page 1 of 9 Pages
Exhibit Index Appears on Page 6
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SCHEDULE 13D
CUSIP NO. 25468B 10 7
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- ----------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
McDonald's Corporation
Tax ID No. 36-2361282
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
NA
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 SOLE VOTING POWER
NUMBER OF
SHARES 0
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BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 0
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REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH 0
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10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.0%
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14 TYPE OF REPORTING PERSON
CO
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Page 2 of 9 Pages
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This Amendment No. 1 is the final amendment (this "Final
Amendment") to the Schedule 13D for the event dated August 30,
1994 (the "Schedule 13D" or "this Statement") of McDonald's
Corporation, a Delaware corporation ("McDonald's" or the
"Reporting Person"), with respect to the shares of Common Stock,
$.01 par value (the "Shares"), of Discovery Zone, Inc., a
Delaware corporation (the "Company"). This Final Amendment amends
and supplements Items 4, 5, 6 and 7 of the Schedule 13D as set
forth below.
Item 4. Purpose of the Transaction.
On December 20, 1996 McDonald's and GMC Acquisition, Inc.
("GMC") entered into a stock purchase agreement, attached hereto
as Exhibit 4 and incorporated by reference herein (the "Stock
Purchase Agreement"), pursuant to which McDonald's agreed to
sell all of the 5,500,000 Shares owned by it to GMC for a
nominal purchase price (the "Sale Transaction"). The closing of
the Sale Transaction under the Stock Purchase Agreement occurred
on December 26, 1996, as a result of which McDonald's no longer
owns any Shares. The purpose of the transaction for McDonald's
was to completely dispose of its interest in the Company.
McDonald's does not currently intend to acquire any additional
Shares or other securities of the Company.
Item 5. Interest in Securities of the Issuer.
(a), (b) As a result of the closing of the Sale Transaction
and the disposition by McDonald's of its 5,500,000 Shares
pursuant thereto, McDonald's no longer has any beneficial
ownership or interest in, or sole or shared power to vote or
dispose of, the Shares or any other securities of the Company. To
McDonald's knowledge, no director or executive officer of
McDonald's holds any securities of the Company.
(c) There have been no transactions by McDonald's or, to
its knowledge, any of its executive officers or directors, in the
Shares during the past sixty days except for the Sale
Transaction.
(d) Not applicable.
(e) At the time of the closing of the Sale Transaction on
December 26, 1996, McDonald's ceased to be the beneficial owner
of more than five percent of the Shares outstanding, as described
above in Items 4 and 5.
Page 3 of 9 Pages
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Item 6. Contracts, Arrangements, Understandings or Relationships
With Respect to Securities of the Issuer.
On December 26, 1996, McDonald's disposed of all of its
interest in the Shares under the terms and conditions of the
Stock Purchase Agreement, which is filed herewith as Exhibit 4
and is incorporated herein by reference.
Item 7. Material to be filed as Exhibits.
Exhibit 4. Stock Purchase Agreement by and between
McDonald's Corporation and GMC Acquisition, Inc., dated as of
December 20, 1996.
Page 4 of 9 Pages
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Signature
After reasonable inquiry and to the best of my knowledge
and belief, I certify that the information set forth in this
amended statement is true, complete and correct.
Dated: December 26, 1996
MCDONALD'S CORPORATION
By: /s/ Gloria Santona
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Name: Gloria Santona
Title: Vice President,
Associate General
Counsel and Secretary
Page 5 of 9 Pages
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Exhibit Index
Exhibit Number Description Page Number
Exhibit 1 Agreement and Plan of Merger dated as of *
August 30, 1994 among Discovery Zone
Inc., Discovery Zone International, Inc.,
Leaps & Bounds, Incorporated and
McDonald's Corporation.
Exhibit 2 Sale Restriction and Registration Rights *
Agreement between Discovery Zone, Inc.
and McDonald's Corporation dated as of
August 30, 1994.
Exhibit 3 Co-Sale Agreement among McDonald's *
Corporation, Donald F. Flynn, and
Discovery Zone, Inc. dated as of August
30, 1994.
Exhibit 4 Stock Purchase Agreement by and between 7
McDonald's Corporation and GMC
Acquisition, Inc., dated as of December 20,
1996.
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* Previously filed.
Page 6 of 9 Pages
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EXHIBIT 4
STOCK PURCHASE AGREEMENT
Stock Purchase Agreement dated as of December 20, 1996 by
and between McDonald's Corporation ("McDonald's") and GMC
Acquisition, Inc. ("Purchaser").
WHEREAS, McDonald's is the owner of 5,500,000 shares of
Discovery Zone, Inc. ("Discovery Zone") common stock (the "Shares");
WHEREAS, McDonald's wishes to sell and Purchaser wishes to
purchase the Shares;
NOW, THEREFORE, in consideration of the foregoing and other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. On the basis of the representations, acknowledgments and
agreements herein contained and subject to the terms and
conditions herein set forth, McDonald's agrees to sell to the
Purchaser and Purchaser agrees to purchase from McDonald's the
Shares free and clear of any liens, claims or encumbrances
(except as otherwise provided herein), for a purchase price
previously agreed to by the parties. McDonald's shall deliver the
stock certificate or certificates representing the Shares to
Purchaser on or before December 31, 1996.
2. Purchaser acknowledges, represents and agrees that:
(i) it is an "accredited investor" within the meaning
of Rule 50l(a)(1)(2) or (3) under the Securities Act of 1933 (the
"Securities Act"), an entity in which all of the equity owners
are accredited investors within the meaning of Rule 501(a)(1)(2)
or (3) under the Securities Act or a "qualified institutional
buyer" within the meaning of Rule 144A of the Securities Act;
(ii) it has received all financial and other
information relating to Discovery Zone and the Shares as it
deemed necessary in connection with its decision to purchase the
Shares and that neither McDonald's nor any person representing
McDonald's has provided any financial or other information or
made any representation to it with respect to Discovery Zone upon
which it is relying in making its investment decision with
respect to the Shares;
(iii) the Shares are being purchased for its own account
for the purpose of investment and not with a view to or for offer
or sale in connection with any distribution thereof;
(iv) the Shares may not be offered, sold, transferred,
pledged or otherwise disposed of, unless it complies with all
applicable federal and state securities laws and regulations then
in effect;
(v) it is aware that Discovery Zone has filed
voluntary petitions for bankruptcy relief under chapter 11,
title 11, of the United States Code ("U.S.C.") and that
any recovery in respect of the Shares will subject to a
plan of reorganization pursuant to 11 U.S.C. Section 1129
Page 7 of 9 Pages
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approved by the United States Bankruptcy Court and that it must
bear the economic risk of the entire loss of its investment in
the Shares and it has such knowledge and experience in financial
and business matters necessary to evaluate the merits and risks
of purchasing the Shares in such circumstances;
(vi) it has received a copy of the draft Joint
Disclosure Statement pursuant to 11 U.S.C. Section 1125 and First
Amended Joint Plan of Reorganization pursuant to 11 U.S.C.
Section 1129 (collectively the "Joint Plan") which has been
proposed by the Debtors (as defined in the Joint Plan) and Birch
Holdings LLC;
(vii) such Joint Plan provides that the Shares are
impaired under the Joint Plan and shall be canceled, annulled and
extinguished as of the Effective Date (as defined in the Joint
Plan) and that the holders of the Shares shall not be entitled to
receive or retain any property or interest in property on account
of such Shares under the Joint Plan;
(viii) if such Joint Plan (or other plan of reorganization
with similar language) were to be approved by the United States
Bankruptcy Court, the Shares shall be worthless;
(ix) it has received a copy of a Stipulation and Order
Between Debtors and McDonald's Corporation Providing For The
Resolution, Settlement and Compromise Of Disputes And For Rent
Deferrals and Allowance of Certain Claims which was approved by
the United States Bankruptcy Court for the District of Delaware
on November 18, 1996 (the "Stipulation") and it will not make any
objection to any of the terms and conditions of the Stipulation
contained in any plan of reorganization; and
(x) by this Stock Purchase Agreement, it is not
purchasing from McDonald's and McDonald's does not sell or
otherwise transfer to it, any claims, rights or causes of action
against any person(s) or entity (the "Claims") arising out of or
related to the circumstances of McDonald's acquisition of the
Shares or McDonald's retention of the Shares since the time that
McDonald's acquired them, including without limitation, Claims
arising out of or related to representations made to McDonald's
in connection with McDonald's acquisition of the Shares,
provided, however, that Purchaser shall be entitled to receive
any distribution to equity holders under any plan of
reorganization; but shall not be entitled to any distribution to
McDonald's as a result of McDonald's status as a creditor of the
Debtors.
3. This Stock Purchase Agreement contains the entire
agreement of the parties with regard to the subject matter
hereof, and, except with respect to the previously agreed
purchase price, supersedes any and all prior agreements and
understandings, oral or written, related hereto.
Page 8 of 9 Pages
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4. This Stock Purchase Agreement shall be interpreted and
construed under the laws of the State of Illinois.
McDonald's Corporation GMC Acquisition, Inc.
By: /s/ Michael Richard By: /s/ Michael Heisley
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Its: Vice President Its: President
Page 9 of 9 Pages
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