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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 1, 1999
REGISTRATION NO. 333-74139
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1 TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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AMC ENTERTAINMENT INC.
(Exact name of registrant as specified in its charter)
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DELAWARE 7832 43-1304369
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification
incorporation or organization) Number)
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106 WEST 14TH STREET KANSAS CITY, MISSOURI 64105-1977
(816) 221-4000
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
PETER C. BROWN,
CO-CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF FINANCIAL OFFICER
AMC ENTERTAINMENT INC.
106 WEST 14TH STREET
KANSAS CITY, MISSOURI 64105-1977
(816) 221-4000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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COPIES TO:
RAYMOND F. BEAGLE, JR.
Lathrop & Gage L.C.
2345 Grand Boulevard
Kansas City, Missouri 64108
(816) 460-5834
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As Soon as Practicable after the Effective Date of this Registration Statement.
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If the Securities registered on this Form are to be offered in connection
with the formation of a holding company and there is compliance with General
Instruction G, check the following box. / /
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
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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 SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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PROSPECTUS
OFFER TO EXCHANGE ALL OUTSTANDING
9 1/2% SENIOR SUBORDINATED NOTES DUE FEBRUARY 1, 2011
$225,000,000 PRINCIPAL AMOUNT OUTSTANDING FOR
9 1/2% EXCHANGE SENIOR SUBORDINATED NOTES DUE FEBRUARY 1, 2011 OF
AMC ENTERTAINMENT INC.
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We offer to exchange up to $225,000,000 aggregate principal amount of our
9 1/2% Exchange Senior Subordinated Notes due February 1, 2011 (the "Exchange
Notes"), which are registered under the Securities Act of 1933, for an equal
principal amount of our outstanding 9 1/2% Senior Subordinated Notes due
February 1, 2011 which were issued on January 27, 1999 in a private sale (the
"Initial Notes"). We refer to the Exchange Notes and the Initial Notes together
as the "Notes."
TERMS OF THE EXCHANGE OFFER
- The Exchange Offer expires at 5:00 p.m., New York City time, on May 10,
1999, unless extended.
- The Exchange Offer is subject to certain customary conditions, which we
may waive.
- The Exchange Offer is not conditioned upon any minimum principal balance
of the Initial Notes being tendered for exchange.
- You may withdraw tenders of Initial Notes at any time before the Exchange
Offer expires.
- All Initial Notes that are validly tendered and not withdrawn will be
exchanged for Exchange Notes.
- Initial Notes may only be tendered in denominations of $1,000 and integral
multiples thereof.
- We will not receive any proceeds from, and no underwriter is being used in
connection with, the Exchange Offer.
- The terms of the Exchange Notes are substantially identical to the terms
of the Initial Notes, except that the Exchange Notes will not have any
transfer restrictions or registration rights.
- The Exchange Notes will not be listed on any exchange or quoted on NASDAQ.
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Each broker-dealer that receives Exchange Notes for its own account pursuant
to the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Notes. The Letter of Transmittal
states that by so acknowledging and by delivering a prospectus, a broker-dealer
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act. This Prospectus, as it may be amended or supplemented from
time to time, may be used by a broker-dealer in connection with resales of
Exchange Notes as a result of market-making activities or other trading
activities. The Company has agreed that, starting on the Expiration Date (as
defined herein) and ending on the close of business one year after the
Expiration Date, it will make this Prospectus available to any broker-dealer for
use in connection with any such resale. See "Plan of Distribution".
BEFORE PARTICIPATING IN THIS EXCHANGE OFFER, PLEASE REFER TO THE SECTION IN
THIS PROSPECTUS ENTITLED "RISK FACTORS" BEGINNING ON PAGE 13.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved the Initial Notes or the Exchange Notes
or determined if this Prospectus is truthful or complete. Any representation to
the contrary is a criminal offense.
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The date of this Prospectus is April 5, 1999.
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You should rely only on the information contained and incorporated by reference
in this Prospectus. We have not authorized anyone to provide you with different
information. We are not making an offer of these securities in any state or
other jurisdiction where the offer is not permitted. You should not assume that
the information contained in this Prospectus is accurate as of any date other
than the date on the front of this Prospectus.
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TABLE OF CONTENTS
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Additional Information..................................................................................... (ii)
Documents Incorporated by Reference........................................................................ (ii)
Summary.................................................................................................... 1
Selected Financial Data.................................................................................... 10
Risk Factors............................................................................................... 13
Use of Proceeds............................................................................................ 24
Capitalization............................................................................................. 25
Management of the Company.................................................................................. 26
The Exchange Offer......................................................................................... 30
Description of Exchange Notes.............................................................................. 41
Certain Federal Income Tax Consequences.................................................................... 64
Plan of Distribution....................................................................................... 68
Legal Matters.............................................................................................. 68
Experts.................................................................................................... 68
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(i)
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ADDITIONAL INFORMATION
This Prospectus incorporates by reference documents containing important
business and financial information that are not presented in or delivered with
this Prospectus. You may obtain copies of such documents without charge, other
than exhibits to such documents that are not specifically incorporated by
reference herein, by making written or oral request to: AMC Entertainment Inc.,
Attention: Ms. Nancy L. Gallagher, Vice President and Secretary, 106 West 14th
Street, Kansas City, Missouri 64105-1977 (telephone: (816) 221-4000). IN ORDER
TO ASSURE TIMELY DELIVERY, YOU SHOULD MAKE SUCH REQUEST NO LATER THAN MAY 3,
1999, WHICH IS FIVE BUSINESS DAYS BEFORE THE EXPIRATION DATE OF THE EXCHANGE
OFFER.
We are subject to the informational requirements of the Exchange Act and, in
accordance therewith, file Annual Reports on Form 10-K, Quarterly Reports on
Form 10-Q, Proxy Statement and other reports and information with the Securities
and Exchange Commission. Such reports and other information can be inspected and
copied at prescribed rates at the public reference facilities mentioned below.
You may read and copy any materials we file without charge at, or obtain
copies upon payment of prescribed fees from, the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain
information on the operation of the Commission's Public Reference Room by
calling the Commission at 1-800-SEC-0330. The Commission also maintains a web
site that contains reports, proxy and information statements and other
information regarding registrants that file documents with the Commission,
including the Company, and the address is http://www.sec.gov.
Our Common Stock is listed on the American Stock Exchange and is also listed
on the Pacific Stock Exchange. Our periodic reports and proxy statements filed
under the Exchange Act as well as other information about us can be requested at
the American Stock Exchange, 86 Trinity Place, New York, New York 10086 and at
the Pacific Stock Exchange, 301 Pine Street, Suite 1104, San Francisco,
California 94104.
We have filed a registration statement on Form S-4 under the Securities Act
with the Commission with respect to the Exchange Notes offered by this
Prospectus, The Commission's rules and regulations permit us to omit from the
Prospectus certain information contained in the registration statement. For
additional information with respect to us and the Exchange Notes, we refer you
to the registration statement, including its exhibits and the financial
statements, notes and schedules filed as a part of the registration statement or
incorporated by reference to it. You may read and copy the registration
statement at the public reference facilities mentioned above.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents and other materials, which we have filed with the
Securities and Exchange Commission, are incorporated herein and specifically
made a part of this Prospectus by this reference:
(1) Annual Report on Form 10-K for the fiscal year ended April 2, 1998, as
amended;
(2) Quarterly Reports on Form 10-Q for the quarters ended July 2, 1998,
October 1, 1998 and December 31, 1998;
(3) Proxy Statement for the Annual Meeting of Stockholders filed on October
20, 1998; and
(4) Current Reports on Form 8-K filed on July 17, 1998, August 5, 1998,
September 11, 1998, January 15, 1999, January 25, 1999 and March 25,
1999.
In addition, all documents that we may file with the Securities and Exchange
Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934 after the date hereof and prior to the termination of any
offering of securities made by this Prospectus shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
date of filing of such documents with the Securities and Exchange Commission.
Any statement contained in this Prospectus or in a document incorporated or
deemed to be incorporated by reference in this Prospectus shall be deemed to be
modified
(ii)
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or superseded for purposes of this Prospectus to the extent that a statement
contained in this Prospectus or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
Statements contained in this Prospectus or in any document incorporated by
reference in this Prospectus as to the contents of any contract or other
document referred to herein or therein are not necessarily complete, and in each
instance, reference is made to the copy of such contract or other document filed
as an exhibit to the registration statement of which this Prospectus is a part
or to the documents incorporated by reference, each such statement being
qualified in all respects by such reference.
(iii)
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SUMMARY
THIS SUMMARY HIGHLIGHTS INFORMATION CONTAINED ELSEWHERE AND INCORPORATED BY
REFERENCE IN THIS PROSPECTUS. BECAUSE IT IS A SUMMARY, IT DOES NOT CONTAIN ALL
OF THE INFORMATION THAT MAY BE IMPORTANT TO YOU. YOU SHOULD READ THE ENTIRE
PROSPECTUS CAREFULLY, INCLUDING THE SECTION ENTITLED "RISK FACTORS" AND THE
FINANCIAL STATEMENTS AND THE RELATED NOTES TO THOSE STATEMENTS INCORPORATED BY
REFERENCE IN THIS PROSPECTUS BEFORE TENDERING YOUR INITIAL NOTES FOR EXCHANGE.
EXCEPT AS OTHERWISE REQUIRED BY THE CONTEXT, REFERENCES IN THIS PROSPECTUS
TO "WE," "US," "OUR," THE "ISSUER", THE "COMPANY" OR "AMCE" REFER TO THE
COMBINED BUSINESS OF AMC ENTERTAINMENT INC. AND ALL OF ITS SUBSIDIARIES. THE
TERM "AMC" REFERS TO THE COMPANY'S SUBSIDIARY, AMERICAN MULTI-CINEMA, INC. THE
TERM "YOU" REFERS TO AN OWNER OF THE INITIAL NOTES TO WHOM THE EXCHANGE OFFER IS
BEING MADE.
CERTAIN INFORMATION CONTAINED IN THIS SUMMARY AND ELSEWHERE IN THIS
PROSPECTUS, INCLUDING INFORMATION WITH RESPECT TO OUR EXPECTED OPERATIONS,
EXPECTED FINANCIAL RESULTS, COST SAVINGS, PLANS AND STRATEGY FOR OUR BUSINESS
AND RELATED FINANCING, ARE FORWARD-LOOKING STATEMENTS. YOU SHOULD SEE "RISK
FACTORS" FOR A DISCUSSION OF IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS
TO DIFFER MATERIALLY FROM THE FORWARD-LOOKING STATEMENTS.
THE COMPANY
We are one of the leading theatrical exhibition companies in North America,
based on revenues. In the fiscal year ended April 2, 1998, we had revenues of
$846,795,000. As of December 31, 1998, we operated 239 theatres with a total of
2,748 screens located in 23 states, the District of Columbia, Portugal, Japan,
Spain, China (Hong Kong) and Canada. Approximately 59% of our screens are
located in California, Florida, Texas, Arizona and Missouri, and approximately
69% of our domestic screens are located in areas among the 20 largest
"Designated Market Areas" (television market areas as defined by Nielsen Media
Research).
We are an industry leader in the development and operation of "megaplex" and
"multiplex" theatres, primarily in large metropolitan markets. Megaplexes are
theatres with predominantly stadium-style seating (seating with an elevation
between rows to provide unobstructed viewing) and other amenities to enhance the
movie-going experience. Multiplexes are theatres generally without stadium-style
seating. All but two of our megaplexes have 14 or more screens. We believe that
our strategy of developing megaplexes has prompted the current theatrical
exhibition industry trend in the United States and Canada toward the development
of larger theatre complexes. This trend has accelerated the obsolescence of many
existing movie theatres, including certain multiplexes, by setting new standards
for moviegoers, who have demonstrated their preference for the more attractive
surroundings, wider variety of films, better customer services and more
comfortable seating typical of megaplexes.
In addition to providing a superior entertainment experience, megaplexes
generally realize economies of scale by serving more patrons from common support
facilities. This spreads costs over a higher revenue base. Our megaplexes have
consistently ranked among our top grossing facilities on a per screen basis and
many are among the top grossing theatres in North America. During the
thirty-nine weeks ended December 31, 1998, attendance per screen on an
annualized basis at our megaplexes was 71,000 compared to 54,300 for our
multiplexes. In addition, during this thirty-nine week period, average revenue
per patron at our megaplex theatres was $6.93 compared to $6.18 for our
multiplex theatres, and operating cash flow before rent of our megaplex theatres
was 36.4% of the total revenues of such theatres, whereas operating cash flow
before rent of our multiplex theatres was 33.2% of the total revenues of such
theatres. (Operating cash flow before rent excludes non-theatre level revenues
and expenses, including all corporate overhead. We use operating cash flow
before rent as an internal statistic to measure theatre level performance.)
Our initial five megaplexes, which were opened during fiscal 1996, exceeded
our expectations for attendance per screen. We believe this resulted from, among
other factors, the newness of the concept and
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the lack of competition in the markets where the initial megaplexes were opened.
Subsequent megaplexes have generated, and those planned to be opened in the
future are expected to generate, lower attendance per screen than the initial
five megaplexes.
As of December 31, 1998, 1,314 screens, or 47.8% of our total screens, were
located in megaplexes and our average number of screens per theatre was 11.5.
The average number of screens per theatre for the ten largest North American
theatrical exhibition companies (based on number of screens) was 7.2 and the
average for all North American theatrical exhibition companies was 6.1, based on
the listing of exhibitors in the National Association of Theatre Owners 1998-99
Encyclopedia of Exhibition, as of May 1, 1998. As of May 1, 1998, our average
number of screens per theatre was 10.7.
We continually upgrade our theatre circuit by opening new theatres
(primarily megaplexes), adding new screens to existing theatres and selectively
closing or disposing of unprofitable multiplexes. From April 1996 through
December 31, 1998, we opened 56 new theatres with 1,205 screens, representing
43.9% of our current number of screens, acquired four multiplexes with 29
screens, added 44 screens to existing theatres and closed or disposed of 47
theatres with 249 screens. Of the 1,205 screens opened during the period, 1,172
screens were located in a total of 52 megaplexes. As of December 31, 1998, we
had 10 megaplexes under construction with a total of 242 screens.
Our revenues are generated primarily from box office admissions and our
theatre concessions sales, which accounted for 65% and 30%, respectively, of our
fiscal 1998 revenues. The balance of our revenues are generated primarily by our
on-screen advertising business, video games located in theatre lobbies and the
rental of theatre auditoriums.
Our principal subsidiaries are American Multi-Cinema, Inc., AMC
Entertainment International, Inc., National Cinema Network, Inc. and AMC Realty,
Inc. All of our domestic theatrical exhibition business is conducted through
American Multi-Cinema, Inc. We are developing theatres in international markets
through AMC Entertainment International, Inc. and its subsidiaries. We engage in
the on-screen advertising business through National Cinema Network, Inc. Our
real estate activities are conducted through AMC Realty, Inc. and its
subsidiaries.
The Company's predecessor was founded in Kansas City, Missouri in 1920 by
the father of Mr. Stanley H. Durwood, the current Co-Chairman of the Board and
Chief Executive Officer of the Company.
The Company is a Delaware corporation with its principal executive offices
located at 106 West 14th Street, Kansas City, Missouri 64105-1977. Its telephone
number at such address is (816) 221-4000.
BUSINESS STRATEGY
Our strategy is to expand our theatre circuit primarily by developing new
megaplexes in major markets in the United States and select international
markets. Most of our new theatres will be megaplexes which we will equip with
SONY Dynamic Digital Sound-TM- (SDDS-TM-) and AMC LoveSeat-Registered Trademark-
style seating (plush, high-backed seats with retractable armrests). Other
amenities may include auditoriums with TORUS-TM- Compound Curved Screens and
High Impact Theatre Systems-TM- (HITS-TM-), which enhance picture and sound
quality, respectively.
Our strategy of establishing megaplexes enhances attendance and concessions
sales by enabling us to exhibit concurrently a variety of motion pictures
attractive to different segments of the movie-going public. Megaplexes also
allow us to match a particular motion picture's attendance patterns to the
appropriate auditorium size (ranging from approximately 90 to 450 seats),
thereby extending the run of a motion picture and providing superior theatre
economics. We believe that megaplexes enhance our ability to license
commercially popular motion pictures and to economically access prime real
estate sites due to our desirability as an anchor tenant.
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We believe that the megaplex format has started a new replacement cycle for
the industry. The new format raises moviegoers' expectations by providing
superior viewing lines, comfort, picture and sound quality as well as increased
choices of films and start times. We believe that consumers will increasingly
choose theatres based on the quality of the movie-going experience rather than
simply upon the location of the theatre. As a result, we believe that older,
smaller theatres will ultimately become obsolete when a megaplex opens in their
market area.
We believe that significant market opportunities exist for development of
modern megaplexes in select international markets. The theatrical exhibition
business has become increasingly global, and box office receipts from
international markets exceed those of the U.S. market. In addition, the
production and distribution of feature films and demand for American motion
pictures are increasing in many countries. We believe that our experience in
developing and operating megaplexes provides us with a significant advantage in
developing megaplexes in international markets, and we intend to utilize this
experience, as well as our existing relationships with domestic motion picture
studios, to enter select international markets. Our strategy in these markets is
to operate leased theatres. Presently our activities in international markets
are directed toward Japan, Spain, China (Hong Kong) and Canada.
We fund the costs of constructing new theatres through internally generated
cash flow or borrowed funds. We generally lease our theatres pursuant to
long-term non-cancelable operating leases requiring the developer, who owns the
property, to reimburse us for a portion of the construction costs. However, we
may decide to own the real estate assets of new theatres and, following
construction, sell and leaseback the real estate assets pursuant to long-term
non-cancelable operating leases. A recent accounting pronouncement, EITF 97-10,
will require us to record future operating lease commitments as lease financing
obligations on our balance sheet unless we change the manner in which we
contract for the construction of theatres. Historically, we have owned and paid
for the equipment necessary to fixture a theatre; however, recently we entered
into a master lease agreement for up to $25 million of equipment necessary to
fixture certain theatres. In the third and fourth quarters of fiscal 1998, we
engaged in transactions with Entertainment Properties Trust, a real estate
investment trust, pursuant to which we sold to and leased back from
Entertainment Properties Trust the real estate assets associated with 13
megaplexes (the "Sale and Leaseback Transaction") and granted an option to
purchase and lease back the real estate assets associated with one additional
megaplex. We also granted Entertainment Properties Trust, for a period of five
years subsequent to November 1997, a right of first refusal and first offer to
purchase and lease back to us any other real estate assets associated with
megaplexes owned or ground leased by us or our subsidiaries, exercisable upon
our intended disposition of such property.
Through our wholly-owned subsidiary, AMC Realty, Inc., and its subsidiaries,
we are involved in the pre-development of complementary entertainment and retail
properties adjacent to some of our megaplexes. We believe that in doing this, we
will create environments that will enhance the entertainment experience for our
movie-going patrons, thus improving the performance of our theatres. AMC Realty,
Inc.'s subsidiaries presently are involved in the pre-development of several
retail/entertainment projects, including a project in downtown Kansas City,
Missouri known as the "Power and Light District-Registered Trademark-."
THEATRICAL EXHIBITION INDUSTRY OVERVIEW
Motion picture theatres are the primary initial distribution channel for new
motion picture releases, and we believe that the theatrical success of a motion
picture is often the most important factor in establishing its value in the
cable television, videocassette and other ancillary markets. We also believe
that the emergence of new motion picture distribution channels has not adversely
affected attendance at theatres and that these distribution channels do not
provide an experience comparable to that of viewing a movie in a theatre. We
believe that the public will continue to recognize the advantages of viewing a
movie on a large screen with superior audio and visual quality, while enjoying a
variety of concessions and sharing the experience with a larger audience.
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Annual domestic theatre attendance has averaged approximately one billion
persons since the early 1960s. Since 1988, the industry has experienced
significant growth, with attendance increasing at a 3.5% compound growth rate
over the period. During 1998, estimated domestic attendance was 1.5 billion.
Variances in year-to-year attendance are primarily related to the overall
popularity and supply of motion pictures.
The theatrical exhibition industry in North America is comprised of over 500
exhibitors, approximately 280 of which operate four or more screens. According
to the Motion Pictures Association of America, the number of indoor screens in
the United States was 33,440 at the end of 1998. Based on the May 1, 1998
listing of exhibitors in the National Association of Theatre Owners 1998-99
Encyclopedia of Exhibition, we believe that the ten largest exhibitors (in terms
of number of screens) operated approximately 55% of such number of screens, with
no one exhibitor operating more than ten percent of the total screens.
Information concerning the ten largest exhibitors does not reflect changes in
screens operated by them between the date of the National Association of Theatre
Owners information and the date of the Motion Pictures Association of America
information.
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THE EXCHANGE OFFER
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REGISTRATION RIGHTS AGREEMENT..... We issued the Initial Notes on January 27, 1999 to
Salomon Smith Barney and NationsBank Montgomery
Securities LLC (the "Initial Purchasers"). The Initial
Purchasers placed the Initial Notes with qualified
institutional buyers and non-U.S. persons in
transactions exempt from the registration requirements
of the Securities Act and applicable state securities
laws. In connection with this private placement, we
entered into a registration rights agreement with the
Initial Purchasers, which provides, among other things,
for the Exchange Offer. See "The Exchange Offer."
THE EXCHANGE OFFER................ We are offering Exchange Notes in exchange for an equal
principal amount of Initial Notes. As of this date,
there is $225,000,000 aggregate principal amount of
Initial Notes outstanding. Initial Notes may be tendered
only in integral multiples of $1,000.
RESALE OF EXCHANGE NOTES.......... We believe that the Exchange Notes issued in the
Exchange Offer may be offered for resale, resold or
otherwise transferred by you without compliance with the
registration and prospectus delivery provisions of the
Securities Act, provided that:
- you are acquiring the Exchange Notes in the
ordinary course of your business;
- you are not participating, do not intend to
participate, and have no arrangement or
understanding with any person to participate, in
the distribution of the Exchange Notes; and
- you are not an "affiliate" of ours.
If any of the foregoing are not true and you transfer
any Exchange Note without registering such Exchange Note
and delivering a prospectus meeting the requirements of
the Securities Act, or without an exemption from
registration of your Exchange Notes from such
requirements, you may incur liability under the
Securities Act. We do not assume or indemnify you
against such liability.
Each broker-dealer that receives Exchange Notes for its
own account in exchange for Initial Notes that were
acquired by such broker-dealer as a result of market
making or other trading activities must acknowledge that
it will deliver a prospectus meeting the requirements of
the Securities Act in connection with any resale of the
Exchange Notes. A broker-dealer may use this Prospectus
for an offer to resell, a resale or any other retransfer
of the Exchange Notes. See "The Exchange Offer-- Effect
of the Exchange Offer" and "Plan of Distribution."
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CONSEQUENCES OF FAILURE TO
EXCHANGE INITIAL NOTES.......... If you do not exchange your Initial Notes for Exchange
Notes, you will no longer be able to compel us to
register the Initial Notes under the Securities Act. In
addition, you will not be able to offer or sell the
Initial Notes unless they are registered under the
Securities Act (and we will have no obligation to
register them, except for some limited exceptions), or
unless you offer or sell them under an exemption from
the requirements of, or a transaction not subject to,
the Securities Act. See "Risk Factors--Failure to
Participate in the Exchange Offer Will Have Adverse
Consequences" and "The Exchange Offer--Effect of the
Exchange Offer."
EXPIRATION OF THE EXCHANGE
OFFER........................... The Exchange Offer will expire at 5:00 p.m., New York
City time, on May 10, 1999 (the "Expiration Date"),
unless we decide to extend the Expiration Date.
CONDITIONS TO THE EXCHANGE
OFFER........................... The Exchange Offer is not subject to any condition other
than certain customary conditions, including that:
- the Exchange Offer does not violate any applicable
law or applicable interpretation of law of the staff
of the SEC;
- no litigation materially impairs our ability to
proceed with the Exchange Offer;
- no change or prospective change in our business or
financial affairs materially impairs our ability
to proceed with the Exchange Offer or materially
impairs the contemplated benefits of the Exchange
Offer to us; and
- we obtain all the governmental approvals we deem
necessary for the Exchange Offer.
See "The Exchange Offer--Certain Conditions to the
Exchange Offer."
PROCEDURES FOR TENDERING INITIAL
NOTES........................... If you wish to accept the Exchange Offer, you must
complete, sign and date the Letter of Transmittal, or a
facsimile of the Letter of Transmittal, and transmit it
together with all other documents required by the Letter
of Transmittal (including the Initial Notes to be
exchanged) to The Bank of New York, as exchange agent
(the "Exchange Agent") at the address set forth on the
cover page of the Letter of Transmittal. In the
alternative, you can tender your Initial Notes by
following the procedures for book-entry transfer, as
described in this document. For more information on
accepting the Exchange Offer and tendering your Initial
Notes, see "The Exchange Offer--Procedures for
Tendering" and "--Book-Entry Transfer."
GUARANTEED DELIVERY PROCEDURES.... If you wish to tender your Initial Notes and you cannot
get your required documents to the Exchange Agent by the
Expiration Date, you may tender your Initial Notes
according to the guaranteed delivery procedure under the
heading "The Exchange Offer--Guaranteed Delivery
Procedures."
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SPECIAL PROCEDURE FOR BENEFICIAL
HOLDERS......................... If you are a beneficial holder whose Initial Notes are
registered in the name of a broker, dealer, commercial
bank, trust company, or other nominee and you wish to
tender your Initial Notes in the Exchange Offer, you
should contact the registered holder promptly and
instruct the registered holder to tender your Initial
Notes on your behalf. If you are a beneficial holder and
you wish to tender your Initial Notes on your own
behalf, you must, prior to delivering the Letter of
Transmittal and your Initial Notes to the Exchange
Agent, either make appropriate arrangements to register
ownership of your Initial Notes in your own name or
obtain a properly completed bond power from the
registered holder. The transfer of registered ownership
may take considerable time. See "The Exchange
Offer--Procedures for Tendering" and "--Book Entry
Transfer."
WITHDRAWAL RIGHTS................. You may withdraw the tender of your Initial Notes at any
time prior to 5:00 p.m., New York City time, on the
Expiration Date. To withdraw, you must send a written or
facsimile transmission of your notice of withdrawal to
the Exchange Agent at its address set forth herein under
"The Exchange Offer-- Withdrawal of Tenders" by 5:00
p.m., New York City time, on the Expiration Date.
ACCEPTANCE OF INITIAL NOTES AND
DELIVERY OF EXCHANGE NOTES...... Subject to certain conditions, we will accept all
Initial Notes that are properly tendered in the Exchange
Offer and not withdrawn prior to 5:00 p.m., New York
City time, on the Expiration Date. We will deliver the
Exchange Notes promptly after the Expiration Date. See
"The Exchange Offer--Acceptance of Initial Notes for
Exchange; Delivery of Exchange Notes."
TAX CONSIDERATIONS................ We believe that the exchange of Initial Notes for
Exchange Notes will not be a taxable exchange for
federal income tax purposes, but you should consult your
tax adviser about the tax consequences of this exchange.
See "Certain U.S. Federal Income Tax Consequences."
EXCHANGE AGENT.................... The Bank of New York is serving as exchange agent in
connection with the Exchange Offer. The mailing address
of the Exchange Agent is 101 Barclay Street, 7 East, New
York, New York 10286, Attn: Diane Amoroso,
Reorganization Section, See "The Exchange
Offer--Exchange Agent."
FEES AND EXPENSES................. We will bear all expenses related to consummating the
Exchange Offer and complying with the Registration
Rights Agreement. See "The Exchange Offer--Fees and
Expenses."
USE OF PROCEEDS................... We will not receive any cash proceeds from the issuance
of the Exchange Notes. We used the proceeds from the
sale of the Initial Notes to reduce outstanding
borrowings under our Credit Facility. See "Use of
Proceeds."
</TABLE>
7
<PAGE>
SUMMARY DESCRIPTION OF EXCHANGE NOTES
<TABLE>
<S> <C>
NOTES OFFERED..................... $225,000,000 principal amount of 9 1/2% Exchange Senior
Subordinated Notes due 2011 of AMC Entertainment Inc.
ISSUER............................ AMC Entertainment Inc.
MATURITY DATE..................... February 1, 2011.
INTEREST PAYMENT DATES............ February 1 and August 1 of each year, commencing August
1, 1999.
OPTIONAL REDEMPTION............... We may redeem the Exchange Notes at our option, in whole
or in part, at any time on or after, February 1, 2004 at
104.75% of the principal amount thereof, declining
ratably to 100.00% of the principal amount thereof on or
after February 1, 2007, plus in each case interest
accrued to the redemption date.
CHANGE OF CONTROL................. Upon a Change of Control (as defined herein), you as a
holder of the Exchange Notes will have the right to
require us to repurchase the Exchange Notes at a price
equal to 101% of the principal amount thereof plus
accrued and unpaid interest to the date of repurchase.
See "Description of Notes--Change of Control."
SINKING FUND...................... None.
RANKING........................... The Exchange Notes will be unsecured senior subordinated
indebtedness ranking PARI PASSU with all of our other
existing and future senior subordinated indebtedness.
The payment of all obligations in respect of the
Exchange Notes will be subordinated, as set forth
herein, in right of payment to the prior payment in full
in cash or Cash Equivalents of all Senior Indebtedness
(as defined herein). As of December 31, 1998, after
giving pro forma effect to the offering of the Initial
Notes and the application of the estimated net proceeds
therefrom as described in "Use of Proceeds", we would
have had $83.1 million of Senior Indebtedness and $199.0
million of PARI PASSU indebtedness outstanding. In
addition, the Exchange Notes will be effectively
subordinated to all liabilities of our Subsidiaries (as
defined herein). As of December 31, 1998, our
Subsidiaries had $259.9 million of liabilities,
including trade payables but excluding:
- intercompany obligations;
- liabilities under guarantees of our obligations;
and
- obligations under operating leases and other
obligations not reflected in our consolidated
financial statements.
CERTAIN COVENANTS................. The Indenture contains certain covenants that, among
other things, restrict our ability and the ability of
our Subsidiaries to:
- incur additional indebtedness;
- pay dividends or make distributions in respect of
capital stock;
- purchase or redeem capital stock;
</TABLE>
8
<PAGE>
<TABLE>
<S> <C>
- enter into transactions with certain affiliates;
- become liable for any indebtedness that is
subordinate or junior in right of payment to any
Senior Indebtedness and senior in right of payment
to the Notes; or
- consolidate, merge or sell all or substantially
all of our assets, other than in certain
transactions between one or more of our
wholly-owned subsidiaries and us.
All of the foregoing restrictive covenants will apply
unless and until the Fall-away Event (as defined herein)
occurs. In such event, we will be released from our
obligations to comply with the restrictive covenants
described above, other than certain of the covenants
relating to mergers and a sale of substantially all of
our assets, as well as certain other obligations. All of
these limitations are subject to a number of important
qualifications. In particular, there are no restrictions
on our ability or the ability of our Subsidiaries to
prepay subordinated debt or to make advances to, or
invest in, other entities (including unaffiliated
entities). See "Risk Factors--Limitations of Covenants"
and "Description of Exchange Notes--Certain Covenants"
and "--Merger and Sale of Substantially All Assets."
ABSENCE OF PUBLIC MARKET FOR THE
NOTES........................... The Exchange Notes will be new securities for which
there is currently no market. Although the Initial
Purchasers have informed us that they currently intend
to make a market in the Exchange Notes, they are not
obligated to do so, and any such market making may be
discontinued at any time without notice. Accordingly, we
cannot assure you as to the development or liquidity of
any market for the Exchange Notes. We do not intend to
apply for listing of the Exchange Notes on any
securities exchange or for quotation on the National
Association of Securities Dealers Automated Quotation
System ("NASDAQ"). In connection with the issuance of
the Initial Notes, we arranged for the Initial Notes to
be eligible for trading in the Private Offering, Resale
and Trading through Automated Linkages Market.
</TABLE>
RISK FACTORS
The Notes offered hereby involve a high degree of risk, and prospective
purchasers should carefully consider the factors described under "Risk Factors."
9
<PAGE>
SELECTED FINANCIAL DATA
The following table sets forth selected data regarding the Company's five
most recent fiscal years and the interim periods ended December 31, 1998 and
January 1, 1998. Operating results for the interim period ended December 31,
1998 are not necessarily indicative of the results that may be expected for the
entire fiscal year ending April 1, 1999. The historical financial information
for each of the fiscal years specified below has been derived from the Company's
consolidated financial statements for such periods. The unaudited pro forma
financial information of the Company as of and for the fiscal year ended April
2, 1998 and for the interim period ended December 31, 1998 has been adjusted to
give effect to the offering of the Initial Notes and the application of the net
proceeds thereof to the reduction of outstanding indebtedness under the Credit
Facility as described under "Use of Proceeds". Such pro forma information does
not purport to represent what the Company's results of operations would have
been had the offering of the Initial Notes occurred on the dates presented or to
project the Company's financial position or results of operations for any future
period.
<TABLE>
<CAPTION>
PRO
PRO FORMA(11) ACTUAL ACTUAL FORMA(11)
THIRTY-NINE THIRTY-NINE THIRTY-NINE FIFTY-TWO ACTUAL YEARS ENDED
WEEKS ENDED WEEKS ENDED WEEKS ENDED WEEKS ENDED ---------------------------------
DECEMBER 31, DECEMBER 31, JANUARY 1, APRIL 2, APRIL 2, APRIL 3, MARCH 28,
1998 1998 1998 1998(1) 1998(1) 1997(1) 1996(1)
------------- ------------- ----------- ----------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
<CAPTION>
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
SUMMARY CONSOLIDATED STATEMENT OF
OPERATIONS:
Total revenues.................. $ 785,353 $ 785,353 $ 629,890 $ 846,795 $ 846,795 $ 749,597 $ 655,972
Total cost of operations........ 648,376 648,376 502,447 685,540 685,540 580,002 491,358
General and administrative...... 44,717 44,717 41,893 54,354 54,354 56,647 52,059
Depreciation and
amortization(2)............... 64,472 64,472 50,116 70,117 70,117 52,572 42,087
Impairment of long-lived
assets(2)..................... -- -- 46,998 46,998 46,998 7,231 1,799
------------- ------------- ----------- ----------- --------- --------- -----------
Operating income (loss)......... 27,788 27,788 (11,564) (10,214) (10,214) 53,145 68,669
Interest expense................ 33,622 26,217 27,520 45,303 35,679 22,022 28,828
Investment income............... 1,085 1,085 805 1,090 1,090 856 7,052
Minority interest............... -- -- -- -- -- -- --
Gain (loss) on disposition of
assets........................ 2,259 2,259 3,360 3,704 3,704 (84) (222)
------------- ------------- ----------- ----------- --------- --------- -----------
Earnings (loss) before income
taxes and extraordinary
item.......................... (2,490) 4,915 (34,919) (50,723) (41,099) 31,895 46,671
Income tax provision............ (792) 1,800 (14,150) (19,968) (16,600) 12,900 19,300
Extraordinary item, net of
taxes(3)...................... -- -- -- -- -- -- (19,350)
------------- ------------- ----------- ----------- --------- --------- -----------
Net earnings (loss)............. $ (1,698) $ 3,115 $ (20,769) $ (30,755) $ (24,499) $ 18,995 $ 8,021
------------- ------------- ----------- ----------- --------- --------- -----------
------------- ------------- ----------- ----------- --------- --------- -----------
Preferred dividends............. -- -- 3,849 4,846 4,846 5,907 7,000
------------- ------------- ----------- ----------- --------- --------- -----------
Net earnings (loss) for common
shares........................ $ (1,698) $ 3,115 $ (24,618) $ (35,601) $ (29,345) $ 13,088 $ 1,021
------------- ------------- ----------- ----------- --------- --------- -----------
------------- ------------- ----------- ----------- --------- --------- -----------
Earnings (loss) per share before
extraordinary item:
Basic......................... $ (0.07) $ 0.13 $ (1.34) $ (1.93) $ (1.59) $ 0.75 $ 1.23
Diluted....................... $ (0.07) $ 0.13 $ (1.34) $ (1.93) $ (1.59) $ 0.74 $ 1.15
Earnings (loss) per share:
Basic......................... $ (0.07) $ 0.13 $ (1.34) $ (1.93) $ (1.59) $ 0.75 $ 0.06(3)
Diluted....................... $ (0.07) $ 0.13 $ (1.34) $ (1.93) $ (1.59) $ 0.74 $ 0.34
CONSOLIDATED BALANCE SHEET DATA
(AT PERIOD END):
Cash, equivalents and
investments................... $ 34,277 $ 34,277 $ 53,525 -- $ 9,881 $ 24,715 $ 10,795
Total assets.................... 910,152 904,452 838,159 -- 795,780 719,055 483,458
Corporate borrowings............ 457,730 452,030 378,977 -- 348,990 315,072 126,150
Capital lease obligations....... 49,426 49,426 55,446 -- 54,622 58,652 62,022
Stockholders' equity............ 136,605 136,605 144,269 -- 139,455 170,012 158,918
<CAPTION>
MARCH 30, MARCH 31,
1995(1) 1994(1)
----------- -----------
<S> <C> <C>
<S> <C> <C>
SUMMARY CONSOLIDATED STATEMENT OF
OPERATIONS:
Total revenues.................. $ 563,344 $ 586,300
Total cost of operations........ 432,763 446,957
General and administrative...... 41,639 40,559
Depreciation and
amortization(2)............... 37,913 38,048
Impairment of long-lived
assets(2)..................... -- --
----------- -----------
Operating income (loss)......... 51,029 60,736
Interest expense................ 35,908 36,375
Investment income............... 10,013 1,156
Minority interest............... -- 1,599
Gain (loss) on disposition of
assets........................ (156) 296
----------- -----------
Earnings (loss) before income
taxes and extraordinary
item.......................... 24,978 27,412
Income tax provision............ (9,000) 12,100
Extraordinary item, net of
taxes(3)...................... -- --
----------- -----------
Net earnings (loss)............. $ 33,978 $ 15,312
----------- -----------
----------- -----------
Preferred dividends............. 7,000 538
----------- -----------
Net earnings (loss) for common
shares........................ $ 26,978 $ 14,774
----------- -----------
----------- -----------
Earnings (loss) per share before
extraordinary item:
Basic......................... $ 1.64 $ 0.90
Diluted....................... $ 1.45 $ 0.89
Earnings (loss) per share:
Basic......................... $ 1.64 $ 0.90
Diluted....................... $ 1.45 $ 0.89
CONSOLIDATED BALANCE SHEET DATA
(AT PERIOD END):
Cash, equivalents and
investments................... $ 140,377 $ 151,469
Total assets.................... 522,154 501,276
Corporate borrowings............ 200,222 200,149
Capital lease obligations....... 67,282 68,039
Stockholders' equity............ 157,388 130,404
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
PRO
PRO FORMA(11) ACTUAL ACTUAL FORMA(11)
THIRTY-NINE THIRTY-NINE THIRTY-NINE FIFTY-TWO ACTUAL YEARS ENDED
WEEKS ENDED WEEKS ENDED WEEKS ENDED WEEKS ENDED ---------------------------------
DECEMBER 31, DECEMBER 31, JANUARY 1, APRIL 2, APRIL 2, APRIL 3, MARCH 28,
1998 1998 1998 1998(1) 1998(1) 1997(1) 1996(1)
------------- ------------- ----------- ----------- --------- --------- -----------
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
OTHER FINANCIAL DATA:
Capital expenditures............ $ 177,063 $ 177,063 $ 293,507 $ 389,217 $ 389,217 $ 253,380 $ 120,796
Proceeds from sale/leasebacks... -- -- 214,300 283,800 283,800 -- --
Rent expense.................... 119,065 119,065 72,742 106,383 106,383 80,061 64,813
Preopening expense(4)........... 1,982 1,982 1,592 2,243 2,243 2,414 573
Theatre closure expense(5)...... 2,801 2,801 -- -- -- -- --
EBITDA (as adjusted)(6)......... 92,260 92,260 85,550 106,901 106,901 112,948 112,555
EBITDAR(7)...................... 211,325 211,325 158,292 213,284 213,284 193,009 177,368
EBITDA margin(8)................ 11.7% 11.7% 13.6% 12.6% 12.6% 15.1% 17.2%
EBITDAR margin(9)............... 26.9% 26.9% 25.1% 25.2% 25.2% 25.7% 27.0%
Ratio of earnings to fixed
charges(10)................... -- -- -- -- -- 1.55x 1.81x
Net interest expense............ 32,973 25,568 27,211 44,788 35,164 21,453 22,337
Ratio of EBITDA to net interest
expense....................... 2.80x 3.61x 3.14x 2.39x 3.04x 5.26x 5.04x
Ratio of EBITDAR to net interest
expense plus rent............. 1.39x 1.46x 1.58x 1.41x 1.51x 1.90x 2.04x
OPERATING DATA:
Number of Megaplex theatres
operated...................... 59 59 37 44 44 19 5
Number of Megaplex screens
operated...................... 1,314 1,314 795 987 987 379 98
Number of Multiplex theatres
operated...................... 180 180 192 185 185 209 221
Number of Multiplex screens
operated...................... 1,434 1,434 1,496 1,455 1,455 1,578 1,621
Average screens per theatre..... 11.5 11.5 10.0 10.7 10.7 8.6 7.6
Attendance...................... 116,734 116,734 96,887 130,021 130,021 121,391 112,794
Theatre revenues per patron..... $ 6.56 $ 6.56 $ 6.33 $ 6.35 $ 6.35 $ 6.04 $ 5.70
<CAPTION>
MARCH 30, MARCH 31,
1995(1) 1994(1)
----------- -----------
<S> <C> <C>
OTHER FINANCIAL DATA:
Capital expenditures............ $ 56,403 $ 10,651
Proceeds from sale/leasebacks... -- --
Rent expense.................... 60,076 58,443
Preopening expense(4)........... -- --
Theatre closure expense(5)...... -- --
EBITDA (as adjusted)(6)......... 88,942 98,784
EBITDAR(7)...................... 149,018 157,227
EBITDA margin(8)................ 15.8% 16.8%
EBITDAR margin(9)............... 26.5% 26.8%
Ratio of earnings to fixed
charges(10)................... 1.42x 1.48x
Net interest expense............ 27,904 34,206
Ratio of EBITDA to net interest
expense....................... 3.19x 2.89x
Ratio of EBITDAR to net interest
expense plus rent............. 1.69x 1.70x
OPERATING DATA:
Number of Megaplex theatres
operated...................... -- --
Number of Megaplex screens
operated...................... -- --
Number of Multiplex theatres
operated...................... 232 236
Number of Multiplex screens
operated...................... 1,630 1,603
Average screens per theatre..... 7.0 6.8
Attendance...................... 101,536 106,240
Theatre revenues per patron..... $ 5.46 $ 5.46
</TABLE>
- ----------------------------------
(1) Fiscal 1997 consists of 53 weeks. All other fiscal years consist of 52
weeks.
(2) During fiscal 1998, 1997 and 1996, we recognized non-cash impairment losses
on 59, 18 and 4 of our multiplexes, respectively. The estimated future cash
flows of these theatres, undiscounted and without interest charges, were
less than the carrying value of the theatre assets.
(3) Fiscal 1996 includes a $19.35 million extraordinary loss on early
extinguishment of debt (net of income tax benefit of $13.4 million) equal to
$1.17 per common share.
(4) Preopening expense is comprised of advertising and promotional expense that
is incurred in connection with the opening of a new theatre. Certain other
preopening costs are capitalized and amortized over a two year period.
Effective April 1, 1999, all capitalized preopening costs will be written
off as a cumulative effect adjustment and all future preopening costs will
be expensed as incurred.
(5) Theatre closure expense relates to actual and estimated lease exit costs on
five of our multiplex theatres. We expect to have additional closure
expenses in the future. See "Risk Factors--Declining Multiplex Theatres."
(6) Represents net earnings (loss) plus interest, income taxes, depreciation and
amortization and adjusted for impairment losses, gain (loss) on disposition
of assets, equity in earnings of unconsolidated affiliates and extraordinary
item. We have included EBITDA because we believe that EBITDA provides
lenders and stockholders additional information for estimating our value and
evaluating our ability to service debt. We believe that EBITDA is a
financial measure commonly used in our industry and should not be construed
as an alternative to operating income (as determined in accordance with
GAAP). EBITDA, as we use the term herein, may not be comparable to EBITDA as
reported by other companies. In addition, EBITDA is not intended to
represent cash flow (as determined in accordance with GAAP) and does not
represent the measure of cash available for discretionary uses. EBITDA as
defined in the Indenture will generally be greater than as presented above.
See "Description of Notes-- Certain Definitions--Consolidated EBITDA."
(7) Represents EBITDA plus rent expense.
11
<PAGE>
(8) Defined as EBITDA as a percentage of total revenues.
(9) Defined as EBITDAR as a percentage of total revenues.
(10) We had a deficiency of earnings to fixed charges for the thirty-nine weeks
ended December 31, 1998 and January 1, 1998 and the fiscal year ended April
2, 1998 of $427,000, $40.06 million and $48.48 million, respectively.
Earnings consist of income (loss) before taxes, plus fixed charges
(excluding capitalized interest). Fixed charges consist of interest expense,
amortization of debt issuance cost, and one-third of rent expense on
operating leases treated as representative of the interest factor
attributable to rent expense. On a pro form a basis after giving effect to
the offering of the Initial Notes as though such transaction had occurred at
the beginning of the period, we had a deficiency of earnings to fixed
charges for the thirty-nine weeks ended December 31, 1998 and the fiscal
year ended April 2, 1998 of $7.83 million and $58.10 million, respectively.
(11) The pro forma Statement of Operations Data for the thirty-nine weeks ended
December 31, 1998 and for the fiscal year ended April 2, 1998 give effect to
the offering of the Initial Notes as though such transaction had occurred at
the beginning of the period. The pro forma balance sheet data gives effect
to such transaction as though it had occurred on December 31, 1998. The pro
forma Statement of Operations Data includes the addition to interest expense
for the issuance of the 9 1/2% Senior Subordinated Notes due 2011, including
amortization of debt issuance costs, and the reduction of interest expense
associated with the reduction of outstanding indebtedness under the Credit
Facility from the net proceeds from the offering of the Initial Notes. If
such offering had occurred on April 4, 1997, the excess proceeds would have
been available for investment. Interest income from this use of proceeds
would have been approximately $937,000 for the thirty-nine weeks ended
December 31, 1998 (assuming a rate of 5.0%) and $1.76 million for the year
(52 weeks) ended April 2, 1998 (assuming a rate of 5.1%).
12
<PAGE>
RISK FACTORS
AN INVESTMENT IN THE NOTES OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING FACTORS, IN ADDITION TO THE OTHER
INFORMATION CONTAINED IN THIS PROSPECTUS, IN DECIDING WHETHER TO INVEST IN THE
NOTES. THIS PROSPECTUS AND DOCUMENTS INCORPORATED BY REFERENCE HEREIN CONTAIN
FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. OUR ACTUAL
RESULTS MAY DIFFER SIGNIFICANTLY FROM THE RESULTS DISCUSSED IN THE
FORWARD-LOOKING STATEMENTS. FACTORS THAT MIGHT CAUSE SUCH DIFFERENCES INCLUDE
THOSE DISCUSSED BELOW.
FAILURE TO PARTICIPATE IN THE EXCHANGE OFFER WILL HAVE ADVERSE CONSEQUENCES
If you do not exchange your Initial Notes for Exchange Notes pursuant to the
Exchange Offer, you will continue to be subject to the restrictions on transfer
of your Initial Notes, as set forth in the legend on your Initial Notes. The
restrictions on transfer of your Initial Notes arise because we sold the Initial
Notes in a private offering. In general, the Initial Notes may not be offered or
sold, unless registered under the Securities Act or pursuant to an exemption
from, or in a transaction not subject to, such requirements. We do not intend to
register the Initial Notes under the Securities Act.
After completion of the Exchange Offer, holders of Initial Notes who do not
tender their Initial Notes in the Exchange Offer will no longer be entitled to
any exchange or registration rights under the Registration Rights Agreement,
except under limited circumstances.
If you exchange your Initial Notes in the Exchange Offer for the purpose of
participating in a distribution of the Exchange Notes, you may be deemed to have
received restricted securities and, if so, will be required to comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction. To the extent Initial Notes are tendered
and accepted in the Exchange Offer, the trading market, if any, for the Initial
Notes would be adversely affected. See "The Exchange Offer."
SUBSTANTIAL OBLIGATIONS; NEED FOR ADDITIONAL CAPITAL
We had approximately $501 million of indebtedness outstanding as of December
31, 1998, including approximately $199 million of our 9 1/2% Senior Subordinated
Notes due 2009 (the "9 1/2% Notes due 2009"), $253 million under our Credit
Facility and $49.4 million in capitalized leases. We also have significant
rental obligations under operating leases, the incurrence of which are not
restricted under the Indenture. As of April 2, 1998, the undiscounted base
rentals over the lives of such leases (with initial base terms ranging generally
from 13 to 25 years) were over $2.4 billion.
Our business plan requires that we make substantial capital expenditures.
See "--Substantial Capital Expenditures; Uncertainty of Theatre Development." We
intend to finance a substantial portion of these expenditures by borrowing. The
total commitment under the Credit Facility is $425 million, but the facility
contains covenants that limit our ability to incur debt (whether under the
Credit Facility or from other sources). However, the banks under our Credit
Facility have recently agreed to amend certain covenants of the Credit Facility
to increase our ability to incur debt, which has improved our borrowing capacity
under the Credit Facility. Under the most restrictive of these covenants, our
compliance with, and the amount of additional borrowing capacity under, the
Credit Facility is determined as of the end of each quarter, based on "net
indebtedness" at the end of the quarter and our "Annualized EBITDA" during the
previous four quarters, as such terms are defined in the Credit Facility. As of
December 31, 1998, after giving effect to the use of the net proceeds of the
offering of the Initial Notes and such recent amendments to our Credit Facility,
we could have had approximately $815 million in net indebtedness under this
covenant and therefore would have had available approximately $342 million
additional borrowing capacity under the Credit Facility. This amount is
substantially less than we would need to fund our expansion program.
Furthermore, based on our performance during the fourth quarter, we expect that
the total amount of net indebtedness which we could have at April 1, 1999 will
be less than it was at December 31, 1998.
13
<PAGE>
Subject to favorable market conditions, our business plan also contemplates
selling and leasing back the real estate assets associated with newly
constructed megaplex theatres, which could be a more expensive source of
financing than additional debt. Entertainment Properties Trust has notified us
of its intent to exercise a purchase option (subject to due diligence review) on
one of our megaplex theatres; the purchase price would be approximately $23.5
million.
In order to satisfy our obligations under the Notes, the 9 1/2% Notes due
2009, the Credit Facility and our leases, and to incur incremental debt to fund
our expansion program, we will have to generate substantial operating cash flow.
Our ability to meet debt service, rental and other obligations will depend on
our future performance, which will be subject to prevailing economic conditions
and to financial, business and other factors beyond our control. If our cash
flow were to prove inadequate to meet our debt service, rental and other
obligations, we may be required to refinance all or a portion of our existing
debt, to sell assets or to obtain additional financing. We cannot assure you
that any such refinancing or that any such sale of assets or additional
financing would be possible on favorable terms if at all.
The amount of our indebtedness and lease obligations could have important
consequences to you, as a holder of the Notes, including the following: (i) our
ability to obtain additional financing in the future for working capital,
capital expenditures, acquisitions, general corporate purposes or other purposes
and our ability to refinance the Notes and other indebtedness upon maturity or a
change in control may be impaired and (ii) a substantial portion of our cash
flow from operations will be dedicated to the payment of lease rentals and
principal and interest on our indebtedness, thereby reducing the funds available
to us for operations, payment of dividends and any future business
opportunities. Because the interest rate under the Notes exceeds that under the
Credit Facility, the offering of the Initial Notes will result in increased
interest expense for us.
SUBORDINATION OF THE NOTES
The Notes are our general unsecured obligations. They are subordinated in
right of payment to all of our existing and future Senior Indebtedness,
including obligations under the Credit Facility. Our obligations under the Notes
are PARI PASSU with our obligations under our 9 1/2% Notes due 2009. As of
December 31, 1998, after giving pro forma effect to the offering of the Initial
Notes, the application of the net proceeds therefrom as described in "Use of
Proceeds" and recent amendments to our Credit Facility, we would have had
outstanding Senior Indebtedness of $83.1 million and we would have had available
approximately $342 million additional borrowing capacity under the Credit
Facility. Amounts borrowed under the Credit Facility would be included as Senior
Indebtedness. Subject to certain limitations, we will be able to incur
additional indebtedness, including Senior Indebtedness, under the Indenture. See
"Description of Notes--Certain Covenants--Limitation on Consolidated
Indebtedness."
If we liquidate, dissolve, reorganize or engage in any similar proceeding,
our assets will be available to pay obligations on the Notes only after our
Senior Indebtedness has been paid in full, and there may not be sufficient
assets remaining to pay you as a holder of the Notes. In addition, we may not
pay principal of, premium, if any, or interest on the Notes or purchase, redeem
or otherwise retire the Notes, if any principal, premium, if any, or interest on
any Senior Indebtedness is not paid when due (whether at final maturity, upon
scheduled installment, acceleration or otherwise) unless such payment default
has been cured or waived or such Senior Indebtedness has been repaid in full. In
addition, under certain circumstances, if any non-payment default exists with
respect to Designated Senior Indebtedness (as defined herein), we may not make
any payments on the Notes for a specified period of time, unless such default is
cured or waived or such Designated Senior Indebtedness has been repaid in full.
If we fail to make any payment on the Notes when due or within any applicable
grace period, whether or not on account of the payment blockage provisions
referred to above, we would be in default under the Indenture and the holders of
the Notes could accelerate the maturity thereof on or after the fifth business
day following such event of default. See "Description of Notes--Subordination."
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If certain financial ratios exceed specified limits, we must pledge all the
stock of all our operating subsidiaries to secure our indebtedness under the
Credit Facility.
HOLDING COMPANY STRUCTURE
We are a holding company with no operations of our own. Consequently, our
ability to service our debt and pay dividends is dependent upon the earnings
from the businesses conducted by our subsidiaries. The distribution of those
earnings, or advances or other distributions of funds by these subsidiaries to
us, all of which could be subject to statutory or contractual restrictions, are
contingent upon the subsidiaries' earnings and are subject to various business
considerations.
Our subsidiaries have guaranteed our obligations under the Credit Facility.
However, our subsidiaries are not obligors or guarantors of the Notes.
Therefore, the claims of creditors of such subsidiaries, including claims of
lenders under the Credit Facility, the claims of trade creditors, and claims of
preferred stockholders (if any) of such subsidiaries, generally will have
priority with respect to the assets and earnings of such subsidiaries over the
claims of our creditors. The Notes, therefore, are effectively subordinated to
creditors (including trade creditors) and preferred stockholders (if any) of
such subsidiaries. As of December 31, 1998, our subsidiaries had $259.9 million
of liabilities, including trade payables but excluding (i) intercompany
obligations, (ii) liabilities under guarantees of our obligations and (iii)
obligations under operating leases and other obligations not reflected in our
consolidated financial statements. Accordingly, there can be no assurance that,
in the event of our bankruptcy, after providing for claims of creditors and
preferred stockholders (if any) of our subsidiaries, there would be sufficient
assets available to pay amounts due to you as a holder of the Notes.
LIMITATIONS OF COVENANTS
Although the Indenture limits our ability to incur indebtedness, such
limitation is subject to a number of significant qualifications, as follows.
- The definition of EBITDA used in the Indenture, which is a principal
measure of our debt capacity under the Indenture, is more favorable to the
Company than that shown under "Selected Financial and Operating Data." See
"Description of Exchange Notes--Certain Definitions--Consolidated EBITDA."
- The Indenture does not impose any limitation on our incurrence of capital
lease obligations or liabilities that are not considered "Indebtedness"
under the Indenture (such as operating leases), nor does it impose any
limitation on the amount of liabilities incurred by subsidiaries, if any,
that might be designated as Unrestricted Subsidiaries (as defined herein).
See "--Substantial Obligations"; and "Description of Exchange
Notes--Certain Covenants--Limitation on Consolidated Indebtedness."
- The Indenture will treat future operating leases that are recorded on our
balance sheet as lease financing obligations in accordance with EITF 97-10
as permitted indebtedness.
- There are no restrictions on our ability to prepay subordinated debt or to
make advances to, or invest in, other entities (including unaffiliated
entities) and no restrictions on the ability of our subsidiaries to enter
into agreements restricting their ability to pay dividends or otherwise
transfer funds to us.
- If the Notes attain Investment Grade Status, the covenants in the
Indenture limiting our ability to incur indebtedness, pay dividends,
acquire stock or engage in transactions with affiliates will cease to
apply.
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OPERATING RISKS IN THE THEATRICAL EXHIBITION INDUSTRY
We predominantly license "first run" motion pictures. Our ability to operate
successfully depends upon a number of factors, the most important of which are:
- the availability and popularity of such "first run" motion pictures;
- the allocation of popular motion pictures to us as a result of our
relationship with motion picture distributors;
- the terms upon which motion pictures are licensed to us; and
- the performance of such motion pictures in the markets in which we
operate.
As a result of these factors, historically our operating results have fluctuated
significantly and we expect them to do so in future periods.
DEPENDENCE ON DISTRIBUTORS. We must rely on distributors of motion
pictures, over whom we have no control, for the films which we exhibit. Our
business can be adversely affected if the production of motion pictures is
disrupted or if our access to motion pictures is limited or delayed because of a
deterioration in our relationship with such distributors or for some other
reason. For example, since fiscal 1995, we licensed films of a certain
distributor for a smaller number of theatres than we otherwise would have. To
the extent that we are unable to license a popular film for exhibition in our
theatres, our operating results may be adversely affected.
SIGNIFICANCE OF PRICE TERMS. Price terms of film licenses also affect our
results. Recently, more distributors have been licensing films under firm term
fee arrangements, where final terms are negotiated at the time of licensing,
instead of on a settlement basis, where terms are adjusted subsequent to the
exhibition of a motion picture. Firm term arrangements generally result in our
retaining a lower percentage of admissions, particularly when a film plays off
more quickly than expected when the terms were negotiated.
IMPACT OF POOR PERFORMING FILMS. Because film distributors have
historically released those films which they anticipate will be the most
successful during the summer and holiday seasons, poor performance of such films
or disruption in the release of films during such periods can adversely affect
our quarterly results for those particular periods.
HIGHER COST OF MEGAPLEXES. The entertainment industry trend towards
megaplexes is relatively recent. Although megaplexes generally produce higher
revenues per patron, they also generally require greater capital expenditures
than the previous generation of multiplexes, special construction and limited
use designs by developers of such properties. In addition, the fixed costs of
operating megaplexes generally are higher than those related to multiplexes,
which can result in greater volatility in operating results based on changes in
operating revenues. Therefore, we cannot assure you that we will be able to
operate such theatres profitably or recoup our investment on such theatres.
GENERAL ECONOMIC CONDITIONS. Our success depends on general economic
conditions and the willingness of consumers to allocate their expenditures
toward theatrical exhibition. To the extent such activities become less popular
or consumers spend less on theatrical exhibition activities, our operations
could be adversely affected.
SEASONALITY OF OPERATIONS
As with other exhibitors, our business is seasonal in nature, with the
highest attendance and revenues generally occurring during the summer months and
holiday seasons. Accordingly, our results for one quarter are not necessarily
indicative of our results for the next quarter and we sometimes incur net losses
in the first and, less frequently, the fourth fiscal quarters.
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DECLINING MULTIPLEX THEATRES
A majority of our screens presently are in multiplex theatres. As with other
exhibitors, certain of our multiplexes, generally those smaller in screen count,
are subject to deteriorating financial performance and to being rendered
obsolete through the introduction of new, competing megaplexes, some of which we
operate. For example, the summer of 1997 was the first summer film season,
generally the highest grossing period for the film industry, that we and our
competitors were operating a significant number of megaplexes. During this
period, the financial results of certain of our multiplexes were significantly
less than anticipated at the beginning of fiscal 1998. This was due primarily to
competition from the newer megaplexes. Primarily as a result of the competition
from newer megaplexes, attendance per screen at multiplexes open throughout
fiscal 1997 and 1998 declined from 62,800 in fiscal 1997 to 56,800 in fiscal
1998.
As a result of their deteriorating performance, we recognized a non-cash
impairment loss in fiscal 1998 of $46,998,000 ($27,728,000 after tax, or $1.50
per share) on 59 multiplexes with 412 screens in 14 states. This followed
impairment losses of $7,231,000 ($4,266,000 after tax, or $.24 per share) on 18
multiplexes with 82 screens in nine states in fiscal 1997 and $1,799,000
($1,061,000 after tax, or $.06 per share) on four multiplexes with 21 screens in
three states in fiscal 1996. These impairment losses were recognized because the
future cash flows of these theatres, undiscounted and without interest charges,
were less than the carrying value of the theatre assets. We believe that the
amount of the impairment losses which we have taken are adequate. However,
deterioration in the performance of other multiplexes which may be competitively
impacted in the future could require us to recognize additional impairment
losses.
We are evaluating our future plans for the affected multiplexes, which may
include selling theatres, subleasing properties to other exhibitors or for other
uses, retrofitting certain theatres to the standards of a megaplex or closing
theatres and terminating the leases. Any or all of these options could result in
a significant impact to our results of operations and financial position.
Closure or other dispositions of certain multiplexes could result in expenses
related to lease exit costs which are primarily comprised of expected payments
to landlords or conversion costs. Such expenses could aggregate up to $32
million over the next four years.
INTERNATIONAL OPERATIONS RISK
We are pursuing opportunities for operating megaplexes in Europe, Canada and
Asia. In 1996, we opened a 13-screen theatre in Japan and a 20-screen theatre in
Portugal. During the current fiscal year, we have opened a 24-screen theatre in
Spain, a 16-screen theatre in Japan, an 11-screen theatre in China (Hong Kong)
and two theatres with a total of 44 screens in Canada. As of December 31, 1998,
we had commenced construction of three additional international theatres, two in
Canada and one in Japan.
There are significant differences between the theatrical exhibition industry
in the United States and in certain international markets. These include:
- REGULATORY BARRIERS. International market entry may be affected by
restrictions on the size of theatres, the issuance of licenses and the
ownership of land.
- VERTICAL INTEGRATION OF PRODUCTION AND EXHIBITION COMPANIES. In certain
international markets, vertical integration of production and exhibition
companies can have an adverse effect on our ability to license motion
pictures for international exhibition. The operations of our first theatre
in Japan previously was negatively impacted by local film distributors who
restricted our ability to obtain film product until after our competitors
received it. While this issue has been resolved in Japan, there can be no
assurances that this or similar problems will not recur in Japan or other
international markets.
- FLUCTUATING CURRENCY VALUES. We do not hedge against the risk of
fluctuating currency values.
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- QUOTA SYSTEMS. Quota systems sometimes are used to limit the number of
foreign films that can be exhibited in a domestic market. Some countries
use quota systems to protect their domestic film industry. Quota systems
may adversely affect revenues from theatres that we develop in such
markets.
Such differences in industry structure and regulatory and trade practices
may adversely affect our ability to expand internationally or to operate at a
profit following such expansion. See "--Substantial Capital Expenditures;
Uncertainty of Theatre Development."
COMPETITION
We compete against both local and national exhibitors, some of which may
have substantially greater financial resources. There are over 500 companies
competing in the domestic theatrical exhibition industry, approximately 280 of
which operate four or more screens. Industry participants vary substantially in
size, from small independent operators to large international chains. Recently,
four of the industry's largest companies have merged, and there may be
additional mergers in the future. According to the Motion Pictures Association
of America, the number of indoor screens in the United States was 33,440 at the
end of 1998. Based on the May 1, 1998 listing of exhibitors in the National
Association of Theatre Owners 1998-99 Encyclopedia of Exhibition, we believe
that the ten largest exhibitors (in terms of number of screens) operated
approximately 55% of such number of screens, with no one exhibitor operating
more than ten percent of the total screens. Information concerning the ten
largest exhibitors does not reflect changes in screens operated by them between
the date of the National Association of Theatre Owners information and the date
of the Motion Pictures Association of America information.
Our theatres are subject to varying degrees of competition in the geographic
areas in which they operate. Competitors may be national circuits, regional
circuits or smaller independent exhibitors. Competition is often intense with
respect to the following factors.
- ATTRACTING PATRONS. The competition for patrons is dependent upon factors
such as the availability of popular motion pictures, the location and
number of theatres and screens in a market, the comfort and quality of the
theatres and pricing. Many of our competitors have sought to increase the
number of screens that they operate. Competitors have built or may be
planning to build theatres in certain areas where we operate, which could
result in excess capacity and increased competition for patrons.
- LICENSING MOTION PICTURES. We believe that the principal competitive
factors with respect to film licensing include licensing terms, seating
capacity and the location and condition of an exhibitor's theatres.
- FINDING NEW THEATRE SITES. We must compete with exhibitors and others in
our efforts to locate and acquire attractive sites for our theatres. See
"--Substantial Capital Expenditures; Uncertainty of Theatre Development."
We expect that in the long term the addition of new megaplexes will help us
obtain more favorable allocations of film product and other licensing terms from
distributors than our competitors. However, competition from established
theatres that have established relationships with distributors initially may
negatively impact the earnings of new megaplexes.
We also face competition in the international markets in which we operate.
See "--International Operations Risk."
The theatrical exhibition industry also faces competition from other
distribution channels for filmed entertainment, such as cable television, pay
per view and home video systems, as well as from all other forms of
entertainment.
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SUBSTANTIAL CAPITAL EXPENDITURES; UNCERTAINTY OF THEATRE DEVELOPMENT
Our growth strategy involves the development of new megaplexes and may
involve acquisitions of existing theatres and theatre circuits. From April 1996
to December 31, 1998, we opened 56 new theatres and 1,249 screens, acquired four
theatres and 29 screens and as of December 31, 1998, had 10 megaplexes with an
aggregate of 242 screens under construction. We have plans to open approximately
1,000 screens, including 300 in international markets, during fiscal years 2000
and 2001. If we execute our growth strategy as planned, we estimate that capital
expenditures will aggregate approximately $545 million during such period. There
can be no assurance that we will successfully develop new screens or
successfully complete those under construction, that we will stay within our
construction budgets for such screens or that the financial performance of such
screens will be equivalent to the performance of the Company's existing screens.
See "--Substantial Obligations; Need for Additional Capital."
The development of new theatre locations involves significant risks and
investments and is also likely to have an initial negative impact on earnings
and EBITDA.
- COMPETITION FOR SITES. There is significant competition in the United
States for site locations from both theatre companies and other businesses
and significant competition among theatre companies for theatre
acquisition opportunities. As we and our competitors continue to build
megaplexes, we may find it increasingly difficult to obtain attractive
sites.
- DEVELOPMENT LAG TIME. We typically require 18 to 24 months to open a
domestic theatre on a site from the time we identify the site. We
generally require an additional year or more to open an international
theatre.
- ECONOMIC AND OTHER CONDITIONS. The availability of attractive site
locations can be adversely affected by changes in the national, regional
and local economic climate. Local conditions, such as scarcity of space or
an increase in demand for real estate in the area, demographic changes,
competition from other available space and changes in real estate, zoning
and tax laws can also affect the availability of attractive site
locations.
- FINANCING. Our expansion program will require financing in addition to the
currently available commitment amount under our Credit Facility and
internally generated funds. We cannot assure you that we will be able to
obtain such additional financing at favorable rates. See "--Substantial
Obligations; Need for Additional Capital."
As a result of the foregoing, we cannot assure you that we will be able to
acquire attractive site locations or existing theatres or theatre circuits on
terms we consider acceptable, that we will be able to acquire financing for such
theatres on acceptable terms or that our strategy will result in improvements to
our business, financial condition or profitability. See "--Competition."
RESTRICTIONS UNDER FINANCING AGREEMENTS; VARIABLE INTEREST RATE
Our Credit Facility contains certain financial and other covenants,
including covenants requiring us to maintain certain financial ratios and
restricting our ability to incur indebtedness or to create or suffer to exist
certain liens. The Credit Facility also requires that certain amounts of
indebtedness thereunder be repaid by specified dates. Our ability to comply with
such provisions may be affected by events beyond our control. See "--Substantial
Obligations; Need for Additional Capital."
If we fail to make any required payment under the Credit Facility or to
comply with any of the financial and operating covenants included in the Credit
Facility, we would be in default. Our lenders could then vote to accelerate the
maturity of the indebtedness under the Credit Facility and foreclose upon the
stock of our subsidiaries, if pledged, securing the Credit Facility. Other
creditors might then accelerate other indebtedness. If the lenders under the
Credit Facility accelerate the maturity of the indebtedness thereunder, we
cannot assure you that we will have sufficient assets to satisfy our obligations
under the
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Credit Facility or our other indebtedness, including the Notes. In addition, if
we were to default on our obligations to holders of Senior Indebtedness, such as
the Credit Facility, the subordination provisions of the Indenture likely would
restrict payments to you as a holder of the Notes.
Our indebtedness under the Credit Facility bears interest at rates that
fluctuate with changes in certain prevailing interest rates (although, subject
to certain conditions, such rates may be fixed for certain periods). If interest
rates increase, we may be unable to meet our debt service obligations under the
Credit Facility and other indebtedness.
ADA COMPLIANCE
Our theatres must comply with Title III of the Americans with Disabilities
Act of 1990 (the "ADA"). Compliance with the ADA requires that public
accommodations "reasonably accommodate" individuals with disabilities and that
new construction or alterations made to "commercial facilities" conform to
accessibility guidelines unless "structurally impracticable" for new
construction or technically infeasible for alterations. Non-compliance with the
ADA could result in the imposition of injunctive relief, fines, an award of
damages to private litigants or additional capital expenditures to remedy such
noncompliance.
Although we believe that our theatres are in substantial compliance with the
ADA, in the summer of 1998 the Civil Rights Division of the Department of
Justice (the "DOJ") threatened to sue us based on an alleged pattern or practice
of violations of Title III of the ADA at our newly constructed and renovated
theatres having stadium-style seating. Thereafter, we engaged in discussions
with the DOJ in an effort to ascertain the DOJ's position and resolve this
matter on a reasonable basis. However, on January 29, 1999, we were notified
that the DOJ had filed suit in the United States District Court for the Central
District of California, UNITED STATES OF AMERICA V. AMC ENTERTAINMENT INC. AND
AMERICAN MULTI-CINEMA, INC. The complaint alleges that we have designed,
constructed and operated two of our motion picture theatres in the Los Angeles
area and unidentified theatres elsewhere that have stadium-style seating in
violation of DOJ regulations implementing Title III of the ADA and related
"Standards for Accessible Design" (the "Standards"). The complaint alleges
various types of non-compliance with the DOJ's Standards, but relates primarily
to issues relating to lines of sight. The DOJ seeks declaratory and injunctive
relief regarding existing and future theatres with stadium-style seating,
compensatory damages and civil penalty.
The current DOJ position appears to be that theatres must provide wheelchair
seating locations and transfer seats with viewing angles to the screen that are
at the median or better, counting all seats in the auditorium. Heretofore, we
have attempted to conform to the evolving standards imposed by the DOJ. However,
we believe that the DOJ's current position has no basis in the ADA or related
regulations and is an attempt to amend the ADA regulations without complying
with the Administrative Procedures Act. We intend to file an answer denying the
allegations made in the DOJ's complaint and asserting that the DOJ is engaging
in unlawful rulemaking. A similar suit recently has been filed by another
exhibitor, CINEMARK USA, INC. V. UNITED STATES DEPARTMENT OF JUSTICE, United
States District Court for the Northern District of Texas, Case No. 399CV0183-L.
We have made a motion to intervene in this litigation. Although no assurances
can be given, based on existing precedent involving stadiums or stadium seating,
we believe that an adverse decision in the matter brought against us by the DOJ
is not likely to have a material adverse effect on our financial condition,
liquidity or results of operations. However, there have been only a few cases
involving stadiums or stadium seating.
In an unrelated action filed October 16, 1998, a private plaintiff filed
suit in the United States District Court for the District of Southern Florida,
BARBARA HARRIS V. AMERICAN MULTI-CINEMA, INC., CIV 98-2472, alleging that we
have violated the ADA by failing to provide comparable seating for wheelchair
patrons. The suit seeks an injunction against continued operation of the
megaplex in violation of the ADA. On November 30, 1998, Cyndi Soto filed suit in
the United States District Court for the Central District of California, CYNDI
SOTO V. AMERICAN MULTI-CINEMA, INC. AND JANSS/TYS LONG BEACH ASSOCIATES,
CV989547JSLRNBX, alleging that one of our theatres violated the ADA and
California law by failing to
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remove certain barriers to access. The suit seeks an unspecified amount of
general, special and punitive damages under California law and an injunction
requiring the Company to remove the alleged barriers. On February 26, 1999, a
purported class action was filed in the United States District Court for the
Southern District of Texas, WILLIAM PAUL STORRS V. AMC ENTERTAINMENT, INC. AND
AMERICAN MULTI-CINEMA, INC., H9906191 alleging that we have violated the ADA and
the Texas Human Resources Code by failing to provide comparable lines of sight
to wheelchair patrons in one of our Texas theatres. The suit seeks injunctive
and declaratory relief and damages. We recently settled for a nominal amount an
action filed in March 1998, HOWARD BELL V. AMC 24 THEATRES, U.S.P.C.D. Arizona,
CIV 980390, that made allegations similar to those in the preceding cases.
POTENTIAL CONFLICTS OF INTEREST
We sponsored Entertainment Properties Trust's formation, and Mr. Peter C.
Brown, our Co-Chairman of the Board, President and Chief Financial Officer,
serves as Chairman of the Board of Trustees of Entertainment Properties Trust.
Because of the various agreements between Entertainment Properties Trust and us,
situations may arise where we have differing interests from Entertainment
Properties Trust. These agreements include (i) leases with respect to 16 theatre
properties, (ii) an option to purchase one additional property and (iii) a
five-year right of first refusal and first offer in favor of Entertainment
Properties Trust to purchase any megaplex and related entertainment properties
acquired or developed and owned (or ground leased) by us. Because of the
relationships between us and Entertainment Properties Trust, there exists the
risk that we will not achieve the same results in our dealings with
Entertainment Properties Trust that we might achieve if such relationships did
not exist. Although we believe that the existing terms of the leases and other
agreements between Entertainment Properties Trust and us reflected market
conditions when they were negotiated, it is possible such terms might have been
different had they been negotiated on an arm's length basis.
ENVIRONMENTAL REGULATION
The Company owns and operates facilities throughout the U.S. and in several
foreign countries, and is subject to the environmental laws and regulations of
those jurisdictions, particularly laws governing the cleanup of hazardous
materials and the management of properties. While the Company is not currently
involved in any environmental matter that could have a material adverse effect
on its financial condition or results of operations, in the future, the Company
might be required to participate in the cleanup of a property that it owns or
leases or at which it is alleged to have disposed of hazardous materials from
one of its facilities. In certain circumstances, the Company might be solely
responsible for any such liability under environmental laws, and, therefore, any
such claims could be material.
POTENTIAL IMPACT OF YEAR 2000 ON COMPANY.
The failure of information technology ("IT") and embedded, or non-IT
systems, because of the Year 2000 issue or otherwise, could adversely affect our
operations. If not corrected, many computer-based systems and theatre equipment,
such as air conditioning systems and fire and sprinkler systems, could encounter
difficulty differentiating between the year 1900 and the year 2000 and
interpreting other dates, resulting in system malfunctions, corruption of data
or system failure. Additionally, we rely upon outside third parties ("business
partners") to supply many of the products and services that we need in our
business. Such products include films which we exhibit and concession products
which we sell. Attendance at our theatres could be severely impacted if one or
more film producers are unable to produce new films because of Year 2000 issues.
We could suffer other business disruptions and loss of revenues if any other
types of material business partners fail to supply the goods or services
necessary for our operations.
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CONTROLLING STOCKHOLDERS
Mr. Stanley H. Durwood, our 78-year old Co-Chairman of the Board and Chief
Executive Officer, owns all the Company's outstanding Class B Stock, which has
ten votes per share and presently is entitled to elect 75% of the members of the
Board of Directors. Mr. Durwood therefore generally has voting control of the
Company, subject to the right of holders of Common Stock to elect 25% of the
members of the Board of Directors. Recently, Mr. Durwood commenced treatment for
a recurrence of esophageal cancer. He was diagnosed with the condition and had
surgery in early 1997.
Mr. Stanley H. Durwood has created a revocable voting trust and revocable
INTER VIVOS trust for his benefit that hold all of the Class B Stock that he
beneficially owns. Mr. Durwood is the sole acting trustee of these trusts; the
named successor trustees are Messrs. Charles J. Egan, Jr., a Director of the
Company, and Raymond F. Beagle, Jr., general counsel to the Company. Under the
terms of the voting trust, Mr. Durwood has all voting powers with respect to
shares held therein during his lifetime. Thereafter, all voting rights with
respect to such shares vest in his successor trustees and any additional
trustees whom they might appoint. The trustees must exercise such rights by
majority vote. Unless revoked by Mr. Durwood or otherwise terminated or extended
in accordance with its terms, the voting trust will terminate in the year 2030.
Mr. Stanley H. Durwood owns approximately 4.0 million shares of Class B
Stock, representing 67.5% of the voting interest in the Company. His children
own an aggregate of approximately 6.35 million shares of Common Stock,
representing 10.6% of the voting interest in the Company, and 32.7% of the
outstanding shares of Common Stock.
As a result of their ownership of shares of Common Stock and because
attendance at stockholders' meetings generally is less than 100%, any corporate
action requiring the approval of the holders of Common Stock voting as a class
may as a practical matter require the approval of the Durwood children. Matters
requiring approval of holders of the Common Stock voting as a class include any
proposed amendment to the Restated and Amended Certificate of Incorporation
changing the authorized number of shares of Common Stock or altering the powers,
preferences or special rights of the shares of such class so as to affect them
adversely.
Holders of Common Stock are entitled to elect 25% of the Company's Board. As
stated above, the Durwood children hold 32.7% of the shares of Common Stock.
Until August 2000, the Durwood children have given an irrevocable proxy to the
Secretary and any Assistant Secretary of the Company to vote their shares of
Common Stock for each candidate to the Board in the same proportion as the
aggregate votes cast by all other stockholders not affiliated with the Company,
its directors and officers. Also, the Durwood children have agreed during such
period not to become a member of any group, solicit proxies or enter into any
arrangement or agreement with respect to voting shares.
REPURCHASE OF THE NOTES UPON CHANGE OF CONTROL
Upon the occurrence of a Change of Control (as defined herein), we will be
required to make an offer to repurchase the Notes at a price equal to 101% of
the principal amount thereof, plus accrued and unpaid interest, if any, to the
date of repurchase. Certain events involving a Change of Control will result in
an event of default under the Credit Facility and may result in an event of
default under our other indebtedness that we may incur in the future. An event
of default under the Credit Facility or other future Senior Indebtedness could
result in an acceleration of such indebtedness, in which case the subordination
provisions of the Notes would require payment in full of such Senior
Indebtedness before repurchase of the Notes. See "Description of Notes--Change
of Control," and "--Subordination." We cannot assure you that we would have
sufficient resources to repurchase the Notes or pay our obligations if the
indebtedness under the Credit Facility or other future Senior Indebtedness were
accelerated upon the occurrence of a Change of Control. The acceleration of
Senior Indebtedness and our inability to repurchase all of the tendered Notes
would constitute Events of Default under the Indenture. These provisions may be
deemed
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to have anti-takeover effects and may delay, defer or prevent a merger, tender
offer or other takeover attempt. No assurance can be given that the terms of any
future indebtedness will not contain cross default provisions based upon Change
of Control or other defaults under such debt instruments.
LACK OF PUBLIC MARKET
The Notes are a new issue of securities for which there is currently no
trading market. Although the Initial Purchasers have informed us that they
currently intend to make a market in the Notes, they are not obligated to do so,
and any such market making may be discontinued at any time without notice. We do
not intend to apply for listing of the Notes on any securities exchange or for
quotation on NASDAQ.
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USE OF PROCEEDS
We will not receive any cash proceeds from the issuance of the Exchange
Notes offered hereby. In consideration for issuing the Exchange Notes as
contemplated in this Prospectus, we will receive in exchange Initial Notes in
like principal amount, the terms of which are the same in all material respects
as the form and terms of the Exchange Notes except that the Exchange Notes have
been registered under the Securities Act and will not contain terms restricting
the transfer thereof or providing for registration rights. The Initial Notes
surrendered in exchange for the Exchange Notes will be retired and cancelled and
cannot be reissued. Accordingly, issuance of the Exchange Notes will not
increase our indebtedness.
We received net proceeds of approximately $219.3 million from the offering
of the Initial Notes. We applied the net proceeds from the offering of the
Initial Notes to reduce indebtedness under our Credit Facility. As of December
31, 1998, after giving effect to the use of the net proceeds of the offering of
the Initial Notes and a recent amendment to our Credit Facility, we could have
had approximately $815 million in net indebtedness under the Credit Facility and
therefore had available approximately $342 million additional borrowing capacity
under the Credit Facility, based on "net indebtedness" at the end of the quarter
and "Annualized EBITDA" during the previous four quarters, as such terms are
defined in the Credit Facility.
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CAPITALIZATION
The following table sets forth our total capitalization (including
short-term debt) as of December 31, 1998 and as adjusted to give pro forma
effect to the offering of the Initial Notes and the application of the $219.3
million in estimated net proceeds thereof to the reduction of outstanding
indebtedness under the Credit Facility as described in "Use of Proceeds."
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1998
-----------------------
ACTUAL AS ADJUSTED
---------- -----------
(IN THOUSANDS)
<S> <C> <C>
Short-term debt (including current maturities of capital lease obligations).............. $ 3,998 $ 3,998
Long-term debt
Credit Facility (1).................................................................... 253,000 33,700
Notes.................................................................................. -- 225,000
9 1/2% Notes due 2009.................................................................. 199,030 199,030
Capital lease obligations.............................................................. 45,428 45,428
---------- -----------
Total debt............................................................................... 501,456 507,156
Total stockholders' equity............................................................... 136,605 136,605
---------- -----------
Total capitalization..................................................................... $ 638,061 $ 643,761
---------- -----------
---------- -----------
</TABLE>
- ------------------------
(1) Our indebtedness under the Credit Facility was $105 million on March 4,
1999. The total commitment under the Credit Facility is $425 million, but
the facility contains covenants that limit our ability to incur debt
(whether under the Credit Facility or from other sources). See "Risk
Factors--Substantial Obligations; Need for Additional Capital."
25
<PAGE>
MANAGEMENT OF THE COMPANY
DIRECTORS AND OFFICERS
The Directors and Executive Officers of the Company are as follows:
<TABLE>
<CAPTION>
YEARS
ASSOCIATED
WITH THE
NAME AGE(1) POSITIONS COMPANY(1)
- ----------------------------------- ----------- ------------------------------------------------------- -------------
<S> <C> <C> <C>
Stanley H. Durwood................. 78 Co-Chairman of the Board, Chief Executive Officer and 53(2)
Director (AMCE); Chairman of the Board, Chief
Executive Officer and Director (AMC)
Peter C. Brown..................... 40 Co-Chairman of the Board and President (AMCE); 7
Executive Vice President (AMC); Chief Financial
Officer and Director (AMCE and AMC)
Philip M. Singleton................ 52 President (AMC); Executive Vice President (AMCE); Chief 24(2)
Operating Officer and Director (AMCE and AMC)
John D. McDonald................... 41 Executive Vice President-North American Operations 23(2)
(AMC)
Charles J. Egan, Jr................ 66 Director (AMCE) 12
William T. Grant, II............... 48 Director (AMCE) 2
John P. Mascotte................... 59 Director (AMCE) 2
Paul E. Vardeman................... 68 Director (AMCE) 15(2)
Richard T. Walsh................... 45 Senior Vice President (AMC) 23(2)
Richard J. King.................... 49 Senior Vice President (AMC) 26(2)
Rolando B. Rodriguez............... 39 Senior Vice President (AMC) 23(2)
Craig R. Ramsey.................... 48 Senior Vice President-Finance (AMCE and AMC) 3
Richard L. Obert................... 59 Senior Vice President-Chief Accounting and Information 9
Officer (AMCE and AMC)
Charles P. Stilley................. 44 President (AMC Realty, Inc.) 17(2)
Richard M. Fay..................... 49 President (AMC Film Marketing, a division of AMC) 3
</TABLE>
- ------------------------
(1) As of December 31, 1998.
(2) Includes years of service with the predecessor of the Company.
All directors are elected annually, and each holds office until his
successor has been duly elected and qualified or his earlier resignation or
removal. There are no family relationships between any Director and any
Executive Officer of the Company.
All current Executive Officers of the Company hold such offices at the
pleasure of the Company's Board of Directors, subject in certain instances, to
their rights under employment agreements.
26
<PAGE>
As part of its succession planning and with the approval of Mr. Stanley H.
Durwood, our Board of Directors has appointed the Company's President and Chief
Financial Officer, Mr. Peter C. Brown, as Co-Chairman. Mr. Brown oversees all
Company matters with Mr. Durwood.
Mr. Stanley H. Durwood has served as a Director of the Company from its
organization on June 14, 1983, and of AMC since August 2, 1968. Mr. Durwood has
served as Co-Chairman of the Board of the Company since May 15, 1998. Mr.
Durwood served as Chairman of the Board of the Company from February 1986 until
May 15, 1998, and as Chairman of the Board of AMC since February 1986. Mr.
Durwood has served as Chief Executive Officer of the Company since June 1983,
and of AMC since February 20, 1986. Mr. Durwood served as President of the
Company (i) from June 1983 through February 20, 1986, (ii) from May 1988 through
June 1989, and (iii) from October 6, 1995 to January 10, 1997. Mr. Durwood
served as President of AMC (i) from August 2, 1968 through February 20, 1986,
(ii) from May 13, 1988 through November 8, 1990, and (iii) from October 6, 1995
to January 10, 1997. Mr. Durwood is a graduate of Harvard University.
Mr. Peter C. Brown has served as a Director of the Company and AMC since
November 12, 1992 and has served as Co-Chairman of the Board of the Company
since May 15, 1998. Mr. Brown was elected President of the Company on January
10, 1997. Mr. Brown served as Executive Vice President of the Company from
August 3, 1994 to January 10, 1997. Mr. Brown served as Executive Vice President
of AMC from August 3, 1994 to January 10, 1997. Mr. Brown has served as
Executive Vice President of AMC since August 3, 1994, and as Chief Financial
Officer of the Company and AMC since November 14, 1991. Mr. Brown served as
Senior Vice President of the Company and AMC from November 14, 1991 until his
appointment as Executive Vice President in August 1994. Mr. Brown served as
Treasurer of the Company and AMC from September 28, 1992 through September 19,
1994. Mr. Brown also serves as Chairman of the Board of Trustees of
Entertainment Properties Trust, a real estate investment trust, and serves on
the board of directors of Protection One, Inc., a security alarm monitoring
company. Mr. Brown also serves as a member of the Board of Trustees of the
Kansas City Art Institute and Rockhurst High School. In addition, Mr. Brown is a
member of the Board of Advisors for the University of Kansas School of Business.
Mr. Brown is a graduate of the University of Kansas.
Mr. Philip M. Singleton has served as a Director of the Company and AMC
since November 12, 1992. Mr. Singleton was elected President of AMC on January
10, 1997. Mr. Singleton has served as Executive Vice President of the Company
since August 3, 1994 and as Chief Operating Officer of the Company and AMC since
November 14, 1991. Mr. Singleton served as Executive Vice President of AMC from
August 3, 1994 to January 10, 1997. Mr. Singleton served as Senior Vice
President of the Company and AMC from November 14, 1991 until his appointment as
Executive Vice President in August 1994. Prior to November 14, 1991, Mr.
Singleton served as Vice President in charge of operations for the Southeast
Division of AMC from May 10, 1982. Mr. Singleton holds an undergraduate degree
from California State University, Sacramento, and an M.B.A. degree from the
University of South Florida.
Mr. Charles J. Egan, Jr., has served as a Director of the Company since
October 30, 1986. Mr. Egan is Vice President of Hallmark Cards, Incorporated,
and was General Counsel of such company until December 31, 1996. Hallmark Cards,
Incorporated is primarily engaged in the business of greeting cards and related
social expressions products, Crayola crayons and the production of movies for
television. Mr. Egan also serves as a member of the Board of Trustees, Treasurer
and Chairman of the Finance Committee of the Kansas City Art Institute. Mr. Egan
holds an A.B. degree from Harvard University and an LL.B. degree from Columbia
University.
Mr. William T. Grant, II has served as a Director of the Company since
November 14, 1996. Mr. Grant is Chairman of the Board, President, Chief
Executive Officer and a Director of LabONE, Inc. LabONE, Inc. provides risk
appraisal laboratory testing services to the insurance industries in the United
States and Canada. Mr. Grant also serves on the board of directors of Commerce
Bancshares, Inc., Kansas City Power & Light Company, Business Men's Assurance
Company of America, and Response Oncology, Inc.
27
<PAGE>
Mr. Grant is a board member of the Boys and Girls Clubs of Greater Kansas City.
Mr. Grant holds a B.A. degree from the University of Kansas and an M.B.A. degree
from the Wharton School of Finance at the University of Pennsylvania.
Mr. John P. Mascotte has served as a Director of the Company since November
14, 1996. Mr. Mascotte assumed the duties of President and Chief Executive
Officer of BlueCross BlueShield of Kansas City on July 1, 1997. Prior thereto,
Mr. Mascotte served as Chairman of Johnson & Higgins of Missouri, Inc., a
privately held insurance broker, from January 1996 to June 30, 1997, and as
Chairman of the Board and Chief Executive Officer of The Continental
Corporation, a property-casualty insurer, from December 1982 through December
1995. Mr. Mascotte is also currently a consultant to the First Episcopal
District, African Methodist Episcopal Church. Mr. Mascotte also serves on the
board of directors of Hallmark Cards, Incorporated, Hallmark Entertainment,
Inc., Business Men's Assurance Company of America and American Home Products
Corporation, in addition to serving on the boards of BlueCross BlueShield of
Kansas City and the BlueCross and Blue Shield Association. Also, Mr. Mascotte is
Vice Chairman of the Aspen Institute, Chairman of LISC (Local Initiatives
Support Corp.) and a member of the Board of Trustees of the New York Public
Library and Midwest Research Institute. Mr. Mascotte is a board member of the
Hall Family Foundation and the Greater Kansas City Community Foundation and is
Co-Chairman of the Jazz District Redevelopment Corporation in Kansas City,
Missouri. Mr. Mascotte holds B.S. degrees from St. Joseph's College, Rensselaer,
Indiana, and an LL.B. degree from the University of Virginia. Mr. Mascotte is
also a certified public accountant and a chartered life underwriter.
Mr. Paul E. Vardeman has served as a Director of the Company since June 14,
1983. Mr. Vardeman was a director, officer and shareholder of the law firm of
Polsinelli, White, Vardeman & Shalton, P.C., Kansas City, Missouri from 1982
until his retirement from such firm in November 1997. Prior thereto, Mr.
Vardeman served as a Judge of the Circuit Court of Jackson County, Missouri. Mr.
Vardeman holds undergraduate and J.D. degrees from the University of
Missouri-Kansas City.
Mr. John D. McDonald has served as Executive Vice President-North American
operations of AMC since October 1, 1998. Prior thereto, Mr. McDonald served as
Senior Vice President, corporate operations from November 9, 1995 until his
promotion to Executive Vice President on October 1, 1998. Mr. McDonald served as
Vice President, corporate operations from September 22, 1992 through November 9,
1995.
Mr. Richard T. Walsh has served as Senior Vice President in charge of
operations for the West Division of AMC since July 1, 1994. Previously, Mr.
Walsh served as Vice President in charge of operations for the Central Division
of AMC from June 10, 1992, and as Vice President in charge of operations for the
Midwest Division of AMC from December 1, 1988.
Mr. Richard J. King has served as Senior Vice President in charge of
operations for the East Division of AMC since January 4, 1995. Previously, Mr.
King served as Vice President in charge of operations for the East Division of
AMC from June 10, 1992, and as Vice President in charge of operations for the
Southwest Division of AMC from October 30, 1986.
Mr. Rolando B. Rodriguez has served as Senior Vice President in charge of
operations for the South Division of AMC since April 2, 1996. Previously, Mr.
Rodriguez served as Vice President and South Division Operations Manager of AMC
from July 1, 1994, as Assistant South Division Operations Manager of AMC from
February 12, 1993, as South Division Senior Operations Manager from March 29,
1992, and as South Division Operations Manager from August 6, 1989.
Mr. Richard L. Obert has served as Senior Vice President-Chief Accounting
and Information Officer of the Company and AMC since November 9, 1995, and prior
thereto served as Vice President and Chief Accounting Officer of the Company and
AMC from January 9, 1989.
Mr. Craig R. Ramsey has served as Senior Vice President-Finance of the
Company since August 20, 1998. Prior thereto, Mr. Ramsey served as Vice
President of Finance from January 17, 1997 and as
28
<PAGE>
Director of Information Systems and Director of Financial Reporting since
joining the Company on February 1, 1995. Previously, Mr. Ramsey served as Vice
President-Corporate Accounting and Data Processing for Mid-America Dairymen,
Inc.
Mr. Charles P. Stilley has served as President of AMC Realty, Inc., a wholly
owned subsidiary of the Company, since February 9, 1993, and prior thereto
served as Senior Vice President of AMC Realty, Inc. from March 3, 1986.
Mr. Richard M. Fay has served as President-AMC Film Marketing, a division of
AMC, since September 8, 1995. Previously, Mr. Fay served as Senior Vice
President and Assistant General Sales Manager of Sony Pictures from 1994 until
joining AMC. From 1991 to 1994, Mr. Fay served as Vice President and Head Film
Buyer for the eastern division of United Artists Theatre Circuit, Inc.
RECENT EMPLOYMENT AGREEMENTS
Messrs. Peter C. Brown, Philip M. Singleton, Richard T. Walsh and Richard M.
Fay have entered into new employment agreements with the Company providing for
annual base salaries of no less than the following amounts: Mr. Brown--$400,000;
Mr. Singleton--$375,000; Mr. Walsh--$230,041 and Mr. Fay-- $285,031. The
agreements also provide for discretionary bonuses, an automobile allowance,
reimbursement of reasonable travel and entertainment expenses and other benefits
offered from time to time to other executive officers. The employment agreements
of Mr. Brown and Mr. Singleton have terms of three years and those of Mr. Walsh
and Mr. Fay have terms of two years. On the anniversary date of each agreement,
one year shall be added to its term, so that each employment agreement shall
always have a three-year or two-year term, as the case may be, as of each
anniversary date. Each employment agreement terminates generally without
severance if such employee is terminated for cause, as defined in the employment
agreement, or upon such employee's resignation, death or disability as defined
in his employment agreement. Pro rata bonus payments will be made upon
termination by reason of disability or death. If either Mr. Brown or Mr.
Singleton is terminated without cause or terminates his agreement following a
material breach by the Company or a change in control, as defined in the
agreement, he will be entitled to receive (i) a lump sum cash payment equal to
the lesser of 4.5 times current base salary or 2.99 times average annual W-2
earnings for the prior five years and (ii) the value of all outstanding employee
stock options held by such employee. If either Mr. Walsh or Mr. Fay is
terminated without cause or terminates his agreement subsequent to specified
changes in his responsibilities, base salary or benefits following a change in
control, as defined in the agreement, he will be entitled to receive a lump sum
cash payment equal to two years base salary. In addition, if either Mr. Brown or
Mr. Singleton dies, is terminated without cause or terminates his agreement
following a material breach by the Company or a change in control, the Company
will redeem shares previously purchased by him with the proceeds of a loan from
the Company. (Mr. Brown financed the purchase of 375,000 shares with such a loan
and Mr. Singleton financed the purchase of 250,000 shares with such a loan). In
such event, if the employee's obligations under the note to the Company exceed
the value of the stock which he acquired with the note proceeds, the Company
will forgive a portion of such excess in an amount based on a formula set forth
in the agreement. The amounts payable to the named executive officers under
these employment agreements, assuming termination by reason of a change of
control as of March 1, 1999 were as follows: Mr. Brown-- $1,067,652; Mr.
Singleton--$1,000,923; Mr. Walsh $424,931; and Mr. Fay--$526,509.
29
<PAGE>
THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
We sold the Initial Notes in a private offering on January 27, 1999, to the
Initial Purchasers pursuant to a purchase agreement dated as of January 21, 1999
by and among the Company and the Initial Purchasers (the "Purchase Agreement").
The Initial Purchasers subsequently resold the Initial Notes to qualified
institutional buyers and non-U.S. persons in reliance, and subject to the
restrictions imposed under, Rule 144A and Regulation S under the Securities Act.
Under the Registration Rights Agreement that we and the Initial Purchasers
entered into in connection with the private offering of the Initial Notes, we
are required to file, no more than 90 days following the date the Initial Notes
were originally issued (the "Issue Date"), the Registration Statement of which
this Prospectus is a part providing for a registered exchange offer of new notes
identical in all material respects to the Initial Notes, except that such new
notes will be freely transferable and will not have any covenants regarding
exchange and registration rights (the "Exchange Offer"). Under the Registration
Rights Agreement, we are required to:
- use our best efforts to cause the Registration Statement to be declared
effective no later than June 26, 1999 (150 days after the Issue Date),
- keep the Exchange Offer open for not less than 30 days (or longer if
required by applicable law) after the date that notice of the Exchange
Offer is mailed to holders of the Initial Notes, and
- use our best efforts to consummate the Exchange Offer no later than July
26, 1999 (180 days after the Issue Date).
In the event that (1) applicable law or interpretations of the staff of the
Commission do not permit us to effect such an Exchange Offer, (2) for any other
reason the Registration Statement is not consummated within 180 days after the
original issuance of the Initial Notes, (3) the Initial Purchasers so request
with respect to Notes not eligible to be exchanged for Exchange Notes in the
Exchange Offer or (4) any holder of Initial Notes (other than an Initial
Purchaser with respect to an unsold allotment) is not eligible to participate in
the Exchange Offer or does not receive freely tradeable Exchange Notes in the
Exchange Offer other than by reason of such holder being our affiliate (it being
understood that the requirement that an Exchanging Dealer (as defined below)
deliver the prospectus contained in the Exchange Offer Registration Statement in
connection with sales of Exchange Notes shall not result in such Exchange Notes
being not "freely tradeable"), we will, at our cost, (a) as promptly as
practicable, file a shelf registration statement covering resales of the Initial
Notes or the Exchange Notes, as the case may be (the "Shelf Registration
Statement"), (b) use our best efforts to cause the Shelf Registration Statement
to be declared effective under the Securities Act and (c) use our best efforts
to keep the Shelf Registration Statement effective until January 27, 2001. We
will, in the event a Shelf Registration Statement is filed, among other things,
provide to each holder for whom such Shelf Registration Statement was filed
copies of the prospectus which is a part of the Shelf Registration Statement,
notify each such holder when the Shelf Registration Statement has become
effective and take certain other actions as are required to permit unrestricted
resales of the Initial Notes or the Exchange Notes, as the case may be. A holder
selling such Initial Notes or Exchange Notes pursuant to the Shelf Registration
Statement generally would be required to be named as a selling security holder
in the related prospectus and to deliver a prospectus to purchasers, will be
subject to certain of the civil liability provisions under the Securities Act in
connection with such sales and will be bound by the provisions of the
Registration Rights Agreement which are applicable to such holder (including
certain indemnification obligations).
If (1) on or prior to June 26, 1999 neither the Registration Statement nor
the Shelf Registration Statement has been declared effective, (2) on or prior to
July 26, 1999 neither the Exchange Offer has been consummated nor the Shelf
Registration Statement has been declared effective, or (3) after either the
Exchange Offer Registration Statement or the Shelf Registration Statement has
been declared effective,
30
<PAGE>
such Registration Statement thereafter ceases to be effective or usable (subject
to certain exceptions) in connection with resales of Initial Notes or Exchange
Notes in accordance with and during the periods specified in the Registration
Rights Agreement (each such event referred to in clauses (1) through (3), a
"Registration Default"), interest ("Special Interest") will accrue on the
principal amount of the Initial Notes and the Exchange Notes (in addition to the
stated interest on the Initial Notes and the Exchange Notes) from and including
the date on which any such Registration Default shall occur to but excluding the
date on which all Registration Defaults have been cured. Special Interest will
accrue at a rate of 0.50% per annum during the 90-day period immediately
following the occurrence of such Registration Default and shall increase by
0.50% per annum at the end of each subsequent 30-day period, but in no event
shall such rate exceed 1.0% per annum.
EFFECT OF THE EXCHANGE OFFER
Based on interpretations by the staff of the Commission set forth in
no-action letters issued to third parties, we believe that you may offer for
resale, resell, and otherwise transfer the Exchange Notes issued to you pursuant
to the Exchange Offer in exchange for your Initial Notes (unless you are an
"affiliate of the Company within the meaning of Rule 405 under the Securities
Act and except as noted below with respect to persons who are "Exchanging
Dealers") without compliance with the registration and prospectus delivery
provisions of the Securities Act, provided that you can represent that:
- you are not engaged in, and do not intend to engage in, and have no
arrangement or understanding with any person to participate in, a
distribution of the Exchange Notes;
- you are acquiring the Exchange Notes in the ordinary course of your
business; and
- you did not acquire the Initial Notes directly from us or from one of our
affiliates for resale pursuant to Rule 144A, Regulation S or other
available exemption under the Securities Act.
By tendering the Initial Notes in exchange for Exchange Notes, you will be
required to make representations to that effect. If you are participating in or
intend to participate in a distribution of the Exchange Notes, or have any
arrangement or understanding with any person to participate in a distribution of
the Exchange Notes to be acquired pursuant to the Exchange Offer, you may be
deemed to have received "restricted securities" and may not rely on the
applicable interpretations of the staff of the Securities and Exchange
Commission. You may only sell your Exchange Notes pursuant to a registration
statement containing the selling security holder information required by Item
507 or 508 of Regulation S-K under the Securities Act, as applicable, or
pursuant to an exemption from the registration requirement of the Securities
Act.
Each broker-dealer that receives Exchange Notes for its own account in
exchange for Initial Notes, where such Initial Notes were acquired by such
broker-dealer as a result of market-making activities or other trading
activities (but not directly from us or one of our affiliates) (an "Exchanging
Dealer"), must acknowledge in the Letter of Transmittal that it will deliver a
prospectus in connection with any resale of such Exchange Notes. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. Based upon interpretations by the staff of the
Commission, we believe that Exchange Notes issued pursuant to the Exchange Offer
to Exchanging Dealers may be offered for resale, resold and otherwise
transferred by a Exchanging Dealer upon compliance with the prospectus delivery
requirements, but without compliance with the registration requirements, of the
Securities Act. This Prospectus, as it may be amended or supplemented from time
to time, may be used by an Exchanging Dealer in connection with resales of
Exchange Notes received in exchange for Initial Notes. We have agreed that,
starting on the Expiration Date (as defined herein) and ending on the close of
business one year after the Expiration Date, we will make this Prospectus
available to any broker-dealer for use in connection with any such resale. By
acceptance of this Exchange Offer, each broker-dealer that receives Exchange
Notes pursuant to
31
<PAGE>
the Exchange Offer agrees to notify us prior to using this Prospectus in
connection with the sale or transfer of Exchange Notes. See "Plan of
Distribution."
To the extent Initial Notes are tendered and accepted in the Exchange Offer,
the principal amount of outstanding Initial Notes will decrease with a resulting
decrease in the liquidity in the market for the Initial Notes. Initial Notes
that are still outstanding following the consummation of the Exchange Offer will
continue to be subject to certain transfer restrictions.
TERMS OF THE EXCHANGE OFFER
We are sending this Prospectus and the accompanying Letter of Transmittal to
all registered holders as of April 5, 1999.
Upon the terms and subject to the conditions set forth in this Prospectus
and in the Letter of Transmittal, we will accept any and all Initial Notes
validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on
the Expiration Date. As of the date of this Prospectus, an aggregate of $225
million principal amount of the Initial Notes is outstanding. We will issue
$1,000 principal amount of Exchange Notes in exchange for each $1,000 principal
amount of outstanding Initial Notes accepted in the Exchange Offer. You may
tender some or all of your Initial Notes pursuant to the Exchange Offer.
However, Initial Notes may be tendered only in integral multiples of $1,000.
By tendering Initial Notes in exchange for Exchange Notes and by executing
the Letter of Transmittal, you will be required to represent, among other
things, that:
- you are not an "affiliate" (as defined in Rule 405 of the Securities Act)
of the Company (or, if you are an affiliate, that you will comply with the
registration and prospectus delivery requirements of the Securities act to
the extent applicable);
- you are not engaged in, and do not intend to engage in, and have no
arrangement or understanding with any person to participate in, a
distribution of the Exchange Notes;
- you are acquiring the Exchange Notes in the ordinary course of your
business;
- you did not acquire the Initial Notes directly from us or from one of our
affiliates for resale pursuant to Rule 144A, Regulation S or other
available exemption under the Securities Act.
Each Exchanging Dealer must acknowledge in the Letter of Transmittal that it
will deliver a prospectus in connection with any resale of such Exchange Notes.
See "Plan of Distribution."
The form and terms of the Exchange Notes will be identical in all material
respects to the form and terms of the Initial Notes, except that:
- the offering of the Exchange Notes has been registered under the
Securities Act;
- the Exchange Notes will not be subject to transfer restrictions; and
- the Exchange Notes will be issued free of any covenants regarding exchange
and registration rights (including that they will not provide for
Additional Interest).
The Exchange Notes will evidence the same debt as the Initial Notes and will
be entitled to the benefits of the Indenture under which the Initial Notes were,
and the Exchange Notes will be, issued.
This Prospectus, together with the accompanying Letter of Transmittal, is
initially being sent to all registered holders of Initial Notes on or about
April 5, 1999. The Exchange Offer is not conditioned upon any minimum aggregate
principal amount of Initial Notes being tendered. However, the Exchange Offer is
subject to certain customary conditions, which we may waive, and to the terms
and provisions of the Registration Rights Agreement. See "--Certain Conditions
to the Exchange Offer."
32
<PAGE>
You do not have any appraisal or dissenters' rights under law or the
Indenture in connection with the Exchange Offer. We intend to conduct the
Exchange Offer in accordance with the applicable requirements of the Exchange
Act and the rules and regulations of the Commission thereunder.
If we do not accept for exchange any tendered Initial Notes because of an
invalid tender, the occurrence of certain other events set forth herein or
otherwise, any such unaccepted Initial Notes will be returned, without expense
to you, as promptly as practicable after the Expiration Date.
If you tender Initial Notes in the Exchange Offer, you will not be required
to pay brokerage commissions or fees or, subject to the instructions in the
Letter of Transmittal, transfer taxes with respect to the exchange of Initial
Notes pursuant to the Exchange Offer. We will pay all charges and expenses,
other than certain applicable taxes, in connection with the Exchange Offer. See
"--Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" means 5:00 p.m., New York City time, on May 10,
1999, unless we, in our sole discretion, extend the Exchange Offer, in which
case the term "Expiration Date" shall mean the latest date and time to which the
Exchange Offer is extended.
We have the right to delay accepting any Initial Notes, to extend the
Exchange Offer or, if any of the conditions set forth below under "Certain
Conditions to the Exchange Offer" shall not have been satisfied, to terminate
the Exchange Offer, by giving oral or written notice of such delay, extension or
termination to the Exchange Agent. We also have the right to amend the terms of
the Exchange Offer in any manner. If we delay acceptance of any Initial Notes,
or terminate or amend the Exchange Offer, we will make a public announcement
thereof as promptly as practicable. If we believe that we have made a material
amendment of the terms of the Exchange Offer, we will promptly disclose such
amendment in a manner reasonably calculated to inform the holders of such
amendment and we will extend the Exchange Offer to the extent required by law.
We will notify the Exchange Agent of any extension of the Exchange Offer in
writing or orally (which we will promptly confirm in writing). Unless otherwise
required by applicable law or regulation, we will make a public announcement of
any extension of the Expiration Date before 9:00 a.m., New York City time, on
the first business day after the previously-scheduled expiration date.
Without limiting the manner in which we may choose to make public
announcements of any delay, extension, termination or amendment of the Exchange
Offer, we shall have no obligation to publish, advise or otherwise communicate
any such public announcement, other than by making a timely press release
thereof.
INTEREST ON THE EXCHANGE NOTES
Interest on the Exchange Notes will accrue from the last interest payment
date on which interest was paid on the Initial Notes surrendered in exchange
therefor or, if no interest has been paid on the Initial Notes, from January 27,
1999. The Exchange Notes will bear interest at a rate of 9 1/2% per year.
Interest on the Exchange Notes will be payable semiannually on February 1 and
August 1 of each year, beginning August 1, 1999.
PROCEDURES FOR TENDERING
A holder of Initial Notes who wishes to tender Initial Notes for exchange
pursuant to the Exchange Offer must transmit a properly completed and duly
executed Letter of Transmittal, or a facsimile thereof, together with any
required signature guarantees and with the certificates representing the Initial
Notes being tendered and any other required documents, to the Exchange Agent
prior to 5:00 p.m., New York City time, on the Expiration Date. Alternatively,
you may either (i) cause The Depository Trust Company ("DTC" or the "Book-Entry
Transfer Facility") to send an Agent's Message (as defined below) to the
Exchange Agent in lieu of a Letter of Transmittal and a timely confirmation of a
book-entry transfer (a
33
<PAGE>
"Book-Entry Confirmation") of such Initial Notes, if such procedure is
available, into the Exchange Agent's account at DTC pursuant to the procedure
for book-entry transfer described below or (ii) comply with the guaranteed
delivery procedures described below. To be tendered effectively, the Letter of
Transmittal and the Initial Notes, or a Book-Entry Confirmation, as the case may
be, and other required documents must be received by the Exchange Agent at the
address set forth below under "--Exchange Agent" prior to 5:00 p.m., New York
City time, on the Expiration Date. DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE
WITH ITS PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
The term "Agent's Message" means a message transmitted by DTC to, and
received by, the Exchange Agent and forming a part of a Book-Entry Confirmation,
which states that DTC has received an express acknowledgment from the
participant in DTC tendering the Initial Notes stating (i) the aggregate
principal amount of Initial Notes which have been tendered by such participant,
(ii) that such participant has received and agrees to be bound by the terms of
the Letter of Transmittal and (iii) that the Company may enforce such agreement
against the participant.
DTC has authorized DTC participants that hold Initial Notes on behalf of
beneficial owners of Initial Notes through DTC to tender their Initial Notes as
if they were holders. To effect a tender of Initial Notes, DTC participants
should transmit their acceptance to DTC through the DTC Automated Tender Offer
Program ("ATOP") and follow the procedure for book-entry transfer set forth in
"--Book-Entry Transfer."
The tender (as set forth above) by a holder of Initial Notes will constitute
an agreement between such holder and us in accordance with the terms and subject
to the conditions set forth herein and in the Letter of Transmittal.
Delivery of all documents must be made to the Exchange Agent at its address
set forth herein. Holders may also request that their respective brokers,
dealers, commercial banks, trust companies or nominees effect such tender for
the holders.
The method of delivery of Initial Notes, the Letter of Transmittal and all
other required documents to the Exchange Agent, including through DTC's ATOP
system, is at the election and risk of the holders. Instead of delivery by mail,
we recommend that holders use an overnight or hand delivery service. In all
cases, sufficient time should be allowed to assure timely delivery. NO LETTER OF
TRANSMITTAL OR INITIAL NOTES SHOULD BE SENT TO US.
Only a holder of Initial Notes may tender such Initial Notes in the Exchange
Offer. The term "holder" with respect to the Exchange Offer means any person in
whose name Initial Notes are registered on the register maintained by the
Trustee or any other person who has obtained a properly completed bond power
from the registered holder, or any person whose Initial Notes are held of record
by DTC who desires to deliver such Initial Notes by book-entry transfer at DTC.
Any beneficial holder whose Initial Notes are registered in the name of his
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should contact such registered holder promptly and instruct such
registered holder to tender on his behalf. If such beneficial holder wishes to
tender on his own behalf, such beneficial holder must, prior to completing and
executing the Letter of Transmittal and delivering his Initial Notes, either
make appropriate arrangements to register ownership of the Initial Notes in such
holder's name or obtain a properly completed bond power from the registered
holder. The transfer of record ownership may take considerable time.
Signatures on a Letter of Transmittal or a notice of withdrawal must be
guaranteed by an "Eligible Institution", which means
- a member firm of a registered national securities exchange or of the
National Association of Securities Dealers, Inc.;
- a commercial bank or trust company having an office or correspondent in
the United States; or
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- an "eligible guarantor institution" within the meaning of Rule 17Ad-15
under the Exchange Act,
unless the Initial Notes tendered pursuant thereto are tendered
- by a registered holder who has not completed the box entitled "Special
Issuance Instructions" or "Special Delivery Instructions" on the Letter of
Transmittal; or
- for the account of an Eligible Institution.
If the Letter of Transmittal is signed by the recordholder(s) of the Initial
Notes tendered, the signature must correspond with the name(s) written on the
face of the Initial Notes without alteration, enlargement or any change
whatsoever. If the Letter of Transmittal is signed by a participant in DTC, the
signature must correspond with the name as it appears on the security position
listing as the holder of the Initial Notes.
If the Letter of Transmittal is signed by a person other than the registered
holder of any Initial Notes listed therein, such Initial Notes must be endorsed
or accompanied by appropriate bond powers which authorize such person to tender
the Initial Notes on behalf of the registered holder, and, in either case,
signed as the name of the registered holder or holders appears on the Initial
Notes.
If the Letter of Transmittal or any Initial Notes or bond powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and, unless waived by us, evidence
satisfactory to us of their authority to so act must be submitted with the
Letter of Transmittal.
A tender will be deemed to have been received as of the date when the
tendering holder's duly signed Letter of Transmittal accompanied by the Initial
Notes tendered (or a timely confirmation of a book-entry transfer of Initial
Notes into the Exchange Agent's account at DTC with an Agent's Message) or a
Notice of Guaranteed Delivery from an Eligible Institution is received by the
Exchange Agent. Issuances of Exchange Notes in exchange for Initial Notes
tendered pursuant to a Notice of Guaranteed Delivery by an Eligible Institution
will be made only against delivery of the Letter of Transmittal (and any other
required documents) and the tendered Initial Notes (or a timely confirmation
received of a book-entry transfer of Initial Notes into the Exchange Agent's
account at DTC with an Agent's Message) with the Exchange Agent.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance and withdrawal of the tendered Initial Notes will be
determined by us in our sole discretion, which determination will be final and
binding. We reserve the absolute right to reject any and all Initial Notes not
properly tendered or any Initial Notes our acceptance of which would, in the
opinion of our counsel, be unlawful. We also reserve the absolute right to waive
any irregularities or conditions of tender as to particular Initial Notes. Our
interpretation of the terms and conditions of the Exchange Offer (including the
instructions in the Letter of Transmittal) will be final and binding on all
parties. Unless waived, any defects or irregularities in connection with tenders
of Initial Notes must be cured within such time as we shall determine. Neither
we, the Exchange Agent nor any other person shall be under any duty to give
notification of defects or irregularities with respect to tenders of Initial
Notes nor shall we, the Exchange Agent or any other person incur any liability
for failure to give such notification. Tenders of Initial Notes will not be
deemed to have been made until such irregularities have been cured or waived.
Any Initial Notes received by the Exchange Agent that are not properly tendered,
and as to which the defects or irregularities have not been cured or waived,
will be returned without cost by the Exchange Agent to the tendering holder of
such Initial Notes unless otherwise provided in the Letter of Transmittal as
soon as practicable following the Expiration Date.
In addition, we reserve the right in our sole discretion to (a) purchase or
make offers for any Initial Notes that remain outstanding subsequent to the
Expiration Date, or, as set forth under "--Certain Conditions to the Exchange
Offer," to terminate the Exchange Offer and (b) to the extent permitted by
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applicable law, purchase Initial Notes in the open market, in privately
negotiated transactions or otherwise. The terms of any such purchases or offers
may differ from the terms of the Exchange Offer.
By tendering, each holder of Initial Notes will represent to us that, among
other things:
- the Exchange Notes acquired pursuant to the Exchange Offer in exchange for
such holder's Initial Notes are being obtained in the ordinary course of
business of the person receiving such Exchange Notes, whether or not such
person is the holder;
- neither the holder nor any other person receiving such Exchange Notes has
an arrangement or understanding with any person to participate in the
distribution of the Exchange Notes;
- neither the holder nor any such other person receiving such Exchange Notes
is an "affiliate" of ours, within the meaning of Rule 405 under the
Securities Act (or, if such person is an affiliate, that it will comply
with the registration and prospectus delivery requirements of the
Securities act to the extent applicable);
- the holder did not acquire the Initial Notes directly from us or from one
of our affiliates for resale pursuant to Rule 144A, Regulation S or other
available exemption under the Securities Act.
ACCEPTANCE OF INITIAL NOTES FOR EXCHANGE; DELIVERY OF EXCHANGE NOTES
Upon satisfaction or waiver of all of the conditions to the Exchange Offer,
we will accept, promptly after the Expiration Date, all Initial Notes properly
tendered and will issue the Exchange Notes promptly after acceptance of the
Initial Notes. See "--Certain Conditions to the Exchange Offer." For each
Initial Note accepted for exchange, the holder of such Initial Notes will
receive an Exchange Note having a principal amount equal to that of the
surrendered Initial Note.
For purposes of the Exchange Offer, we shall be deemed to have accepted
properly tendered Initial Notes for exchange when, as and if we have given oral
or written notice thereof to the Exchange Agent, with written confirmation of
any oral notice to be given promptly thereafter.
In all cases, issuance of Exchange Notes for Initial Notes that are accepted
for exchange pursuant to the Exchange Offer will be made only after timely
receipt by the Exchange Agent of a properly completed and duly executed Letter
of Transmittal and certificates for such Initial Notes, or a timely Book-Entry
Confirmation (with an Agent's Message) of the book-entry transfer of such
Initial Notes into the Exchange Agent's account at the Book-Entry Transfer
Facility, and all other required documents, in each case, in form satisfactory
to us and the Exchange Agent. If any tendered Initial Notes are not accepted for
any reason set forth in the terms and conditions of the Exchange Offer or if
Initial Notes are submitted for a greater principal amount than the holder
desires to exchange, such unaccepted or non-exchanged Initial Notes will be
returned without expense to the tendering holder thereof (or, in the case of
Initial Notes tendered by book-entry transfer procedures described below, such
non-exchanged Initial Notes will be credited to an account maintained with such
Book-Entry Transfer Facility) as promptly as practicable after withdrawal,
rejection of tender, the Expiration Date or earlier termination of the Exchange
Offer.
BOOK-ENTRY TRANSFER
The Exchange Agent will establish a new account or utilize an existing
account with respect to the Initial Notes at DTC within two business days after
the date of this Prospectus, and any financial institution that is a participant
in DTC and whose name appears on a security position listing as the owner of
Initial Notes may make a book-entry tender of Initial Notes by causing DTC to
transfer such Initial Notes into the Exchange Agent's account in accordance with
DTC's procedures for such transfer. However, although tender of Initial Notes
may be effected through book-entry transfer into the Exchange Agent's account at
DTC, an Agent's Message and any other required documents, must, in any case, be
received by the Exchange Agent at its address set forth below under the caption
"Exchange Agent" on or prior to the
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Expiration Date, or the guaranteed delivery procedures described below must be
complied with. The confirmation of a book-entry transfer of Initial Notes into
the Exchange Agent's account at DTC as described above is referred to herein as
a "Book Entry Confirmation." Delivery of documents to DTC in accordance with
DTC's procedures does not constitute delivery to the Exchange Agent.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Initial Notes and who cannot deliver their
Initial Notes, the Letter of Transmittal, or any other required documents to the
Exchange Agent prior to the Expiration Date, or holders who cannot complete the
procedure for book-entry transfer on a timely basis, may effect a tender if:
- the tender is made through an Eligible Institution;
- prior to the Expiration Date, the Exchange Agent receives from such
Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by facsimile transmission, mail or hand delivery)
setting forth the name and address of the holder of the Initial Notes, the
certificate number or numbers of such Initial Notes and the principal
amount of Initial Notes tendered, stating that the tender is being made
thereby, and guaranteeing that, within three business days after the
Expiration Date the Letter of Transmittal (or facsimile thereof), together
with certificates for all tendered Initial Notes, in proper form for
transfer, or a Book-Entry Confirmation with an Agent's Message, as the
case may be, and any other required documents will be deposited by the
Eligible Institution with the Exchange Agent; and
- the certificates for all tendered Initial Notes, in proper form for
transfer, or a Book-Entry Confirmation as the case may be, and all other
required documents are received by the Exchange Agent within three
business days after the Expiration Date.
Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be
sent to holders who wish to tender their Initial Notes according to the
guaranteed delivery procedures set forth above.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Initial Notes may be
withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration
Date.
To withdraw a tender of Initial Notes in the Exchange Offer, a facsimile
transmission or letter notice of withdrawal must be received by the Exchange
Agent at its address set forth herein prior to 5:00 p.m., New York City time, on
the Expiration Date. Any such notice of withdrawal must:
- specify the name of the person having deposited the Initial Notes to be
withdrawn (the "Depositor");
- include a statement that the Depositor is withdrawing its election to have
Initial Notes exchanged and identify the Initial Notes to be withdrawn
(including the certificate number or numbers and principal amount of such
Initial Notes);
- be signed by the Depositor in the same manner as the original signature on
the Letter of Transmittal by which such Initial Notes were tendered
(including any required signature guarantees) or be accompanied by
documents of transfer sufficient to permit the Trustee with respect to the
Initial Notes to register the transfer of such Initial Notes into the name
of the Depositor withdrawing the tender; and
- specify the name in which any such Initial Notes are to be registered, if
different from that of the Depositor.
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If Initial Notes have been tendered pursuant to the procedures for
book-entry transfer set forth in "--Procedures for Tendering" and "--Book-Entry
Transfer," the notice of withdrawal must specify the name and number of the
account at DTC to be credited with the withdrawal of Initial Notes, in which
case a notice of withdrawal will be effective if delivered to the Exchange Agent
by written, telegraphic, telex or facsimile transmission.
All questions as to the validity, form and eligibility (including time of
receipt) for such withdrawal notices will be determined by us, and our
determination shall be final and binding on all parties. Any Initial Notes so
withdrawn will be deemed not to have been validly tendered for purposes of the
Exchange Offer and no Exchange Notes will be issued with respect thereto unless
the Initial Notes so withdrawn are validly re-tendered. Any Initial Notes which
have been tendered for exchange which are not exchanged for any reason will be
returned to the holder thereof without cost to such holder (or, in the case of
Initial Notes tendered by book-entry transfer into the Exchange Agent's account
at DTC pursuant to the book-entry transfer procedures described above, such
Initial Notes will be credited to an account maintained with DTC for the Initial
Notes) as promptly as practicable after withdrawal, rejection of tender,
Expiration Date or earlier termination of the Exchange Offer. Properly withdrawn
Initial Notes may be re-tendered by following one of the procedures described
above under "--Procedures for Tendering" at any time prior to the Expiration
Date.
CERTAIN CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other term of the Exchange Offer, we will not be
required to accept Initial Notes for exchange, or issue Exchange Notes in
exchange for any Initial Notes, and we may terminate or amend the Exchange Offer
as provided in this Prospectus before the acceptance of such Initial Notes, if:
- an action or proceeding has been instituted or threatened in any court or
before any governmental agency or body that in our judgment would
reasonably be expected to prohibit, prevent or otherwise impair our
ability to proceed with the Exchange Offer or materially impair the
contemplated benefits of the Exchange Offer to us;
- a change in the current interpretation of the staff of the Commission has
occurred, which current interpretation permits the Exchange Notes issued
pursuant to the Exchange Offer in exchange for the Initial Notes to be
offered for resale, resold or otherwise transferred by holders thereof
(other than in certain circumstances);
- a law, statute, rule or regulation has been adopted or enacted which, in
our judgment, would reasonably be expected to impair our ability to
proceed with the Exchange Offer or materially impair the contemplated
benefits of the Exchange Offer to us;
- a stop order has been issued by the Commission or any state securities
authority suspending the effectiveness of the Registration Statement of
which this Prospectus is a part or the qualification of the Indenture
under the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), or proceedings shall have been initiated or, to our knowledge,
threatened for that purpose;
- a governmental approval has not been obtained, which approval we deem in
our sole discretion, necessary for the consummation of the Exchange Offer;
or
- a change, or a development involving a prospective change, in our business
or financial affairs has occurred which, in our sole judgment, might
materially impair our ability to proceed with the Exchange Offer or
materially impair the contemplated benefits of the Exchange Offer to us.
These conditions are for our sole benefit and may be asserted by us
regardless of the circumstances giving rise to any such condition or may be
waived by us, in whole or in part, at any time and from time to time, if we
determine in our reasonable discretion that any of the foregoing events or
conditions has occurred or exists or has not been satisfied, subject to
applicable law. Our failure at any time to exercise
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any of the foregoing rights will not be deemed a waiver of any such right and
each such right will be deemed an ongoing right which we may assert at any time
and from time to time.
There can be no assurance that any such condition will not occur. Holders of
Initial Notes will have certain rights against us under the Registration Rights
Agreement should we fail to consummate the Exchange Offer. If we determine that
we may terminate the Exchange Offer, as set forth above, we may:
- refuse to accept any Initial Notes and return any Initial Notes that have
been tendered to the holders thereof;
- extend the Exchange Offer and retain all Initial Notes tendered prior to
the Expiration Date, subject to the rights of such holders of tendered
Initial Notes to withdraw their tendered Initial Notes; or
- waive such termination event with respect to the Exchange Offer and accept
all properly tendered Initial Notes that have not been withdrawn.
If such waiver constitutes a material change in the Exchange Offer, we will
disclose such change by means of a supplement to this Prospectus that will be
distributed to each registered holder of Initial Notes, and we will extend the
Exchange Offer for a period of five to ten business days, depending upon the
significance of the waiver and the manner of disclosure to the registered
holders of the Initial Notes, if the Exchange Offer would otherwise expire
during such period.
EXCHANGE AGENT
The Bank of New York, the Trustee under the Indenture, has been appointed as
Exchange Agent for the Exchange Offer. Questions and requests for assistance and
inquiries for additional copies of this Prospectus or of the Letter of
Transmittal should be directed to the Exchange Agent addressed as follows:
By Mail, Overnight Courier or Hand Delivery:
The Bank of New York
101 Barclay Street, 7 East
New York, New York 10286
Attention: Diane Amoroso, Reorganization Section
By Facsimile Transmission: (212) 815-6339
Confirm by Telephone: (212) 815-3750
DELIVERY OF THE LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH
ABOVE DOES NOT CONSTITUTE A VALID DELIVERY OF SUCH LETTER OF TRANSMITTAL.
FEES AND EXPENSES
We will pay the expenses of soliciting tenders. We have not retained any
dealer-manager in connection with the Exchange Offer and will not make any
payments to brokers, dealers or others soliciting acceptances of the Exchange
Offer. We will pay the Exchange Agent reasonable and customary fees for its
services and will reimburse it for its reasonable out-of-pocket expenses in
connection therewith.
We will pay the cash expenses incurred in connection with the Exchange
Offer. Such expenses include fees and expenses of the Exchange Agent and
Trustee, accounting and legal fees and printing costs, among others.
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TRANSFER TAXES
We will pay all transfer taxes, if any, applicable to the exchange of
Initial Notes pursuant to the Exchange Offer. If, however, certificates
representing Exchange Notes or Initial Notes for principal amounts not tendered
or accepted for exchange are to be delivered to, or are to be issued in the name
of, any person other than the registered holder of the Initial Notes tendered,
or if tendered Initial Notes are registered in the name of any person other than
the person signing the Letter of Transmittal, or if a transfer tax is imposed
for any reason other than the exchange of Initial Notes pursuant to the Exchange
Offer, then the amount of any such transfer taxes (whether imposed on the
registered holder or any other persons) will be payable by the tendering holder.
If satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted with the Letter of Transmittal, the amount of such transfer taxes will
be billed directly to such tendering holder.
ACCOUNTING TREATMENT
The Exchange Notes will be recorded at the same carrying value as the
Initial Notes on the date of the exchange. Accordingly, we will not recognize
any gain or loss for accounting purposes. The expenses of the Exchange Offer and
the unamortized expenses relating to the issuance of the Initial Notes will be
amortized over the term of the Exchange Notes.
REGULATORY APPROVALS
We do not believe that the receipt of any material federal or state
regulatory approvals will be necessary in connection with the Exchange Offer,
other than the effectiveness of the Exchange Offer Registration Statement under
the Securities Act.
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DESCRIPTION OF EXCHANGE NOTES
The Initial Notes were and the Exchange Notes will be issued under an
indenture dated as of January 27, 1999 (the "Indenture"), between AMC
Entertainment Inc., as issuer, and The Bank of New York, as trustee (the
"Trustee"). For purposes of this Description of the Notes, the term "Company"
refers to AMC Entertainment Inc. and does not include its subsidiaries. The
Exchange Notes are subject to all of the terms of the Indenture, and Holders of
Exchange Notes are referred to the Indenture, which has been filed as an exhibit
to the Registration Statement of which this Prospectus is a part, for a
statement thereof. The form of the Exchange Notes will be identical in all
material respects to that of the Initial Notes except that the Exchange Notes
have been registered under the Securities Act and, therefore, will not bear
legends restricting their transfer. The Exchange Notes will not represent new
indebtedness of the Company, and will rank PARI PASSU with the Initial Notes and
with the Company's 9 1/2% Senior Subordinated Notes due 2009. Any provision of
the Indenture which requires action by or approval of a specified percentage of
the Holders of the outstanding Notes shall require the approval of the Holders
of such percentage of outstanding Initial Notes and Exchange Notes, in the
aggregate. Upon the effectiveness of an Exchange Offer Registration Statement or
Shelf Registration Statement, as the case may be, filed under the Securities Act
with respect to the Notes, the Indenture will be subject to and governed by the
Trust Indenture Act of 1939, as amended. The following summaries of certain
material provisions of the Indenture do not purport to be complete, and where
reference is made to particular provisions of the Indenture, such provisions,
including the definitions of certain terms, are incorporated by reference as a
part of such summaries or terms, which are qualified in their entirety by such
reference. The definitions of certain capitalized terms used in the following
summary are set forth below under "--Certain Definitions".
There are $225 million principal amount of Initial Notes issued under the
Indenture. The Indenture also provides for the original issuance of up to $100
million of additional Notes (subject to the covenants described under "--Certain
Covenants"). Any additional Notes will be identical to the Notes in all respects
except issue date and issue price.
GENERAL
The Notes will mature on February 1, 2011 and are limited to $325 million
aggregate principal amount. The Initial Notes were issued in a principal amount
of $225 million. Each Exchange Note will bear interest at the rate set forth on
the cover page hereof from January 27, 1999 or from the most recent interest
payment date to which interest has been paid, payable semiannually on February 1
and August 1 of each year, commencing August 1, 1999, to the person in whose
name the Exchange Note (or any predecessor Initial Note) is registered at the
close of business on the January 15 or July 15 next preceding such interest
payment date. Interest will be computed on the basis of a 360-day year of
twelve, 30-day months.
Principal of and premium, if any, and interest on the Notes will be payable
in immediately available funds, and the Notes will be exchangeable and
transferable, at the office or agency of the Company in The City of New York
(which initially will be the corporate trust office of the Trustee, The Bank of
New York, 101 Barclay Street, 21W, New York, NY 10286); PROVIDED, HOWEVER, that
payment of interest may be made at the option of the Company by check mailed to
the person entitled thereto as shown on the Note Register. No service charge
will be made for any registration of transfer or exchange or redemption of
Notes, except for certain taxes or other governmental charges that may be
imposed in connection with any registration of transfer or exchange.
The Notes are not entitled to the benefit of any sinking fund.
FALL-AWAY EVENT
In the event that the Notes achieve Investment Grade Status and no Event of
Default or Default shall have occurred and be continuing at such time (the
occurrence of the foregoing events, being collectively
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referred to as the "Fall-away Event"), upon the request of the Company the
covenants described under "--Certain Covenants" will no longer be applicable to
the Company and its Subsidiaries. See "--Certain Covenants". As a result, upon
the occurrence of the Fall-away Event the Notes will be entitled to
substantially no covenant protection.
SUBORDINATION
The Notes will be unsecured senior subordinated indebtedness of the Company
ranking PARI PASSU with the Company's 9 1/2% Notes due 2009 and all other
existing and future senior subordinated indebtedness of the Company. The payment
of all Obligations in respect of the Notes will be subordinated, as set forth in
the Indenture, in right of payment to the prior payment in full in cash or Cash
Equivalents of all Senior Indebtedness.
In the event of any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding in
connection therewith, relating to the Company or to its assets, or any
liquidation, dissolution or other winding-up of the Company, whether voluntary
or involuntary, or any assignment for the benefit of creditors or other
marshalling of assets or liabilities of the Company, the holders of Senior
Indebtedness will first be entitled to receive payment in full in cash or Cash
Equivalents of all Senior Indebtedness, or provision shall be made for such
payment in full in cash or Cash Equivalents to the satisfaction of the holders
of Senior Indebtedness, before the Holders will be entitled to receive any
payment or distribution of any kind or character from any source (other than any
payment or distribution in the form of equity securities or subordinated
securities of the Company or any successor obligor provided for by a plan of
reorganization or readjustment that, in the case of any such subordinated
securities, are subordinated in right of payment to all Senior Indebtedness that
may at the time be outstanding to at least the same extent as the Notes are so
subordinated as provided in the Indenture) (such equity securities or
subordinated securities hereinafter being "Permitted Junior Securities") on
account of all Obligations in respect of the Notes or on account of the
purchase, deposit for defeasance or redemption or other acquisition of Notes.
No payment (other than any payments made pursuant to the provisions
described under "--Defeasance and Covenant Defeasance of the Indenture" from
monies or U.S. Government Obligations previously deposited with the Trustee) or
distribution of any assets of the Company of any kind or character from any
source, whether in cash, property or securities (other than Permitted Junior
Securities), may be made by the Company on account of all Obligations in respect
of the Notes or on account of the purchase, redemption, deposit for defeasance
or other acquisition of Notes upon the occurrence of any default in payment
(whether at stated maturity, upon scheduled installment, by acceleration or
otherwise) of principal of, premium, if any, or interest in respect of any
Senior Indebtedness beyond any applicable grace periods (a "Payment Default")
until such Payment Default shall have been cured or waived or have ceased to
exist or such Senior Indebtedness shall have been discharged or paid in full in
cash or Cash Equivalents.
No payment (other than any payments made pursuant to the provisions
described under "--Defeasance and Covenant Defeasance of the Indenture" from
monies or U.S. Government Obligations previously deposited with the Trustee) or
distribution of any assets of the Company of any kind or character from any
source, whether in cash, property or securities (other than Permitted Junior
Securities), may be made by the Company on account of all Obligations in respect
of the Notes or on account of the purchase, redemption, deposit for defeasance
or other acquisition of Notes for the period specified below ("Payment Blockage
Period") upon the occurrence of any default with respect to any Designated
Senior Indebtedness not covered by the immediately preceding paragraph pursuant
to which the maturity thereof may be accelerated (a "Non-payment Default") and
receipt by the Trustee of written notice thereof from the representatives of the
holders of any Designated Senior Indebtedness.
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The Payment Blockage Period will commence upon the date of receipt by the
Trustee of written notice from such representative and shall end on the earliest
of
(1) 179 days thereafter (PROVIDED any Designated Senior Indebtedness as
to which notice was given shall not theretofore have been accelerated, in
which case the provisions of the second preceding paragraph shall apply),
(2) the date on which such Non-payment Default is cured, waived or
ceases to exist or such Designated Senior Indebtedness is discharged or paid
in full in cash or Cash Equivalents,
(3) such Designated Senior Indebtedness has been discharged or paid in
full in cash or Cash Equivalents or
(4) such Payment Blockage Period shall have been terminated by written
notice to the Trustee from the representative initiating such Payment
Blockage Period,
after which the Company will resume making any and all required payments in
respect of the Notes, including any missed payments. In any event, not more than
one Payment Blockage Period may be commenced during any period of 365
consecutive days. No event of default that existed or was continuing on the date
of the commencement of any Payment Blockage Period will be, or can be, made the
basis for the commencement of a subsequent Payment Blockage Period, unless such
default has been cured or waived for a period of not less than 90 consecutive
days.
In the event that, notwithstanding the foregoing, the Trustee or any holder
of the Notes shall have received any payment prohibited by the foregoing, then
such payment shall be paid over to the representatives of such Designated Senior
Indebtedness initiating the Payment Blockage Period, to be held in trust for
distribution to the holders of Senior Indebtedness or, to the extent amounts are
not then due in respect of Senior Indebtedness, prompt return to the Company, or
otherwise as a court of competent jurisdiction shall direct.
Failure by the Company to make any required payment in respect of the Notes
when due or within any applicable grace period, whether or not occurring during
a Payment Blockage Period, will result in an Event of Default and, thereafter,
Holders will have the right to require repayment of the Notes in full. See
"--Events of Default".
By reason of such subordination, in the event of liquidation, receivership,
reorganization or insolvency of the Company, creditors of the Company who are
holders of Senior Indebtedness may recover more, ratably, than the Holders, and
assets which would otherwise be available to pay obligations in respect of the
Notes will be available only after all Senior Indebtedness has been paid in full
in cash or Cash Equivalents, and there may not be sufficient assets remaining to
pay amounts due on any or all of the Notes.
"SENIOR INDEBTEDNESS" means:
(1) all obligations of the Company, now or hereafter existing, under or
in respect of the Credit Facility, whether for principal, premium, if any,
interest (including interest accruing after the filing of, or which would
have accrued but for the filing of, a petition by or against the Company
under the Bankruptcy Laws, whether or not such interest is allowed as a
claim after such filing in any proceeding under such law), fees, expenses,
indemnities, gross-ups or other payments thereunder and
(2) the principal of, premium, if any, and interest on all other
Indebtedness of the Company (other than the Notes and the 9 1/2% Notes due
2009), whether outstanding on the date of the Indenture or thereafter
created, incurred or assumed, unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the same or pursuant to
which the same is outstanding expressly provides that such Indebtedness
shall not be senior in right of payment to the Notes.
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Notwithstanding the foregoing, "Senior Indebtedness" shall not include:
(1) Indebtedness evidenced by the Notes,
(2) Indebtedness of the Company that is expressly subordinated in right
of payment to any Senior Indebtedness of the Company, the Notes or the
Indebtedness evidenced by the 9 1/2% Notes due 2009,
(3) Indebtedness of the Company that by operation of law is subordinate
to any general unsecured obligations of the Company,
(4) Indebtedness of the Company to the extent incurred in violation of
any covenant of the Indenture,
(5) any liability for Federal, state or local taxes or other taxes, owed
or owing by the Company,
(6) trade account payables owed or owing by the Company,
(7) amounts owed by the Company for compensation to employees or for
services rendered to the Company,
(8) Indebtedness of the Company to any Subsidiary or any other Affiliate
of the Company, and
(9) Indebtedness which when incurred and without respect to any election
under Section 1111(b) of Title 11 of the United States Code is without
recourse to the Company or any Subsidiary.
"DESIGNATED SENIOR INDEBTEDNESS" means:
(1) all Senior Indebtedness under the Credit Facility and
(2) any other Senior Indebtedness
(a) which at the time of determination exceeds $30 million in
aggregate principal amount,
(b) which is specifically designated in the instrument evidencing
such Senior Indebtedness as "Designated Senior Indebtedness" by the
Company and
(c) as to which the Trustee has been given written notice of such
designation.
OPTIONAL REDEMPTION
The Notes are redeemable, at the option of the Company, as a whole or in
part, at any time on or after February 1, 2004, at the Redemption Prices
(expressed as percentages of the principal amount thereof) set forth below
together with accrued and unpaid interest to the Redemption Date, if redeemed
during the 12-month period beginning on February 1 of the years indicated:
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
- --------------------------------------------------------------------------------- -----------
<S> <C>
2004............................................................................. 104.750%
2005............................................................................. 103.167%
2006............................................................................. 101.583%
2007 and thereafter.............................................................. 100.000%
</TABLE>
If less than all of the Notes are to be redeemed at any time, selection of
Notes for redemption will be made by the Trustee not more than 60 days prior to
the Redemption Date by such method as the Trustee shall deem fair and
appropriate; PROVIDED, HOWEVER, that Notes will not be redeemed in amount less
than the minimum authorized denomination of $1,000. Notice of redemption shall
be mailed by first class mail not less than 30 nor more than 60 days prior to
the Redemption Date to each Holder of Notes to be
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redeemed at its registered address. If any Note is to be redeemed in part only,
the notice of redemption that relates to such Note shall state the portion of
the principal amount thereof to be redeemed. A new Note in a principal amount
equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Note. On and after the Redemption
Date, interest will cease to accrue on Notes or portions thereof called for
redemption.
CERTAIN COVENANTS
The Indenture will provide that all of the following restrictive covenants
will be applicable to the Company unless and until the Fall-away Event occurs.
In such event, the Company will be released from its obligations to comply with
the restrictive covenants described below as well as certain other obligations.
The covenants that will be released upon the Fall-away Event are "Limitation on
Consolidated Indebtedness", "Limitation on Restricted Payments", "Limitation on
Transactions with Affiliates", "Limitation on Senior Subordinated Indebtedness"
and clause (3) under the "Merger and Sale of Assets" covenant.
LIMITATION ON CONSOLIDATED INDEBTEDNESS. The Company shall not, and shall
not permit any of its Subsidiaries to, create, incur, assume or guarantee, or in
any other manner become directly or indirectly liable for the payment of, any
Indebtedness (excluding Permitted Indebtedness) unless, at the time of such
event and after giving effect thereto on a pro forma basis, the Company's
Consolidated EBITDA Ratio for the four full fiscal quarters immediately
preceding such event, taken as one period calculated on the assumption that such
Indebtedness had been incurred on the first day of such four quarter period, is
greater than or equal to 1.75:1. The definition of EBITDA used for this purpose
differs in significant respects from that presented under "Summary Financial
Data." See "--Certain Definitions."
LIMITATION ON RESTRICTED PAYMENTS. The Company shall not directly or
indirectly:
(1) declare or pay any dividend on, or make any distribution in respect
of, any shares of the Company's or any Subsidiary's Capital Stock (excluding
dividends or distributions payable in shares of its Capital Stock or in
options, warrants or other rights to purchase such Capital Stock, but
including dividends or distributions payable in Redeemable Capital Stock or
in options, warrants or other rights to purchase Redeemable Capital Stock
(other than dividends on such Redeemable Capital Stock payable in shares of
such Redeemable Capital Stock)) held by any Person other than the Company or
any of its Wholly Owned Subsidiaries; or
(2) purchase, redeem or acquire or retire for value any Capital Stock of
the Company or any Affiliate thereof (other than any Wholly Owned Subsidiary
of the Company) or any options, warrants or other rights to acquire such
Capital Stock;
(such payments or any other actions described in (1) and (2) above are
collectively referred to as "Restricted Payments") unless at the time of and
after giving effect to the proposed Restricted Payment (the amount of any such
Restricted Payment, if other than cash, as determined by the Board of Directors,
whose determination shall be conclusive and evidenced by a Board Resolution):
(a) no Default or Event of Default shall have occurred and be
continuing,
(b) the Company could incur $1.00 of additional Indebtedness (other than
Permitted Indebtedness) under the provisions of "Limitation on Consolidated
Indebtedness" and
(c) the aggregate amount of all Restricted Payments declared or made
after the Closing Date (including the proposed Restricted Payment) does not
exceed the sum of:
(i) (x) Consolidated EBITDA for the Restricted Payments Computation
Period minus (y) 1.75 times Consolidated Interest Expense for the
Restricted Payments Computation Period;
(ii) the aggregate net proceeds, including the Fair Market Value of
property other than cash (as determined by the Board of Directors, whose
determination shall be conclusive, except that
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for any property whose Fair Market Value exceeds $10 million such Fair
Market Value shall be confirmed by an independent appraisal obtained by
the Company), received after the Closing Date by the Company from the
issuance or sale (other than to any of its Subsidiaries) of shares of
Capital Stock of the Company (other than Redeemable Capital Stock) or
warrants, options or rights to purchase such shares of Capital Stock;
(iii) the aggregate net proceeds, including the Fair Market Value of
property other than cash (as determined by the Board of Directors, whose
determination shall be conclusive, except that for any property whose
Fair Market Value exceeds $10 million such Fair Market Value shall be
confirmed by an independent appraisal obtained by the Company), received
after the Closing Date by the Company from debt securities that have been
converted into or exchanged for Capital Stock of the Company (other than
Redeemable Capital Stock) to the extent such debt securities were
originally sold for such net proceeds plus the aggregate cash received by
the Company at the time of such conversion; and
(iv) $100 million.
Notwithstanding the foregoing limitation, the Company may
(1) pay dividends on its Capital Stock within sixty days of the
declaration thereof if, on the declaration date, such dividends could have
been paid in compliance with the foregoing limitation or
(2) acquire, redeem or retire Capital Stock in exchange for, or in
connection with a substantially concurrent issuance of, Capital Stock of the
Company (other than Redeemable Capital Stock).
LIMITATION ON TRANSACTIONS WITH AFFILIATES. The Company shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly enter into
or suffer to exist any transaction or series of related transactions (including,
without limitation, the sale, purchase, exchange or lease of assets, property or
services) with any Affiliate of the Company (other than a Wholly Owned
Subsidiary of the Company) involving aggregate consideration in excess of $5
million unless
(1) such transaction or series of transactions is on terms that are no
less favorable to the Company or such Subsidiary, as the case may be, than
would be available at the time of such transaction or series of transactions
in a comparable transaction in an arm's-length dealing with an unaffiliated
third party,
(2) such transaction or series of transactions is in the best interests
of the Company and
(3) with respect to a transaction or series of transactions involving
aggregate payments equal to or greater than $50 million, a majority of
disinterested members of the Board of Directors determines that such
transaction or series of transactions complies with clauses (1) and (2)
above, as evidenced by a Board Resolution.
Notwithstanding the foregoing limitation, the Company and its Subsidiaries
may enter into or suffer to exist the following:
(1) any transaction pursuant to any contract in existence on the Closing
Date;
(2) any Restricted Payment permitted to be made pursuant to the
provisions of "Limitation on Restricted Payments" above;
(3) any transaction or series of transactions between the Company and
one or more of its Subsidiaries or between two or more of its Subsidiaries
(PROVIDED that no more than 5% of the equity interest in any such Subsidiary
is owned, directly or indirectly (other than by direct or indirect ownership
of an equity interest in the Company), by any Affiliate of the Company other
than a Subsidiary) and
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(4) the payment of compensation (including amounts paid pursuant to
employee benefit plans) for the personal services of officers, directors and
employees of the Company or any of its Subsidiaries.
LIMITATION ON SENIOR SUBORDINATED INDEBTEDNESS. The Company will not incur,
create, issue, assume, guarantee or otherwise become liable for any Indebtedness
that is subordinate or junior in right of payment to any Senior Indebtedness and
senior in right of payment to the Notes.
MERGER AND SALE OF SUBSTANTIALLY ALL ASSETS
The Company shall not, in a single transaction or through a series of
related transactions, consolidate with or merge with or into any other Person
(other than any Wholly Owned Subsidiary) or sell, assign, transfer, lease or
otherwise dispose of all or substantially all of its properties and assets to
any Person (other than any Wholly Owned Subsidiary) or group of affiliated
Persons unless at the time and after giving effect thereto
(1) either
(a) the Company shall be the continuing corporation or
(b) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance, transfer, lease or disposition the properties and
assets of the Company substantially as an entirety (the "Surviving
Entity") shall be a corporation duly organized and validly existing under
the laws of the United States of America, any state thereof or the
District of Columbia and shall, in either case, expressly assume all the
obligations of the Company under the Notes and the Indenture,
(2) immediately before and immediately after giving effect to such
transaction on a pro forma basis, no Default or Event of Default shall have
occurred and be continuing, and
(3) immediately before and immediately after giving effect to such
transaction on a pro forma basis, except in the case of the consolidation or
merger of any Subsidiary with or into the Company, the Company (or the
Surviving Entity if the Company is not the continuing corporation) could
incur $1.00 of additional Indebtedness (other than Permitted Indebtedness)
under the provisions of "Limitation on Consolidated Indebtedness".
In connection with any consolidation, merger, transfer or lease contemplated
hereby, the Company shall deliver, or cause to be delivered, to the Trustee, in
the form and substance reasonably satisfactory to the Trustee, an Officer's
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, transfer or lease and the supplemental indenture in respect thereto
comply with the provisions described herein and that all conditions precedent
herein provided for or relating to such transaction have been complied with.
Upon any consolidation or merger or any transfer of all or substantially all
of the assets of the Company in accordance with the foregoing, the successor
corporation formed by such a consolidation or into which the Company is merged
or to which such transfer is made shall succeed to, shall be substituted for and
may exercise every right and power of the Company under the Notes and the
Indenture, with the same effect as if such successor corporation had been named
as the Company therein. In the event of any transaction (other than a lease)
described and listed in the immediately preceding paragraphs in which the
Company is not the continuing corporation, the successor Person formed or
remaining shall succeed to, be substituted for and may exercise every right and
power of the Company, and the Company shall be discharged from all obligations
and covenants under the Notes and the Indenture.
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<PAGE>
CHANGE OF CONTROL
Upon the occurrence of a Change of Control, the Company will be required to
make an offer (a "Change of Control Offer") to purchase all Outstanding Notes at
a purchase price (the "Change of Control Purchase Price") equal to 101% of their
principal amount plus accrued and unpaid interest, if any, to the date of
purchase.
Within 30 days following the date upon which the Change of Control occurred,
the Company must send, by first class mail, a notice to each Holder, with a copy
to the Trustee, which notice shall govern the terms of the Change of Control
Offer. Such notice will state, among other things, the purchase date, which must
be no earlier than 30 days nor later than 60 days from the date such notice is
mailed, other than as may be required by law (the "Change of Control Payment
Date"). The Change of Control Offer is required to remain open for at least 20
Business Days and until the close of business on the Change of Control Payment
Date.
The Change of Control provision of the Notes may in certain circumstances
make it more difficult or discourage a takeover of the Company and, as a result,
may make removal of incumbent management more difficult. The Change of Control
provision, however, is not the result of the Company's knowledge of any specific
effort to accumulate the Company's stock or to obtain control of the Company by
means of a merger, tender offer, solicitation or otherwise, or part of a plan by
management to adopt a series of anti-takeover provisions. Instead, the Change of
Control provision is a result of negotiations between the Company and the
Initial Purchasers.
The Credit Facility provides that certain change of control events with
respect to the Company would constitute a default thereunder. In such
circumstances, the subordination provisions in the Indenture could restrict
payments to the Holders of the Notes. Finally, the Company's ability to pay cash
to the Holders of the Notes in connection with a Change of Control may be
limited to the Company's then existing financial resources. There can be no
assurance that sufficient funds will be available when necessary to make any
required purchases.
The provisions of the Indenture would not necessarily afford Holders of the
Notes protection in the event of a highly leveraged transaction, reorganization,
restructuring, merger or similar transaction involving the Company that may
adversely affect the Holders.
If an offer is made to repurchase the Notes pursuant to a Change of Control
Offer, the Company will comply with all tender offer rules under state and
Federal securities laws, including, but not limited to, Section 14(e) under the
Exchange Act and Rule 14(e) thereunder, to the extent applicable to such offer.
ADDITIONAL INFORMATION
Anyone who receives this Prospectus may obtain a copy of the Indenture and
the Registration Rights Agreement without charge by writing to AMC Entertainment
Inc., Attention: Ms. Nancy L. Gallagher, Vice President and Secretary, 106 West
14th Street, Kansas City, Missouri 64105-1977 (telephone: (816) 221-4000).
CERTAIN DEFINITIONS
Set forth below are certain defined terms used in the Indenture. Reference
is made to the Indenture for the definition of any other capitalized term used
herein for which no definition is provided.
"ACQUIRED INDEBTEDNESS" of any particular Person shall mean Indebtedness of
any other Person existing at the time such other Person merged with or into or
became a Subsidiary of such particular Person or assumed by such particular
Person in connection with the acquisition of assets from any other Person, and
not incurred by such other Person in connection with, or in contemplation of,
such other Person merging with or into such particular Person or becoming a
Subsidiary of such particular Person or such acquisition.
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<PAGE>
"AFFILIATE" shall mean, with respect to any specified Person:
(1) any other Person directly or indirectly controlling or controlled by
or under direct or indirect common control with such specified Person or
(2) any other Person that owns, directly or indirectly, 10% or more of
such Person's Capital Stock or any officer or director of any such Person or
other Person or with respect to any natural Person, any person having a
relationship with such Person by blood, marriage or adoption not more remote
than first cousin.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"BOARD OF DIRECTORS" shall mean the Board of Directors of the Company or any
committee of such Board of Directors duly authorized to act under the Indenture.
"BOARD RESOLUTION" shall mean a copy of a resolution, certified by the
Secretary of the Company to have been duly adopted by the Board of Directors and
to be in full force and effect on the date of such certification, and delivered
to the Trustee.
"BUSINESS DAY" shall mean any day other than a Saturday or Sunday or other
day on which banks in New York, New York, Kansas City, Missouri, or the city in
which the Trustee's Office is located are authorized or required to be closed,
or, if no Note is outstanding, the city in which the principal corporate trust
office of the Trustee is located.
"CAPITAL LEASE OBLIGATION" of any Person shall mean any obligations of such
Person and its Subsidiaries on a consolidated basis under any capital lease of a
real or personal property which, in accordance with GAAP, has been recorded as a
capitalized lease obligation (together with Indebtedness in the form of
operating leases entered into by the Company or its Subsidiaries after May 21,
1998 and required to be reflected on a consolidated balance sheet pursuant to
EITF 97-10).
"CAPITAL STOCK" of any Person shall mean any and all shares, interests,
participations or other equivalents (however designated) of such Person's
capital stock, any rights (other than debt securities convertible into capital
stock), warrants or options to acquire such capital stock, whether now
outstanding or issued after the date of the Indenture.
"CASH EQUIVALENTS" means:
(1) United States dollars,
(2) securities issued or directly and fully guaranteed or insured by the
United States government or any agency or instrumentality,
(3) certificates of deposit and eurodollar time deposits with maturities
of six months or less from the date of acquisition, bankers' acceptances
with maturities not exceeding six months and overnight bank deposits, in
each case with any United States domestic commercial bank having capital and
surplus in excess of $500 million and a Keefe Bank Watch Rating of "B" or
better,
(4) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (2) and (3) entered
into with any financial institution meeting the qualifications specified in
clause (3) above,
(5) commercial paper having one of the two highest rating categories
obtainable from Moody's or S&P in each case maturing within six months after
the date of acquisition and
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(6) readily marketable direct obligations issued by any State of the
United States of America or any political subdivision thereof having one of
the two highest rating categories obtainable from Moody's or S&P.
"CHANGE OF CONTROL" shall mean the occurrence of, after the date of the
Indenture, either of the following events:
(1) any Person (other than a Permitted Holder) or any Persons (other
than any Permitted Holders) acting together that would constitute a group
(for purposes of Section 13(d) of the Exchange Act, or any successor
provision thereto) (a "Group"), together with any Affiliates thereof (other
than any Permitted Holders) shall beneficially own (as defined in Rule 13d-3
under the Exchange Act, or any successor provision thereto) at least 50% of
the aggregate voting power of all classes of Capital Stock of the Company
entitled to vote generally in the election of directors (the determination
of aggregate voting power to recognize that the Company's Class B Stock, par
value 66 2/3 CENTS per share, currently has ten votes per share and the
Company's Common Stock, par value 66 2/3 CENTS per share, currently has one
vote per share) or
(2) any Person (other than a Permitted Holder) or Group (other than any
Permitted Holders) together with any Affiliates thereof (other than any
Permitted Holders) shall succeed in having a sufficient number of its
nominees who are not management nominees elected to the Board of Directors
of the Company such that such nominees when added to any existing director
remaining on the Board of Directors of the Company after such election who
is an Affiliate (other than any Permitted Holder) of such Group, will
constitute a majority of the Board of Directors of the Company.
"CLOSING DATE" shall mean the date on which the Offered Notes are originally
issued under the Indenture.
"CONSOLIDATED EBITDA" shall mean, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period increased (to the
extent deducted in determining Consolidated Net Income) by the sum of:
(1) all income taxes of such Person and its Subsidiaries paid or accrued
in accordance with GAAP for such period (other than income taxes
attributable to extraordinary, unusual or non-recurring gains or losses);
(2) Consolidated Interest Expense of such Person and its Subsidiaries
for such period;
(3) depreciation expense of such Person and its Subsidiaries for such
period;
(4) amortization expense of such Person and its Subsidiaries for such
period including amortization of capitalized debt issuance costs; and
(5) any other non-cash charges of such Person and its Subsidiaries for
such period (including non-cash expenses recognized in accordance with
Financial Accounting Standard Number 106), all determined on a consolidated
basis in accordance with GAAP;
PROVIDED, HOWEVER, that, for purposes of this definition, all transactions
involving the acquisition of any Person or motion picture theatre by another
Person shall be accounted for on a "pooling of interests" basis and not as a
purchase; PROVIDED, FURTHER, that, solely with respect to calculations of the
Consolidated EBITDA Ratio:
(1) Consolidated EBITDA shall include the effects of incremental
contributions the Company reasonably believes in good faith could have been
achieved during the relevant period as a result of a Theatre Completion had
such Theatre Completion occurred as of the beginning of the relevant period;
PROVIDED, HOWEVER, that such incremental contributions were identified and
quantified in good
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faith in an Officers' Certificate delivered to the Trustee at the time of
any calculation of the Consolidated EBITDA Ratio,
(2) Consolidated EBITDA shall be calculated on a pro forma basis after
giving effect to any motion picture theatre or screen that was permanently
or indefinitely closed for business at any time on or subsequent to the
first day of such period as if such theatre or screen was closed for the
entire period, and
(3) All preopening expense and theatre closure expense which reduced
Consolidated Net Income during any applicable period shall be added to
Consolidated EBITDA.
"CONSOLIDATED EBITDA RATIO" of any Person shall mean, for any period, the
ratio of Consolidated EBITDA to Consolidated Interest Expense for such period
(other than any non-cash Consolidated Interest Expense attributable to any
amortization or write-off of deferred financing costs); PROVIDED that, in making
such computation,
(1) the Consolidated Interest Expense attributable to interest on any
Indebtedness computed on a pro forma basis and bearing a floating interest
rate shall be computed as if the rate in effect on the date of computation
had been the applicable rate for the entire period, and
(2) with respect to any Indebtedness which bears, at the option of such
Person, a fixed or floating rate of interest, such Person shall apply, at
its option, either the fixed or floating rate.
"CONSOLIDATED INTEREST EXPENSE" of any Person shall mean, without
duplication, for any period, as applied to any Person:
(1) the sum of
(a) the aggregate of the interest expense on Indebtedness of such
Person and its consolidated Subsidiaries for such period, on a
consolidated basis, including, without limitation:
(i) amortization of debt discount,
(ii) the net cost under Interest Rate Protection Agreements
(including amortization of discounts),
(iii) the interest portion of any deferred payment obligation and
(iv) accrued interest, plus
(b) the interest component of the Capital Lease Obligations paid,
accrued and/or scheduled to be paid or accrued by such Person and its
consolidated Subsidiaries during such period, minus
(2) the cash interest income (exclusive of deferred financing fees) of
such Person and its consolidated subsidiaries during such period, in each
case as determined in accordance with GAAP consistently applied.
"CONSOLIDATED NET INCOME (LOSS)" of any Person shall mean, for any period,
the consolidated net income (or loss) of such Person and its consolidated
Subsidiaries for such period as determined in accordance with GAAP, adjusted, to
the extent included in calculating such net income (loss), by excluding all
extraordinary gains or losses (net of reasonable fees and expenses relating to
the transaction giving rise thereto) of such Person and its Subsidiaries.
"CONSTRUCTION INDEBTEDNESS" shall mean Indebtedness incurred by the Company
or its Subsidiaries in connection with the construction of motion picture
theatres or screens.
"CREDIT FACILITY" shall mean that certain Amended and Restated Credit
Agreement, dated as of April 10, 1997, among the Company, The Bank of Nova
Scotia, as administrative agent, Bank of America National Trust and Savings
Association, as document agent, and the various other financial institutions
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<PAGE>
thereto, as the same may be amended from time to time, together with any
extensions, revisions, refinancings or replacements thereof by a lender or
syndicate of lenders.
"CURRENCY HEDGING OBLIGATIONS" shall mean the obligations of any Person
pursuant to an arrangement designed to protect such Person against fluctuations
in currency exchange rates.
"DEBT RATING" shall mean the rating assigned to the Notes by Moody's or S&P,
as the case may be.
"DEFAULT" means any event which is, or after notice or the passage of time
or both, would be, an Event of Default.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.
"FAIR MARKET VALUE" shall mean, with respect to any asset or property, the
sale value that would be obtained in an arm's-length transaction between an
informed and willing seller under no compulsion to sell and an informed and
willing buyer under no compulsion to buy.
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" or "GAAP" shall mean generally
accepted accounting principles in the United States, consistently applied.
"GUARANTEE" shall mean, with respect to any Person, any obligation,
contingent or otherwise, of such Person directly or indirectly guaranteeing any
Indebtedness or other obligation of any other Person and, without limiting the
generality of the foregoing, any obligation, direct or indirect, contingent or
otherwise, of such Person:
(1) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other obligation of such other Person
(whether arising by virtue of partnership arrangements, or by agreements to
keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or
(2) entered into for purposes of assuring in any other manner the
obligee of such Indebtedness or other obligation of the payment thereof or
to protect such obligee against loss in respect thereof (in whole or in
part);
PROVIDED that the term "Guarantee" shall not include endorsements for collection
or deposit in the ordinary course of business. The term "Guarantee" used as a
verb has a corresponding meaning.
"GUARANTEED INDEBTEDNESS" of any Person shall mean, without duplication, all
Indebtedness of any other Person referred to in the definition of Indebtedness
and all dividends of other Persons for the payment of which, in either case,
such Person is directly or indirectly responsible or liable as obligor,
guarantor or otherwise.
"INDEBTEDNESS" shall mean, with respect to any Person, without duplication:
(1) all indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services, excluding any trade
payables and other accrued current liabilities incurred in the ordinary
course of business, but including, without limitation, all obligations of
such Person in connection with any letters of credit and acceptances issued
under letter of credit facilities, acceptance facilities or other similar
facilities, now or hereafter outstanding,
(2) all obligations of such Person evidenced by bonds, notes, debentures
or other similar instruments,
(3) all indebtedness created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such
Person (even if the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of
such property), but excluding trade accounts payable arising in the ordinary
course of business,
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(4) every obligation of such Person issued or contracted for as payment
in consideration of the purchase by such Person or a Subsidiary of such
Person of the Capital Stock or substantially all of the assets of another
Person or in consideration for the merger or consolidation with respect to
which such Person or a Subsidiary of such Person was a party,
(5) all Indebtedness referred to in clauses (1) through (4) above of
other Persons and all dividends of other Persons, the payment of which is
secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien upon or in
property (including, without limitation, accounts and contract rights) owned
by such Person, even though such Person has not assumed or become liable for
the payment of such Indebtedness,
(6) all Guaranteed Indebtedness of such Person,
(7) all obligations under Interest Rate Protection Agreements of such
Person,
(8) all Currency Hedging Obligations of such Person,
(9) all Capital Lease Obligations of such Person, and
(10) any amendment, supplement, modification, deferral, renewal,
extension or refunding of any liability of the types referred to in clauses
(1) through (9) above.
"INTEREST RATE PROTECTION AGREEMENT" shall mean any interest rate protection
agreement, interest rate future agreement, interest rate option agreement,
interest rate swap agreement, interest rate cap agreement, interest rate collar
agreement, interest rate hedge agreement, option or future contract or other
similar agreement or arrangement designed to protect the Company or any of its
Subsidiaries against fluctuations in interest rates.
"INVESTMENT GRADE STATUS" exists as of a date and thereafter if at such date
either:
(1) the Debt Rating of Moody's is at least Baa3 (or the equivalent) or
higher or
(2) the Debt Rating of S&P is at least BBB- (or the equivalent) or
higher.
"LIEN" shall mean any mortgage, lien (statutory or other), pledge, security
interest, encumbrance, claim, hypothecation, assignment for security, deposit
arrangement or preference or other security agreement of any kind or nature
whatsoever. A Person shall be deemed to own subject to a Lien any property which
it has acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
relating to Indebtedness of such Person. The right of a distributor to the
return of its film held by a Person under a film licensing agreement is not a
Lien as used herein. Reservation of title under an operating lease by the lessor
and the interest of the lessee therein are not Liens as used herein.
"MATURITY" means, with respect to any Note, the date on which the principal
of such Note becomes due and payable as provided in such Note or the Indenture,
whether at the Stated Maturity or by declaration of acceleration, call for
redemption or otherwise.
"MOODY'S" shall mean Moody's Investor Service, Inc. or any successor to the
rating agency business thereof.
"NON-RECOURSE INDEBTEDNESS" shall mean Indebtedness as to which:
(1) none of the Company or any of its Subsidiaries
(a) provides credit support (including any undertaking, agreement or
instrument which would constitute Indebtedness) or
(b) is directly or indirectly liable and
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(2) no default with respect to such Indebtedness (including any rights
which the holders thereof may have to take enforcement action against the
relevant Unrestricted Subsidiary or its assets) would permit (upon notice,
lapse of time or both) any holder of any other Indebtedness of the Company
or its Subsidiaries (other than Non-recourse Indebtedness) to declare a
default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity.
"OBLIGATIONS" means any principal (including reimbursement obligations and
guarantees), premium, if any, interest (including interest accruing on or after
the filing of, or which would have accrued but for the filing of, any petition
in bankruptcy or for reorganization relating to the Company whether or not a
claim for post-filing interest is allowed in such proceedings), penalties, fees,
expenses, indemnifications, reimbursements, claims for rescission, damages,
gross-up payments and other liabilities payable under the documentation
governing any Indebtedness or otherwise.
"OFFICER" shall mean the Chairman of the Board, any Co-Chairman of the
Board, President, the Chief Executive Officer, any Executive Vice President and
the Chief Financial Officer of the Company.
"OFFICERS' CERTIFICATE" shall mean a certificate signed by two Officers.
"OPINION OF COUNSEL" shall mean a written opinion of counsel to the Company
or any other Person reasonably satisfactory to the Trustee.
"PERMITTED HOLDER" means:
(1) Mr. Stanley H. Durwood, his spouse and any of his lineal descendants
and their respective spouses (collectively, the "Durwood Family") and any
Affiliate of any member of the Durwood Family,
(2) Mr. Stanley H. Durwood's estate, or any trust established by Mr.
Stanley H. Durwood, during any period of administration prior to the
distribution of assets to beneficiaries who are Persons described in clause
(3) below,
(3) any trust which is established solely for the benefit of one or more
members of the Durwood Family (whether or not any member of the Durwood
Family is a trustee of such trust) or solely for the benefit of one or more
charitable organizations or solely for the benefit of a combination of
members of the Durwood Family and one or more charitable organizations and
(4) any Subsidiary, any employee stock purchase plan, stock option plan
or other stock incentive plan or program, retirement plan or automatic
reinvestment plan or any substantially similar plan of the Company or any
Subsidiary or any Person holding securities of the Company for or pursuant
to the terms of any such employee benefit plan; PROVIDED that if any lender
or other Person shall foreclose on or otherwise realize upon or exercise any
remedy with respect to any security interest in or Lien on any securities of
the Company held by any Person listed in this clause (4), then such
securities shall no longer be deemed to be held by a Permitted Holder.
"PERMITTED INDEBTEDNESS" shall mean the following:
(1) Indebtedness of the Company under the Offered Notes;
(2) Indebtedness of the Company under the Credit Facility in an
aggregate principal amount at any one time outstanding not to exceed $425
million;
(3) Indebtedness of the Company or any of its Subsidiaries outstanding
on the Closing Date;
(4) Indebtedness of the Company or any of its Subsidiaries consisting of
Permitted Interest Rate Protection Agreements;
(5) Indebtedness of the Company or any of its Subsidiaries to any one or
the other of them;
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(6) Indebtedness incurred to renew, extend, refinance or refund (each, a
"refinancing") any Indebtedness outstanding on the Closing Date in an
aggregate principal amount not to exceed the principal amount of the
Indebtedness so refinanced plus the amount of any premium required to be
paid in connection with such refinancing pursuant to the terms of the
Indebtedness so refinanced or the amount of any premium reasonably
determined by the Company as necessary to accomplish such refinancing by
means of a tender offer or privately negotiated repurchase, plus the
expenses of the Company incurred in connection with such refinancing;
(7) Indebtedness of any Subsidiary incurred in connection with the
Guarantee of any Indebtedness of the Company;
(8) Indebtedness relating to Currency Hedging Obligations entered into
solely to protect the Company or any of its Subsidiaries from fluctuations
in currency exchange rates and not to speculate on such fluctuations;
(9) Capital Lease Obligations of the Company or any of its Subsidiaries;
(10) Indebtedness of the Company or any of its Subsidiaries in
connection with one or more standby letters of credit or performance bonds
issued in the ordinary course of business or pursuant to self-insurance
obligations;
(11) Indebtedness represented by property, liability and workers'
compensation insurance (which may be in the form of letters of credit);
(12) Acquired Indebtedness; PROVIDED that such Indebtedness, if incurred
by the Company, would be in compliance with "Limitation on Consolidated
Indebtedness";
(13) Indebtedness of the Company or any of its Subsidiaries to an
Unrestricted Subsidiary for money borrowed; PROVIDED that such Indebtedness
is subordinated in right of payment to the Notes and the Weighted Average
Life of such Indebtedness is greater than the Weighted Average Life of the
Notes;
(14) Construction Indebtedness in an aggregate principal amount that
does not exceed $100 million; and
(15) Indebtedness not otherwise permitted to be incurred pursuant to
clauses (1) through (14) above which, together with any other Indebtedness
pursuant to this clause (14), has an aggregate principal amount that does
not exceed $100 million at any time outstanding.
"PERMITTED INTEREST RATE PROTECTION AGREEMENTS" shall mean, with respect to
any Person, Interest Rate Protection Agreements entered into in the ordinary
course of business by such Person that are designed to protect such Person
against fluctuations in interest rates with respect to Permitted Indebtedness
and that have a notional amount no greater than the payment due with respect to
Permitted Indebtedness hedged thereby.
"PERSON" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint stock company, trust, estate,
unincorporated organization or government or any agency or political subdivision
thereof.
"REDEEMABLE CAPITAL STOCK" shall mean any Capital Stock that, either by its
terms, by the terms of any security into which it is convertible or exchangeable
or otherwise, is or upon the happening of an event or passage of time would be
required to be redeemed prior to the final Stated Maturity of the Notes or is
redeemable at the option of the holder thereof at any time prior to such final
Stated Maturity, or is convertible into or exchangeable for debt securities at
any time prior to such final Stated Maturity at the option of the holder
thereof.
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"RESTRICTED PAYMENTS" shall have the meaning set forth in the "Limitation on
Restricted Payments" covenant.
"RESTRICTED PAYMENTS COMPUTATION PERIOD" shall mean the period (taken as one
accounting period) from the beginning of the first fiscal quarter commencing
after the Closing Date to the last day of the Company's fiscal quarter preceding
the date of the applicable proposed Restricted Payment.
"S&P" shall mean Standard & Poor's Ratings Service or any successor to the
rating agency business thereof.
"STATED MATURITY", when used with respect to any Note or any installment of
interest thereof, means the date specified in such Note as the fixed date on
which the principal of such Note or such installment of interest is due and
payable.
"SUBSIDIARY" of any person shall mean:
(1) any corporation of which more than 50% of the outstanding shares of
Capital Stock having ordinary voting power for the election of directors is
owned directly or indirectly by such Person and
(2) any partnership, limited liability company, association, joint
venture or other entity in which such Person, directly or indirectly, has
more than a 50% equity interest, and, except as otherwise indicated herein,
references to Subsidiaries shall refer to Subsidiaries of the Company.
Notwithstanding the foregoing, for purposes hereof, an Unrestricted
Subsidiary shall not be deemed a Subsidiary of the Company other than for
purposes of the definition of "Unrestricted Subsidiary" unless the Company shall
have designated in writing to the Trustee an Unrestricted Subsidiary as a
Subsidiary. A designation of an Unrestricted Subsidiary as a Subsidiary may not
thereafter be rescinded.
"SURVIVING ENTITY" shall have the meaning set forth under "Merger and Sale
of Substantially All Assets".
"THEATRE COMPLETION" shall mean any motion picture theatre or screen which
was first opened for business during any applicable period.
"UNRESTRICTED SUBSIDIARY" shall mean a Subsidiary of the Company designated
in writing to the Trustee
(1) whose properties and assets, to the extent they secure Indebtedness,
secure only Non-Recourse Indebtedness,
(2) that has no Indebtedness other than Non-Recourse Indebtedness and
(3) that has no Subsidiaries.
"VOTING STOCK" shall mean stock of the class or classes pursuant to which
the holders thereof have the general voting power under ordinary circumstances
to elect at least a majority of the board of directors, managers or trustees of
a corporation (irrespective of whether or not at the time, stock of any other
class or classes shall have or might have voting power by reason of the
happening of any contingency).
"WEIGHTED AVERAGE LIFE" shall mean, as of any date, with respect to any debt
security, the quotient obtained by dividing (1) the sum of the products of the
number of years from such date to the dates of each successive scheduled
principal payment (including any sinking fund payment requirements) of such debt
security multiplied by the amount of such principal payment, by (2) the sum of
all such principal payments.
"WHOLLY OWNED SUBSIDIARY" of any Person shall mean a Subsidiary of such
Person, all of the Capital Stock (other than directors' qualifying shares) or
other ownership interests of which shall at the time be owned by such Person or
by one or more Wholly Owned Subsidiaries of such Person or by such Person and
one or more Wholly Owned Subsidiaries of such Person.
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EVENTS OF DEFAULT
The following will be "Events of Default" under the Indenture:
(1) default in the payment of any interest on any Note when it becomes
due and payable and continuance of such default for a period of 30 days;
(2) default in the payment of the principal of or premium, if any, on
any Note at its Maturity (upon acceleration, optional redemption, required
purchase or otherwise);
(3) default in the performance, or breach, of any covenant or warranty
of the Company contained in the Indenture (other than a default in the
performance, or breach, of a covenant or warranty which is specifically
dealt with in clause (1) or (2) above) and continuance of such default or
breach for a period of 60 days after written notice shall have been given to
the Company by the Trustee or to the Company and the Trustee by the holders
of at least 25% in aggregate principal amount of the Notes then outstanding;
(4) (a) one or more defaults in the payment of principal of or premium,
if any, on Indebtedness of the Company or AMC aggregating $5 million or
more, when the same becomes due and payable at the stated maturity thereof,
and such default or defaults shall have continued after any applicable grace
period and shall not have been cured or waived or (b) Indebtedness of the
Company or AMC aggregating $5 million or more shall have been accelerated or
otherwise declared due and payable, or required to be prepaid or repurchased
(other than by regularly scheduled prepayment) prior to the stated maturity
thereof;
(5) any holder of any Indebtedness in excess of $5 million in the
aggregate of the Company or AMC shall notify the Trustee of the intended
sale or disposition of any assets of the Company or AMC that have been
pledged to or for the benefit of such Person to secure such Indebtedness or
shall commence proceedings, or take action (including by way of set-off) to
retain in satisfaction of any such Indebtedness, or to collect on, seize,
dispose of or apply, any such asset of the Company or AMC pursuant to the
terms of any agreement or instrument evidencing any such Indebtedness of the
Company or AMC or in accordance with applicable law;
(6) one or more final judgments or orders shall be rendered against the
Company or AMC for the payment of money, either individually or in an
aggregate amount, in excess of $5 million and shall not be discharged and
either (a) an enforcement proceeding shall have been commenced by any
creditor upon such judgment or order or (b) there shall have been a period
of 60 consecutive days during which a stay of enforcement of such judgment
or order, by reason of a pending appeal or otherwise, was not in effect; and
(7) the occurrence of certain events of bankruptcy, insolvency or
reorganization with respect to the Company or AMC.
If an Event of Default (other than an Event of Default specified in clause
(7) above) shall occur and be continuing, the Trustee or the Holders of not less
than 25% in principal amount of the Notes then outstanding may declare the
principal of all Notes due and payable; PROVIDED, HOWEVER, that so long as the
Credit Facility shall be in full force and effect, if an Event of Default shall
occur and be continuing (other than an Event of Default specified in clause
(7)), any such acceleration shall not become effective until the earlier of
(a) five Business Days following a delivery of a notice of such
acceleration to the agent under the Credit Facility and
(b) the acceleration of any amounts under the Credit Facility.
If an Event of Default specified in clause (7) above occurs and is
continuing, then the principal of all the Notes shall become due and payable
without any declaration or other act on the part of the Trustee or
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any Holder. After a declaration of acceleration, but before a judgment or decree
for payment of the money due has been obtained by the Trustee, the Holders of a
majority in principal amount of the Outstanding Notes, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if
(1) the Company has paid or deposited, or caused to be paid or
deposited, with the Trustee a sum sufficient to pay
(A) all sums paid or advanced by the Trustee under the Indenture and
the reasonable compensation, expenses, disbursements and advances to the
Trustee, its agents and counsel,
(B) all overdue interest on all Notes,
(C) the principal of and premium, if any, on any Notes that has
become due otherwise than by such declaration of acceleration and
interest thereon at the rate borne by the Notes and
(D) to the extent that payment of such interest is lawful, interest
upon overdue interest at the rate borne by the Notes, and
(2) all Events of Default, other than the non-payment of principal of
the Notes which have become due solely by such declaration of acceleration,
have been cured or waived.
The Indenture contains a provision entitling the Trustee, subject to the
duty of the Trustee during the existence of an Event of Default to act with the
required standard of care, to be indemnified by the Holders of Notes before
proceeding to exercise any right or power under the Indenture at the request of
such Holders. The Indenture provides that the Holders of a majority in aggregate
principal amount of the Notes then Outstanding may direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred upon the Trustee.
During the existence of an Event of Default, the Trustee is required to
exercise such rights and powers vested in it under the Indenture and use the
same degree of care and skill in its exercise as a prudent person would exercise
under the circumstances in the conduct of such person's own affairs.
The Trust Indenture Act of 1939 contains limitations on the rights of the
Trustee, should it be a creditor of the Company, to obtain payment of claims in
certain cases or to realize on certain property received by it in respect of any
such claims, as security or otherwise. The Trustee is permitted to engage in
other transactions; PROVIDED that if it acquires any conflicting interest it
must eliminate such conflict upon the occurrence of an Event of Default or else
resign.
The Company will be required to furnish to the Trustee annually a statement
as to any default by the Company in the performance and observance of its
obligations under the Indenture.
DEFEASANCE AND COVENANT DEFEASANCE OF THE INDENTURE
The Company may, at its option, and at any time, elect to have the
obligations of the Company discharged with respect to all Outstanding Notes
("defeasance"). Such defeasance means that the Company shall be deemed to have
paid and discharged the entire indebtedness represented by the Outstanding Notes
and to have satisfied its other obligations under the Indenture, except for the
following which shall survive until otherwise terminated or discharged:
(1) the rights of Holders of Outstanding Notes to receive payments in
respect of the principal of, premium, if any, and interest on such Notes
when such payments are due,
(2) the Company's obligations with respect to the Notes relating to the
issuance of temporary Notes, the registration, transfer and exchange of
Notes, the replacement of mutilated, destroyed, lost or stolen Notes, the
maintenance of an office or agency in The City of New York, the holding of
money for security payments in trust and statements as to compliance with
the Indenture,
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(3) its obligations in connection with the rights, powers, trusts,
duties and immunities of the Trustee and
(4) the defeasance provisions of the Indenture.
In addition the Company may, at its option and at any time, elect to be
released from its obligations with respect to certain of its restrictive
covenants under the Indenture ("covenant defeasance") and any omission to comply
with such obligations shall not constitute a Default or an Event of Default with
respect to the Notes. In the event covenant defeasance occurs, certain events
(not including non-payment, bankruptcy and insolvency events) described under
"Events of Default" will no longer constitute Events of Default with respect to
the Notes.
In order to exercise either defeasance or covenant defeasance:
(1) the Company must irrevocably deposit with the Trustee, in trust, for
the benefit of the Holders, cash in U.S. dollars, certain U.S. government
obligations, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent
public accountants, to pay the principal of (and premium, if any, on) and
interest on the Outstanding Notes on the Stated Maturity (or Redemption
Date, if applicable) of such principal (and premium, if any) or installment
of interest,
(2) in the case of defeasance, the Company shall have delivered to the
Trustee an Opinion of Counsel stating that
(a) the Company has received from, or there has been published by,
the Internal Revenue Service a ruling or
(b) since the date of this Prospectus, there has been a change in the
applicable United States Federal income tax law, in either case to the
effect that, and based thereon such Opinion of Counsel shall confirm
that, the Holders of the Outstanding Notes will not recognize income,
gain or loss for United States Federal income tax purposes as a result of
such defeasance and will be subject to United States Federal income tax
on the same amounts, in the same manner and at the same times as would
have been the case if such defeasance had not occurred,
(3) in the case of covenant defeasance, the Company shall have delivered
to the Trustee an Opinion of Counsel to the effect that the Holders of the
Outstanding Notes will not recognize income, gain or loss for United States
Federal income tax purposes as a result of such covenant defeasance and will
be subject to United States Federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such
covenant defeasance had not occurred,
(4) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that such deposit shall not cause the Trustee or the
trust so created to be subject to the Investment Company Act of 1940 and
(5) the Company must comply with certain other conditions, including
that such defeasance or covenant defeasance will not result in a breach or
violation of, or constitute a default under, the Indenture or any material
agreement or instrument to which the Company is a party or by which it is
bound.
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MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be entered into by the
Company and the Trustee with the consent of the Holders of not less than a
majority in aggregate principal amount of the Outstanding Notes; PROVIDED,
HOWEVER, that no such modification or amendment may, without the consent of the
Holder of each Outstanding Note affected thereby:
(1) change the Stated Maturity of the principal of, or any installment
of interest on, any Note, or reduce the principal amount thereof or the rate
of interest thereon or any premium payable upon the redemption thereof, or
change the coin or currency in which any Note or any premium or the interest
thereon is payable, or impair the right to institute suit for the
enforcement of any such payment after the Stated Maturity thereof (or, in
the case of redemption, on or after the Redemption Date),
(2) reduce the amount of, or change the coin or currency of, or impair
the right to institute suit for the enforcement of, the Change of Control
Purchase Price,
(3) reduce the percentage in principal amount of Outstanding Notes, the
consent of whose Holders is necessary to amend or waive compliance with
certain provisions of the Indenture or to waive certain defaults,
(4) modify any of the provisions relating to supplemental indentures
requiring the consent of Holders or relating to the waiver of past defaults
or relating to the waiver of certain covenants, except to increase the
percentage of Outstanding Notes the consent of whose Holders is required for
such actions or to provide that certain other provisions of the Indenture
cannot be modified or waived without the consent of the Holder of each Note
affected thereby or
(5) modify any of the provisions of the Indenture relating to the
subordination of the Notes in a manner adverse to any Holder.
The Holders of a majority in aggregate principal amount of the Outstanding
Notes may waive compliance with certain restrictive covenants and provisions of
the Indenture.
Without the consent of any holder of the Notes, the Company and the Trustee
may amend the Indenture to cure any ambiguity, omission, defect or
inconsistency, to provide for the assumption by a successor corporation of the
obligations of the Company under the Indenture, to provide for uncertificated
Notes in addition to or in place of certificated Notes (provided that the
uncertificated Notes are issued in registered form for purposes of Section
163(f) of the Code, or in a manner such that the uncertificated Notes are
described in Section 163(f)(2)(B) of the Code), to add Guarantees with respect
to the Notes, to secure the Notes, to add to the covenants of the Company for
the benefit of the holders of the Notes or to surrender any right or power
conferred upon the Company, to make any change that does not adversely affect
the rights of any holder of the Notes, to make any change to the subordination
provisions of the Indenture that would limit or terminate the benefits available
to any holder of Senior Indebtedness under such provisions or to comply with any
requirement of the Securities and Exchange Commission in connection with the
qualification of the Indenture under the Trust Indenture Act.
BOOK-ENTRY SYSTEM
Except as set forth in the following paragraph, the Exchange Notes will be
initially represented by one or more global Notes (each a "Global Exchange
Note"). The Global Exchange Note will be deposited with or on behalf of, The
Depository Trust Company ("DTC") and registered in the name of a nominee of DTC.
Investors may hold their beneficial interests in the Global Exchange Note
directly through DTC if they have an account with DTC or indirectly through
organizations which have accounts with DTC.
Exchange Notes that are issued as described below under "--Certificated
Notes" will be issued in definitive form. Upon the transfer of an Exchange Note
in definitive form, such Exchange Note will, unless the Global Exchange Note has
previously been exchanged for Exchange Notes in definitive form, be
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exchanged for an interest in the Global Exchange Note representing the principal
amount of Exchange Notes being transferred.
The Company expects that pursuant to procedures established by DTC (a) upon
issuance of the Global Exchange Note in exchange for the Initial Notes pursuant
to the Exchange Offer, DTC or its custodian will credit on its internal system
portions of the Global Exchange Note to the respective accounts of persons who
have accounts with DTC and (b) ownership of the Exchange Notes will be shown on,
and the transfer of ownership thereof will be effected only through records
maintained by DTC or its nominee (with respect to interests of participants (as
defined below) and the records of participants (with respect to interests of
persons other than participants). Ownership of beneficial interests in a Global
Exchange Note will be limited to persons that have accounts with DTC
("participants") or persons that may hold interests through participants.
Ownership of beneficial interests in such Global Exchange Note by persons that
hold through participants will be shown on, and the transfer of that ownership
interest within such participant will be effected only through, records
maintained by such participant. The laws of some jurisdictions require that
certain purchasers of securities take physical delivery of such securities in
definitive form. Such limits and such laws may impair the ability to transfer
beneficial interests in a Global Exchange Note.
Payment of principal, premium, if any, and interest on Notes represented by
any such Global Exchange Note will be made to DTC or its nominee, as the case
may be, as the sole registered owner and the sole holder of the Notes
represented thereby for all purposes under the Indenture. None of the Company,
the Trustee or any agent of the Company will have any responsibility or
liability for any aspect of the Depository's reports relating to or payments
made on account of beneficial ownership interests in a Global Exchange Note
representing any Exchange Notes or for maintaining, supervising or reviewing any
of the Depository's records relating to such beneficial ownership interests.
The Company expects that upon receipt of any payment of principal of,
premium, if any, or interest on any Global Exchange Note, DTC will immediately
credit, on its book-entry registration and transfer system, the accounts of
participants with payments in amounts proportionate to their respective
beneficial interests in the principal or face amount of such Global Exchange
Note, as shown on the records of DTC. The Company expects that payments by
participants to owners of beneficial interests in a Global Exchange Note held
through such participants will be governed by standing instructions and
customary practices as is now the case with securities held for customer
accounts registered in "street name" and will be the sole responsibility of such
participants.
So long as DTC or its nominee is the registered owner or holder of such
Global Exchange Note, DTC or such nominee, as the case may be, will be
considered the sole owner or holder of the Exchange Notes represented by such
Global Exchange Note for the purposes of receiving payment on the Exchange
Notes, receiving notices and for all other purposes under the Indenture and the
Exchange Notes. Beneficial interests in the Exchange Notes will be evidenced
only by, and transfers thereof will be effected only through, records maintained
by DTC and its participants. Except as provided below, owners of beneficial
interests in a Global Exchange Note will not be entitled to receive physical
delivery of certificated Exchange Notes in definitive form and will not be
considered the holders of such Global Exchange Note for any purposes under the
Indenture. Accordingly, each person owning a beneficial interest in a Global
Exchange Note must rely on the procedures of DTC and, if such person is not a
participant, on the procedures of the participant through which such person owns
its interest, to exercise any rights of a holder under the Indenture. The
Company understands that under existing industry practices, in the event that
the Company requests any action of holders or that an owner of a beneficial
interest in a Global Exchange Note desires to give or take any action that a
holder is entitled to give or take under the Indenture, DTC would authorize the
participants holding the relevant beneficial interest to give or take such
action, and such participants would authorize beneficial owners owning through
such participants to give or take such action or would otherwise act upon the
instructions of beneficial owners owning through them.
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The Company understands that DTC will take any action permitted to be taken
by a holder of Exchange Notes only at the direction of one or more participants
to whose account with DTC interests in the Global Exchange Note are credited and
only in respect of such portion of the aggregate principal amount of the
Exchange Notes as to which such participant or participants has or have given
such direction.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the Global Exchange Note among participants of DTC, it
is under no obligation to perform or continue to perform such procedures, and
such procedures may be discontinued at any time. None of the Company, the
Trustee or any agent of the Company will have any responsibility for the
performance by DTC or its participants or indirect participants of their
respective obligations under the rules and procedures governing their
operations.
DTC has advised the Company that DTC is a limited-purpose trust company
organized under the Banking Law of the State of New York, a "banking
organization" within the meaning of New York Banking Law, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code and a "clearing agency" registered under the
Exchange Act. DTC was created to hold the securities of its participants and to
facilitate the clearance and settlement of securities transactions among its
participants in such securities through electronic book-entry changes in
accounts of the participants, thereby eliminating the need for physical movement
of securities certificates. The Depository's participants include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations, some of whom (and/or their representatives) own DTC. Access
to the Depository's book-entry system is also available to others, such as
banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a participant, either directly or indirectly.
CERTIFICATED NOTES
Exchange Notes represented by a Global Exchange Note are exchangeable for
certificated Exchange Notes only if (i) DTC notifies the Company that it is
unwilling or unable to continue as a depository for such Global Exchange Note or
if at any time DTC ceases to be a clearing agency registered under the Exchange
Act, and a successor depository is not appointed by the Company within 90 days,
(ii) the Company executes and delivers to the Trustee a notice that such Global
Exchange Note shall be so transferable, registrable and exchangeable, and such
transfer shall be registrable or (iii) there shall have occurred and be
continuing an Event of Default or an event which, with the giving of notice or
lapse of time, or both, would constitute an Event of Default with respect to the
Exchange Notes represented by such Global Exchange Note. Any Global Exchange
Note that is exchangeable for certificated Exchange Notes pursuant to the
preceding sentence will be transferred to, and registered and exchanged for,
certificated Exchange Notes in authorized denominations and registered in such
names as DTC or its nominee holding such Global Exchange Note may direct.
Subject to the foregoing, a Global Exchange Note is not exchangeable, except for
a Global Exchange Note of like denomination to be registered in the name of DTC
or its nominee. In the event that a Global Exchange Note becomes exchangeable
for certificated Exchange Notes, (i) certificated Exchange Notes will be issued
only in fully registered form in denominations of $1,000 or integral multiples
thereof, (ii) payment of principal, premium, if any, and interest on the
certificated Exchange Notes will be payable, and the transfer of the
certificated Exchange Notes will be registrable, at the office or agency of the
Company maintained for such purposes and (iii) no service charge will be made
for any issuance of the certificated Exchange Notes, although the Company may
require payment of a sum sufficient to cover any tax or governmental charge
imposed in connection therewith.
CONCERNING THE TRUSTEE
The Bank of New York is the Trustee under the Indenture.
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The Bank of New York is also the indenture trustee under the indenture
respecting the 9 1/2% Notes due 2009.
GOVERNING LAW
The Indenture and the Notes will be governed by and construed in accordance
with the laws of the State of New York.
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CERTAIN FEDERAL INCOME TAX CONSEQUENCES
GENERAL
The following is a summary of certain material United States federal income
tax consequences of the exchange of Initial Notes for Exchange Notes pursuant to
the Exchange Offer and of the purchase, ownership, and disposition of the
Exchange Notes. The discussion is based on the Internal Revenue Code of 1986
(the "Code"), its legislative history, applicable Treasury Regulations, judicial
authority, and administrative rulings and practice, all as currently existing
and in effect. There can be no assurance that the Internal Revenue Service (the
"IRS") and the courts will not take a contrary view with respect to these tax
consequences, and no ruling from the IRS respecting these tax consequences has
been or will be sought. Legislative, judicial, or administrative changes or
interpretations may be forthcoming that could alter or modify the statements and
conclusions set forth herein. Any such changes or interpretations may be
retroactive and could affect (possibly adversely) the tax consequences of
purchasing, owning, and disposing of the Notes.
Except as otherwise described herein, this discussion applies only to a
person who is an initial beneficial owner who purchased Initial Notes for cash
for their issue price from the Initial Purchasers pursuant to the initial
offering thereof (a "Holder"), and except as otherwise described herein, who is:
(1) a citizen or resident of the United States for United States federal income
tax purposes; (2) a corporation, partnership, or other entity created or
organized in or under the laws of the United States or any political subdivision
thereof; (3) an estate the income of which is subject to United States federal
income taxation regardless of its source; or (4) a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States persons have the authority to control
all substantial decisions of the trust (each a "U.S. Holder"). As used herein
the term "non-U.S. Holder" means a Holder who is not a U.S. Holder.
This discussion deals only with Notes that are held as capital assets by
Holders. This discussion does not deal with purchasers of subsequent offerings
of notes under the Indenture. This discussion also does not address all of the
United States federal income tax consequences that may be relevant to a Holder
in light of such Holder's particular circumstances or to Holders that are
subject to special rules such as, for example, banks and other financial
institutions, dealers in securities, insurance companies, tax-exempt
organizations, persons holding Notes as part of a straddle, hedge, conversion
transaction, or other integrated investment, or persons whose functional
currency is not the United States dollar. Moreover, the effect of any applicable
state, local, or foreign tax laws, or any estate or gift tax laws, is not
discussed.
Holders who contemplate exchanging Initial Notes for Exchange Notes should
consult their own tax advisors concerning the particular consequences to them of
the ownership and disposition of the Exchange Notes under the Code and the law
of any other taxing jurisdiction.
EXCHANGE OFFER
The exchange of Exchange Notes for Initial Notes pursuant to the Exchange
Offer will be disregarded (I.E., will not be treated as a taxable event) and
each Exchange Note will be treated as a continuation of the corresponding
Initial Note. Accordingly, Holders will not recognize gain or loss upon the
exchange, and a Holder will have the same holding period and tax basis in an
Exchange Note immediately after the exchange as it had in the corresponding
Initial Note immediately before the exchange.
U.S. HOLDERS
STATED INTEREST. A U.S. Holder of a Note will be required to include in
gross income for United States federal income tax purposes (as ordinary interest
income) the stated interest payable on the Note at the time such interest is
accrued or received, in accordance with the Holder's method of federal income
tax accounting.
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MARKET DISCOUNT. If a U.S. Holder purchases a Note for an amount that is
less than its stated principal amount, the amount of the difference will be
treated as market discount for federal income tax purposes, unless such
difference is less than a specified DE MINIMIS amount (0.25 percent of its
stated redemption price at maturity multiplied by the number of complete years
to maturity). Under the market discount rules, a U.S. Holder will be required to
treat any principal payment on, or any gain on the sale, exchange, retirement,
or other disposition of, a Note as ordinary income to the extent of the market
discount which has not previously been included in income and is treated as
having accrued on such Note at the time of such payment or disposition. In
addition, the U.S. Holder may be required to defer, until the maturity of the
Note or its earlier disposition in a taxable transaction, the deduction of all
or a portion of the interest expense on any indebtedness incurred or continued
to purchase or carry such Note.
Any market discount will be considered to accrue ratably (I.E., on a
straight line basis) during the period from the date of acquisition to the
maturity date of the Note, unless the U.S. Holder elects to accrue on a constant
yield method. A U.S. Holder of a Note may elect to include market discount in
income currently as it accrues (on either a ratable or constant interest
method), in which case the rule described above regarding deferral of interest
deductions will not apply. This election to include market discount income
currently, once made, applies to all market discount obligations acquired on or
after the first day of the first taxable year to which the election applies and
may not be revoked without the consent of the IRS.
MARKET PREMIUM. A U.S. Holder that purchases a Note for an amount in excess
of its stated redemption price at its earliest call date will be considered to
have purchased the Note at a premium. A U.S. Holder generally may elect to
amortize the excess amount (I.E., the premium) on a constant yield method. The
amount amortized in any year will be treated as a reduction of the U.S. Holder's
interest income from the Note. The premium on a Note held by a U.S. Holder that
does not make such an election will decrease the gain or increase the loss
otherwise recognized on disposition of the Note. The election to amortize
premium on a constant yield method once made applies to all debt obligations
held or subsequently acquired by the electing U.S. Holder on or after the first
day of the first taxable year to which the election applies, other than debt
instruments the interest on which is excludable from gross income, and may not
be revoked without the consent of the IRS.
TAX BASIS. A Holder's tax basis for a Note generally will be the Holder's
purchase price for the Note INCREASED by: (1) the amount of any original issue
discount included in such Holder's gross income; and (2) the amount included in
gross income by the Holder as market discount; and DECREASED by (1) any
amortized premium; and (2) any payment on the Notes other than stated interest.
SALE OR OTHER DISPOSITION. Upon the sale, exchange, redemption, retirement,
or other disposition of an Exchange Note, a Holder will recognize gain or loss
equal to the difference (if any) between the amount realized (not including
amounts attributable to accrued but unpaid stated interest) and the Holder's tax
basis in the Exchange Note. Except to the extent that amounts are required to be
treated as ordinary income under the market discount rules described above, such
gain or loss will be capital gain or loss and will be long-term capital gain or
loss if the Exchange Note has been held for more than one year. The
deductibility of capital losses is subject to limitations.
NON-U.S. HOLDERS
Subject to the discussion of backup withholding below, payments of
principal, if any, and interest by the Company or its paying agent to any
non-U.S. Holder with respect to a Note will not be subject to United States
federal income or withholding tax provided, in the case of interest, that: (1)
such non-U.S. Holder does not actually or constructively own 10 percent or more
of the total combined voting power of all classes of stock of the Company
entitled to vote; (2) such non-U.S. Holder is not a controlled foreign
corporation for United States federal income tax purposes that is related to the
Company through stock ownership; and (3) either: (A) the non-U.S. Holder
certifies to the Company or its agent, under penalties
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of perjury, that it is not a United States person (or, in the case of an
individual, that he is neither a citizen nor a resident of the United States)
and provides the Company with its name and address; or (B) a securities clearing
organization, bank, or other financial institution that holds customers'
securities in the ordinary course of its trade or business (a "financial
institution") certifies to the Company or its agent, under penalties of perjury,
that the certification described in clause (A) hereof has been received from the
non-U.S. Holder by it or by another financial institution acting for the
beneficial owner and furnishes the payor with a copy thereof. The certification
may be made on an IRS Form W-8 or substantially similar substitute form, and a
non-U.S. Holder must inform the Company or its agent or the financial
institution to which the Non-U.S. Holder provided the certification of any
change in the information on the certification within 30 days of the change. A
non-U.S. Holder of one or more Notes who does not meet the requirements of the
second preceding sentence would generally be subject to United States federal
withholding tax at a flat rate of 30 percent (or a lower applicable treaty rate)
on payments of interest on the Notes. Treasury regulations generally effective
for payments made after December 31, 1999 provide alternative methods for
satisfying the certification requirements described above.
Subject to the discussion of backup withholding below, any gain realized
upon the sale, exchange, redemption, or retirement of a Note by a non-U.S.
Holder will not be subject to United States federal income or withholding taxes
unless: (1) such gain is effectively connected with a United States trade or
business of the Holder; or (2) in the case of an individual, such non-U.S.
Holder is present in the United States for 183 days or more in the taxable year
of the disposition and certain other conditions are met.
If a non-U.S. Holder of a Note is engaged in a trade or business in the
United States (or has a permanent establishment therein, if a tax treaty
applies) and interest on the Note or gain realized on the sale, exchange, or
other disposition of the Note is effectively connected with the conduct of such
trade or business (or permanent establishment, if a tax treaty applies), then
the rules set forth in the two preceding paragraphs will not apply (provided, in
the case of withholding, that such non-U.S. Holder furnishes a properly executed
IRS Form 4224 on or before any payment date to claim such an exemption). Such
non-U.S. Holder will be exempt from United States federal withholding tax, but
will be subject to United States federal income tax on such interest and on any
gain realized on the sale, exchange, or other disposition of a Note in the same
manner as if it were a U.S. Holder. In addition, if such non-U.S. Holder is a
foreign corporation, it may be subject to a United States foreign branch profits
tax equal to 30 percent of its effectively connected earnings and profits
(subject to adjustment), unless it qualifies for a lower rate under an
applicable income tax treaty.
NON- U.S. HOLDERS SHOULD CONSULT WITH THEIR TAX ADVISORS REGARDING UNITED
STATES AND FOREIGN TAX CONSEQUENCES OF PURCHASING OWNING, AND DISPOSING OF THE
NOTES.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Backup withholding and information reporting requirements may apply to
certain payments of principal and interest on a Note and to certain payments of
proceeds of the sale or retirement of a Note. The Company, its agent, a broker,
the Trustee, or any paying agent, as the case may be, will be required to
withhold tax from any payment that is subject to backup withholding at a rate of
31 percent of such payment if a U.S. Holder fails to furnish his taxpayer
identification number (social security number or employer identification
number), to certify that such U.S. Holder is not subject to backup withholding,
or to otherwise comply with the applicable requirements of the backup
withholding rules. Certain U.S. Holders (including, among others, all
corporations) are generally not subject to the backup withholding and
information reporting requirements.
Under current Treasury Regulations, backup withholding and information
reporting generally will not apply to payments made by the Company or any paying
agent with respect to the Notes to a Holder of a Note who has provided the
required certification under penalties of perjury that it is not a U.S. Holder
as set forth in clause (3) of the first sentence in the first paragraph under
"Non-U.S. Holders" or has
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otherwise established an exemption (provided that neither the Company nor such
agent has actual knowledge that the Holder is a U.S. Holder or that the
conditions of any other exemption are, in fact, not satisfied).
Payments of the proceeds from the sale by a non-U.S. Holder of a Note made
to or through a foreign office of a broker will not be subject to United States
information reporting, except that if the broker is a United States person, a
controlled foreign corporation for United States federal income tax purposes, a
foreign person 50 percent or more of whose gross income is effectively connected
with a United States trade or business, or, for taxable years beginning after
December 31, 1999, a foreign partnership more than 50 percent of the income or
capital interest in which is owned by U.S. Holders or which has certain
connections with the United States, then United States information reporting may
apply to such payments. Before January 1, 2000 backup withholding will not apply
to any payment of the proceeds from the sale of a Note made to or through a
foreign office of a broker. However, after 1999 backup withholding might apply
if the broker has actual knowledge that the payee is a U.S. Holder. Payments of
the proceeds from the sale of a Note to or through the United States office of a
broker are subject to United States information reporting and backup withholding
unless the Holder certifies under penalties of perjury as to its non-United
States status or otherwise establishes an exemption, provided that the broker
does not have actual knowledge that the Holder is a U.S. Holder or that the
conditions of any other exemption are not, in fact, satisfied.
Any amounts withheld under the backup withholding rules from a payment to a
Holder may be claimed as a credit against such Holder's United States federal
income tax liability, provided that the required information is provided to the
IRS.
THE FOREGOING DISCUSSION IS FOR GENERAL INFORMATION ONLY AND IS NOT TAX
ADVICE. ACCORDINGLY, EACH PROSPECTIVE HOLDER OF AN EXCHANGE NOTE SHOULD CONSULT
WITH SUCH PERSON'S TAX ADVISOR AS TO THE PARTICULAR TAX CONSEQUENCES TO SUCH
PERSON OF PURCHASING, OWNING, AND DISPOSING OF THE EXCHANGE NOTE, INCLUDING THE
APPLICABILITY AND EFFECT OF ANY STATE, LOCAL, OR NON-UNITED STATES LAWS AND ANY
PROSPECTIVE CHANGES IN APPLICABLE TAX LAWS.
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PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Notes for its own account pursuant
to the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Notes. This Prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of Exchange Notes received in exchange for Initial Notes
where such Initial Notes were acquired as a result of market making activities
or other trading activities. The Company has agreed that, starting on the
Expiration Date and ending on the close of business one year after the
Expiration Date, it will make this Prospectus, as amended or supplemented,
available to any broker-dealer for use in connection with any such resale.
The Company will not receive any proceeds from any sale of Exchange Notes by
brokers-dealers. Exchange Notes received by broker-dealers for their own account
pursuant to the Exchange Offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions, through
the writing of options on the Exchange Notes or a combination of such methods of
resale, at market prices prevailing at the time of resale, at prices related to
such prevailing market prices or negotiated prices. Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such Exchange Notes. Any
broker-dealer that resells Exchange Notes that were received by it for its own
account pursuant to the Exchange Offer and any broker or dealer that
participates in a distribution of such Exchange Notes may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit of any
such resale of Exchange Notes and any commissions or concessions received by any
such Persons may be deemed to be underwriting compensation under the Securities
Act. The Letter of Transmittal states that by acknowledging that it will deliver
and by delivering a prospectus, a broker-dealer will not be deemed to admit that
it is an "underwriter" within the meaning of the Securities Act.
For a period of one year after the Expiration Date, the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Company has agreed to pay all expenses
incident to the Exchange Offer (including the expenses of one counsel for the
holder of the Securities) other than commissions or concessions of any brokers
or dealers and will indemnify the holders of the Securities (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.
LEGAL MATTERS
The validity of the Exchange Notes offered hereby will be passed upon for
the Company by Lathrop & Gage L.C., Kansas City, Missouri. Lathrop & Gage L.C.
will rely on the opinion of Cravath, Swaine & Moore as to matters of New York
law. Raymond F. Beagle, Jr., a member of Lathrop & Gage L.C., is general counsel
of the Company and a successor voting trustee under Mr. Stanley H. Durwood's
revocable voting trust. See "Security Ownership of Beneficial Owners."
EXPERTS
The consolidated balance sheets as of April 2, 1998 and April 3, 1997 and
the consolidated statements of operations, stockholders' equity and cash flows
for the year (52 weeks) ended April 2, 1998, the year (53 weeks) ended April 3,
1997 and the year (52 weeks) ended March 28, 1996 incorporated by reference in
this Registration Statement have been included herein in reliance on the report
of PricewaterhouseCoopers LLP, independent accountants, given on the authority
of that firm as experts in accounting and auditing.
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
$225,000,000
OFFER TO EXCHANGE 9 1/2% SENIOR EXCHANGE SUBORDINATED NOTES
DUE FEBRUARY 1, 2011
THAT HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933
FOR OUTSTANDING 9 1/2% SENIOR SUBORDINATED NOTES
DUE FEBRUARY 1, 2011 OF
AMC ENTERTAINMENT INC.
PROSPECTUS
DATED APRIL 5, 1999
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
AMC Entertainment Inc. is incorporated in Delaware. Under Section 145 of the
Delaware General Corporation Law, a corporation has the power, under specified
circumstances, to indemnify its directors, officers, employees and agents in
connection with actions, suits or proceedings brought against them by a third
party or in the right of the corporation, by reason of the fact that they were
or are such directors, officers, employees or agents, against expenses incurred
in any such action, suit or proceeding. The Company's certificate of
incorporation requires indemnification of directors and officers to the full
extent permitted by the Delaware General Corporation Law and provides that, in
any action by a claimant, the Company shall bear the burden of proof that the
claimant is not entitled to indemnification.
Section 102(b)(7) of the Delaware General Corporation Law provides that a
certificate of incorporation may contain a provision eliminating or limiting the
personal liability of a director to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director provided that such
provision shall not eliminate or limit the liability of a director (i) for any
breach of the director's duty of loyalty to the corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 (relating to
liability for unauthorized acquisitions or redemptions of, or dividends on,
capital stock) of the Delaware General Corporation Law, or (iv) for any
transaction from which the director derived an improper personal benefit. The
Certificate of Incorporation of the Company contains the provisions permitted by
Section 102(b)(7) of the Delaware General Corporation Law.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended (the "Securities Act"), may be permitted to directors,
officers and controlling persons of the Company pursuant to the foregoing
provisions, or otherwise, the Company has been advised that, in the opinion of
the Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act and is therefore unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Company of expenses incurred or paid by a director, officer or
controlling person of the Company in the successful defense of any action, suit
or proceeding) is asserted by a director, officer or controlling person thereof
in connection with the securities being registered pursuant to this Registration
Statement, the Company will, unless in the opinion of counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------------ ----------------------------------------------------------------------------------------------------
<C> <S>
2.1 Agreement and Plan of Merger dated as of March 31, 1997 between AMC Entertainment Inc. and Durwood,
Inc. (together with Exhibit A, "Pre-Merger Action Plan") (Incorporated by reference from Exhibit
2.1 to the Company's Registration Statement on Form S-4 (File No. 333-25755) filed April 24,
1997).
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------------ ----------------------------------------------------------------------------------------------------
<C> <S>
2.2 Stock Agreement among AMC Entertainment Inc. and Stanley H. Durwood, his children: Carol D.
Journagan, Edward D. Durwood, Thomas A. Durwood, Elissa D. Grodin, Brian H. Durwood and Peter J.
Durwood (the "Durwood Children"), The Thomas A. and Barbara F. Durwood Family Investment
Partnership (the "TBD Partnership") and Delta Properties, Inc. (Incorporated by reference from
Exhibit 99.3 to Amendment No. 2 to Schedule 13D of Stanley H. Durwood filed September 30, 1997).
2.3 Registration Agreement among AMC Entertainment Inc. and the Durwood Children and Delta Properties,
Inc. (Incorporated by reference from Exhibit 99.2 to Amendment No. 2 to Schedule 13D of Stanley H.
Durwood filed September 30, 1997).
2.4(a) Indemnification Agreement dated as of March 31, 1997 among AMC Entertainment Inc., the Durwood
Family Stockholders and Delta Properties, Inc., together with Exhibit B thereto (Escrow Agreement)
(Incorporated by reference from Exhibit 2.4(a) to the Company's Registration Statement on Form S-4
(File No. 333-25755) filed April 24, 1997).
2.4(b) Durwood Family Settlement Agreement (Incorporated by reference from Exhibit 99.1 to Schedule 13D of
Durwood, Inc. and Stanley H. Durwood filed May 7, 1996).
2.4(c) First Amendment to Durwood Family Settlement Agreement (Incorporated by reference from Exhibit
2.4(c) to the Company's Registration Statement on Form S-4 (File No. 333-25755) filed April 24,
1997).
2.4(d) Second Amendment to Durwood Family Settlement Agreement dated as of August 15, 1997, among Stanley
H. Durwood, the Durwood Children and the TBD Partnership (Incorporated by reference from Exhibit
99.7 to Amendment No. 2 to Schedule 13D of Stanley H. Durwood filed September 30, 1997).
3.1 Amended and Restated Certificate of Incorporation of AMC Entertainment Inc. (as amended on December
2, 1997) (Incorporated by reference from Exhibit 3.1 to the Company's Form 10-Q (File No. 1-8747)
dated January 1, 1998).
3.2 Bylaws of AMC Entertainment Inc. (Incorporated by reference from Exhibit 3.3 to the Company's Form
10-Q (File No. 0-12429) for the quarter ended December 26, 1996).
4.1(a) Amended and Restated Credit Agreement dated as of April 10, 1997, among AMC Entertainment Inc., as
the Borrower, The Bank of Nova Scotia, as Administrative Agent, and Bank of America National Trust
and Savings Association, as Documentation Agent, and Various Financial Institutions, as Lenders,
together with the following exhibits thereto: significant subsidiary guarantee, form of notes,
form of pledge agreement and form of subsidiary pledge agreement (Incorporated by reference from
Exhibit 4.3 to the Company's Registration Statement on Form S-4 (File No. 333-25755) filed April
24, 1997).
4.1(b) Second Amendment, dated January 16, 1998, to Amended and Restated Credit Agreement dated as of April
10, 1997 (Incorporated by reference from Exhibit 4.2 to the Company's Form 10-Q (File No. 1-8747)
for the quarter ended January 1, 1998).
4.1(c) Third Amendment, dated March 15, 1999, to Amended and Restated Credit Agreement dated as of April
10, 1997 (Incorporated by reference from Exhibit 4 to the Company's Form 8-K (File No. 1-8747)
dated March 25, 1999).
4.2(a) Indenture dated March 19, 1997, respecting AMC Entertainment Inc.'s 9 1/2% Senior Subordinated Notes
due 2009 (Incorporated by reference from Exhibit 4.1 to the Company's Form 8-K (File No. 1-8747)
dated March 19, 1997).
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------------ ----------------------------------------------------------------------------------------------------
<C> <S>
4.2(b) First Supplemental Indenture respecting AMC Entertainment Inc.'s 9 1/2% Senior Subordinated Notes
due 2009 (Incorporated by reference from Exhibit 4.4(b) to Amendment No. 2. to the Company's
Registration Statement on Form S-4 (File No.333-29155) filed August 4, 1997).
4.3 Indenture dated January 27, 1999, respecting AMC Entertainment Inc.'s 9 1/2% Senior Subordinated
Notes due 2011 (Incorporated by reference from Exhibit 4.3 to the Company's 10-Q (File No. 1-8747)
for the quarter ended December 31, 1998).
4.4 Registration Rights Agreement, dated January 27, 1999, respecting AMC Entertainment Inc.'s 9 1/2%
Senior Subordinated Notes due 2011 (Incorporated by reference from Exhibit 4.4 to the Company's
10-Q (File No. 1-8747) for the quarter ended December 31, 1998).
4.5 In accordance with Item 601(b)(4)(iii)(A) of Regulation S-K, certain instruments respecting long
term debt of the Registrant have been omitted but will be furnished to the Commission upon
request.
*5.1 Opinion of Lathrop & Gage L.C.
*5.2 Opinion of Cravath, Swaine & Moore
10.1. AMC Entertainment Inc. 1983 Stock Option Plan (Incorporated by reference from Exhibit 10.1 to the
Company's Form S-1 (File No. 2-84675) filed June 22, 1983).
10.2. AMC Entertainment Inc. 1984 Employee Stock Purchase Plan (Incorporated by reference from Exhibit
28.1 to the Company's Form S-8 (File No. 2-97523) filed July 3, 1984).
10.3. AMC Entertainment Inc. 1984 Employee Stock Option Plan (Incorporated by reference from Exhibit 28.1
to the Company's S-8 and S-3 (File No. 2-97522) filed July 3, 1984).
10.3.(a) AMC Entertainment Inc. 1994 Stock Option and Incentive Plan, as amended (Incorporated by reference
from Exhibit 10.1 to the Company's Form 10-Q (File No. 0-12429) for the quarter ended December 26,
1996).
10.3.(b) Form of Non-Qualified (NON-ISO) Stock Option Agreement (Incorporated by reference from Exhibit 10.2
to the Company's Form 10-Q (File No. 0-12429) for the quarter ended December 26, 1996).
10.4. American Multi-Cinema, Inc. Savings Plan, a defined contribution 401(k) plan, restated January 1,
1989, as amended (Incorporated by reference from Exhibit 10.6 to the Company's Form S-1 (File No.
33-48586) filed June 12, 1992, as amended).
10.5(a) Defined Benefit Retirement Income Plan for Certain Employees of American Multi-Cinema, Inc. dated
January 1, 1989, as amended (Incorporated by reference from Exhibit 10.7 to the Company's Form S-1
(File No. 33-48586) filed June 12, 1992, as amended).
10.5(b) AMC Supplemental Executive Retirement Plan dated January 1, 1994 (Incorporated by reference from
Exhibit 10.7(b) to the Company's Form 10-K (File No. 0-12429) for the fiscal year ended March 30,
1995).
10.6 Employment Agreement between American Multi-Cinema, Inc. and Philip M. Singleton (Incorporated by
reference from Exhibit 10.2 to the Company's Form 10-Q (File No. 1-8747) for the quarter ended
December 31, 1998).
10.7 Employment Agreement between American Multi-Cinema, Inc. and Peter C. Brown (Incorporated by
reference from Exhibit 10.1 to the Company's Form 10-Q (File No.1-8747) for the quarter ended
December 31, 1998).
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------------ ----------------------------------------------------------------------------------------------------
<C> <S>
10.8 Disability Compensation Provisions respecting Stanley H. Durwood (Incorporated by reference from
Exhibit 10.12 to the Company's Form S-1 (File No. 33-48586) filed June 12, 1992, as amended).
10.9 Executive Medical Expense Reimbursement and Supplemental Accidental Death or Dismemberment Insurance
Plan, as restated effective as of February 1, 1991 (Incorporated by reference from Exhibit 10.13
to the Company's Form S-1 (File No. 33-48586) filed June 12, 1992, as amended).
10.10 Division Operations Incentive Program (incorporated by reference from Exhibit 10.15 to the Company's
Form S-1 (File No. 33-48586) filed June 12, 1992, as amended).
10.11 Partnership Interest Purchase Agreement dated May 28, 1993, among Exhibition Enterprises
Partnership, Cinema Enterprises, Inc., Cinema Enterprises II, Inc., American Multi-Cinema, Inc.,
TPI Entertainment, Inc. and TPI Enterprises, Inc. (Incorporated by reference from Exhibit 10.29 to
the Company's Form 10-K (File No. 1-8747) for the fiscal year ended April 1, 1993).
10.12 Mutual Release and Indemnification Agreement dated May 28, 1993, among Exhibition Enterprises
Partnership, Cinema Enterprises, Inc., American Multi-Cinema, Inc., TPI Entertainment, Inc. and
TPI Enterprises, Inc. (Incorporated by reference from Exhibit 10.30 to the Company's Form 10-K
(File No. 1-8747) for the fiscal year ended April 1, 1993).
10.13 Assignment and Assumption Agreement between Cinema Enterprises II, Inc. and TPI Entertainment, Inc.
(Incorporated by reference from Exhibit 10.31 to the Company's Form 10-K (File No. 1-8747) for the
fiscal year ended April 1, 1993).
10.14 Confidentiality Agreement dated May 28, 1993, among TPI Entertainment, Inc., TPI Enterprises, Inc.,
Exhibition Enterprises Partnership, Cinema Enterprises, Inc., Cinema Enterprises II, Inc. and
American Multi-Cinema, Inc. (Incorporated by reference from Exhibit 10.32 to the Company's Form
10-K (File No. 1-8747) for the fiscal year ended April 1, 1993).
10.15 Termination Agreement dated May 28, 1993, among TPI Entertainment, Inc., TPI Enterprises, Inc.
Exhibition Enterprises Partnership, American Multi-Cinema, Inc., Cinema Enterprises, Inc., AMC
Entertainment Inc., Durwood, Inc., Stanley H. Durwood and Edward D. Durwood (Incorporated by
reference from Exhibit 10.33 to the Company's Form 10-K (File No. 1-8747) for the fiscal year
ended April 1, 1993).
10.16 Promissory Note dated June 16, 1993, made by Thomas L. Velde and Katherine G. Terwilliger, husband
and wife, payable to American Multi-Cinema, Inc. (Incorporated by reference from Exhibit 10.34 to
the Company's Form 10-K (File No. 1-8747) for the fiscal year ended April 1, 1993).
10.17 Second Mortgage dated June 16, 1993, among Thomas L. Velde, Katherine G. Terwilliger and American
Multi-Cinema, Inc. (Incorporated by reference from Exhibit 10.35 to the Company's Form 10-K (File
No. 1-8747) for the fiscal year ended April 1, 1993).
10.18 Summary of American Multi-Cinema, Inc. Executive Incentive Program (Incorporated by reference from
Exhibit 10.36 to the Company's Registration Statement on Form S-2 (File No. 33-51693) filed
December 23, 1993).
10.19 AMC Non-Qualified Deferred Compensation Plans (Incorporated by reference from Exhibit 10.37 to
Amendment No. 2 to the Company's Registration Statement on Form S-2 (File No. 33-51693) filed
February 18, 1994).
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------------ ----------------------------------------------------------------------------------------------------
<C> <S>
10.20 Employment Agreement between AMC Entertainment Inc., American Multi-Cinema, Inc. and Stanley H.
Durwood (Incorporated by reference from Exhibit 10.32 to the Company's Form 10-K (File No.
0-12429) for the fiscal year ended March 28, 1996).
10.21 Real Estate Contract dated November 1, 1995 among Richard M. Fay, Mary B. Fay and American
Multi-Cinema, Inc. (Incorporated by reference from Exhibit 10.33 to the Company's Form 10-K (File
No. 0-12429) for the fiscal year ended March 28, 1996).
10.22 American Multi-Cinema, Inc. Retirement Enhancement Plan (Incorporated by reference from Exhibit
10.26 to the Company's Registration Statement on Form S-4 (File No. 333-25755) filed April 24,
1997).
10.23 Employment Agreement between American Multi-Cinema, Inc. and Richard M. Fay (Incorporated by
reference from Exhibit 10.3 to the Company's Form 10-Q (File No. 1-8747) for the quarter ended
December 31, 1998).
10.24 American Multi-Cinema, Inc. Executive Savings Plan (Incorporated by reference from Exhibit 10.28 to
the Company's Registration Statement on Form S-4 (File No. 333-25755) filed April 24, 1997).
10.25 Limited Partnership Agreement of Planet Movies Company, L.P. dated October 17, 1997 (Incorporated by
reference from Exhibit 10.25 to the Company's Form 10-K (File No. 1-8747) for the fiscal year
ended April 2, 1998).
10.26 Agreement of Sale and Purchase dated November 21, 1997 among American Multi-Cinema, Inc. and AMC
Realty, Inc., as Seller, and Entertainment Properties Trust, as Purchaser (Incorporated by
reference from Exhibit 10.1 of the Company's Current Report on Form 8-K (File No. 1-8747) filed
December 9, 1997).
10.27 Option Agreement dated November 21, 1997 among American Multi-Cinema, Inc. and AMC Realty, Inc., as
Seller, and Entertainment Properties Trust, as Purchaser (Incorporated by reference from Exhibit
10.2 of the Company's Current Report on Form 8-K (File No. 1-8747) filed December 9, 1997).
10.28 Right to Purchase Agreement dated November 21, 1997, between AMC Entertainment, Inc., as Grantor,
and Entertainment Properties Trust as Offeree (Incorporated by reference from Exhibit 10.3 of the
Company's Current Report on Form 8-K (File No. 1-8747) filed December 9, 1997.)
10.29 Lease dated November 21, 1997 between Entertainment Properties Trust, as Landlord, and American
Multi-Cinema, Inc., as Tenant (Incorporated by reference from Exhibit 10.4 of the Company's
Current Report on Form 8-K (File No. 1-8747) filed December 9, 1997). (Similar leases have been
entered into with respect to the following theatres: Mission Valley 20, Promenade 16, Ontario
Mills 30, Lennox 24, West Olive 16, Studio 30, Huebner Oaks 24, First Colony 24, Oak View 24,
Leawood Town Center 20, South Barrington 30, Gulf Pointe 30, Cantera 30, Mesquite 30 and Hampton
Town Center 24.)
10.30 Guaranty of Lease dated November 21, 1997 between AMC Entertainment, Inc., as Guarantor, and
Entertainment Properties Trust, as Owner (Incorporated by reference from Exhibit 10.5 of the
Company's Current Report on Form 8-K (File No. 1-8747) filed December 9, 1997, (Similar guaranties
have been entered into with respect to the following theatres: Mission Valley 20, Promenade 16,
Ontario Mills 30, Lennox 24, West Olive 16, Studio 30, Huebner Oaks 24, First Colony 24, Oak View
24, Leawood Town Center 20, South Barrington 30, Gulf Pointe 30, Cantera 30, Mesquete 30 and
Hampton Town Center 24.)
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------------ ----------------------------------------------------------------------------------------------------
<C> <S>
10.31 Promissory Note dated August 11, 1998, made by Peter C. Brown, payable to AMC Entertainment Inc.
(Incorporated by reference from Exhibit 10.1 to the Company's Form 10-Q (File No. 1-8747) for the
quarter ended October 1, 1998).
10.32 Promissory Note dated September 14, 1998, made by Philip M. Singleton, payable to AMC Entertainment
Inc. (incorporated by reference from Exhibit 10.2 to the Company's Form 10-Q (File No. 1-8747) for
the quarter ended October 1, 1998).
10.33 Employment agreement between AMC Entertainment Inc., American Multi-Cinema, Inc. and Richard T.
Walsh dated February 1, 1999 (Incorporated by reference from Exhibit 10.4 to the Company's Form
10-Q (File No. 1-8747) for the quarter ended December 31, 1998).
10.34 AMC Entertainment Inc. 1994 Stock Option and Incentive Plan, as amended (Incorporated by reference
from Exhibit 10.5 to the Company's Form 10-Q (File No. 1-8747) for the quarter ended December 31,
1998).
10.35 Form of Non-Qualified (Non-ISO) Stock Option Agreement used in November 13, 1998 option grants to
Mr. Stanley H. Durwood, Mr. Peter C. Brown and Mr. Philip M. Singleton (Incorporated by reference
from Exhibit 10.6 to the Company's Form 10-Q (File No. 1-8747) for the quarter ended December 31,
1998).
**12.1 Computation of ratio of earnings to fixed charges
**12.2 Computation of ratio of EBITDA to net interest expense.
16 Letter regarding change in certifying accountant (Incorporated by reference from Exhibit 19.6 to the
Company's Form 10-Q (File No. 0-12429) for the quarter ended July 2, 1992).
**21 Subsidiaries of AMC Entertainment Inc.
*23.1 Consent of PricewaterhouseCoopers LLP to the use of their report of independent accountants.
*23.2 Consent of Lathrop & Gage L.C. to the use of their opinion filed as Exhibit 5.1 (Incorporated in
Exhibit 5.1).
*23.3 Consent of Cravath, Swaine & Moore to the use of their opinion filed as Exhibit 5.2 (Incorporated in
Exhibit 5.2).
**24 Power of Attorney
*25 Statement of Eligibility and Authorization of The Bank of New York, Trustee.
*99.1 Form of Letter of Transmittal.
*99.2 Form of Notice of Guaranteed Delivery.
*99.3 Form of Letter to Clients.
*99.4 Form of Letter to Nominees.
</TABLE>
- ------------------------
* Filed herewith
**Previously filed with this registration statement
II-6
<PAGE>
ITEM 22. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the 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 Securities Act and will be governed by the final
adjudication of such issue.
The undersigned Registrant hereby undertakes:
(a) To file, during period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high and of
the estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no more
than 20 percent change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the
effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
PROVIDED, HOWEVER, that paragraphs (a)(i) and (ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.
(b) 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.
(c) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination
of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-7
<PAGE>
The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, AMC
Entertainment Inc. has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Kansas
City and the State of Missouri, on the 31st day of March, 1999.
<TABLE>
<S> <C> <C>
AMC ENTERTAINMENT INC.
By: /s/ PETER C. BROWN
-----------------------------------------
Peter C. Brown
CO-CHAIRMAN OF THE BOARD,
PRESIDENT AND CHIEF FINANCIAL OFFICER
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
TITLE DATE
-------------------------- -------------------
<C> <S> <C>
* Co-Chairman of the Board,
- ------------------------------ Chief Executive Officer March 31, 1999
Stanley H. Durwood and Director
Co-Chairman of the Board,
* President, Chief
- ------------------------------ Financial Officer and March 31, 1999
Peter C. Brown Director
* Executive Vice President,
- ------------------------------ Chief Operating Officer March 31, 1999
Philip M. Singleton and Director
*
- ------------------------------ Director March 31, 1999
Paul E. Vardeman
*
- ------------------------------ Director March 31, 1999
Charles J. Egan, Jr.
*
- ------------------------------ Director March 31, 1999
William T. Grant II
*
- ------------------------------ Director March 31, 1999
John P. Mascotte
* Senior Vice President,
- ------------------------------ Chief Accounting and March 31, 1999
Richard L. Obert Information officer
</TABLE>
* Peter C. Brown, by signing his name hereto, signs this document on behalf of
each of the persons indicated by an asterisk above pursuant to a power of
attorney duly executed by such person and filed herewith with the Securities
and Exchange Commission.
<TABLE>
<S> <C> <C>
March 31, 1999 /s/ PETER C. BROWN
-----------------------------------------
Peter C. Brown
ATTORNEY-IN-FACT
</TABLE>
II-9
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------------ ----------------------------------------------------------------------------------------------------
<C> <S>
2.1 Agreement and Plan of Merger dated as of March 31, 1997 between AMC Entertainment Inc. and Durwood,
Inc. (together with Exhibit A, "Pre-Merger Action Plan") (Incorporated by reference from Exhibit
2.1 to the Company's Registration Statement on Form S-4 (File No. 333-25755) filed April 24,
1997).
2.2 Stock Agreement among AMC Entertainment Inc. and Stanley H. Durwood, his children: Carol D.
Journagan, Edward D. Durwood, Thomas A. Durwood, Elissa D. Grodin, Brian H. Durwood and Peter J.
Durwood (the "Durwood Children"), The Thomas A. and Barbara F. Durwood Family Investment
Partnership (the "TBD Partnership") and Delta Properties, Inc. (Incorporated by reference from
Exhibit 99.3 to Amendment No. 2 to Schedule 13D of Stanley H. Durwood filed September 30, 1997).
2.3 Registration Agreement among AMC Entertainment Inc. and the Durwood Children and Delta Properties,
Inc. (Incorporated by reference from Exhibit 99.2 to Amendment No. 2 to Schedule 13D of Stanley H.
Durwood filed September 30, 1997).
2.4(a) Indemnification Agreement dated as of March 31, 1997 among AMC Entertainment Inc., the Durwood
Family Stockholders and Delta Properties, Inc., together with Exhibit B thereto (Escrow Agreement)
(Incorporated by reference from Exhibit 2.4(a) to the Company's Registration Statement on Form S-4
(File No. 333-25755) filed April 24, 1997).
2.4(b) Durwood Family Settlement Agreement (Incorporated by reference from Exhibit 99.1 to Schedule 13D of
Durwood, Inc. and Stanley H. Durwood filed May 7, 1996).
2.4(c) First Amendment to Durwood Family Settlement Agreement (Incorporated by reference from Exhibit
2.4(c) to the Company's Registration Statement on Form S-4 (File No. 333-25755) filed April 24,
1997).
2.4(d) Second Amendment to Durwood Family Settlement Agreement dated as of August 15, 1997, among Stanley
H. Durwood, the Durwood Children and the TBD Partnership (Incorporated by reference from Exhibit
99.7 to Amendment No. 2 to Schedule 13D of Stanley H. Durwood filed September 30, 1997).
3.1 Amended and Restated Certificate of Incorporation of AMC Entertainment Inc. (as amended on December
2, 1997) (Incorporated by reference from Exhibit 3.1 to the Company's Form 10-Q (File No. 1-8747)
dated January 1, 1998).
3.2 Bylaws of AMC Entertainment Inc. (Incorporated by reference from Exhibit 3.3 to the Company's Form
10-Q (File No. 0-12429) for the quarter ended December 26, 1996).
4.1(a) Amended and Restated Credit Agreement dated as of April 10, 1997, among AMC Entertainment Inc., as
the Borrower, The Bank of Nova Scotia, as Administrative Agent, and Bank of America National Trust
and Savings Association, as Documentation Agent, and Various Financial Institutions, as Lenders,
together with the following exhibits thereto: significant subsidiary guarantee, form of notes,
form of pledge agreement and form of subsidiary pledge agreement (Incorporated by reference from
Exhibit 4.3 to the Company's Registration Statement on Form S-4 (File No. 333-25755) filed April
24, 1997).
4.1(b) Second Amendment, dated January 16, 1998, to Amended and Restated Credit Agreement dated as of April
10, 1997 (Incorporated by reference from Exhibit 4.2 to the Company's Form 10-Q (File No. 1-8747)
for the quarter ended January 1, 1998).
</TABLE>
II-10
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------------ ----------------------------------------------------------------------------------------------------
<C> <S>
4.1(c) Third Amendment, dated March 15, 1999, to Amended and Restated Credit Agreement dated as of April
10, 1997 (Incorporated by reference from Exhibit 4 to the Company's Form 8-K (File No. 1-8747)
dated March 25, 1999).
4.2(a) Indenture dated March 19, 1997, respecting AMC Entertainment Inc.'s 9 1/2% Senior Subordinated Notes
due 2009 (Incorporated by reference from Exhibit 4.1 to the Company's Form 8-K (File No. 1-8747)
dated March 19, 1997).
4.2(b) First Supplemental Indenture respecting AMC Entertainment Inc.'s 9 1/2% Senior Subordinated Notes
due 2009 (Incorporated by reference from Exhibit 4.4(b) to Amendment No. 2. to the Company's
Registration Statement on Form S-4 (File No.333-29155) filed August 4, 1997).
4.3 Indenture dated January 27, 1999, respecting AMC Entertainment Inc.'s 9 1/2% Senior Subordinated
Notes due 2011 (Incorporated by reference from Exhibit 4.3 to the Company's 10-Q (File No. 1-8747)
for the quarter ended December 31, 1998).
4.4 Registration Rights Agreement, dated January 27, 1999, respecting AMC Entertainment Inc.'s 9 1/2%
Senior Subordinated Notes due 2011 (Incorporated by reference from Exhibit 4.4 to the Company's
10-Q (File No. 1-8747) for the quarter ended December 31, 1998).
4.5 In accordance with Item 601(b)(4)(iii)(A) of Regulation S-K, certain instruments respecting long
term debt of the Registrant have been omitted but will be furnished to the Commission upon
request.
*5.1 Opinion of Lathrop & Gage L.C.
*5.2 Opinion of Cravath, Swaine & Moore
10.1 AMC Entertainment Inc. 1983 Stock Option Plan (Incorporated by reference from Exhibit 10.1 to the
Company's Form S-1 (File No. 2-84675) filed June 22, 1983).
10.2 AMC Entertainment Inc. 1984 Employee Stock Purchase Plan (Incorporated by reference from Exhibit
28.1 to the Company's Form S-8 (File No. 2-97523) filed July 3, 1984).
10.3 AMC Entertainment Inc. 1984 Employee Stock Option Plan (Incorporated by reference from Exhibit 28.1
to the Company's S-8 and S-3 (File No. 2-97522) filed July 3, 1984).
10.3(a) AMC Entertainment Inc. 1994 Stock Option and Incentive Plan, as amended (Incorporated by reference
from Exhibit 10.1 to the Company's Form 10-Q (File No. 0-12429) for the quarter ended December 26,
1996).
10.3(b) Form of Non-Qualified (NON-ISO) Stock Option Agreement (Incorporated by reference from Exhibit 10.2
to the Company's Form 10-Q (File No. 0-12429) for the quarter ended December 26, 1996).
10.4 American Multi-Cinema, Inc. Savings Plan, a defined contribution 401(k) plan, restated January 1,
1989, as amended (Incorporated by reference from Exhibit 10.6 to the Company's Form S-1 (File No.
33-48586) filed June 12, 1992, as amended).
10.5(a) Defined Benefit Retirement Income Plan for Certain Employees of American Multi-Cinema, Inc. dated
January 1, 1989, as amended (Incorporated by reference from Exhibit 10.7 to the Company's Form S-1
(File No. 33-48586) filed June 12, 1992, as amended).
10.5(b) AMC Supplemental Executive Retirement Plan dated January 1, 1994 (Incorporated by reference from
Exhibit 10.7(b) to the Company's Form 10-K (File No. 0-12429) for the fiscal year ended March 30,
1995).
</TABLE>
II-11
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------------ ----------------------------------------------------------------------------------------------------
<C> <S>
10.6 Employment Agreement between American Multi-Cinema, Inc. and Philip M. Singleton (Incorporated by
reference from Exhibit 10.2 to the Company's Form 10-Q (File No. 1-8747) for the quarter ended
December 31, 1998).
10.7 Employment Agreement between American Multi-Cinema, Inc. and Peter C. Brown (Incorporated by
reference from Exhibit 10.1 to the Company's Form 10-Q (File No.1-8747) for the quarter ended
December 31, 1998).
10.8 Disability Compensation Provisions respecting Stanley H. Durwood (Incorporated by reference from
Exhibit 10.12 to the Company's Form S-1 (File No. 33-48586) filed June 12, 1992, as amended).
10.9 Executive Medical Expense Reimbursement and Supplemental Accidental Death or Dismemberment Insurance
Plan, as restated effective as of February 1, 1991 (Incorporated by reference from Exhibit 10.13
to the Company's Form S-1 (File No. 33-48586) filed June 12, 1992, as amended).
10.10 Division Operations Incentive Program (incorporated by reference from Exhibit 10.15 to the Company's
Form S-1 (File No. 33-48586) filed June 12, 1992, as amended).
10.11 Partnership Interest Purchase Agreement dated May 28, 1993, among Exhibition Enterprises
Partnership, Cinema Enterprises, Inc., Cinema Enterprises II, Inc., American Multi-Cinema, Inc.,
TPI Entertainment, Inc. and TPI Enterprises, Inc. (Incorporated by reference from Exhibit 10.29 to
the Company's Form 10-K (File No. 1-8747) for the fiscal year ended April 1, 1993).
10.12 Mutual Release and Indemnification Agreement dated May 28, 1993, among Exhibition Enterprises
Partnership, Cinema Enterprises, Inc., American Multi-Cinema, Inc., TPI Entertainment, Inc. and
TPI Enterprises, Inc. (Incorporated by reference from Exhibit 10.30 to the Company's Form 10-K
(File No. 1-8747) for the fiscal year ended April 1, 1993).
10.13 Assignment and Assumption Agreement between Cinema Enterprises II, Inc. and TPI Entertainment, Inc.
(Incorporated by reference from Exhibit 10.31 to the Company's Form 10-K (File No. 1-8747) for the
fiscal year ended April 1, 1993).
10.14 Confidentiality Agreement dated May 28,1993, among TPI Entertainment, Inc., TPI Enterprises, Inc.,
Exhibition Enterprises Partnership, Cinema Enterprises, Inc., Cinema Enterprises II, Inc. and
American Multi-Cinema, Inc. (Incorporated by reference from Exhibit 10.32 to the Company's Form
10-K (File No. 1-8747) for the fiscal year ended April 1, 1993).
10.15 Termination Agreement dated May 28, 1993, among TPI Entertainment, Inc., TPI Enterprises, Inc.
Exhibition Enterprises Partnership, American Multi-Cinema, Inc., Cinema Enterprises, Inc., AMC
Entertainment Inc., Durwood, Inc., Stanley H. Durwood and Edward D. Durwood (Incorporated by
reference from Exhibit 10.33 to the Company's Form 10-K (File No. 1-8747) for the fiscal year
ended April 1, 1993).
10.16 Promissory Note dated June 16, 1993, made by Thomas L. Velde and Katherine G. Terwilliger, husband
and wife, payable to American Multi-Cinema, Inc. (Incorporated by reference from Exhibit 10.34 to
the Company's Form 10-K (File No. 1-8747) for the fiscal year ended April 1, 1993).
10.17 Second Mortgage dated June 16, 1993, among Thomas L. Velde, Katherine G. Terwilliger and American
Multi-Cinema, Inc. (Incorporated by reference from Exhibit 10.35 to the Company's Form 10-K (File
No. 1-8747) for the fiscal year ended April 1, 1993).
</TABLE>
II-12
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------------ ----------------------------------------------------------------------------------------------------
<C> <S>
10.18 Summary of American Multi-Cinema, Inc. Executive Incentive Program (Incorporated by reference from
Exhibit 10.36 to the Company's Registration Statement on Form S-2 (File No. 33-51693) filed
December 23, 1993).
10.19 AMC Non-Qualified Deferred Compensation Plans (Incorporated by reference from Exhibit 10.37 to
Amendment No. 2 to the Company's Registration Statement on Form S-2 (File No. 33-51693) filed
February 18, 1994).
10.20 Employment Agreement between AMC Entertainment Inc., American Multi-Cinema, Inc. and Stanley H.
Durwood (Incorporated by reference from Exhibit 10.32 to the Company's Form 10-K (File No.
0-12429) for the fiscal year ended March 28, 1996).
10.21 Real Estate Contract dated November 1, 1995 among Richard M. Fay, Mary B. Fay and American
Multi-Cinema, Inc. (Incorporated by reference from Exhibit 10.33 to the Company's Form 10-K (File
No. 0-12429) for the fiscal year ended March 28, 1996).
10.22 American Multi-Cinema, Inc. Retirement Enhancement Plan (Incorporated by reference from Exhibit
10.26 to the Company's Registration Statement on Form S-4 (File No. 333-25755) filed April 24,
1997).
10.23 Employment Agreement between American Multi-Cinema, Inc. and Richard M. Fay (Incorporated by
reference from Exhibit 10.3 to the Company's Form 10-Q (File No. 1-8747) for the quarter ended
December 31, 1998).
10.24 American Multi-Cinema, Inc. Executive Savings Plan (Incorporated by reference from Exhibit 10.28 to
the Company's Registration Statement on Form S-4 (File No. 333-25755) filed April 24, 1997).
10.25 Limited Partnership Agreement of Planet Movies Company, L.P. dated October 17, 1997 (Incorporated by
reference from Exhibit 10.25 to the Company's Form 10-K (File No. 1-8747) for the fiscal year
ended April 2, 1998).
10.26 Agreement of Sale and Purchase dated November 21, 1997 among American Multi-Cinema, Inc. and AMC
Realty, Inc., as Seller, and Entertainment Properties Trust, as Purchaser (Incorporated by
reference from Exhibit 10.1 of the Company's Current Report on Form 8-K (File No. 1-8747) filed
December 9, 1997).
10.27 Option Agreement dated November 21, 1997 among American Multi-Cinema, Inc. and AMC Realty, Inc., as
Seller, and Entertainment Properties Trust, as Purchaser (Incorporated by reference from Exhibit
10.2 of the Company's Current Report on Form 8-K (File No. 1-8747) filed December 9, 1997).
10.28 Right to Purchase Agreement dated November 21, 1997, between AMC Entertainment, Inc., as Grantor,
and Entertainment Properties Trust as Offeree (Incorporated by reference from Exhibit 10.3 of the
Company's Current Report on Form 8-K (File No. 1-8747) filed December 9, 1997.)
10.29 Lease dated November 21, 1997 between Entertainment Properties Trust, as Landlord, and American
Multi-Cinema, Inc., as Tenant (Incorporated by reference from Exhibit 10.4 of the Company's
Current Report on Form 8-K (File No. 1-8747) filed December 9, 1997). (Similar leases have been
entered into with respect to the following theatres: Mission Valley 20, Promenade 16, Ontario
Mills 30, Lennox 24, West Olive 16, Studio 30, Huebner Oaks 24, First Colony 24, Oak View 24,
Leawood Town Center 20, South Barrington 30, Gulf Pointe 30, Cantera 30, Mesquite 30 and Hampton
Town Center 24.)
</TABLE>
II-13
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------------ ----------------------------------------------------------------------------------------------------
<C> <S>
10.30 Guaranty of Lease dated November 21, 1997 between AMC Entertainment, Inc., as Guarantor, and
Entertainment Properties Trust, as Owner (Incorporated by reference from Exhibit 10.5 of the
Company's Current Report on Form 8-K (File No. 1-8747) filed December 9, 1997, (Similar guaranties
have been entered into with respect to the following theatres: Mission Valley 20, Promenade 16,
Ontario Mills 30, Lennox 24, West Olive 16, Studio 30, Huebner Oaks 24, First Colony 24, Oak View
24, Leawood Town Center 20, South Barrington 30, Gulf Pointe 30, Cantera 30, Mesquete 30 and
Hampton Town Center 24.)
10.31 Promissory Note dated August 11, 1998, made by Peter C. Brown, payable to AMC Entertainment Inc.
(Incorporated by reference from Exhibit 10.1 to the Company's Form 10-Q (File No. 1-8747) for the
quarter ended October 1, 1998).
10.32 Promissory Note dated September 14, 1998, made by Philip M. Singleton, payable to AMC Entertainment
Inc. (Incorporated by reference from Exhibit 10.2 to the Company's Form 10-Q (File No. 1-8747) for
the quarter ended October 1, 1998).
10.33 Employment agreement between AMC Entertainment Inc., American Multi-Cinema, Inc. and Richard T.
Walsh dated February 1, 1999 (Incorporated by reference from Exhibit 10.4 to the Company's Form
10-Q (File No. 1-8747) for the quarter ended December 31, 1998).
10.34 AMC Entertainment Inc. 1994 Stock Option and Incentive Plan, as amended (Incorporated by reference
from Exhibit 10.5 to the Company's Form 10-Q (File No. 1-8747) for the quarter ended December 31,
1998).
10.35 Form of Non-Qualified (Non-ISO) Stock Option Agreement used in November 13, 1998 option grants to
Mr. Stanley H. Durwood, Mr. Peter C. Brown and Mr. Philip M. Singleton (Incorporated by reference
from Exhibit 10.6 to the Company's Form 10-Q (File No. 1-8747) for the quarter ended December 31,
1998).
**12.1 Computation of ratio of earnings to fixed charges
**12.2 Computation of ratio of EBITDA to net interest expense.
16 Letter regarding change in certifying accountant (Incorporated by reference from Exhibit 19.6 to the
Company's Form 10-Q (File No. 0-12429) for the quarter ended July 2, 1992).
**21 Subsidiaries of AMC Entertainment Inc.
*23.1 Consent of PricewaterhouseCoopers LLP to the use of their report of independent accountants.
*23.2 Consent of Lathrop & Gage L.C. to the use of their opinion filed as Exhibit 5.1 (Incorporated in
Exhibit 5.1).
*23.3 Consent of Cravath, Swaine & Moore to the use of their opinion filed as Exhibit 5.2 (Incorporated in
Exhibit 5.2).
**24 Power of Attorney
*25 Statement of Eligibility and Authorization of The Bank of New York, Trustee.
*99.1 Form of Letter of Transmittal.
*99.2 Form of Notice of Guaranteed Delivery.
*99.3 Form of Letter to Clients.
</TABLE>
II-14
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------------ ----------------------------------------------------------------------------------------------------
<C> <S>
*99.4 Form of Letter to Nominees.
</TABLE>
- ------------------------
* Filed herewith
** Previously filed with this registration statement
II-15
<PAGE>
EXHIBIT 5.1
[LETTERHEAD OF]
LATHROP & GAGE L.C.
MARCH 31, 1999
AMC Entertainment Inc.
106 West 14th Street
Kansas City, Missouri 64105
Re: AMC Entertainment Inc. 9 1/2% Exchange Senior Subordinated Notes due
February 1, 2001
Ladies and Gentlemen:
We have acted as counsel to AMC Entertainment Inc., a corporation organized
under the laws of the State of Delaware (the "Company"), in connection with the
registration of $225,000,000 principal amount of 9 1/2% Exchange Senior
Subordinated Notes due 2011 of the Company (the "Exchange Notes"), pursuant to
the Registration Statement on Form S-4 (Registration No. 333-74139, as amended
to date, the "Registration Statement") filed with the Securities and Exchange
Commission by the Company under the Securities Act of 1933 (the "Act").
As such counsel, we have examined the Registration Statement, the Indenture
dated as of January 27, 1997 between The Bank of New York, as Trustee, and the
Company, and have made such other factual and legal investigations as we
considered necessary or appropriate for purposes of this opinion. We are
familiar with the proceedings undertaken by the Company in connection with the
authorization and issuance of the Exchange Notes.
As to matters of fact, we have relied, to the extent we deem proper, upon
the representations and certificates of officers of the Company and upon certain
certificates of and telephone conversations with public officials. As to matters
of law, our opinion is limited to matters relating to the laws of the State of
Missouri and the United States and to the General Corporation Law of the State
of Delaware.
We have assumed due authorization, execution and delivery of the Indenture
by The Bank of New York and the enforceability of the Indenture against The Bank
of New York. We have also assumed, to the extent we deem proper, the correctness
of all statements of fact contained in all agreements, certificates and other
documents examined by us; the correctness of all statements of fact made in
response to our inquiries by officers and other representatives of the Company
and by public officials; the legal capacity of all natural persons; the
genuineness of all signatures on all agreements and other documents examined by
us; the authenticity of all documents submitted to us as originals and the
conformity to original documents of all documents submitted to us as copies.
Based upon such examinations and investigations it is our opinion that:
(i) the Company is a corporation duly organized and validly existing in good
standing under the laws of the State of Delaware; and
(ii) the Exchange Notes have been duly authorized for issuance by the
Company and, when the Registration Statement has become effective under
the Act and the Exchange Notes have been duly executed and
authenticated in accordance with the Indenture and issued as
contemplated in the Registration Statement, will constitute valid and
binding obligations of the Company enforceable against the Company in
accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and
remedies and to general principles of equity, whether such
enforceability is considered in a proceeding at law or in equity, and
by the discretion of the courts before which any proceeding therefor
may be brought.
<PAGE>
The foregoing is subject to the following comments and qualifications:
We note that the Indenture and the Exchange Notes provide that they are
governed by the laws of the State of New York. In giving our opinion in numbered
paragraph (ii) above, we have relied as to all matters of New York law solely on
the opinion, dated March 31, 1999, of Cravath, Swain & Moore, and we believe
such reliance to be reasonable.
We express no opinions other than as herein expressly set forth, and no
expansion of our opinions may be made by implication or otherwise. This letter
is solely for your use in the transaction indicated above and may not be
furnished to any other person or entity without the express written consent of
this firm.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to all references made to this firm in such
Registration Statement. In giving such consent, we do not thereby admit that we
are in the category of persons whose consent is required under Section 7 of the
Act.
Very truly yours,
/s/ Lathrop & Gage L.C.
<PAGE>
EXHIBIT 5.2
[LETTERHEAD OF]
CRAVATH, SWAINE & MOORE
[NEW YORK OFFICE]
AMC ENTERTAINMENT INC.
$225,000,000 9 1/2% EXCHANGE SENIOR
SUBORDINATED NOTES DUE 2011
March 31, 1999
Dear Sirs:
In connection with the registration under the Securities Act of 1933 (the
"Act") of $225,000,000 principal amount of 9 1/2% Exchange Senior Subordinated
Notes Due 2011 (the "Securities") of AMC Entertainment Inc., a Delaware
corporation (the "Company"), we have examined such corporate records,
certificates and other documents, and such questions of law, as we have
considered necessary or appropriate for the purposes of this opinion. We acted
as counsel for the initial purchasers in connection with the offering by the
Company of its 9 1/2% Senior Subordinated Notes Due 2011, in exchange for which
the Securities are to be issued, and it is in that capacity that we are
delivering this opinion.
Upon the basis of the aforementioned examination, we advise you that, in our
opinion, when the Registration Statement has become effective under the Act and
the Securities have been duly executed and authenticated in accordance with the
Indenture relating to the Securities and issued as contemplated in the
Registration Statement, the Securities will constitute valid and legally binding
obligations of the Company, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer, and other similar laws
affecting creditors' rights generally from time to time in effect and to general
principles of equity, including without limitation, concepts of materiality,
reasonableness, good faith and fair dealing, regardless of whether considered in
a proceeding in equity or at law.
The foregoing opinion is limited to the laws of the State of New York, and
we are expressing no opinion as to the effect of the laws of any other
jurisdiction. We have assumed that the Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
that the Securities have been duly authorized for issuance by the Company under
the laws of the State of Delaware, that the Securities, when issued, will
constitute valid and legally binding obligations of the Company under the laws
of the State of Delaware, that the Indenture relating to the Securities has been
duly authorized, executed and delivered by the Company under the laws of the
State of Delaware, and that the indenture constitutes a valid and legally
binding obligation of the Company under the laws of the State of Delaware. We
understand that Lathrop & Gage L.C. is giving you their opinion, dated March 31,
1999, as to such matters.
Also, we have assumed that the Indenture has been duly authorized, executed
and delivered by the Trustee thereunder, an assumption which we have not
independently verified.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to us under the heading "Validity
of Notes" in the Prospectus. In giving such consent, we do not thereby admit
that we are in the category of persons whose consent is required under Section 7
of the Act.
Very truly yours,
/s/ Cravath, Swaine & Moore
AMC Entertainment Inc.
106 West 14th Street
Kansas City, Missouri 64105
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement
on Form S-4 of our report dated May 1, 1998, on our audits of the financial
statements of AMC Entertainment Inc. and subsidiaries as of April 2, 1998 and
April 3, 1997, and the year (52 weeks) ended April 2, 1998, the year (53 weeks)
ended April 3, 1997 and the year (52 weeks) ended March 28, 1996 which report is
incorporated by reference in this Form S-4 and is included in AMC Entertainment
Inc.'s Annual Report on Form 10-K for the year ended April 2, 1998. We also
consent to the references to our firm under the caption "Experts".
/s/ PRICEWATERHOUSECOOPERS LLP
Kansas City, Missouri
March 31, 1999
<PAGE>
EXHIBIT 25
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER
THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2) / /
---------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
<TABLE>
<S> <C> <C>
NEW YORK 10286 13-5160382
(State of incorporation if not (Zip code) (I.R.S. employer identification
a U.S. national bank) no.)
</TABLE>
ONE WALL STREET,
NEW YORK, N.Y.
(Address of principal executive offices)
------------------------
AMC ENTERTAINMENT INC.
(Exact name of obligor as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 64105-1977 43-1304369
(State or other jurisdiction of (Zip code) (I.R.S. employer identification
incorporation or organization) no.)
</TABLE>
106 WEST 14TH STREET,
KANSAS CITY, MISSOURI
(Address of principal executive offices)
------------------------
9 1/2% EXCHANGE SENIOR SUBORDINATED NOTES DUE 2011
(Title of the indenture securities)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT
IS SUBJECT.
<TABLE>
<CAPTION>
NAME ADDRESS
- -------------------------------------------------------- -------------------------------------------
<S> <C>
Superintendent of Banks of the State of New York 2 Rector Street, New York,
N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
</TABLE>
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE
7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R.
229.10(D).
1. A copy of the Organization Certificate of The Bank of New York (formerly
Irving Trust Company) as now in effect, which contains the authority to
commence business and a grant of powers to exercise corporate trust
powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration
Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with
Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 22nd day of March, 1999.
<TABLE>
<S> <C> <C>
THE BANK OF NEW YORK
By: /s/ REMO J. REALE
-----------------------------------------
Name: Remo J. Reale
Title: ASSISTANT VICE PRESIDENT
</TABLE>
<PAGE>
EXHIBIT 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business December 31,
1998, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
IN THOUSANDS
--------------
<S> <C> <C>
ASSETS
CASH AND BALANCES DUE FROM DEPOSITORY INSTITUTIONS:
Noninterest-bearing balances and currency and coin............................................. $ 3,951,273
Interest-bearing balances...................................................................... 4,134,162
SECURITIES:
Held-to-maturity securities.................................................................... 932,468
Available-for-sale securities.................................................................. 4,279,246
Federal funds sold and Securities purchased under agreements to resell........................... 3,161,626
Loans and lease financing receivables:
Loans and leases, net of unearned income......................................... 37,861,802
LESS: Allowance for loan and lease losses........................................ 619,791
LESS: Allocated transfer risk reserve............................................ 3,572
Loans and leases, net of unearned income, allowance, and reserve............................... 37,238,439
Trading Assets................................................................................... 1,551,556
Premises and fixed assets (including capitalized leases)......................................... 684,181
Other real estate owned.......................................................................... 10,404
Investments in unconsolidated subsidiaries and associated companies.............................. 196,032
Customers' liability to this bank on acceptances outstanding..................................... 895,160
Intangible assets................................................................................ 1,127,375
Other assets..................................................................................... 1,915,742
--------------
Total assets..................................................................................... $ 60,077,664
--------------
--------------
LIABILITIES
DEPOSITS:
In domestic offices............................................................................ $ 27,020,578
Noninterest-bearing.............................................................. 11,271,304
Interest-bearing................................................................. 15,749,274
In foreign offices, Edge and Agreement subsidiaries, and IBFs.................................. 17,197,743
Noninterest-bearing.............................................................. 103,007
Interest-bearing................................................................. 17,094,736
Federal funds purchased and Securities sold under agreements to repurchase....................... 1,761,170
Demand notes issued to the U.S. Treasury......................................................... 125,423
Trading liabilities.............................................................................. 1,625,632
Other borrowed money:
With remaining maturity of one year or less.................................................... 1,903,700
With remaining maturity of more than one year through three years.............................. 0
With remaining maturity of more than three years............................................... 31,639
Bank's liability on acceptances executed and outstanding......................................... 900,390
Subordinated notes and debentures................................................................ 1,308,000
Other liabilities................................................................................ 2,708,852
--------------
Total liabilities................................................................................ 54,583,127
--------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
IN THOUSANDS
--------------
<S> <C> <C>
EQUITY CAPITAL
Common stock..................................................................................... 1,135,284
Surplus.......................................................................................... 764,443
Undivided profits and capital reserves........................................................... 3,542,168
Net unrealized holding gains (losses) on available-for-sale securities........................... 82,367
Cumulative foreign currency translation adjustments.............................................. (29,725)
--------------
Total equity capital............................................................................. 5,494,537
--------------
Total liabilities and equity capital............................................................. $ 60,077,664
--------------
--------------
</TABLE>
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true to the best of my
knowledge and belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of
our knowledge and belief has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System
and is true and correct.
Thomas A. Reyni
Gerald L. Hassell DIRECTORS
Alan R. Griffith
<PAGE>
EXHIBIT 99.1
LETTER OF TRANSMITTAL
FOR
9 1/2% SENIOR SUBORDINATED NOTES
OF
AMC ENTERTAINMENT INC.
PURSUANT TO THE
EXCHANGE OFFER
IN RESPECT OF
ALL OF ITS OUTSTANDING 9 1/2% SENIOR SUBORDINATED
NOTES DUE FEBRUARY 1, 2011
FOR
9 1/2% EXCHANGE SENIOR SUBORDINATED
NOTES DUE FEBRUARY 1, 2011
---------------------
PURSUANT TO THE PROSPECTUS DATED APRIL 5, 1999
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
MAY 10, 1999 UNLESS THE EXCHANGE OFFER IS EXTENDED (THE "EXPIRATION DATE").
TENDERS OF INITIAL NOTES MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M. ON
THE EXPIRATION DATE.
- --------------------------------------------------------------------------------
TO: THE BANK OF NEW YORK AS EXCHANGE AGENT
<TABLE>
<CAPTION>
BY MAIL: BY FACSIMILE: BY HAND OR OVERNIGHT COURIER:
<S> <C> <C>
The Bank of New York (212) 815-6339 The Bank of New York
101 Barclay Street, 7 East 101 Barclay Street, 7 East
New York, New York 10286 New York, New York 10286
Attention: Diane Amoroso Confirm by Telephone: Attention: Diane Amoroso
Reorganization Section (212) 815-3750 Reorganization Section
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID TENDER OF 9 1/2% SENIOR SUBORDINATED NOTES DUE
2011 (THE "INITIAL NOTES"). THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
HOLDERS WHO WISH TO BE ELIGIBLE TO RECEIVE EXCHANGE NOTES FOR THEIR INITIAL
NOTES PURSUANT TO THE EXCHANGE OFFER MUST VALIDLY TENDER (AND NOT
WITHDRAW) THEIR INITIAL NOTES TO THE EXCHANGE AGENT PRIOR TO
THE EXPIRATION DATE.
By execution hereof, the undersigned acknowledges receipt of the Prospectus
dated April 5, 1999, of AMC Entertainment Inc., a Delaware corporation (the
"Company"), as the same may be amended from time to time (the "Prospectus"),
which, together with this Letter of Transmittal and the instructions hereto (the
"Letter of Transmittal"), constitute the Company's offer (the "Exchange Offer")
to exchange $1,000 principal amount of its 9 1/2% Exchange Senior Subordinated
Notes due February 1, 2011 (the "Exchange Notes") that have been registered
under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to
a Registration Statement of which the Prospectus constitutes a part, for each
$1,000 principal amount of its outstanding Initial Notes, upon the terms and
subject to the conditions set forth in the Prospectus.
<PAGE>
Unless the context otherwise requires, the term "Holder" means any person in
whose name Initial Notes are registered on the register maintained by the
Trustee or any other person who has obtained a properly completed bond power
from the registered holder, or any person whose Initial Notes are held of record
by The Depository Trust Company ("DTC" or the "Book-Entry Transfer Facility")
who desires to deliver such Initial Notes by book-entry transfer at DTC.
This Letter of Transmittal is to be used by Holders of Initial Notes if: (i)
certificates representing Initial Notes are to be physically delivered to the
Exchange Agent herewith by Holders; (ii) tender of Initial Notes is to be made
by book-entry transfer to the Exchange Agent's account at DTC pursuant to the
procedures set forth in the Prospectus under the caption "The Exchange
Offer--Book-Entry Transfer" by any financial institution that is a participant
in DTC and whose name appears on a security position listing as the owner of
Initial Notes or (iii) delivery of Initial Notes is to be made according to the
guaranteed delivery procedures set forth in the Prospectus under the caption
"The Exchange Offer--Guaranteed Delivery Procedures," and, in each case,
instructions are not being transmitted through the DTC Automated Tender Program
("ATOP"). DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN
ACCORDANCE WITH SUCH BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
In order to properly complete this Letter of Transmittal, a Holder must (i)
complete the box entitled "Method of Delivery" by checking one of the three
boxes therein and supplying the appropriate information, (ii) complete the box
entitled "Description of Initial Notes," (iii) if such Holder is an Exchanging
Dealer (as defined below) and wishes to receive additional copies of the
Prospectus for delivery in connection with resales of Exchange Notes, check the
applicable box, (iv) sign this Letter of Transmittal by completing the box
entitled "Please Sign Here", (v) if appropriate, check and complete the boxes
relating to the "Special Issuance Instructions" and "Special Delivery
Instructions," and (vi) complete the Substitute Form W-9. Each Holder should
carefully read the detailed Instructions below prior to completing this Letter
of Transmittal. See "The Exchange Offer--Procedures For Tendering" in the
Prospectus.
DTC participants that are accepting the Exchange Offer should transmit their
acceptance to DTC, which will edit and verify the acceptance and execute a
book-entry transfer to the Exchange Agent's account at DTC. DTC will then send
an Agent's Message to the Exchange Agent for its acceptance. Delivery of the
Agent's Message by DTC will satisfy the terms of the Exchange Offer as to
execution and delivery of a Letter of Transmittal by the participant identified
in the Agent's Message.
Holders who wish to tender their Initial Notes and who cannot deliver their
Initial Notes, the Letter of Transmittal, or any other required documents to the
Exchange Agent prior to the Expiration Date, or holders who cannot complete the
procedure for book-entry transfer on a timely basis, may effect a tender of such
Initial Notes in accordance with the guaranteed delivery procedures set forth in
the Prospectus under the caption "The Exchange Offer--Guaranteed Delivery
Procedures." See Instruction 2 below.
A Holder having Initial Notes registered in the name of a broker, dealer,
commercial bank, trust company or other nominee should contact such broker,
dealer, commercial bank, trust company or other nominee if they desire to accept
the Exchange Offer with respect to the Initial Notes so registered.
THE EXCHANGE OFFER IS NOT BEING MADE TO (NOR WILL TENDERS OF INITIAL NOTES
BE ACCEPTED FROM OR ON BEHALF OF) HOLDERS IN ANY JURISDICTION IN WHICH THE
MAKING OR ACCEPTANCE OF THE EXCHANGE OFFER WOULD NOT BE IN COMPLIANCE WITH THE
LAWS OF SUCH JURISDICTION.
All capitalized terms used herein and not defined herein shall have the
meaning ascribed to them in the Prospectus.
2
<PAGE>
Your bank or broker can assist you in completing this form. The instructions
included with this Letter of Transmittal must be followed. Questions and
requests for assistance or for additional copies of the Prospectus, this Letter
of Transmittal and the Notice of Guaranteed Delivery may be directed to the
Exchange Agent, whose address and telephone number appear on the front cover of
this Letter of Transmittal. See Instruction 11 below.
The undersigned has completed, executed and delivered this Letter of
Transmittal to indicate the action the undersigned desires to take with respect
to the Exchange Offer. HOLDERS WHO WISH TO ACCEPT THE EXCHANGE OFFER AND TENDER
THEIR INITIAL NOTES MUST COMPLETE THIS LETTER OF TRANSMITTAL IN ITS ENTIRETY.
METHOD OF DELIVERY
/ / CHECK HERE IF CERTIFICATES FOR TENDERED INITIAL NOTES ARE BEING
DELIVERED HEREWITH.
/ / CHECK HERE IF TENDERED INITIAL NOTES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH A
BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution: __________________________________________
Account Number: ______________ Transaction Code Number: ______________
/ / CHECK HERE IF TENDERED INITIAL NOTES ARE BEING DELIVERED PURSUANT TO A
NOTICE OF GUARANTEED DELIVERY PREVIOUSLY DELIVERED TO THE EXCHANGE
AGENT PURSUANT TO INSTRUCTION 2 BELOW AND COMPLETE THE FOLLOWING:
Name of Registered Holder(s): ___________________________________________
Window Ticket No. (if any): _____________________________________________
Date of Execution of Notice of Guaranteed Delivery: _____________________
Name of Eligible Institution that Guaranteed Delivery: __________________
Delivered by Book-Entry Transfer (yes or no): ___________________________
Account Number: ______________ Transaction Code Number: ______________
3
<PAGE>
List below the Initial Notes to which this Letter of Transmittal relates. If
the space provided below is inadequate, list the certificate numbers and
principal amounts on a separately executed schedule and affix the schedule to
this Letter of Transmittal. Tenders of Initial Notes will be accepted only in
principal amounts equal to $1,000 or integral multiples thereof.
<TABLE>
<CAPTION>
<S> <C> <C>
DESCRIPTION OF INITIAL NOTES
<CAPTION>
PRINCIPAL AMOUNT
NAME(S) AND ADDRESS(ES) OF HOLDER(S) CERTIFICATE TENDERED (IF LESS
(PLEASE FILL IN, IF BLANK) NUMBERS* THAN ALL)**
<S> <C> <C>
TOTAL PRINCIPAL AMOUNT OF INITIAL NOTES TENDERED
* Need not be completed by Holders tendering by book-entry transfer (see below).
** Unless otherwise indicated in the column labeled "Principal Amount Tendered" and
subject to the terms and conditions of the Prospectus, a Holder will be deemed to
have tendered the aggregate principal amount represented by the Initial Notes listed.
See Instruction 3.
</TABLE>
4
<PAGE>
FOR EXCHANGING DEALERS ONLY:
/ / CHECK HERE AND PROVIDE THE INFORMATION REQUESTED BELOW IF YOU ARE AN
EXCHANGING DEALER (AS DEFINED BELOW) AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF
THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO, AS WELL
AS ANY NOTICES FROM THE COMPANY TO SUSPEND AND RESUME USE OF THE PROSPECTUS. BY
TENDERING ITS INITIAL NOTES AND EXECUTING THIS LETTER OF TRANSMITTAL, EACH
EXCHANGING DEALER AGREES TO USE ITS REASONABLE BEST EFFORTS TO NOTIFY THE
COMPANY OR THE EXCHANGE AGENT WHEN IT HAS SOLD ALL OF ITS EXCHANGE NOTES. (IF NO
EXCHANGING DEALERS CHECK THIS BOX, OR IF ALL EXCHANGING DEALERS WHO HAVE CHECKED
THIS BOX SUBSEQUENTLY NOTIFY THE COMPANY OR THE EXCHANGE AGENT THAT ALL THEIR
EXCHANGE NOTES HAVE BEEN SOLD, THE COMPANY WILL NOT BE REQUIRED TO MAINTAIN THE
EFFECTIVENESS OF THE EXCHANGE OFFER REGISTRATION STATEMENT OR TO UPDATE THE
PROSPECTUS AND WILL NOT PROVIDE ANY NOTICES TO ANY HOLDERS TO SUSPEND OR RESUME
USE OF THE PROSPECTUS.)
Provide the name of the individual who should receive, on behalf of the
Holder, additional copies of the Prospectus, and amendments and supplements
thereto, and any notices to suspend and resume use of the Prospectus:
Name: __________________________________________________________________________
Address: _______________________________________________________________________
________________________________________________________________________________
Telephone No.: _________________________________________________________________
Facsimile No.: _________________________________________________________________
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
5
<PAGE>
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Company the principal amount of Initial Notes
indicated above. Subject to, and effective upon, the acceptance for exchange of
the Initial Notes tendered herewith, the undersigned hereby exchanges, assigns
and transfers to, or upon the order of, the Company all right, title and
interest in and to such Initial Notes. The undersigned hereby irrevocably
constitutes and appoints the Exchange Agent as the true and lawful agent and
attorney-in-fact of the undersigned (with full knowledge that the Exchange Agent
also acts as the agent of the Company and as the Trustee under the Indenture for
the Initial Notes and the Exchange Notes) with respect to such Initial Notes
with full power of substitution (such power-of-attorney being deemed to be an
irrevocable power coupled with an interest) to (i) present such Initial Notes
and all evidences of transfer and authenticity to, or transfer ownership of,
such Initial Notes on the account books maintained by the Book-Entry Transfer
Facility to, or upon the order of, the Company, (ii) present such Initial Notes
for transfer of ownership on the books of the Company or the trustee under the
Indenture (the "Trustee"), and (iii) receive all benefits and otherwise exercise
all rights of beneficial ownership of such Initial Notes, all in accordance with
the terms of and conditions of the Exchange Offer as described in the
Prospectus.
The undersigned represents and warrants that he or she has full power and
authority to tender, exchange, assign and transfer the Initial Notes tendered
hereby and to acquire Exchange Notes issuable upon the exchange of such tendered
Initial Notes, and that, when the same are accepted for exchange, the Company
will acquire good and unencumbered title to the tendered Initial Notes, free and
clear of all liens, restrictions, charges and encumbrances and not subject to
any adverse claim or right. The undersigned also warrants that it will, upon
request, execute and deliver any additional documents deemed by the Exchange
Agent or the Company to be necessary or desirable to complete the exchange,
assignment and transfer of the Initial Notes tendered hereby or transfer
ownership of such Initial Notes on the account books maintained by the
Book-Entry Transfer Facility.
The Exchange Offer is subject to certain conditions as set forth in the
Prospectus under the caption "The Exchange Offer--Conditions." The undersigned
recognizes that as a result of these conditions (which may be waived by the
Company, in whole or in part), as more particularly set forth in the Prospectus,
the Company may not be required to exchange any of the Initial Notes tendered
hereby and, in such event, the Initial Notes not exchanged will be returned to
the undersigned at the address shown below.
THE UNDERSIGNED UNDERSTANDS AND AGREES THAT THE COMPANY RESERVES THE RIGHT
NOT TO ACCEPT TENDERED INITIAL NOTES FROM ANY TENDERING HOLDER IF THE COMPANY
DETERMINES, IN ITS REASONABLE DISCRETION, THAT SUCH ACCEPTANCE COULD RESULT IN A
VIOLATION OF APPLICABLE SECURITIES LAWS.
The undersigned, if the undersigned is a beneficial holder, represents, or,
if the undersigned is a broker, dealer, commercial bank, trust company or other
nominee, represents that it has received representations from the beneficial
owners of the Initial Notes (the "Beneficial Owner") stating that:
(i) neither the Holder nor any such Beneficial Owner is an "affiliate," as
defined under Rule 405 of the Securities Act, of the Company, or, if such person
is an affiliate, that it will comply with the registration and prospectus
delivery requirements of the Securities Act, to the extent applicable;
(ii) the Exchange Notes to be acquired in connection with the Exchange Offer
by the Holder and each Beneficial Owner of the Initial Notes are being acquired
by the Holder and each such Beneficial Owner in the ordinary course of business
of the Holder and each such Beneficial Owner;
(iii) the Holder and each such Beneficial Owner are not engaged in, do not
intend to engage in, and have no arrangement or understanding with any person to
participate in, a distribution of the Exchange Notes;
6
<PAGE>
(iv) the Holder nor such Beneficial Owner did not purchase the Initial Notes
directly from us or one of our affiliates for resale pursuant to Rule 144A,
Regulation S or other exemption under the Securities Act; and
(v) if the Holder is an Exchanging Dealer (as defined below) that acquired
the Initial Notes as a result of market-making activities or other trading
activities, it will deliver the Prospectus in connection with any resale of
Exchange Notes acquired in the Exchange Offer (but by so acknowledging and by
delivering the Prospectus, the undersigned will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act).
The Holder and each Beneficial Owner acknowledge and agree that any person
participating in the Exchange Offer for the purpose of distributing the Exchange
Notes must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with a secondary resale transaction of the
Exchange Notes acquired by such person and cannot rely on the position of the
staff of the Commission set forth in the no-action letters that are discussed in
the Prospectus under the caption "The Exchange Offer--Effect of the Exchange
Offer" and may only sell the Exchange Notes acquired by such person pursuant to
a registration statement containing the selling security holder information
required by Item 507 and 508 of Regulation S-K under the Securities Act, as
applicable, or pursuant to an exemption from the registration requirements of
the Securities Act.
EACH BROKER-DEALER WHO ACQUIRED INITIAL NOTES FOR ITS OWN ACCOUNT AS A
RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES (BUT NOT DIRECTLY
FROM THE COMPANY OR ANY AFFILIATE OF THE COMPANY) (AN "EXCHANGING DEALER"), BY
TENDERING SUCH INITIAL NOTES AND EXECUTING THIS LETTER OF TRANSMITTAL, AGREES TO
NOTIFY THE COMPANY PRIOR TO USING THE PROSPECTUS IN CONNECTION WITH THE SALE OR
TRANSFER OF EXCHANGE NOTES AND THAT, UPON RECEIPT OF NOTICE FROM THE COMPANY OF
(I) THE OCCURRENCE OF ANY EVENT OR THE DISCOVERY OF ANY FACT WHICH MAKES ANY
STATEMENT CONTAINED OR INCORPORATED BY REFERENCE IN THE PROSPECTUS UNTRUE IN ANY
MATERIAL RESPECT OR WHICH CAUSES THE PROSPECTUS TO OMIT TO A STATE A MATERIAL
FACT NECESSARY IN ORDER TO MAKE THE STATEMENTS CONTAINED OR INCORPORATED BY
REFERENCE THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT
MISLEADING OR (II) THE OCCURRENCE OF CERTAIN OTHER EVENTS SPECIFIED IN THE
REGISTRATION RIGHTS AGREEMENT, SUCH EXCHANGING DEALER WILL SUSPEND THE SALE OF
EXCHANGE NOTES PURSUANT TO THE PROSPECTUS UNTIL THE COMPANY HAS AMENDED OR
SUPPLEMENTED THE PROSPECTUS TO CORRECT SUCH MISSTATEMENT OR OMISSION AND HAS
FURNISHED COPIES OF THE AMENDED OR SUPPLEMENTED PROSPECTUS TO THE EXCHANGING
DEALER OR THE COMPANY HAS GIVEN NOTICE THAT THE SALE OF THE EXCHANGE NOTES MAY
BE RESUMED, AS THE CASE MAY BE.
EACH EXCHANGING DEALER SHOULD CHECK THE BOX HEREIN UNDER THE CAPTION "FOR
EXCHANGING DEALERS ONLY" IN ORDER TO RECEIVE ADDITIONAL COPIES OF THE
PROSPECTUS, AND ANY AMENDMENTS AND SUPPLEMENTS THERETO, FOR USE IN CONNECTION
WITH RESALES OF THE EXCHANGE NOTES, AS WELL AS ANY NOTICES FROM THE COMPANY TO
SUSPEND AND RESUME USE OF THE PROSPECTUS. BY TENDERING ITS INITIAL NOTES AND
EXECUTING THIS LETTER OF TRANSMITTAL, EACH EXCHANGING DEALER AGREES TO USE ITS
REASONABLE BEST EFFORTS TO NOTIFY THE COMPANY OR THE EXCHANGE AGENT WHEN IT HAS
SOLD ALL OF ITS EXCHANGE NOTES. IF NO EXCHANGING DEALERS CHECK SUCH BOX, OR IF
ALL EXCHANGING DEALERS WHO HAVE CHECKED SUCH BOX SUBSEQUENTLY NOTIFY THE COMPANY
OR THE EXCHANGE AGENT THAT ALL THEIR EXCHANGE NOTES HAVE BEEN SOLD, THE COMPANY
WILL NOT BE REQUIRED TO MAINTAIN THE EFFECTIVENESS OF THE EXCHANGE OFFER
REGISTRATION STATEMENT OR TO UPDATE THE PROSPECTUS AND WILL NOT PROVIDE ANY
HOLDERS WITH ANY NOTICES TO SUSPEND OR RESUME USE OF THE PROSPECTUS.
For purposes of the Exchange Offer, the Company shall be deemed to have
accepted properly tendered Initial Notes for exchange when, as and if the
Company has given oral or written notice thereof to the Exchange Agent, with
written confirmation of any oral notice to be given promptly thereafter. If any
tendered Initial Notes are not accepted for exchange pursuant to the Exchange
Offer for any reason, certificates for any such unaccepted Initial Notes will be
returned (except with respect to tenders through DTC), without expense, to the
undersigned at the address shown below or at a different address as may be
indicated under "Special Issuance Instructions" as promptly as practicable after
the Expiration Date.
The undersigned understands that the Company reserves the right, at any time
and from time to time, in its sole discretion (subject to its obligation under
the Registration Rights Agreement) (i) to delay
7
<PAGE>
accepting any Initial Notes, to extend the Exchange Offer or, if any of the
conditions set forth in the Prospectus under the caption "The Exchange
Offer--Certain Conditions to the Exchange Offer" shall not have been satisfied,
to terminate the Exchange Offer, by giving oral or written notice of such delay,
extension or termination to the Exchange Agent or (ii) to amend the terms of the
Exchange Offer in any manner.
The undersigned understands that tenders of the Initial Notes pursuant to
any one of the procedures described under "The Exchange Offer--Procedures for
Tendering" in the Prospectus and in the instructions hereto will constitute a
binding agreement between the undersigned and the Company in accordance with the
terms and subject to the conditions of the Exchange Offer. All authority herein
conferred or agreed to be conferred by this Letter of Transmittal and every
obligation of the undersigned hereunder shall be binding upon the heirs, legal
representatives, successors and assigns, executors, administrators and trustees
in bankruptcy of the undersigned and shall survive the death or incapacity of
the undersigned. Tendered Initial Notes may be withdrawn at any time prior to
5:00 p.m., New York City time, on the Expiration Date in accordance with the
terms of the Exchange Offer.
The undersigned also understands and acknowledges that the Company reserves
the right in its sole discretion to (a) purchase or make offers for any Initial
Notes that remain outstanding subsequent to the Expiration Date, or, as set
forth under "The Exchange Offer--Certain Conditions to the Exchange Offer," to
terminate the Exchange Offer and (b) to the extent permitted by applicable law,
purchase Initial Notes in the open market, in privately negotiated transactions
or otherwise. The terms of any such purchases or offers may differ from the
terms of the Exchange Offer.
The undersigned understands that the delivery and surrender of the Initial
Notes is not effective, and the risk of loss of the Initial Notes does not pass
to the Exchange Agent, until receipt by the Exchange Agent of this Letter of
Transmittal, or a manually signed facsimile hereof, properly completed and duly
executed, with any required signature guarantees, together with all accompanying
evidences of authority and any other required documents in form satisfactory to
the Company. All questions as to form of all documents and the validity
(including time of receipt) and acceptance of tenders and withdrawals of Initial
Notes will be determined by the Company, in its sole discretion, which
determination shall be final and binding.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions," the undersigned hereby requests that any Initial Notes
representing principal amounts not tendered or not accepted for exchange be
issued in the name(s) of the undersigned and that Exchange Notes be issued in
the name(s) of the undersigned (or, in the case of Initial Notes delivered by
book-entry transfer, by credit to the account at the Book-Entry Transfer
Facility designated herein). Similarly, unless otherwise indicated herein in the
box entitled "Special Delivery Instructions," the undersigned hereby requests
that any Initial Notes representing principal amounts not tendered or not
accepted for exchange and certificates for Exchange Notes be delivered to the
undersigned at the address(es) shown below. In the event that the "Special
Issuance Instructions" box or the "Special Delivery Instructions" box is, or
both are, completed, the undersigned hereby requests that any Initial Notes
representing principal amounts not tendered or not accepted for exchange be
issued in the name(s) of, certificates for such Initial Notes be delivered to,
and certificates for Exchange Notes be issued in the name(s) of, and be
delivered to, the person(s) at the address(es) so indicated, as applicable. The
undersigned recognizes that the Company has no obligation pursuant to the
"Special Issuance Instructions" box or "Special Delivery Instructions" box to
transfer any Initial Notes from the name of the registered Holder(s) thereof if
the Company does not accept for exchange any of the principal amount of such
Initial Notes so tendered.
8
<PAGE>
- --------------------------------------------------------------------------------
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL HOLDERS OF INITIAL NOTES REGARDLESS OF
WHETHER INITIAL NOTES ARE BEING PHYSICALLY DELIVERED HEREWITH)
This Letter of Transmittal must be signed by the Holder(s) of Initial
Notes exactly as their name(s) appear(s) on certificate(s) for Initial Notes
or, if delivered by a participant in the Book-Entry Transfer Facility,
exactly as such participant's name appears on a security position listing as
the owner of Initial Notes, or by person(s) authorized to become Holder(s)
by endorsements and documents transmitted with this Letter of Transmittal.
If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, such person must set forth his or her full title
below under "Capacity" and submit evidence satisfactory to the Company of
such person's authority to so act. See Instruction 4 below.
If the signature appearing below is not of the record holder(s) of the
Initial Notes, then the record holder(s) must sign a valid bond power.
X __________________________________ Date: _________________________________
X __________________________________ Date: _________________________________
SIGNATURE(S) OF REGISTERED HOLDER(S) OR AUTHORIZED SIGNATORY
Date: ________________________________________ , 1999
Name(s): ___________________________________________________________________
(PLEASE PRINT)
Capacity: __________________________________________________________________
Address: ___________________________________________________________________
____________________________________________________________________________
(INCLUDING ZIP CODE)
Area Code and Telephone No.: _______________________________________________
Social Security No.: _______________________________________________________
PLEASE COMPLETE SUBSTITUTE FORM W-9 HEREIN
/ / CHECK HERE IF YOU ARE A BROKER DEALER WHO ACQUIRED THE INITIAL NOTES
FOR ITS OWN ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER TRADING
ACTIVITIES AND WISH TO RECEIVE ADDITIONAL COPIES OF THE PROSPECTUS AND
COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.
Name: ___________________________________________________________________
Address: ________________________________________________________________
SIGNATURE GUARANTEE (SEE INSTRUCTION 4 BELOW)
Certain Signatures Must Be Guaranteed by an Eligible Institution
____________________________________________________________________________
(NAME OF ELIGIBLE INSTITUTION GUARANTEEING SIGNATURES)
____________________________________________________________________________
(ADDRESS (INCLUDING ZIP CODE) AND TELEPHONE NUMBER
____________________________________________________________________________
(INCLUDING AREA CODE) OF FIRM)
____________________________________________________________________________
(AUTHORIZED SIGNATURE)
____________________________________________________________________________
(PRINTED NAME)
____________________________________________________________________________
(TITLE)
Dated: ________________________________________ , 1999
- --------------------------------------------------------------------------------
9
<PAGE>
- -------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 3, 4, 5 AND 7)
To be completed ONLY if certificates for Initial Notes in a principal amount
not tendered or not accepted for exchange are to be issued in the name of,
or certificates for Exchange Notes are to be issued to the order of, someone
other than the person or persons whose signature(s) appear(s) within this
Letter of Transmittal or issued to an address different from that shown in
the box entitled "Description of Initial Notes" within this Letter of
Transmittal.
Issue: / / Initial Notes
/ / Exchange Notes
(CHECK AS APPLICABLE)
Name: ______________________________________________________________________
(PLEASE PRINT)
Address: ___________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(ZIP CODE)
__________________________________________________________________________
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(SEE SUBSTITUTE FORM W-9 HEREIN)
Credit Initial Notes not exchanged and delivered by book entry transfer to
the Book Entry Transfer Facility account set below:
____________________________________________________________________________
(BOOK ENTRY TRANSFER FACILITY ACCOUNT NUMBER)
Credit Exchange Notes to the Book Entry Transfer Facility account set below:
____________________________________________________________________________
(BOOK ENTRY TRANSFER FACILITY ACCOUNT NUMBER)
- ------------------------------------------------------
- ------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 4 AND 5)
To be completed ONLY if certificates for Initial Notes in a principal amount
not accepted for exchange or certificates for Exchange Notes are to be sent
to someone other than the person or persons whose signature(s) appear(s)
within this Letter of Transmittal or to an address different from that shown
in the box entitled "Description of Initial Notes" within the Letter of
Transmittal.
Deliver: / / Initial Notes
/ / Exchange Notes
(CHECK AS APPLICABLE)
Name: ______________________________________________________________________
(PLEASE PRINT)
Address: ___________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(ZIP CODE)
__________________________________________________________________________
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(SEE SUBSTITUTE FORM W-9 HEREIN)
- -----------------------------------------------------
10
<PAGE>
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Exchange Offer
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND CERTIFICATES FOR INITIAL NOTES OR
BOOK-ENTRY CONFIRMATIONS; WITHDRAWAL OF TENDERS.
To tender Initial Notes in the Exchange Offer, physical delivery of
certificates for Initial Notes or confirmation of a book-entry transfer into the
Exchange Agent's account with a Book-Entry Transfer Facility of Initial Notes
tendered electronically, as well as a properly completed and duly executed copy
or manually signed facsimile of this Letter of Transmittal, or in the case of a
book-entry transfer, an Agent's Message, and any other documents required by
this Letter of Transmittal, must be received by the Exchange Agent at its
address set forth herein prior to 5:00 p.m., New York City time, on the
Expiration Date. Tenders of Initial Notes in the Exchange Offer may be made
prior to 5:00 p.m., New York City time, on the Expiration Date in the manner
described in the preceding sentence and otherwise in compliance with this Letter
of Transmittal. THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL,
CERTIFICATES FOR INITIAL NOTES AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE
AGENT, INCLUDING DELIVERY THROUGH DTC AND ANY ACCEPTANCE OF AN AGENT'S MESSAGE,
IS AT THE ELECTION AND RISK OF THE HOLDER TENDERING INITIAL NOTES. IF SUCH
DELIVERY IS MADE BY MAIL, IT IS SUGGESTED THAT THE HOLDER USE PROPERLY INSURED,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED AND THAT SUFFICIENT TIME SHOULD BE
ALLOWED TO ASSURE TIMELY DELIVERY. NO ALTERNATIVE, CONDITIONAL OR CONTINGENT
TENDERS OF INITIAL NOTES WILL BE ACCEPTED. Except as otherwise provided below,
the delivery will be made when actually received by the Exchange Agent. THIS
LETTER OF TRANSMITTAL, CERTIFICATES FOR THE INITIAL NOTES AND ANY OTHER REQUIRED
DOCUMENTS SHOULD BE SENT ONLY TO THE EXCHANGE AGENT, NOT TO THE COMPANY, THE
TRUSTEE OR DTC.
Initial Notes tendered pursuant to the Exchange Offer may be withdrawn at
any time prior to 5:00 p.m., New York City time, on the Expiration Date. In
order to be valid, notice of withdrawal of tendered Initial Notes must comply
with the requirements set forth in the Prospectus under the caption "The
Exchange Offer--Withdrawal of Tenders."
2. GUARANTEED DELIVERY PROCEDURES.
Holders who wish to tender their Initial Notes and who cannot deliver their
Initial Notes, the Letter of Transmittal, or any other required documents to the
Exchange Agent prior to the Expiration Date, or holders who cannot complete the
procedure for book-entry transfer on a timely basis, may effect a tender of
Initial Notes in accordance with the guaranteed delivery procedures set forth in
the Prospectus under the caption "The Exchange Offer--Guaranteed Delivery
Procedures."
Pursuant to the guaranteed delivery procedures:
(i) such tender must be made through an Eligible Institution;
(ii) prior to the Expiration Date, the Exchange Agent must have received
from such Eligible Institution, at one of the addresses set forth on
the cover of this Letter of Transmittal, a properly completed and duly
executed Notice of Guaranteed Delivery (by facsimile transmission, mail
or hand delivery) setting forth the name(s) and address(es) of the
registered Holder(s), the certificate number or numbers of such Initial
Notes and the principal amount of Initial Notes being tendered, and
stating that the tender is being made thereby and guaranteeing that,
within three business days after the Expiration Date, the Letter of
Transmittal (or a facsimile thereof), together with certificates for
all tendered Initial Notes in proper form for transfer, or a Book-Entry
Confirmation with an Agent Message's, as the case may be, and any other
documents required by this Letter of Transmittal and the instructions
hereto, will be deposited by such Eligible Institution with the
Exchange Agent; and
11
<PAGE>
(iii) the Exchange Agent must have received this Letter of Transmittal and
certificates for all tendered Initial Notes, in proper form for
transfer, or a Book-Entry Confirmation, as the case may be, and all
other documents required by this Letter of Transmittal within three
business days after the Expiration Date.
3. PARTIAL TENDERS.
Tenders of Initial Notes will be accepted in all denominations of $1,000 and
integral multiples in excess thereof. If less than the entire principal amount
of any Initial Notes evidenced by a submitted certificate is tendered, the
tendering Holder must fill in the principal amount tendered in the last column
of the box entitled "Description of Initial Notes" herein. The entire principal
amount represented by the certificates for all Initial Notes delivered to the
Exchange Agent will be deemed to have been tendered, unless otherwise indicated.
The entire principal amount of all Initial Notes not tendered or not accepted
for exchange will be sent (or, if tendered by book-entry transfer, returned by
credit to the account at the Book-Entry Transfer Facility designated herein) to
the Holder unless otherwise provided in the "Special Issuance Instructions" or
"Special Delivery Instructions" boxes of this Letter of Transmittal.
4. SIGNATURES ON THIS LETTER OF TRANSMITTAL, BOND POWERS AND ENDORSEMENTS;
GUARANTEE OF SIGNATURES.
If this Letter of Transmittal (or facsimile hereof) is signed by the
Holder(s) of the Initial Notes tendered hereby, the signature(s) must correspond
with the name(s) as written on the face of the Initial Notes without alteration,
enlargement or any change whatsoever. If this Letter of Transmittal (or
facsimile hereof) is signed by a participant in DTC, the signature must
correspond with the name as it appears on the security position listing as the
owner of the Initial Notes.
If any of the Initial Notes tendered hereby are registered in the name of
two or more Holders, all such Holders must sign this Letter of Transmittal. If
any tendered Initial Notes are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
copies of this Letter of Transmittal and any necessary accompanying documents as
there are different names in which certificates are held.
If this Letter of Transmittal or any Initial Notes or bond powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and proper evidence satisfactory to the
Company of their authority to so act must be submitted with this Letter of
Transmittal.
If this Letter of Transmittal (or facsimile hereof) is signed by the
registered Holder(s) of Initial Notes tendered and the certificate(s) for
Exchange Notes issued in exchange therefor is to be issued (or any untendered
principal amount of Initial Notes is to be reissued) to the registered Holder,
such Holder need not and should not endorse any tendered Initial Note, nor
provide a separate bond power. In any other case, such holder must either
properly endorse the Initial Notes tendered or transmit a properly completed
separate bond power with this Letter of Transmittal, with the signatures on the
endorsement or bond power guaranteed by an Eligible Institution.
If this Letter of Transmittal (or facsimile hereof) is signed by a person
other than the registered Holder(s) of any Initial Notes listed, such Initial
Notes must be endorsed or accompanied by appropriate bond powers signed as the
name of the registered Holder(s) appears on the Initial Notes and guaranteed by
an Eligible Institution.
Endorsements on Initial Notes or signatures on bond powers required by this
Instruction 4 must be guaranteed by an Eligible Institution.
Signatures on this Letter of Transmittal (or facsimile hereof) must be
guaranteed by an Eligible Institution unless the Initial Notes tendered pursuant
thereto are tendered (i) by a registered Holder who has not completed the box
set forth herein entitled "Special Issuance Instructions" or the box entitled
"Special Delivery Instructions" or (ii) for the account of an Eligible
Institution.
12
<PAGE>
5. SPECIAL ISSUANCE AND SPECIAL DELIVERY INSTRUCTIONS.
Tendering Holders should indicate in the applicable box or boxes the name
and address to which Initial Notes for principal amounts not tendered or not
accepted for exchange or certificates for Exchange Notes, if applicable, are to
be sent or issued, if different from the name and address of the Holder signing
this Letter of Transmittal. In the case of payment to a different name, the
taxpayer identification or social security number of the person named must also
be indicated. If no instructions are given, Initial Notes not tendered or not
accepted for exchange will be returned, and certificates for Exchange Notes will
be sent, to the Holder of the Initial Notes tendered.
6. TAXPAYER IDENTIFICATION NUMBER.
Each tendering Holder is required to provide the Exchange Agent with the
Holder's social security or Federal employer identification number, on
Substitute Form W-9, which is provided under "Important Tax Information" below,
or alternatively, to establish another basis for exemption from backup
withholding. A Holder must cross out item (2) in the Certification box in Part 2
on Substitute Form W-9 if such Holder is subject to backup withholding. Failure
to provide the information on the form may subject such Holder to 31% Federal
backup withholding tax on any payment made to the Holder with respect to the
Exchange Offer. The box in Part 3 of the form should be checked if the tendering
Holder has not been issued a Taxpayer Identification Number ("TIN") and has
either applied for a TIN or intends to apply for a TIN in the near future. If
the box in Part 3 is checked the Holder should also sign the attached
Certification of Awaiting Taxpayer Identification Number. If the Exchange Agent
is not provided with a TIN within 60 days thereafter, the Exchange Agent will
withholding 31% on all such payments of the Exchange Notes until a TIN is
provided to the Exchange Agent.
7. TRANSFER TAXES.
The Company will pay all transfer taxes, if any, applicable to the exchange
of Initial Notes pursuant to the Exchange Offer. If, however, certificates
representing Exchange Notes or Initial Notes for principal amounts not tendered
or accepted for exchange are to be delivered to, or are to be issued in the name
of, any person other than the registered Holder of the Initial Notes tendered,
or if tendered Initial Notes are registered in the name of any person other than
the person signing the Letter of Transmittal, or if a transfer tax is imposed
for any reason other than the exchange of Initial Notes pursuant to the Exchange
Offer, then the amount of any such transfer taxes (whether imposed on the
registered Holder or any other persons) will be payable by the tendering Holder.
If satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted with the Letter of Transmittal, the amount of such transfer taxes will
be billed directly to such tendering Holder.
8. IRREGULARITIES.
All questions as to the form of all documents and the validity (including
time of receipt) and acceptance of all tenders and withdrawals of Initial Notes
will be determined by the Company, in its sole discretion, which determination
shall be final and binding. ALTERNATIVE, CONDITIONAL OR CONTINGENT TENDERS OF
INITIAL NOTES WILL NOT BE CONSIDERED VALID. The Company reserves the absolute
right to reject any and all tenders of Initial Notes that are not in proper form
or the acceptance of which, in the Company's opinion, would be unlawful. The
Company also reserves the right to waive any defects, irregularities or
conditions of tender as to particular Initial Notes. The Company's
interpretations of the terms and conditions of the Exchange Offer (including the
instructions in this Letter of Transmittal) will be final and binding. Any
defect or irregularity in connection with tenders of Initial Notes must be cured
within such time as the Company determines, unless waived by the Company.
Tenders of Initial Notes shall not be deemed to have been made until all defects
or irregularities have been waived by the Company or cured. A defective tender
(which defect is not waived by the Company or cured by the Holder) will not
constitute a valid tender of Initial Notes and will not entitle the Holder to
Exchange Notes. None of the Company, the Trustee, the Exchange Agent or any
other person will be under any duty to give notice of any defect or irregularity
in any tender or withdrawal of any Initial Notes, or incur any liability to
Holders for failure to give any such notice.
13
<PAGE>
9. WAIVER OF CONDITIONS.
The Company reserves the right, in its reasonable discretion, to amend or
waive any of the conditions to the Exchange Offer.
10. MUTILATED, LOST, STOLEN OR DESTROYED CERTIFICATES FOR INITIAL NOTES.
Any Holder whose certificates for Initial Notes have been mutilated, lost,
stolen or destroyed should write to or telephone the Trustee at the address or
telephone number set forth on the cover of this Letter of Transmittal for the
Exchange Agent.
11. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.
Questions relating to the procedure for tendering Initial Notes and requests
for assistance or additional copies of the Prospectus, this Letter of
Transmittal, the Notice of Guaranteed Delivery or other documents may be
directed to the Exchange Agent, whose address and telephone number appear above.
IMPORTANT TAX INFORMATION
Under federal income tax laws, a Holder who tenders Initial Notes prior to
receipt of the Exchange Notes is required to provide the Exchange Agent with
such Holder's correct TIN on the attached Substitute Form W-9 or otherwise
establish a basis for exemption from backup withholding. If such Holder is an
individual, the TIN is his or her social security number. If the Exchange Agent
is not provided with the correct TIN, a $500 penalty may be imposed by the
Internal Revenue Service ("IRS") and payments, including any Exchange Notes,
made to such Holder with respect to Initial Notes exchanged pursuant to the
Exchange Offer may be subject to backup withholding. A willful failure to
provide a correct TIN may subject a Holder to criminal penalties, including
imprisonment.
Certain Holders (including, among others, corporations and certain foreign
persons) are not subject to these backup withholding and reporting requirements.
Exempt Holders should indicate their exempt status on the Substitute Form W-9. A
foreign person may qualify as an exempt recipient by submitting to the Exchange
Agent a properly completed IRS Form W-8, signed under penalties of perjury,
attesting to that Holder's exempt status. A Form W-8 can be obtained from the
Exchange Agent. See the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional instructions.
Holders are urged to consult their own tax advisors to determine whether they
are exempt.
If backup withholding applies, the Exchange Agent is required to withholding
31% of any payments made to the Holder or other payee. Backup withholding is not
an additional Federal income tax. Rather, any amounts withheld under the backup
withholding rules will be allowed as a refund or a credit against such Holder's
federal income tax liability, provided that the required information is
furnished to the IRS.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments, including any Exchange Notes,
made with respect to Initial Notes exchanged pursuant to the Exchange Offer, the
Holder is required to provide the Exchange Agent with (i) the Holder's correct
TIN by completing the attached form, certifying that the TIN provided on the
Substitute Form W-9 is correct (or that such Holder is awaiting a TIN) and that
(A) such Holder is exempt from backup withholding, (B) the Holder has not been
notified by the IRS that the Holder is subject to backup withholding as a result
of failure to report all interest or dividends or (C) the IRS has notified the
Holder that the Holder is no longer subject to backup withholding and (ii) if
applicable, an adequate basis for exemption from backup withholding.
WHAT NUMBER TO GIVE THE EXCHANGE AGENT
The Holder is required to give the Exchange Agent the TIN (e.g., social
security number or employer identification number) of the registered Holder. If
the Initial Notes are held in more than one name or are held not in the name of
the actual owner, consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
number to report.
14
<PAGE>
PAYER'S NAME: __________________________
<TABLE>
<C> <S> <C>
- -----------------------------------------------------------------------------------------
SUBSTITUTE Part 1--PLEASE PROVIDE Social Security Number
FORM W-9 YOUR TIN IN THE BOX AT OR ------------------------
Department of the Treasury RIGHT AND CERTIFY BY Employer Identification
Internal Revenue Service SIGNING AND DATING BELOW Number
-------------------------------------------------------
Part 2--Certification--Under Penalties of Internal
Revenue Service perjury, I certify that:
Payer's Request for Taxpayer
Identification Number (TIN)
(1) The number shown on this form is my correct
Taxpayer Identification Number (or I am waiting for a
number to be Identification Number (TIN) issued to
me) and
(2) I am not subject to backup withholding because: (a)
I am exempt from backup withholding or (b) have not
been notified by the Internal Revenue Service (IRS)
that I am subject to backup withholding as a result
of a failure to report all interest or dividends or
(c) the IRS has notified me that I am no longer
subject to backup withholding.
-------------------------------------------------------
Part 3--Awaiting TIN / /
- -----------------------------------------------------------------------------------------
CERTIFICATE INSTRUCTIONS--You must cross out item (2) in Part 2 above if you have been
notified by the IRS that you are subject to backup withholding because of under
reporting interest or dividends on your tax return. However, if after being notified by
the IRS that you were subject to backup withholding you received another notification
from the IRS stating that you are no longer subject to backup withholding, do not cross
out item (2).
Signature ------------------------------------------------------------- Date
---------------
- -----------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN
BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO HOLDERS OF
EXCHANGE NOTES PURSUANT TO THE EXCHANGE OFFER. PLEASE REVIEW THE
ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE
IF YOU CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer
identification number has not been issued to me, and either (a) I
have mailed or delivered an application to receive a taxpayer
identification number to the appropriate Internal Revenue Service
Center or Social Security Administration Office or (b) I intend to
mail or deliver an application in the near future. I understand
that if I do not provide a taxpayer identification number within
60 days, 31 percent of all reportable payments made to me
thereafter will be withheld until I provide a number.
--------------------------------------------------------
Signature
--------------------------------------------------------
Date
15
<PAGE>
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY
FOR
9 1/2% SENIOR SUBORDINATED NOTES DUE 2011
OF
AMC ENTERTAINMENT, INC.
As set forth in the Prospectus dated April 5, 1999 (as the same may be
amended from time to time, the "Prospectus") of AMC Entertainment, Inc. (the
"Company") under the caption "The Exchange Offer--Guaranteed Delivery
Procedures," and in the accompanying Letter of Transmittal (the "Letter of
Transmittal") and Instruction 2 thereto, this form, or one substantially
equivalent, must be used to tender any of the Company's outstanding 9 1/2%
Senior Subordinated Notes due 2011 (the "Initial Notes") pursuant to the
Exchange Offer, if (i) the Initial Notes to be tendered, a Holder's Letter of
Transmittal or other required documents cannot be delivered to the Exchange
Agent prior to the Expiration Date with respect to the Exchange Offer or (ii)
the procedures for book-entry transfer cannot be completed prior to the
Expiration Date. This form may be delivered by an Eligible Institution by mail
or hand delivery or transmitted, via facsimile, to the Exchange Agent as set
forth below.
Terms not otherwise defined herein shall have their respective meanings as
set forth in the Prospectus.
------------------------------------------------------------------------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON MAY
10, 1999, UNLESS EXTENDED OR TERMINATED (THE "EXPIRATION
DATE"). TENDERS OF INITIAL NOTES MAY BE WITHDRAWN AT
ANY TIME PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON
THE EXPIRATION DATE.
- --------------------------------------------------------------------------------
The Exchange Agent
<TABLE>
<S> <C> <C>
BY MAIL: BY FACSIMILE: BY HAND OR OVERNIGHT
COURIER:
The Bank of New York (212) 815-6339 The Bank of New York
101 Barclay Street, 7 East 101 Barclay Street, 7 East
New York, New York 10286 Confirm by Telephone: New York, New York 10286
Attention: Diane Amoroso Attention: Diane Amoroso
Reorganization Section (212) 815-3750 Reorganization Section
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION TO A
NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on the
Letter of Transmittal is required to be guaranteed by an "Eligible Institution"
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
LADIES AND GENTLEMEN:
The undersigned hereby tender(s) to the Company, upon the terms and subject
to the conditions set forth in the Prospectus and the Letter of Transmittal,
receipt of which is hereby acknowledged, the principal amount of Initial Notes
set forth below pursuant to the guaranteed delivery procedures set forth in the
Prospectus under the caption "The Exchange Offer--Guaranteed Delivery
Procedures."
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender the Initial Notes. The undersigned will, upon
request, execute and deliver any additional documents
<PAGE>
deemed by the Exchange Agent or the Company to be necessary or desirable for the
perfection of the undersigned's tender.
The undersigned understands that tenders of Initial Notes will be accepted
only in principal amounts equal to $1,000 or integral multiples thereof. Tenders
may be withdrawn in accordance with the procedures set forth in the Prospectus.
The undersigned authorizes the Exchange Agent to deliver this Notice of
Guaranteed Delivery to the Company and the Trustee as evidence of the
undersigned's tender of Initial Notes.
All authority herein conferred or agreed to be conferred by this Notice of
Guaranteed Delivery shall survive the death or incapacity of the undersigned and
every obligation of the undersigned under this Notice of Guaranteed Delivery
shall be binding upon the heirs, personal representatives, executors,
administrators, successors, assigns, trustees in bankruptcy and other legal
representatives of the undersigned.
PLEASE SIGN AND COMPLETE
<TABLE>
<CAPTION>
<S> <C>
Signatures of Registered Holder(s) or Date: --------------------------------------
Authorized Signatory: ------------------------ Address: -----------------------------------
- -------------------------------------------- --------------------------------------------
Name(s) of Registered Holder(s): Area Code and Telephone No.:
- -------------------------------------------- --------------------------------------------
Principal Amount of Notes Tendered: If Notes will be delivered by book-entry transfer,
complete the following:
- -------------------------------------------- Depository Account No. ----------------------
Certificate No.(s) of Notes (if available):
- --------------------------------------------
- --------------------------------------------
</TABLE>
This Notice of Guaranteed Delivery must be signed by the Holder(s) exactly as
their names appear on certificates for Initial Notes or on a security position
listing as the owner of Initial Notes, or by person(s) authorized to become
Holder(s) by endorsements and documents transmitted with this Notice of
Guaranteed Delivery. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, such person must set forth his or her full title
below under "Capacity" and submit evidence satisfactory to the Company of such
person's authority to so act.
Please print name(s) and address(es)
Name(s): _____________________________________________________________________
______________________________________________________________________________
Capacity:_____________________________________________________________________
______________________________________________________________________________
<PAGE>
Address(es):__________________________________________________________________
______________________________________________________________________________
Do not send Initial Notes with this form. Initial notes should be sent to the
Exchange Agent, together with a properly completed and validly executed Letter
of Transmittal and any other related documents.
<PAGE>
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a member firm of a registered national securities exchange or
of the National Association of Securities Dealers, Inc. or a commercial bank
or trust company having an office or correspondent in the United States,
hereby (a) represents that each holder of Initial Notes on whose behalf this
tender is being made "own(s)" the Initial Notes covered hereby within the
meaning of Rule 14e-4 under the Securities Exchange Act of 1934, as amended,
(b) represents that such tender of Initial Notes complies with such Rule
14e-4, and (c) guarantees that, within three business days from the date of
this Notice of Guaranteed Delivery, a properly completed and duly executed
Letter of Transmittal (or a facsimile thereof), together with certificates
representing the Initial Notes tendered hereby in proper form for transfer (or
confirmation of the book-entry transfer of such Initial Notes into the
Exchange Agent's account at a Book-Entry Transfer Facility, pursuant to the
procedure for book-entry transfer set forth in the Prospectus under the
caption "The Exchange Offer--Book-Entry Transfer"), and any other required
documents will be deposited by the undersigned with the Exchange Agent at its
address set forth above.
<TABLE>
<CAPTION>
<S> <C>
Name of Firm: ----------------------------- -------------------------------------------
Authorized Signature
Address: ----------------------------------
- ------------------------------------------- Name: ------------------------------------
Area Code and Telephone No.: -------------- Title: -------------------------------------
Date: -------------------------------------
</TABLE>
<PAGE>
EXHIBIT 99.3
AMC ENTERTAINMENT INC.
OFFER FOR ALL OUTSTANDING
9 1/2% SENIOR SUBORDINATED NOTES DUE 2011
IN EXCHANGE FOR
9 1/2% EXCHANGE SENIOR SUBORDINATED NOTES DUE 2011
To Our Clients:
Enclosed for your consideration is a Prospectus dated April 5, 1999 (as the
same may be amended or supplemented from time to time, the "Prospectus") and a
form of Letter of Transmittal (the "Letter of Transmittal") relating to the
offer (the "Exchange Offer") by AMC Entertainment Inc. (the "Company") to
exchange $1,000 principal amount of its 9 1/2% Exchange Senior Subordinated
Notes due February 1, 2011 (the "Exchange Notes") that have been registered
under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to
a Registration Statement of which the Prospectus constitutes a part, for each
$1,000 principal amount of its outstanding 9 1/2% Senior Subordinated Notes due
2011 (the "Initial Notes"), upon the terms and subject to the conditions set
forth in the Prospectus and the Letter of Transmittal. The Exchange Offer is
being made to satisfy certain obligations of the Company contained in the
Registration Rights Agreement dated January 27, 1999, by and among the Company
and the other signatories thereto.
The material is being forwarded to you as the beneficial owner of Initial
Notes held by us for your account or benefit but not registered in your name. A
TENDER OF THE INITIAL NOTES PURSUANT TO THE EXCHANGE OFFER MAY BE MADE ONLY BY
US AS THE REGISTERED HOLDER OF THE INITIAL NOTES, AND PURSUANT TO YOUR
INSTRUCTIONS. Therefore, the Company urges beneficial owners of Initial Notes
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee to contact such holder promptly if they wish to tender Initial
Notes in the Exchange Offer.
Accordingly, we request instructions as to whether you wish us to tender any
or all Initial Notes held by us for your account or benefit, pursuant to the
terms and conditions set forth in the Prospectus and Letter of Transmittal. We
urge you to read carefully the Prospectus and Letter of Transmittal before
instructing us to tender your Initial Notes pursuant to the Exchange Offer.
Your instructions to us should be forwarded as promptly as practicable in
order to permit us to tender Initial Notes on your behalf in accordance with the
provisions of the Exchange Offer. The Exchange Offer will expire at 5:00 p.m.,
New York City Time, on May 10, 1999, unless extended (the "Expiration Date").
Initial Notes tendered pursuant to the Exchange Offer may be withdrawn, subject
to the procedures described in the Prospectus, at any time prior to the
Expiration Date.
Your attention is directed to the following:
1. The Exchange Offer is for any and all Initial Notes.
2. The Exchange Offer is subject to certain conditions set forth in the
Prospectus in the section captioned "The Exchange Offer--Certain
Conditions to the Exchange Offer".
3. Any transfer taxes incident to the transfer of Initial Notes from the
holder to the Company will be paid by the Company, except as otherwise
provided in the Prospectus and the Instructions in the Letter of
Transmittal.
4. The Exchange Offer expires at 5:00 p.m., New York City time, on May 10,
1999, unless extended by the Company.
If you wish to have us tender any or all of your Initial Notes held by us
for your account or benefit, please so instruct us by completing, executing and
returning to us the instruction form that appears below. THE ACCOMPANYING LETTER
OF TRANSMITTAL IS FURNISHED TO YOU FOR INFORMATIONAL PURPOSES ONLY AND MAY NOT
BE USED BY YOU TO TENDER INITIAL NOTES HELD BY US AND REGISTERED IN OUR NAME FOR
YOUR ACCOUNT OR BENEFIT.
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE EXCHANGE OFFER
The undersigned acknowledge(s) receipt of your letter and the enclosed
material referred to therein relating to the Exchange Offer made by AMC
Entertainment Inc. with respect to their Initial Notes.
This will instruct you to tender the Initial Notes held by you for the
account of the undersigned, upon and subject to the terms and conditions set
forth in the Prospectus and the related Letter of Transmittal.
Please tender the Initial Notes held by you for my account as indicated
below:
Aggregate Principal Amount of Initial Notes
<TABLE>
<S> <C>
9 1/2% Senior Subordinated Notes due 2011
---------------------------------------
/ / Please do not tender any Initial Notes
held by you for my account.
Dated: -------------------------------- 1999
---------------------------------------
---------------------------------------
Signature(s)
---------------------------------------
---------------------------------------
Please print name(s) here
---------------------------------------
---------------------------------------
Address(es)
---------------------------------------
Area Code and Telephone Number
---------------------------------------
Tax Identification or Social Security
No(s).
</TABLE>
None of the Initial Notes held by us for your account will be tendered
unless we receive written instructions from you to do so. Unless a specific
contrary instruction is given in the space provided, your signature(s) hereon
shall constitute an instruction to us to tender all the Initial Notes hold by us
for your account.
<PAGE>
EXHIBIT 99.4
AMC ENTERTAINMENT INC.
OFFER FOR ALL OUTSTANDING
9 1/2% SENIOR SUBORDINATED NOTES DUE 2011
IN EXCHANGE FOR
9 1/2% EXCHANGE SENIOR SUBORDINATED NOTES DUE 2011
To Brokers, Dealers, Commercial Banks
Trust Companies and Other Nominees:
Enclosed for your consideration is a Prospectus dated April 5, 1999 (as the
same may be amended or supplemented from time to time, the "Prospectus") and a
form of Letter of Transmittal (the "Letter of Transmittal") relating to the
offer (the "Exchange Offer") by AMC Entertainment Inc. (the "Company") to
exchange $1,000 principal amount of its 9 1/2% Exchange Senior Subordinated
Notes due February 1, 2011 (the "Exchange Notes") that have been registered
under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to
a Registration Statement of which the Prospectus constitutes a part, for each
$1,000 principal amount of its outstanding 9 1/2% Senior Subordinated Notes due
2011 (the "Initial Notes"), upon the terms and subject to the conditions set
forth in the Prospectus and the Letter of Transmittal. The Exchange Offer is
being made in order to satisfy certain obligations of the Company contained in
the Registration Rights Agreement dated January 27, 1999, by and among the
Company and the other signatories thereto.
We are asking you to contact your clients for whom you hold Initial Notes
registered in your name or in the name of your nominee. In addition, we ask you
to contact your clients who, to your knowledge, hold Initial Notes registered in
their own name. The Company will not pay any fees or commissions to any broker,
dealer or other person in connection with the solicitation of tenders pursuant
to the Exchange Offer. You will, however, be reimbursed by the Company for
customary mailing and handling expenses incurred by you in forwarding any of the
enclosed materials to your clients. The Company will pay all transfer taxes, if
any, applicable to the tender of Initial Notes to it or its order, except as
otherwise provided in the Prospectus and the Letter of Transmittal.
Enclosed are copies of the following documents:
1. The Prospectus;
2. A Letter of Transmittal for your use in connection with the tender of
Initial Notes and for the information of your clients;
3. A form of letter that may be sent to your clients for whose accounts you
hold Initial Notes registered in your name or the name of your nominee,
with space provided for obtaining the clients' instructions with regard
to the Exchange Offer;
4. A form of Notice of Guaranteed Delivery; and
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
Your prompt action is requested. The Exchange Offer will expire at 5:00
p.m., New York City Time, on May 10, 1999, unless extended (the "Expiration
Date"). Initial Notes tendered pursuant to the Exchange Offer may be withdrawn,
subject to the procedures described in the Prospectus, at any time prior to the
Expiration Date.
In all cases, exchanges of Initial Notes for Exchange Notes accepted for
exchange pursuant to the Exchange Offer will be made only after timely receipt
by the Exchange Agent of (a) a properly completed and duly executed Letter of
Transmittal, or a facsimile thereof, together with any required signature
guarantees and with the certificates representing the Initial Notes being
tendered and any other required documents or (b) an Agent's Message (as defined
in the Prospectus) in lieu of a Letter of Transmittal and a timely confirmation
of a book-entry transfer of such Initial Notes, if such procedure is available,
into the
<PAGE>
Exchange Agent's account at The Depository Trust Company pursuant to the
procedure for book-entry transfer set forth in the Prospectus under the caption
"The Exchange Offer--Book-Entry Transfer."
Holders who wish to tender their Initial Notes and who cannot deliver their
Initial Notes, the Letter of Transmittal, or any other required documents to the
Exchange Agent prior to the Expiration Date, or holders who cannot complete the
procedure for book-entry transfer on a timely basis, may effect a tender of such
Initial Notes in accordance with the guaranteed delivery procedures set forth in
the Prospectus under the caption "The Exchange Offer--Guaranteed Delivery
Procedures."
Additional copies of the enclosed material may be obtained form the Exchange
Agent, The Bank of New York, by calling (212)815-3750.
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY
PERSON AS AN AGENT OF THE COMPANY OR THE EXCHANGE AGENT, OR AUTHORIZE YOU OR ANY
OTHER PERSON TO MAKE ANY STATEMENTS ON BEHALF OF EITHER OF THEM WITH RESPECT TO
THE EXCHANGE OFFER, EXCEPT FOR STATEMENTS EXPRESSLY MADE IN THE PROSPECTUS AND
THE LETTER OF TRANSMITTAL.
2
