PROSPECTUS Filed pursuant to Rule 424(b)(3)
SEC File No. 333-5115
1,150,000 Shares
Ampex Corporation
Class A Common Stock
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Ampex Corporation ("Ampex" or the "Company") may from time to time offer
shares of Class A Common Stock, $.01 par value ("Common Stock"), in amounts, at
prices and on terms to be determined at the time of offering. The Common Stock
may be offered at prices and on terms to be set forth in one or more supplements
to this Prospectus (each a "Prospectus Supplement").
The shares of Common Stock may be offered directly or through agents
designated from time to time by the Company or to or through underwriters or
dealers. If any agents or underwriters are involved in the sale of any of the
Common Stock, their names, and any applicable purchase price, fee, commission or
discount arrangement between or among them, will be set forth, or will be
calculable from the information set forth, in an accompanying Prospectus
Supplement. No Common Stock may be sold by the Company through agents,
underwriters or dealers without delivery of a Prospectus Supplement describing
the method and terms of the offering of such Common Stock. See "Plan of
Distribution."
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See "Risk Factors" commencing on page 6 for certain
factors that should be considered by prospective
investors.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus is November 27, 1996
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy and information statements and
other information filed with the Commission by the Company can be inspected and
copied at the public reference facilities maintained by the Commission, located
at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549;
and at the Commission's Regional Offices, located at 7 World Trade Center, Suite
1300, New York, New York 10048, and Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511. Copies of all or any part of such
materials also may be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. In addition, such reports and other information may be inspected at the
offices of the American Stock Exchange, 86 Trinity Place, New York, New York
10006- 1881.
Pursuant to the Securities Act of 1933, as amended (the "Securities Act")
and the rules and regulations promulgated thereunder, the Company has filed with
the Commission a Registration Statement on Form S-3 covering the Securities
being offered hereunder (the "Registration Statement," which term includes this
Prospectus and all amendments, supplements, exhibits, annexes and schedules to
the Registration Statement). This Prospectus does not contain all the
information set forth in the Registration Statement, certain parts of which are
omitted as permitted by the rules and regulations of the Commission. Statements
made in this Prospectus as to the contents of any contract, agreement or other
document are not necessarily complete. With respect to each such contract,
agreement or other document filed as an exhibit to the Registration Statement,
reference is hereby made to such exhibit for a more complete description of the
matter involved, and each such statement shall be qualified in its entirety by
such reference.
INFORMATION INCORPORATED BY REFERENCE
The following documents filed by the Company with the Commission (File No.
0-20292) pursuant to the Exchange Act are incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995.
2. The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, June 30 and September 30, 1996.
3. The Company's Current Report on Form 8-K filed on February 5, 1996.
4. The Company's definitive proxy statement dated April 23, 1996 relating
to its annual meeting of stockholders held on June 7, 1996.
5. The Company's Registration Statement on Form 8-A filed with the
Commission on January 16, 1996.
6. The description of the Company's capital stock contained in
Post-Effective Amendment No. 1 on Form S-3 to Registration Statement
on Form S-1 (No. 33-91312) as filed with the Commission on February 9,
1996.
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In addition, all reports and other documents subsequently filed by the
Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after
the date of this Prospectus and prior to the termination of the offering of the
Securities shall be deemed to be incorporated by reference in this Prospectus
from the date of filing such documents. Any statement contained in a document
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any subsequently filed document that 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.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon the written or oral
request of such person, a copy of any and all of the documents that are
incorporated herein by reference (other than exhibits to such documents, unless
such exhibits are specifically incorporated by reference into such documents).
Such requests should be directed to Ampex Corporation, 500 Broadway, Redwood
City, California 94063-3199, Attention: Investor
Relations, (415) 367-4111.
THE COMPANY
The names "Ampex," "DCT," "DST," "DIS" and "DCRsi" are trademarks of Ampex
Corporation.
Ampex is one of the world's leading innovators in the fields of magnetic
recording, digital image processing and high-performance digital storage for the
visual information age. In recent years, the Company has directed substantial
resources to developing products for the emerging commercial mass data storage
market. Ampex provides data storage solutions that serve a wide range of
customer needs, including scientific and technical applications such as
aerospace testing, oil exploration and entertainment.
The Company's principal products are its DST(R) tape drives and robotic
library systems for computer mass storage, its DIS(TM) and DCRsi(TM)
instrumentation recorders, and its DCT(R) professional video recorders and image
processing systems. The Company's DST products for the mass data storage market
offer superior data access times, rapid data transfer rates and extremely low
cost per megabyte of storage. Ampex DIS instrumentation recorders allow users to
record instrumentation data on DST tape cartridges, so that the data can be used
in a computer environment as well as an instrumentation environment. Ampex DCRsi
instrumentation recorders are designed for demanding aeronautical applications
such as commercial and military flight testing, as well as other applications
involving comparable data-gathering challenges in extreme environments. The
Company's DCT video recording products have been developed for high-end digital
component recording applications in entertainment and imaging markets.
During its 52-year history, Ampex has developed extensive technical
expertise in the storage, processing and retrieval of digital images. The
Company commits substantial resources to the research, development and
engineering of new products that capitalize on its knowledge, experience and
patent portfolio. As an example of this strategy, since the last quarter of 1994
the Company has been commercializing its patented "keepered media" technology.
This project, which has not yet resulted in any revenue to the Company, has the
potential to significantly increase the capacity of hard disk drives with
nominal incremental cost. See "Company Strategy" and "Recent Developments"
below.
The Company was incorporated in Delaware in January 1992 as the successor
to a business originally organized in 1944. References to "Ampex" or the
"Company" include subsidiaries of Ampex
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Corporation, unless the context indicates otherwise. The principal executive
offices of the Company are located at 500 Broadway, Redwood City, California
94063, and its telephone number is (415) 367-2011. The Company's Class A Common
Stock is traded on the American Stock Exchange under the symbol "AXC".
Except for historical information contained herein, this Prospectus
contains forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 which involve certain risks and uncertainties. The
Company's actual results or outcomes may differ materially from those
anticipated. Important factors that the Company believes might cause such
differences are discussed in this Prospectus under the caption "Risk Factors"
and in the Company's other documents filed with the Securities and Exchange
Commission, whether or not such documents are incorporated herein by reference.
In assessing these forward-looking statements, readers are urged to read the
statements carefully.
Company Strategy
The Company has historically developed products which are complete systems
targeted at the extremely high performance segments of the market for the
storage of images and data and for digital image processing and compression. A
relatively high proportion of the content of its product is designed by Ampex
itself, and is specific to the requirements of its system products. Ampex
believes that certain technologies that it currently uses only in it own
products potentially could create additional markets for the Company,
principally in the form of components or subsystems. The Company also believes
that by commercializing these products, it may potentially be able to gain
access to market segments which are larger than those addressed by its complete
systems products for which relatively high prices limit the market potential.
For example, certain patented Ampex technologies are used on consumer video
recorders that are priced at a few hundred dollars, while its professional
digital video recorders have list prices that approach $70,000 per unit. While
continuing its practice of licensing such technology, Ampex determined in 1994
to evaluate employing certain of its patented technologies as a basis for
entering into new business areas as a supplier of products.
The Company's strategy is to continue to develop high performance systems,
and also seek opportunities to commercialize existing or newly developed
technologies in the areas of imaging and storage that result from these
developments. The first such technology that Ampex is attempting to
commercialize is its keepered media for use in computer hard disk drives. See
"Recent Developments" and "Risk Factors - Uncertainty as to Commercialization of
Keepered Media," below. The Company is evaluating additional possibilities to
commercialize its technology, but has not yet determined to pursue any
additional project or projects beyond the research and development stage. There
can be no assurance that keepered media or any other technology that Ampex may
seek to develop will be commercially successful. See "Risk Factors - Rapid
Technological Change and Risks of New Product Development" and "- Uncertainty as
to Commercialization of Keepered Media."
Recent Developments
Keepered Media. The Company has previously disclosed its program to
commercialize its patented keepered media technology, consistent with its
strategy to enter new business areas for components or subsystems developed for
use in its complete systems products. Reference is made to the Company's 1995
Form 10-K and its 1996 Quarterly Reports on Form 10-Q for further information
concerning this technology and certain developments and risks related to this
program. See also "Risk Factors Uncertainty as to Commercialization of Keepered
Media," below.
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As disclosed in its September 30, 1996 Form 10-Q, the Company recently
approached three manufacturers of hard disk drives to determine their interest
in concluding an agreement for the inclusion of keepered media platters in
drives to be manufactured by them. Ampex has also been approached recently by
certain other hard disk drive manufacturers with which it did not initiate
contact.
Ampex has been in discussion with several of the above companies and has
provided certain of them with drafts of proposed purchase agreements. The draft
agreements provide for prices and other terms on which such manufacturers could
obtain keepered media disk platters in such volumes as they may elect. Each of
the manufacturers to which Ampex has provided draft agreements has advised the
Company, in general terms, that it would be possible for it to launch a hard
disk drive product incorporating keepered media into volume production in 1997.
In particular, one such manufacturer has advised Ampex that it is evaluating the
initial criteria for a program that would include keepered media. This program
currently contemplates finalization of engineering design in the first quarter
of 1997. If, at that point, the manufacturer decides to put the program into
production, volume manufacturing would be expected to commence later in the
year.
Ampex has held discussions with each of the manufacturers referred to
above concerning the terms of the agreements it has proposed. Ampex has
indicated that it is prepared to offer favorable economic terms to the first
company to conclude an agreement, in recognition of its early adoption of the
technology. To date, one manufacturer has responded with detailed comments and
counterproposals. Based on its negotiations with that manufacturer, Ampex now
believes that there is a general agreement on pricing, duration and the minimum
purchase quantities that would be required for the purchaser to maintain
favorable pricing terms. However, there are also numerous open issues concerning
the structure and terms of the agreement and Ampex is not committed to accept
them or to execute any agreement with this potential purchaser.
The Company intends to continue to negotiate with several manufacturers
that could become initial customers for keepered media in order to determine the
most favorable terms that it can obtain. However, at present, Ampex has no
commitments from any potential purchasers of keepered media, and there could be
unforeseen technical or economic reasons why manufacturers would not proceed
with the technology. See "Risk Factors "- Uncertainty as to Commercialization of
Keepered Media," below. Also, there can be no assurance that Ampex will be able
to obtain terms that it considers favorable or acceptable, which could require
it to defer any such agreement or to discontinue its keepered media development
program.
The Company has previously indicated that it desires to conclude an
agreement for the purchase of keepered media before the end of 1996 because it
believes that this is approximately the timing that would be necessary for it to
generate material revenue from keepered media during 1997. However, there can be
no assurance that any such agreement will be reached or as to the timing of
execution of any such agreement. In view of the number of disk drive
manufacturers that have expressed interest in the technology, and the recent
tests indicating that it may be possible to combine keepered media with
magneto-resistive heads as well as with inductive heads as discussed below, the
Company believes that it may now be desirable to hold discussions with
additional potential customers before finalizing the terms of an initial
agreement.
Magneto-Resistive Heads. To date, Ampex has directed the majority of its
keepered media development efforts to potential disk drive programs that employ
inductive heads, which according to published reports are used in the majority
of disk drives currently in production. However, a number of disk drive
manufacturers have expressed an intention to effect a transition to
magneto-resistive heads in all or a substantial portion of their disk drive
production in the future. In early November 1996,
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Ampex, together with a disk drive manufacturer and a head manufacturer,
participated in tests of keepered media with magneto-resistive heads. The tests
included a demonstration of the activation of the keeper layer by a
magneto-resistive head of a common design. While Ampex believes that this is an
indication that keepered media may be able to address the disk drive market for
both inductive and magneto-resistive heads, it has not yet conducted sufficient
performance and other testing to ensure that this will in fact be possible in
commercial production. See "Risk Factors - Uncertainty as to Commercialization
of Keepered Media," below. The agreements which Ampex has proposed to disk drive
manufacturers would permit the use of keepered media with both inductive or
magneto-resistive heads.
RISK FACTORS
Investment in the Common Stock offered hereby involves a significant
degree of risk. Prospective investors should carefully consider the following
factors, together with the other information included or incorporated by
reference in this Prospectus, in evaluating the Company and its business before
purchasing the Common Stock offered hereby.
Historical Losses; Impact of Restructuring. As a result of substantial net
losses incurred by the Company in each of the years 1990 to 1993, primarily in
its professional television products business, the Company significantly
restructured its business operations in 1993. The restructuring involved changes
in manufacturing, distribution and administration to reduce fixed costs,
withdrawal from or curtailment of a number of unprofitable product lines, and
the write-off of goodwill and other intangible assets associated with its
television products business. As a result of substantial restructuring charges
and operating losses during this period, including a $230.5 million charge in
1993, the Company had a stockholders' deficit of $92.3 million as of September
30, 1996. Although the Company has generated operating and net income in the
fiscal years since 1993, as a result of its decision to narrow its product
lines, the Company's total sales have declined significantly in comparison to
prior periods. In addition, since the restructuring, the Company's revenues have
depended to a greater degree on new products which may have higher technological
and other risks. See "Rapid Technological Change and Risks of New Product
Development." There is no assurance as to future sales levels or operating
results.
Fluctuations In Operating Results. Ampex's sales and results of operations
are generally subject to quarterly fluctuations. Factors affecting operating
results include: customer ordering patterns; availability and market acceptance
of new products; timing of significant orders and new product announcements;
order cancellations; receipt of royalty income; and numerous other factors.
Accordingly, results of a given quarter or year are not necessarily indicative
of results to be expected for future periods. In addition, the Company's
entrance into new businesses since 1993 may have made its future revenues and
operating results more difficult to predict than in prior periods.
Seasonality; Backlog. Sales of most of the Company's products have
historically declined during the third quarter of its fiscal year, due to
seasonal procurement practices of its customers. Although sales in the third
quarter of 1995 did not decline materially relative to prior quarters of that
year, prospective investors should be aware that such a decline may occur in
future years. A substantial portion of the Company's backlog at a given time is
normally shipped within one or two quarters thereafter. Therefore, sales in any
quarter are heavily dependent on orders received in that quarter and the
immediately preceding quarter. The Company's backlog of firms orders at
September 30, 1996 was $5.4 million, as compared to $13.8 million at December
31, 1995, reflecting declines in order backlog in all product categories.
Accordingly, sales for the fourth quarter of 1996 may be less than sales for the
comparable 1995 quarter, and there can be no assurance as to the level of sales
that will be attained in future quarters.
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Fluctuating Royalty Income. Ampex's results of operations in certain prior
fiscal periods reflect the receipt of substantial royalty income, including
material non-recurring payments resulting from negotiated settlements of patent
infringement claims asserted by the Company. Although Ampex has a substantial
number of outstanding and pending patents, and the Company's patents have
generated substantial royalties in the past, it is not possible to predict the
amount of royalty income that will be received in the future. Royalty income can
fluctuate dramatically depending on a number of factors that the Company cannot
predict, such as the extent of use of the Company's patented technology by third
parties, the extent to which the Company must pursue litigation in order to
enforce its patents and the ultimate success of its licensing and litigation
activities. The costs of patent litigation, such as the Company's current
lawsuit against a foreign manufacturer of VHS video recorders, can be material,
and the institution of patent enforcement litigation may also increase the risk
of counterclaims alleging infringement by the Company of patents held by third
parties or seeking to invalidate patents held by the Company. Moreover, there is
no assurance that the Company will continue to develop patentable technology
that will generate significant patent royalties in future years. Ampex's royalty
income fluctuates significantly from quarter to quarter and from year to year,
and there can be no assurance as to the level of royalty income which will be
realized in future periods.
Risk of Declines in Government Sales. Ampex sales to U.S. and foreign
government agencies (directly and through government contractors), principally
of instrumentation recorders, are material to its results of operations. Sales
to government customers are subject to fluctuation as a result of changes in
government spending programs. Sales of the Company's DCRsi instrumentation
recorders have recently declined, reflecting lower sales to the federal
government. Any further material decline in the level of government purchases of
the Company's products could have a material adverse effect on the Company. The
Company is unable to forecast the extent to which sales may be adversely
affected in future periods by continued pressure on government agencies to
reduce spending, particularly amounts related to defense programs.
Possible Disruptions of Manufacturing and Engineering Operations. In
connection with the recent sale of its Redwood City, California property, Ampex
is relocating its manufacturing and engineering operations to a smaller facility
located on a portion of the property which it leased back at the time of sale,
and expects that the relocation of certain of these facilities in the fourth
quarter of 1996 will be the most potentially disruptive to its manufacturers and
engineering operations. Ampex is also consolidating its Colorado Springs,
Colorado manufacturing facilities, following the sale in May 1996 of a portion
of those facilities. In addition to the normal risks of fire, earthquake,
materials shortages and other similar events, relocation or consolidation of key
manufacturing and engineering facilities entails the risks of disruption or
delays in operations, which could temporarily adversely impact sales revenues or
profitability or result in the incurrence of unanticipated expenses. In order to
minimize, in part, the effect of any potential disruption, the Company has
recently been building inventories of its products, including the DST 810
library system which it has begun to ship in limited quantities in the fourth
quarter of 1996. If such increased inventories exceed orders actually received,
the Company's earnings could be adversely affected by any write-downs or
write-offs that may be required. The Company maintains insurance, including
business interruption insurance, covering certain risks. However, there can be
no assurance that the Company will not incur losses beyond the limits of, or
outside the coverage of, its insurance.
Rapid Technological Change and Risks of New Product Development. The data
storage, instrumentation and video recording industries are characterized by
continual technological change and the need to introduce new products and
product upgrades, requiring a high level of expenditure for research and
development. No assurance can be given that the Company's existing products will
not become obsolete, that any new products will win commercial acceptance or
that Ampex's new products or technology will be competitive. Obsolescence of
existing product lines, or inability to develop and
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introduce new products, could have a material adverse effect on sales and
results of operations in the future. In addition, broad-based acceptance of the
Company's DST products will depend to some extent on the availability and
performance of certain applications software being developed by the Company and
independent commercial software developers. The Company has previously announced
that its DST 310 tape drive and DST 410 library are now supported by certain
third party hierarchical storage management and UNIX file system backup software
packages. However, support for the DST 810 library, upon which the Company
believes that increased sales of DST products will depend, is not expected to be
available until 1997, and the currently available third party software runs on
only a limited number of UNIX workstations.
Competition. Ampex encounters significant competition in all its product
markets. Ampex competes in the mass data storage market with a number of
well-established competitors, such as IBM, Storage Technology Corporation,
Exabyte Corporation and Quantum Corporation, as well as smaller companies. In
addition, other manufacturers of scanning video recorders may seek to enter the
mass data storage market in competition with the Company. For example, in 1995
Sony Corporation entered this market with storage products based on its video
recording technology. In addition, price declines in competitive storage
systems, such as magnetic or optical disk drives, can negatively impact the
Company's sales of its DST products. In the instrumentation market, the Company
competes primarily with companies that depend on government contracts for a
major portion of their sales in this market, including Sony Corporation, Loral
Data Systems, Datatape Incorporated and Metrum Incorporated. The number of
competitors in this market has decreased in recent years as the level of
government spending in many areas has declined. In the professional video
recorder market, Sony and Panasonic are the leading competitors of the Company.
There is no assurance that the Company will be able to compete successfully in
these markets in the future.
Dependence On Certain Suppliers. Ampex purchases certain components, such
as customized integrated circuits, from a single domestic or foreign
manufacturer. Significant delays in deliveries or defects in such components
could adversely affect Ampex's manufacturing operations, pending qualification
of an alternative supplier. In addition, the Company produces highly engineered
products in relatively small quantities. As a result, its ability to cause
suppliers to continue production of certain products on which the Company may
depend may be limited. The Company does not generally enter into long-term raw
materials or components supply contracts.
Risks Related to International Operations. Although the Company
significantly curtailed its international operations in connection with the
restructuring of its operations in 1993, sales to foreign customers (including
U.S. export sales) continue to be significant to the Company's results of
operations. International operations are subject to a number of special risks,
including limitations on repatriation of earnings, restrictive actions by local
governments, fluctuations in foreign currency exchange rates and
nationalization. Additionally, export sales are subject to export regulation and
restrictions imposed by U.S. government agencies. Fluctuations in the value of
foreign currencies can affect Ampex's results of operations. The Company does
not normally seek to mitigate its exposure to exchange rate fluctuations by
hedging its foreign currency positions.
Dependence On Key Employees. The Company is dependent upon the performance
of certain key members of management and key technical personnel. The Company
has not entered into employment agreements with any such persons. Edward J.
Bramson, who since January 1991 has served as chief executive of the Company, is
also engaged in the management of certain companies affiliated with Sherborne
Holdings Incorporated, a privately owned Delaware holding company ("SHI"). Mr.
Bramson currently devotes most of his time to the management of the Company. The
loss of the services of Mr.
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Bramson and/or such managers or other key personnel could have a material
adverse effect on the Company.
Anti-Takeover Consequences of Certain Governing Instruments. The
Company's Certificate of Incorporation provides for a classified Board of
Directors, with members of each class elected for a three-year term. The
Certificate of Incorporation provides for nullification of voting rights of
certain foreign stockholders in certain circumstances involving possible
violations of security regulations of the United States Department of Defense.
The instruments governing the Company's outstanding Noncumulative Preferred
Stock require mandatory offers by the Company to redeem such securities in the
event of a Change of Control (as defined). The Certificate of Incorporation
authorizes the Board of Directors of the Company to issue additional shares of
Preferred Stock without the vote of stockholders. Such provisions could have
anti-takeover effects by making an acquisition of the Company by a third party
more difficult or expensive in certain circumstances.
Non-payment of Dividends. The Company has not declared dividends on its
Common Stock since its incorporation in 1992 and has no present intention of
paying dividends on its Common Stock. The Company is also restricted by the
terms of certain agreements and of its outstanding Noncumulative Preferred Stock
as to the declaration of dividends.
Redemption of Preferred Stock. In December 1997, the Company is scheduled
to redeem its outstanding Noncumulative Preferred Stock, having a redemption
price of approximately $70 million, out of funds legally available therefor
(which, in general, means the excess of the fair value of assets over
liabilities of the Company). In certain circumstances the Company may redeem the
Noncumulative Preferred Stock by issuing Common Stock at 90% of fair market
value. As of September 30, 1996, the Company did not have sufficient funds
legally available to redeem the Noncumulative Preferred Stock in full. In the
event the Company does not have sufficient funds legally available to redeem the
Noncumulative Preferred Stock in full on the redemption date, the Company would
remain obligated to redeem such shares from time to time to the extent funds
become legally available for redemption, and would generally be precluded from
declaring cash dividends on, or repurchasing shares of, its Common Stock, until
the Noncumulative Preferred Stock has been redeemed in full. There can be no
assurance the Company will have adequate liquidity or have funds legally
available to redeem the Noncumulative Preferred Stock. Although the Company has
no current plans for redemption of the Noncumulative Preferred Stock prior to
maturity, it will continue to evaluate this possibility in light of market
conditions, its liquidity, and other factors. Any such redemption could involve
the issuance of additional debt or equity securities or other actions that might
result in dilution of current stockholders' equity interests in the Company or
adversely affect the market price of the Common Stock.
Volatility of Stock Price. The trading price of the Company's Common Stock
has been and can be expected to be subject to significant volatility, reflecting
a variety of factors, including quarterly variations in operating results,
announcements of new product introductions by the Company or its competitors,
reports and predictions concerning the Company by analysts and other members of
the media, and general economic or market conditions. The stock market in
general and technology companies in particular have experienced a high degree of
price volatility, which has had a substantial effect on the market prices of
many technology companies for reasons that often are unrelated or
disproportionate to operating performance. In addition, since 1993, the Company
has maintained effective registration statements covering securities of the
Company held by its stockholders, including, at the date of this Prospectus,
approximately 8.8 million shares of Common Stock (representing approximately 18%
of the outstanding Common Stock on a fully diluted basis) held by certain
affiliates of the Company and related parties. The sale, or the offer for sale,
of substantial numbers of such shares could adversely affect the market price
for the Common Stock.
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Uncertainty as to Commercialization of Keepered Media. The successful
commercialization of the Company's proprietary keepered media technology, which
potentially could increase the storage capacity of hard disk drives used in most
personal computers, involves a number of risks. Although Ampex has held
discussions and negotiations with several disk drive manufacturers, it is not
possible at present to determine whether any of these companies, or others that
Ampex may approach in the future, will in fact undertake a commercial product
program or purchase any material quantities of keepered media. Also, there can
be no assurance that Ampex would be able to obtain prices or other terms that it
considers favorable or acceptable. The Company does not presently have
manufacturing facilities suitable for producing keepered media in quantity, and
the Company does not presently intend to license the technology to third
parties. Although the Company has held discussions with several U.S. and foreign
producers of disk drive platters concerning the supply of such platters, no
commitments with respect to availability, price or other terms have been made by
such platter manufacturers. If the Company commences commercial production,
capital requirements could be significant and the Company would probably be
required to issue debt or equity securities, which would increase the Company's
financial leverage or dilute earnings. It is possible that further analysis by
the Company, or by potential customers, will identify technical or economic
issues of which Ampex, at present, is unaware. Ampex is familiar with other
technologies, including magneto-resistive heads, that potential customers might
prefer over keepered media. Although Ampex believes, based on recent test
results, that keepered media can operate with magneto-resistive heads, it has
not yet conducted sufficient performance and other testing to ensure that the
two technologies can in fact be compatible in commercial production. In a high
technology industry such as data storage, other technology may be under
development, or may be developed in the future, that could be technically or
economically superior to keepered media.
If the Company's keepered media technology becomes commercially
successful, that portion of the Company's business may be materially dependent
on the Company's patents covering the technology. However, there can be no
assurance that patents currently held by Ampex, or that may be issued pursuant
to pending and future patent applications filed by Ampex, will not be
challenged, or that patent protection, in itself, would ensure the commercial
success of this program or would provide adequate protection against similar or
other technologies independently developed by industry competitors.
In view of the uncertainties associated with the development and
commercialization of keepered media, some of which are described above, it is
impossible to forecast when, or if, any commercial benefit will be realized by
the Company. Since prospects for keepered media are highly speculative, there is
a material risk that the market price of the Company's securities may experience
increased volatility, in addition to volatility that may result from factors
discussed above under "Volatility of Stock Price."
USE OF PROCEEDS
Unless otherwise indicated in the applicable Prospectus Supplement,
proceeds to the Company from the sale of the Common Stock offered hereby will be
added to the working capital of the Company and used for general corporate
purposes, which may include the acquisition of specialized testing and
production equipment for use in the Company's keepered media research and
development program, if required.
PLAN OF DISTRIBUTION
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The Company may sell the Common Stock directly to one or more
purchasers or through one or more underwriters, brokers, dealers or agents from
time to time in one or more transactions on any exchange, in the
over-the-counter market, through third party trading systems or otherwise, at a
fixed price or prices, which may be changed, or at market prices prevailing at
the time of sale, at prices related to such prevailing market prices or at
negotiated prices. The Company may sell Common Stock as soon as practicable
after effectiveness of the Registration Statement, subject to market conditions
and other factors.
The Prospectus Supplement will set forth the terms of the offering of
the Common Stock, including (i) the name or names of any underwriters or agents
with whom the Company has entered into arrangements with respect to the sale or
issuance of Common Stock, (ii) the initial public offering or purchase price of
the Common Stock, (iii) any underwriting discounts, commissions and other items
constituting underwriters' compensation from the Company and any other
discounts, concessions or commissions allowed or reallowed or paid by any
underwriters to other dealers, (iv) any commissions paid to any agents, (v) the
net proceeds to the Company and (vi) any over-allotment options granted to such
underwriters or agents. In connection with the sale of shares of Common Stock,
underwriters may receive compensation from the Company or from purchasers of
shares of Common Stock, for whom they may act as agents, in the form of
discounts, concessions, or commissions. Underwriters may sell shares of Common
Stock to or through dealers, and such dealers may receive compensation in the
form of discounts, concessions, or commissions from the underwriters and/or
commissions from the purchasers for whom they may act as agents. Underwriters,
dealers, and agents that participate in the distribution of shares of Common
Stock may be deemed to be underwriters, and any discounts or commissions they
receive from the Company, and any profit on the resale of shares of Common Stock
they realize, may be deemed to be underwriting discounts and commissions under
the Securities Act.
Any shares of Common Stock sold pursuant to a Prospectus Supplement
will be listed on the American Stock Exchange, subject to official notice of
issuance.
Under agreements the Company may enter into, underwriters, dealers and
agents who participate in the distribution of shares of Common Stock may be
entitled to indemnification by the Company against certain liabilities,
including liabilities under the Securities Act.
Underwriters, dealers and agents may engage in transactions with, or
perform services for, or be customers of, the Company or affiliates of the
Company in the ordinary course of business.
Unless otherwise set forth in the Prospectus Supplement relating to the
issuance of Common Stock, the obligations of the underwriters to purchase such
Common Stock will be subject to certain conditions precedent and each of the
underwriters with respect to such Common Stock will be obligated to purchase all
of the Common Stock allocated to it if any such Common Stock is purchased. Any
initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers may be changed from time to time.
If so indicated in the applicable Prospectus Supplement, the Company
will authorize underwriters or other persons acting as the Company's agents to
solicit offers by certain institutions to purchase shares of Common Stock from
the Company pursuant to contracts providing for payment and delivery on a future
date. Institutions with which such contracts may be made include commercial and
savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and others, but in all cases such
institutions must be approved by the Company. The obligations of any purchaser
under any such contract will be subject to the condition that the purchase of
the shares of Common Stock shall not at the time of delivery be prohibited under
the laws of the jurisdiction to which
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such purchaser is subject. The underwriters and such other agents will not have
any responsibility in respect of the validity or performance of such contracts.
LEGAL MATTERS
The validity, authorization and issuance of the Common Stock offered
hereby will be passed upon for the Company by Battle Fowler LLP (a limited
liability partnership which includes professional corporations), New York, New
York, who may rely, as to questions of California law and certain other matters,
upon an opinion of General Counsel to the Company. Battle Fowler LLP regularly
provides legal services to the Company and its affiliates. David D. Griffin, who
is of counsel to Battle Fowler LLP, holds 515,000 shares of Common Stock
directly, and is a limited partner in Newhill Partners, L.P., a partnership
which, through SHI, owns shares of Common Stock.
EXPERTS
The consolidated balance sheets as of December 31, 1995 and 1994 and
the consolidated statements of operations, stockholders' deficit and cash flows
for each of the three years in the period ended December 31, 1995, and
supplemental schedule, included in the Company's Annual Report on Form 10-K for
the year ended December 31, 1995, have been audited by Coopers & Lybrand L.L.P.,
independent accountants, as set forth in their report included in such Annual
Report, and are incorporated herein by reference in reliance upon such report,
given upon the authority of said firm as experts in accounting and auditing.
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No dealer, salesman or other person has been authorized to give any information
or to make any representation not contained or incorporated by reference in this
Prospectus. If given or made, such information or representation must not be
relied upon as having been authorized by the Company. This Prospectus does not
constitute an offer to sell, or a solicitation of an offer to buy, Common Stock
in any jurisdiction. Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create an implication that there has
been no change in the affairs of the Company since the date hereof.
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TABLE OF CONTENTS
Page
AVAILABLE INFORMATION........................................... 2
INFORMATION INCORPORATED BY
REFERENCE.............................................. 2
THE COMPANY..................................................... 3
RISK FACTORS.................................................... 6
USE OF PROCEEDS................................................. 10
PLAN OF DISTRIBUTION............................................ 10
LEGAL MATTERS................................................... 12
EXPERTS ....................................................... 12
AMPEX CORPORATION
Class A Common Stock
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PROSPECTUS
November 27, 1996
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