<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 9, 1996
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
REGAL CINEMAS, INC.
(Exact Name of Registrant as Specified in its Charter)
---------------------
<TABLE>
<S> <C>
TENNESSEE 62-1412720
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
</TABLE>
7132 COMMERCIAL PARK DRIVE,
KNOXVILLE, TENNESSEE 37918
(423) 922-1123
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
---------------------
HERBERT S. SANGER, JR.
1801 PLAZA TOWER
KNOXVILLE, TENNESSEE 37929
(423) 525-4600
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
COPIES TO:
<TABLE>
<S> <C>
F. MITCHELL WALKER, JR. KEVIN D. NORWOOD
BASS, BERRY & SIMS PLC WALLER LANSDEN DORTCH & DAVIS
FIRST AMERICAN CENTER 511 UNION STREET
NASHVILLE, TENNESSEE 37238 SUITE 2100
(615) 742-6200 NASHVILLE, TENNESSEE 37219
(615) 244-6380
</TABLE>
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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.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / / ________________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / ________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==================================================================================================
<S> <C> <C> <C> <C>
PROPOSED
PROPOSED MAXIMUM
TITLE OF EACH AMOUNT MAXIMUM AGGREGATE AMOUNT OF
CLASS OF SECURITIES TO BE OFFERING PRICE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED(1) PER SHARE(2) PRICE(2) FEE
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Common Stock, no par value
per share....................... 2,875,000 $39.875 $114,640,625 $39,532
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</TABLE>
(1) Includes 375,000 shares of Common Stock (at a proposed maximum aggregate
offering price of $14,953,125) which the Underwriters have the option to
purchase to cover over-allotments, if any.
(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(c) based upon the average of the high and low
reported prices of the Common Stock as reported on The Nasdaq Stock
Market's National Market on May 7, 1996.
---------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
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<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED MAY 9, 1996
PROSPECTUS
2,500,000 SHARES
[REGAL CINEMAS LOGO]
COMMON STOCK
The shares of Common Stock offered hereby are being sold by Regal Cinemas,
Inc. (the "Company"). The Company's Common Stock is traded on The Nasdaq Stock
Market's National Market (the "Nasdaq National Market") under the symbol "REGL."
On May 8, 1996, the last reported sale price of the Common Stock on the Nasdaq
National Market was $41.125 per share.
SEE "RISK FACTORS" APPEARING ON PAGES 7 THROUGH 8 FOR MATTERS THAT SHOULD
BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SHARES OFFERED HEREBY.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<S> <C> <C> <C>
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PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT(1) COMPANY(2)
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Per Share.................................... $ $ $
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Total(3)..................................... $ $ $
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</TABLE>
(1) The Company has agreed to indemnify the Underwriters against certain civil
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(2) Before deducting estimated expenses of $350,000 payable by the Company.
(3) The Company has granted to the Underwriters an over-allotment option to
purchase up to 375,000 additional shares of Common Stock on the same terms
and conditions as set forth above. If all such shares are purchased by the
Underwriters, total Price to Public will be $ , total Underwriting
Discount will be $ , and total Proceeds to Company will be
$ . See "Underwriting."
---------------------
The shares of Common Stock are offered subject to receipt and acceptance by
the several Underwriters, to prior sale and to the Underwriters' right to reject
any order in whole or in part and to withdraw, cancel or modify the offer
without notice. It is expected that certificates for the shares will be
available for delivery on or about , 1996.
---------------------
J.C. Bradford & Co.
Montgomery Securities
Wheat First Butcher Singer
, 1996
<PAGE> 3
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT
A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET OR OTHERWISE. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
IN CONNECTION WITH THIS OFFERING, CERTAIN UNDERWRITERS AND SELLING GROUP
MEMBERS (IF ANY) MAY ENGAGE IN PASSIVE MARKET MAKING TRANSACTIONS IN THE
COMPANY'S COMMON STOCK ON THE NASDAQ NATIONAL MARKET IN ACCORDANCE WITH RULE
10B-6A UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE
ACT"). SEE "UNDERWRITING."
2
<PAGE> 4
PROSPECTUS SUMMARY
The following is a summary of certain information contained elsewhere or
incorporated by reference in this Prospectus. This summary is not intended to be
complete and is qualified in its entirety by reference to, and should be read in
conjunction with, the detailed information appearing elsewhere or incorporated
by reference in this Prospectus. Except as otherwise noted, all information in
this Prospectus assumes no exercise of the Underwriters' over-allotment option.
All share and per share data contained herein have been restated to give
retroactive effect to the Company's 50% stock dividends in each of December 1994
and December 1995.
THE COMPANY
Regal Cinemas, Inc. (the "Company" or "Regal") is the eighth largest motion
picture exhibitor in the United States based upon the number of screens in
operation. The Company currently operates 128 multi-screen theatres with an
aggregate of 1,006 screens. Regal also has 14 new theatres with 162 screens
under construction, 19 screens under construction at existing theatres and two
pending acquisitions of 18 theatres with 137 screens.
The Company's strategy is to develop, acquire and operate multi-screen
theatres in mid-size metropolitan markets and suburban growth areas of larger
metropolitan markets. The Company averages 7.9 screens per location, as compared
to an average of 4.8 screens per location for the industry and 5.4 screens per
location for the five largest U.S. motion picture exhibitors, as of May 1, 1995.
Management believes that the Company's multi-screen theatres, substantially all
of which show first run movies, promote increased attendance and maximize
operating efficiencies through reduced labor costs and improved utilization of
theatre capacity. Centralized decision making, including accounting, film
licensing and concession purchasing, as well as management incentives based on
controlling theatre-level costs, contribute to the Company's cost-efficient
operations.
The Company's growth has come through the acquisition of existing theatres
and the development of new theatres. Since its inception, Regal has acquired a
net of 98 theatres with 630 screens, which has served to establish and enhance
the Company's presence in selected geographic markets. Regal anticipates that
its future growth will result from the development of new theatres, the addition
of screens to existing theatres, strategic acquisitions of theatre circuits and
the development of entertainment concepts that complement the Company's
theatres. The Company currently plans to develop 150 to 175 screens annually for
the next several years. The Company intends to locate theatres in markets that
it believes are underscreened because of changing demographic trends or that are
served by older theatre facilities or by theatres having an insufficient number
of screens. The Company seeks to locate each theatre where it will be the sole
or dominant exhibitor within a particular geographic film licensing zone.
Management believes that approximately 66% of the Company's theatres are located
in film licensing zones in which Regal is the sole exhibitor.
Regal emphasizes patron satisfaction by providing convenient locations,
comfortable seating, spacious neon-enhanced lobby and concession areas and a
wide variety of film selections. Regal's theatre complexes feature clean, modern
auditoriums with high quality projection and digital stereo surround-sound
systems. Regal's theatres typically contain auditoriums having 100 to 500 seats,
allowing the Company to exhibit films profitably for longer periods by shifting
films from larger to smaller auditoriums within the same complex to accommodate
changing attendance levels. In addition, the Company promotes patron loyalty
through specialized marketing programs for its theatres and feature films.
To complement the Company's theatre development, Regal opened its first
FunScape(TM) comprehensive entertainment complex in Chesapeake, Virginia in
August 1995 and its second FunScape in Rochester, New York in February 1996.
Each complex includes a 13 screen theatre and a 50,000 square foot comprehensive
family entertainment center. The Company currently has two additional FunScape
complexes under construction and may seek to develop additional FunScape
complexes at strategic locations.
3
<PAGE> 5
RECENT DEVELOPMENTS
Pending Acquisitions
Georgia State Theatres, Inc. Merger. Regal has entered into a definitive
Agreement and Plan of Merger (the "Merger Agreement") to acquire Georgia State
Theatres, Inc. ("GST") for approximately 912,000 shares of Regal Common Stock in
a pooling of interests transaction. GST, headquartered in Atlanta, Georgia, has
10 first run theatres with 68 screens, including one drive-in theatre, located
in the metropolitan Atlanta, Georgia area and a partnership in Gainesville,
Georgia. Provided shareholder approval of the Merger Agreement is obtained, the
parties intend to close the transaction and effect the merger (the "GST Merger")
promptly following the special meeting of shareholders scheduled for May 30,
1996.
Krikorian Asset Acquisition. Regal has entered into an agreement to
acquire assets consisting of eight theatres with 69 screens in California (the
"Krikorian Acquisition") from an individual, George Krikorian, and corporations
controlled by him (collectively, "Krikorian"). Consideration for the transaction
is anticipated to be approximately 470,000 shares of Regal Common Stock and
approximately $14.1 million to be paid in cash at closing. The Company
anticipates closing this acquisition during the second quarter of 1996.
THE OFFERING
<TABLE>
<S> <C>
Common Stock offered....................................... 2,500,000 shares
Common Stock to be outstanding after the offering.......... 20,024,379 shares(1)
Use of proceeds............................................ To repay indebtedness
Nasdaq National Market symbol.............................. REGL
</TABLE>
- ---------------
(1) Excludes 2,026,407 shares of Common Stock reserved for issuance upon
exercise of options granted pursuant to the Company's existing stock option
plans, 156,512 shares issuable upon the exercise of outstanding warrants
and an estimated 1,382,000 shares to be issued upon consummation of the GST
Merger and the Krikorian Acquisition.
4
<PAGE> 6
SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA
(IN THOUSANDS, EXCEPT PER SHARE AND OPERATING DATA)
The summary consolidated financial data set forth below as of and for each
of the fiscal years ended December 30, 1993, December 29, 1994 and December 28,
1995, are derived from the financial statements of Regal. Regal began operations
in 1990 and operates on a fiscal year ending on the Thursday closest to December
31. This information should be read in conjunction with the historical financial
statements and notes thereto contained in the Regal Annual Report on Form 10-K/A
which are incorporated by reference herein. See "Available Information" and
"Incorporation of Certain Information by Reference."
The pro forma summary financial data set forth below have been prepared on
a consolidated basis based upon the historical financial statements of Regal and
GST. The pro forma information gives effect to the GST Merger accounted for as a
pooling of interests, based upon an assumed conversion of 912,000 shares of
Regal Common Stock for all shares of GST Common Stock outstanding. In addition,
the pro forma statement of income data and pro forma operating data give effect
to the Krikorian Acquisition as if the acquisition had occurred at the beginning
of the period. Pro forma balance sheet data as of December 28, 1995, also give
effect to the Krikorian Acquisition.
<TABLE>
<CAPTION>
PRO FORMA
FISCAL YEAR ENDED FISCAL YEAR
------------------------------------------ ENDED
DECEMBER 30, DECEMBER 29, DECEMBER 28, DECEMBER 28,
1993 1994 1995 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
STATEMENT OF INCOME DATA(1):
Revenues........................................ $119,905 $159,665 $190,093 $226,043
Operating income................................ 14,096 19,464 32,967 36,166
Income before extraordinary item................ 6,436 9,620 17,685 18,488(2)
Extraordinary item net of tax:
Gain (loss) on extinguishment of debt......... 190 (1,752) (448)
------------ ------------ ------------
Net income...................................... 6,626 7,868 17,237
Preferred stock dividends....................... (430) (50) --
------------ ------------ ------------
Net income applicable to common stock........... $ 6,196 $ 7,818 $ 17,237
============ ============ ============
Earnings per common share:
Primary....................................... $ .50 $ .46 $ .96 $ .95(3)
Fully diluted................................. $ .46 $ .46 $ .95 $ .94(3)
Weighted average shares and equivalents
outstanding:
Primary....................................... 12,320 16,832 18,042 19,478
Fully diluted................................. 14,320 16,947 18,156 19,592
OPERATING DATA(1)(4):
Theatre locations............................... 94 117 125 143
Screens......................................... 630 803 972 1,109
Average screens per location.................... 6.7 6.9 7.8 7.8
Theatre level cash flow (in thousands)(5)....... $ 26,753 $ 38,554 $ 51,429 $ 58,030
</TABLE>
<TABLE>
<CAPTION>
AS OF
DECEMBER 28, 1995
---------------------------
PRO FORMA
ACTUAL AS ADJUSTED(6)
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<S> <C> <C>
BALANCE SHEET DATA:
Total assets.......................................................... $235,159 $275,284
Total long-term debt, including current maturities.................... 102,250 22,017
Total shareholders' equity............................................ 102,053 217,636
</TABLE>
- ---------------
(1) 1993 and 1994 results are restated to give retroactive effect to the
Company's mergers with Litchfield Theatres, Inc. in 1994 (the "Litchfield
Merger") and Neighborhood Entertainment, Inc. in 1995 (the "Neighborhood
Merger"), each of which were accounted for as a pooling of interests. 1995
results are restated to give retroactive effect to the Neighborhood Merger.
5
<PAGE> 7
(2) The pro forma consolidated statements of income do not reflect certain
estimated non-recurring charges aggregating approximately $1.5 million
(approximately $1.1 million after tax) with respect to expenses associated
with the GST Merger, costs associated with refinancing GST's indebtedness
and amounts payable under compensation arrangements with certain GST
officers. Regal expects that those expenses will be reflected in its
results of operations for the period in which the GST Merger is
consummated.
(3) Pro forma primary and fully diluted per share data are based on pro forma
income from continuing operations.
(4) Theatre locations and screens are stated at the end of the respective
periods.
(5) Theatre level cash flow represents total revenues less film rental and
booking costs, cost of concessions and theatre operating expenses. Theatre
level cash flow is included because the Company believes that certain
investors find it useful in analyzing companies in the motion picture
exhibition industry.
(6) Adjusted to reflect the sale by the Company of 2,500,000 shares of Common
Stock offered hereby and the application of the estimated net proceeds
therefrom. See "Use of Proceeds."
6
<PAGE> 8
RISK FACTORS
In addition to the other information included or incorporated by reference
in this Prospectus, the following factors should be considered carefully in
evaluating an investment in the Common Stock offered hereby.
Growth Rate and Integration of Acquisitions. Regal has experienced
substantial growth since its formation through the acquisition of existing
theatres and development of new theatres. During 1995, the Company added a net
of 169 screens. In addition, the Company has two pending acquisitions pursuant
to which the Company expects to acquire 18 theatres with an aggregate of 137
screens during 1996. The closing of each acquisition is subject to certain
customary conditions, including approval of the GST Merger by GST shareholders.
Given the magnitude of these acquisitions, there can be no assurance that the
challenge of assimilating the acquisitions and managing the larger overall
business operations will not have an adverse effect on Regal's results of
operations, especially in the short term. See "Business -- Growth Strategy."
Expansion Plans. Regal's continued ability to expand will depend on a
number of factors, including the selection and availability of suitable
locations, the hiring and training of skilled management and personnel, the
availability of adequate financing and other factors, some of which are beyond
the control of the Company. There is no assurance that Regal will be able to
open all of its planned new theatres or that, if opened, those theatres can be
operated profitably. See "Business -- Growth Strategy."
Dependence on Films. The ability of Regal to operate successfully depends
upon a number of factors, the most important of which is the availability of
marketable motion pictures. Poor relationships with distributors, a disruption
in the production of motion pictures or poor commercial success of motion
pictures could have a material adverse effect upon Regal's business. See
"Business -- Film Licensing."
Fluctuations in Quarterly Results of Operations. Regal's revenues have
been seasonal, coinciding with the timing of releases of motion pictures by the
major distributors. Generally, the most marketable motion pictures have been
released during the summer and the Thanksgiving through year-end holiday season.
The unexpected emergence of a hit film during other periods can alter the
traditional trend. The timing of such releases can have a significant effect on
Regal's results of operations, and the results of one quarter are not
necessarily indicative of results for the next quarter.
Competition. The motion picture exhibition industry is highly competitive,
particularly with respect to licensing films, attracting patrons and finding new
theatre sites. There are a number of well-established competitors. Many of
Regal's competitors have been in existence significantly longer than Regal and
may be better established in the markets where Regal's theatres are or may be
located.
In recent years, alternative motion picture exhibition delivery systems
have been developed for the exhibition of filmed entertainment, including cable
and satellite television, video cassettes and pay per view. An expansion of such
delivery systems could have a material adverse effect upon Regal's business. See
"Business -- Competition."
Dependence on Senior Management. Regal's success depends upon the
continued contributions of its senior management, including Michael L. Campbell,
Chairman and Chief Executive Officer of the Company. The loss of the services of
one or more of Regal's senior management could have a material adverse effect
upon its business and development. Regal's loan agreement provides that Mr.
Campbell or a successor reasonably acceptable to Regal's lenders must be
employed as Chief Executive Officer. Regal has an employment agreement with Mr.
Campbell.
Volatility of Market Price. From time to time, there may be significant
volatility in the market price for the Common Stock. Quarterly operating results
of Regal or of other motion picture exhibitors, changes in general conditions in
the economy, the financial markets or the motion picture industry, natural
disasters or other developments affecting Regal or its competitors could cause
the market price of the Common Stock to fluctuate substantially. In addition, in
recent years the stock market has experienced extreme price and volume
fluctuations. This volatility has had a significant effect on the market prices
of securities issued by many companies for reasons unrelated to their operating
performance.
7
<PAGE> 9
Legislative Initiatives. The Clinton Administration continues to analyze
and propose new legislation that could adversely impact the entire business
community. Minimum wage increases, if passed, could increase Regal's operating
costs. Regal would attempt to offset increased costs through additional
improvements in operating efficiencies and ticket and concession price
increases.
Risks Associated with the 1996 Summer Olympic Games. The Olympics are
being held in and around Atlanta, Georgia in the summer of 1996. The Company
believes that the Olympics may have an adverse impact on the motion picture
exhibition industry generally during that time frame as well as on the Company's
theatre locations in Atlanta, Georgia particularly. Summer months generally
constitute one of the heaviest periods of attendance at movies. To the extent
that the Olympics detract from theatre attendance generally, there could be an
adverse impact on the Company's business during one of its busiest seasons. In
addition, following consummation of the GST Merger, the Company will have 16
theatres in the Atlanta, Georgia area. The traffic congestion, scheduling
conflicts and other factors associated with the Olympics could result in a
reduction in attendance for the Company's Atlanta area theatres during the
summer of 1996.
PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY
The Company's Common Stock is listed on the Nasdaq National Market under
the symbol "REGL." The following table sets forth, for the periods indicated,
the high and low sale prices for the Common Stock as reported by the Nasdaq
National Market.
<TABLE>
<CAPTION>
1994 HIGH LOW
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<S> <C> <C>
First Quarter.......................................... $12.00 $ 9.00
Second Quarter......................................... 14.78 10.44
Third Quarter.......................................... 17.11 11.78
Fourth Quarter......................................... 17.33 14.56
1995
First Quarter.......................................... $17.50 $11.33
Second Quarter......................................... 22.67 15.50
Third Quarter.......................................... 28.67 19.50
Fourth Quarter......................................... 28.75 24.00
1996
First Quarter.......................................... $37.88 $26.75
Second Quarter (through May 8, 1996)................... 44.88 36.25
</TABLE>
On May 8, 1996, the last reported sale price for the Company's Common Stock
on the Nasdaq National Market was $41.125 per share. At April 30, 1996, there
were approximately 280 holders of record of the Company's Common Stock.
The Company has never declared or paid a cash dividend on its Common Stock.
It is the present policy of the Board of Directors to retain all earnings to
support operations and to finance expansion; therefore, the Company does not
anticipate declaring or paying cash dividends on the Common Stock in the
foreseeable future. The declaration and payment of dividends in the future will
be determined based on a number of factors, including the Company's earnings,
financial condition and requirements, restrictions in financing agreements and
other factors deemed relevant by the Board of Directors. Pursuant to the
Company's credit facility, the Company is limited on the payment of material
cash dividends on its outstanding Common Stock.
8
<PAGE> 10
USE OF PROCEEDS
The net proceeds to the Company from the sale of the Common Stock offered
hereby at an assumed price of $41.125 per share are estimated to be $97.7
million ($112.4 million if the Underwriters' over-allotment option is exercised
in full) after deducting the estimated underwriting discount and offering
expenses payable by the Company. The Company will utilize the net proceeds to
repay amounts outstanding under its credit facility (the "Credit Facility"). The
indebtedness under the Credit Facility has been incurred primarily to finance
acquisitions and to construct theatres. Borrowings thereunder currently bear
interest at 6.44%, which is the London Inter-Bank Offering Rate (LIBOR) plus 1%,
and the facility matures in June 2001. Currently, the borrowings under the
Credit Facility are $114.0 million. Upon application of the net proceeds of the
offering to repay a portion of the Credit Facility, the balance of the Credit
Facility will continue to be available for borrowing pursuant to the terms
thereof.
CAPITALIZATION
The following table sets forth the current indebtedness and capitalization
of the Company as of December 28, 1995, the pro forma current indebtedness and
capitalization of the Company after giving effect to the GST Merger and the
Krikorian Acquisition, and as adjusted to reflect the sale by the Company of the
2,500,000 shares of Common Stock offered hereby and the application of the
estimated net proceeds therefrom as described under "Use of Proceeds."
<TABLE>
<CAPTION>
AS OF DECEMBER 28, 1995
------------------------------------
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
-------- --------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Current maturities of long-term debt..................... $ 9,800 $ 13,200 $ --
======== ========= ===========
Total long-term debt, excluding current maturities....... $ 92,450 $106,550 $ 22,017
-------- --------- -----------
Shareholders' equity:
Preferred Stock, no par value; 1,000,000 shares
authorized, none outstanding........................ -- -- --
Common Stock, no par value, 50,000,000 shares
authorized; 17,503,986 shares issued and
outstanding; 18,885,986 shares issued and
outstanding, pro forma; 21,385,986 shares issued and
outstanding, pro forma as adjusted(1)............... 73,832 88,584 186,317
Retained earnings...................................... 28,221 31,319 31,319
-------- --------- -----------
Total shareholders' equity..................... 102,053 119,903 217,636
-------- --------- -----------
Total capitalization...................... $194,503 $226,453 $ 239,653
======== ========= ===========
</TABLE>
- ---------------
(1) Excludes (i) 2,026,407 shares of Common Stock reserved for issuance upon
exercise of options granted pursuant to the Company's existing stock option
plans at a weighted average exercise price of $13.10 per share and (ii)
156,512 shares of Common Stock reserved for issuance upon exercise of
outstanding warrants to purchase Common Stock.
9
<PAGE> 11
BUSINESS
Regal is the eighth largest motion picture exhibitor in the United States
based upon the number of screens in operation. Since its founding, Regal's
growth has come through the acquisition of a net of 98 theatres with 630
screens, the development of 30 theatres with 336 screens and the addition of 40
screens to existing theatres. Operations began with the acquisition of Regal's
first theatre in January 1990. Regal currently operates 128 multi-screen
theatres with an aggregate of 1,006 screens. Regal also has 14 new theatres with
162 screens under construction, 19 screens under construction at existing
theatres, and two pending acquisitions of 18 theatres with 137 screens.
INDUSTRY OVERVIEW
The domestic motion picture exhibition industry is comprised of
approximately 300 exhibitors, 120 of which operate 10 or more total screens. At
May 1, 1995, the five largest exhibitors operated approximately 34% of the total
screens in operation with no one exhibitor operating more than 9% of the total
screens. From 1986 through 1995 the net number of screens in operation in the
United States increased from approximately 21,000 to approximately 27,000 and
admissions revenues increased from approximately $3.9 billion to approximately
$5.4 billion. In an effort to realize greater operating efficiencies, operators
of multi-theatre circuits have emphasized the development of larger multi-screen
complexes. This trend is evidenced by the increase in the average number of
screens per location for the industry from approximately 3.5 screens in 1986 to
approximately 4.8 screens in 1995.
Theatrical motion picture exhibition is the primary launch vehicle for
filmed entertainment. Management believes that the emergence of new forms of
home entertainment, such as cable and satellite television, video cassettes and
pay per view, has not adversely affected theatre admissions or the number of
films released for theatrical exhibition. Overall attendance has remained
relatively stable over the past ten years, with no single year varying more than
approximately 10% from the industry average of 1.1 billion during that period.
Management believes the number of films released for theatrical exhibition will
remain relatively stable or increase because a film's initial theatrical
exhibition success establishes the value of the film throughout its life cycle
in ancillary markets.
In recent years, there has been an increasing consolidation of the major
film production companies. During 1995, films distributed by the eight largest
film production companies accounted for approximately 91% of the domestic
admissions revenues and included 49 of the top 50 grossing films. Films are
licensed through film distributors, who typically establish geographic film
licensing zones and allocate each available film to one theatre within that
zone. See "Film Licensing."
Historically, the motion picture exhibition industry has experienced some
seasonality, as major film distributors generally have released the films
expected to have the greatest commercial appeal during the summer and the
Thanksgiving through year-end holiday season. The seasonality of motion picture
exhibition, however, has become less pronounced in recent years as studios have
begun to release major motion pictures somewhat more evenly throughout the year.
OPERATING STRATEGY
The following are the key elements of the Company's operating strategy:
- Multi-Screen Theatres. The Company's multi-screen theatres enable it to
offer a diverse selection of films; stagger movie starting times;
increase management's flexibility in determining the number of weeks that
a film will run and the size of the auditorium in which it is shown; and
serve patrons from common support facilities. These factors result in
increased attendance, improved utilization of theatre seating capacity
and operating efficiencies.
- Cost Control. Regal has designed prototype theatres adaptable to a
variety of locations, which management believes result in construction
and operating cost savings. The shifting of films to smaller auditoriums
within a theatre to accommodate changing attendance levels allows the
Company to exhibit films for extended periods, resulting in lower film
rental costs as a percentage of admission
10
<PAGE> 12
revenues. In addition, a significant component of theatre level
management's compensation is based on controlling operating expenses at
the theatre level.
- Patron Satisfaction/Quality Control. Regal's theatres are conveniently
located and are modern, high quality facilities that offer a wide variety
of films. To maintain quality and consistency within the Company's
theatres, Regal conducts regular inspections of each theatre and operates
a "mystery shopper" program. To enhance the movie going experience, the
Company invests in high quality projection and stereo sound equipment,
including the latest digital stereo surround-sound systems.
- Centralized Corporate Decision Making/Decentralized
Operations. Functions centralized through the Company's corporate office
include film licensing and concession purchasing, as well as decisions on
theatre construction and configuration. Cost controls at the theatre
level include close monitoring of concession, advertising and payroll
expenses. Regal devotes significant resources to training its theatre
managers, who are responsible for most aspects of its theatres'
day-to-day operations.
- Marketing. Regal actively markets its theatres through grand opening
promotions, including "VIP" preopening parties, direct mail campaigns,
television commercials in certain markets and promotional activities,
such as live music, spotlights and skydivers, which frequently generate
media coverage. Regal develops patron loyalty through a number of
marketing programs such as a summer children's film series in which
children's films are shown at reduced rates during the morning hours.
Regal also utilizes special marketing programs for specific films and
concession items.
GROWTH STRATEGY
The following are the key elements of the Company's growth strategy:
- Develop New Theatres in Existing and Target Markets. The Company
currently has 14 theatres with 162 screens under construction, and
currently plans to develop 150 to 175 screens annually for the next
several years. Regal generally will seek to develop multi-screen theatres
with at least 12 to 16 screens in both its existing markets and in other
mid-sized metropolitan markets and suburban growth areas of larger
metropolitan markets. Management will continue to locate theatres in
areas that are underscreened because of changing demographic trends or
that are served by older theatre facilities or by theatres having an
insufficient number of screens. Regal targets theatre locations with high
visibility and convenient roadway access in geographic film licensing
zones in which it will be the sole exhibitor. Regal continually reviews
potential sites for theatres, including both new construction and the
conversion of existing retail space.
- Add Screens to Existing Theatres. To enhance profitability and maintain
competitiveness at existing theatres, the Company will continue to add
additional screens where appropriate. The Company currently has 19
screens under construction at existing theatre facilities and anticipates
the addition of 15 to 25 screens to certain of its recently acquired
theatres. The addition of screens to existing theatres is designed not to
disrupt operations at the theatres.
- Acquire Theatres. While management believes that a significant portion
of its future growth will come through the development of new theatres,
Regal will continue to consider strategic acquisitions of complementary
theatres or theatre circuits at which Regal can improve profitability and
increase screen counts. Since its inception, Regal has acquired a net of
98 theatres with 630 screens, which has served to establish and enhance
the Company's presence in selected geographic markets.
- Develop Complementary Theatre Concepts. To complement the Company's
theatre development, Regal opened its first FunScape comprehensive family
entertainment complex in Chesapeake, Virginia, in August 1995 and its
second FunScape in Rochester, New York in February 1996. Each complex
includes a 13 screen theatre and a 50,000 square foot comprehensive
family entertainment center. The Company currently has two additional
FunScape complexes under construction and may seek to develop additional
FunScape complexes at strategic locations.
11
<PAGE> 13
THEATRE OPERATIONS
Regal currently operates 128 multi-screen theatres with an aggregate of
1,006 screens in 18 states. Regal averages 7.9 screens per location, as compared
to an average of 4.8 screens per location for the industry and an average for
the five largest domestic motion picture exhibitors of approximately 5.4 screens
at May 1, 1995. Multi-screen theatres enable the Company to offer a wide
selection of films attractive to a diverse group of patrons residing within the
drawing area of a particular theatre complex. Varied auditorium seating
capacities within the same theatre enable the Company to reduce film rental
costs by exhibiting films for a longer period of time by shifting films to
smaller auditoriums to meet changing attendance levels. In addition, operating
efficiencies are realized through the economies of having common box office,
concession, projection, lobby and restroom facilities, which enable the Company
to spread certain costs, such as payroll, advertising and rent, over a higher
revenue base. Staggered movie starting times also minimize staffing
requirements, reduce lobby congestion and contribute to more desirable parking
and traffic flow patterns.
Regal has designed prototype theatres, adaptable to a variety of locations,
which management believes result in construction and operating cost savings.
Regal's multi-screen theatre complexes, which typically contain auditoriums
having from 100 to 500 seats each, feature wall-to-wall screens, digital stereo
surround-sound, multi-station concessions, computerized ticketing systems, plush
seating with cup holders, neon-enhanced interiors and exteriors, and video game
areas adjacent to the theatre lobby. In addition, the Company updates its
theatres as needed to maintain clean, comfortable and modern facilities.
Management believes that maintaining a theatre circuit consisting primarily of
modern multi-screen theatres also enhances the Company's ability to license
commercially successful modern films from distributors. See "Film Licensing."
Functions centralized at the Company's corporate office include site
selection, lease negotiation, theatre design and construction, coordination of
film selection, concession purchasing, advertising and financial and accounting
activities. Regal's theatre operations are under the supervision of its
Executive Vice President and are divided into two geographic divisions, each of
which is headed by a Vice President supervising several district theatre
supervisors. The district theatre supervisors are responsible for implementing
the Company's operating policies and supervising the managers of the individual
theatres, who are responsible for most of the day-to-day operations of the
Company's theatres. Regal seeks theatre managers with experience in the motion
picture exhibition industry and requires all new managers to complete a training
program at designated training theatres. The program is designed to encompass
all phases of theatre operations, including the Company's philosophy, management
strategy, policies, procedures and operating standards.
Management closely monitors the Company's operations and cash flow through
daily reports generated from computerized box office terminals located in each
theatre. These reports permit the Company to maintain an accurate and immediate
count of admissions by film title and show times and provide management with the
information necessary to manage effectively and efficiently the Company's
theatre operations. To maintain quality and consistency within the Company's
theatre circuit, the district supervisors regularly inspect each theatre, and
the Company operates a "mystery shopper" program, which involves unannounced
visits by unidentified customers who report on the quality of service, film
presentation and cleanliness at individual theatres. Regal has implemented an
incentive compensation program for theatre level management which rewards
managers for controlling theatre level operating expenses while complying with
the Company's operating standards.
In addition to revenues from box office admissions, Regal receives revenues
from concession sales and video games located adjacent to the theatre lobby.
Concession sales constituted 28.4% of total revenues for 1995. Regal emphasizes
prominent and appealing concession stations designed for rapid service and
efficiency. Although popcorn, candy and soft drinks remain the best selling
concession items, the Company's theatres offer a wide range of concession
choices. Regal continually seeks to increase concession sales through optimizing
product mix, introducing special promotions from time to time and training staff
to cross sell products. In addition to traditional concession stations, certain
of the Company's existing theatres and theatres currently under development
feature specialty concession cafes serving items such as cappuccino, fruit
juices,
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<PAGE> 14
cookies and muffins, soft pretzels and ice cream. Management negotiates directly
with manufacturers for many of its concession items to ensure adequate supplies
and to obtain competitive prices.
Regal relies upon advertisements and movie schedules published in
newspapers to inform its patrons of film selections and show times. Newspaper
advertisements are typically displayed in a single grouping for all of the
Company's theatres located in the newspaper's circulation area. Primary
multi-media advertising campaigns for major film releases are carried out and
paid for by the film distributors.
The Company conducts marketing efforts throughout the year to promote
specific films, concession items and its theatre complexes. Regal markets its
new theatres through grand opening promotions, including "VIP" preopening
parties, direct mail campaigns, radio and television commercials in certain
markets and promotional activities such as live music, spotlights and skydivers,
which frequently generate media coverage. Regal's theatres also exhibit previews
of coming attractions and films presently playing on the Company's other screens
in the same market area.
Regal operates 10 discount theatres with an aggregate of 62 screens, which
exhibit second run movies and charge lower admission prices (typically $1.50).
These movies are the same high quality features shown at all of Regal's
theatres. The terminology "second run" is an industry term for the showing of
movies after they have been shown for varying periods of time at other theatres.
Regal believes that the increased attendance resulting from lower admission
prices and the lower film rental costs of second run movies compensate for the
lower admission prices and slightly higher operating costs as a percentage of
admission revenues at the Company's discount theatres. The design, construction
and equipment in the Company's discount theatres are of the same high quality as
its first run theatres. Regal's discount theatres generate theatre level cash
flows similar to its first run theatres. Management does not anticipate an
increase in the percentage of discount theatres in its theatre circuit.
Regal operates 87 of its 128 theatres pursuant to lease agreements, owns
the land and buildings for 26 theatres and operates pursuant to ground leases at
15 theatre locations. Of the 128 theatres operated by Regal, 98 were acquired as
existing theatres and 30 have been developed by Regal.
FILM LICENSING
Regal licenses films from distributors on a film-by-film and
theatre-by-theatre basis. Film buyers negotiate directly with film distributors
on behalf of the Company. Prior to negotiating for a film license, the Company
and its film buyers evaluate the prospects for upcoming films. Criteria
considered for each film include cast, director, plot, performance of similar
films, estimated film rental costs and expected Motion Picture Association of
America rating. Successful licensing depends greatly upon the exhibitor's
knowledge of trends and historical film preferences of the residents in markets
served by each theatre, as well as on the availability of commercially
successful motion pictures. Currently, Tri-State Theatre Service, Inc., an
independent film booking agency which is controlled by a director of the Company
("Tri-State"), provides film licenses for Regal. In November 1995, Regal
determined to have film licensing services performed internally. The Company's
head film buyer is an employee of the Company, and several Tri-State film buyers
will relocate to Knoxville and become employees of Regal. Tri-State will
continue to provide consulting services on film recognition and strategy.
Films are licensed from film distributors owned by major film production
companies and from independent film distributors that generally distribute films
for smaller production companies. Film distributors typically establish
geographic film licensing zones and allocate each available film to one theatre
within that zone. Film zones generally encompass a radius of three to five miles
in metropolitan and suburban markets, depending primarily upon population
density. Regal believes that approximately 66% of its theatres are now located
in film licensing zones in which they are now the sole exhibitors, permitting
the Company to exhibit many of the most commercially successful films in these
zones.
In film zones where Regal is the sole exhibitor, the Company obtains film
licenses by selecting a film from among those offered and negotiating directly
with the distributor. In film zones where there is competition, a distributor
will either require the exhibitors in the zone to bid for a film or will
allocate its films
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<PAGE> 15
among the exhibitors in the zone. When films are licensed under the allocation
process, a distributor will choose which exhibitor is offered a movie, and then
that exhibitor will negotiate film rental terms directly with the distributor
for the film. Over the past several years, distributors have generally used the
allocation rather than bidding process to license their films. When films are
licensed through a bidding process, exhibitors compete for licenses based upon
economic terms. Regal currently does not bid for films in any of its markets,
although it may be required to do so in the future. Although Regal predominantly
licenses "first run" films, if a film has substantial remaining potential
following its first run, the Company may license it for a "second run." Film
distributors establish second run availability on a national or market-by-market
basis after the release from first run theatres.
Film licenses entered into in either a negotiated or bidding process
typically specify rental fees based on the higher of a gross receipts formula or
theatre admissions revenue formula. Under a gross receipts formula, the
distributor receives a specified percentage of box office receipts, with the
percentage declining over the term of the film run. First run film rental fees
usually begin at 70% of admission revenues and gradually decline to as low as
30% over a period of four to seven weeks. Second run film rental fees typically
begin at 35% of admission revenues and often decline to 30% after the first
week. Under a theatre admissions revenue formula, the distributor receives a
specified percentage of the excess of admission revenues over a negotiated
allowance for theatre expenses. In addition, Regal is occasionally required to
pay non-refundable guarantees of film rental fees or to make refundable advance
payments of film rental fees or both in order to obtain a license for a film.
Rental fees paid by the Company generally are adjusted subsequent to the
exhibition of a film in a process known as settlement. The commercial success of
a film relative to original distributor expectations is the primary factor taken
into account in the settlement process; secondarily, the past performance of
other films in a specific theatre is a factor. To date the settlement process
has not resulted in material adjustments in the film rental fees accrued by the
Company.
Regal's business is dependent upon the availability of marketable motion
pictures and its relationships with distributors. Many distributors provide
quality first run movies to the motion picture exhibition industry; however,
eight distributors accounted for approximately 91% of industry admission
revenues during 1995, and 49 of the top 50 grossing films. No single distributor
dominates the market. Disruption in the production of motion pictures by the
major studios and/or independent producers or lack of commercial success of
motion pictures would have a material adverse effect upon the Company's
business. Regal licenses films from each of the major distributors and believes
that its and Tri-State's relationships with distributors are good. From year to
year, the revenues attributable to individual distributors will vary widely
depending upon the number and quality of films each distributes. Based on
industry statistics, Regal believes that in 1995 no single distributor accounted
for more than 20% of the films licensed by the Company, or films producing more
than 20% of the Company's admission revenues.
ENTERTAINMENT CENTER
To complement the Company's theatre development, Regal opened its first
FunScape comprehensive entertainment complex located in Chesapeake, Virginia in
August 1995 and its second FunScape in Rochester, New York in February 1996.
Each complex includes a 13 screen theatre and a 50,000 square foot comprehensive
family entertainment center. The theatre facility exhibits first run films, is
equipped with the latest Dolby and DTS digital sound systems, and features an
oversized lobby with two concession stands and a specialty cafe. A food court
connects the theatres to the entertainment center and features nationally
recognized brand name pizza, taco, sandwich and dessert restaurants.
The entertainment center generally will feature a 36-hole, tropical-themed
miniature golf course, a children's soft play and exercise area, multi-level
laser tag, video batting cages, a video golf course, helmet type and motion
simulator virtual reality units and a high-tech video arcade. In addition, the
center contains eight party rooms for various social gatherings. The two-level
family entertainment center is totally enclosed and under roof for year-round
operation.
Each theatre and entertainment center totals approximately 95,000 square
feet, and management believes the facility is a comprehensive entertainment
destination. The Company currently has two additional FunScape complexes under
construction and may seek to develop additional FunScape complexes at strategic
14
<PAGE> 16
locations. The $4.5 to $5.0 million estimated cost of construction of each
entertainment center is comparable to the cost of constructing the adjacent
theatre complex. The Company is financing the construction of entertainment
centers and the attached theatre facilities through cash flow from operations
and borrowings available under its Credit Facility.
COMPETITION
The motion picture exhibition industry is highly competitive, particularly
with respect to licensing films, attracting patrons and finding new theatre
sites. Theatres operated by national and regional circuits and by smaller
independent exhibitors compete with the Company's theatres. Management believes
that the principal competitive factors with respect to film licensing include
licensing terms, the seating capacity, location and reputation of an exhibitor's
theatres, the quality of projection and sound equipment at the theatres and the
exhibitor's ability and willingness to promote the films. Competition for
patrons is dependent upon factors such as the availability of popular films, the
location of theatres, the comfort and quality of theatres and ticket prices.
Regal believes that it competes favorably with respect to each of these factors.
There are approximately 300 participants in the domestic motion picture
exhibition industry. Industry participants vary substantially in size, from
small independent operators of a single screen theatre to large national chains
of multi-screen theatres affiliated with entertainment conglomerates. Many of
the Company's competitors have been in existence significantly longer than Regal
and may be better established in certain of the markets where the Company's
theatres are located.
Certain of Regal's competitors also have sought to increase the number of
theatres and screens in operation. Such increases may cause certain local
markets or portions thereof to become overscreened, resulting in a negative
impact on the earnings of the theatres involved and thus on the Company's
theatres in those markets. Concurrent with the increase in the number of
screens, there has been a reduction in the number of theatre locations and a
consolidation among exhibitors. At May 1, 1995, the five largest motion picture
exhibition companies operated approximately 34% of the total screens, the
largest of which operated less than 9% of the total screens.
The motion picture exhibition industry faces competition from a number of
motion picture exhibition delivery systems. In recent years alternative delivery
systems have been developed for the exhibition of filmed entertainment,
including cable television, video cassettes and pay per view. While the impact
of such delivery systems on movie theatres is difficult to determine precisely,
there can be no assurance that they will not adversely impact attendance at the
Company's theatres. Movie theatres also face competition from other forms of
entertainment competing for the public's leisure time and disposable income.
PENDING ACQUISITIONS
Georgia State Theatres, Inc. Merger. Regal has entered into a definitive
Agreement and Plan of Merger to acquire Georgia State Theatres, Inc. for 912,000
shares of Regal Common Stock in a pooling of interests transaction. GST,
headquartered in Atlanta, Georgia, has 10 first run theatres with 68 screens,
including one drive-in theatre, located in the metropolitan Atlanta, Georgia
area and a partnership in Gainesville, Georgia. Provided shareholder approval of
the Merger Agreement is obtained, the parties intend to close the transaction
and effect the GST Merger promptly following the special meeting of shareholders
scheduled for May 30, 1996.
Krikorian Asset Acquisition. Regal has entered into an agreement to
acquire assets consisting of eight theatres with 69 screens in California from
an individual, George Krikorian, and corporations controlled by him.
Consideration for the Krikorian Acquisition is anticipated to be approximately
470,000 shares of Regal Common Stock and approximately $14.1 million to be paid
in cash at closing. The Company anticipates closing this acquisition during the
second quarter of 1996. Although the Company's operations have historically
focused on the eastern United States, the Company believes that the theatres in
California provide an opportunity for the Company to establish a presence on the
West Coast and expand its operations nationally. In addition, this acquisition
includes a sufficient number of theatres and screens to give the Company a
sufficient presence to cover the incremental costs of managing theatres on the
West Coast.
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<PAGE> 17
MANAGEMENT
The following table sets forth certain information concerning the directors
and executive officers of the Company as of the date of this Prospectus.
<TABLE>
<CAPTION>
NAME AGE POSITION (EXPIRATION OF TERM AS A DIRECTOR)
- ----------------------------------- --- ----------------------------------------------------------
<S> <C> <C>
Michael L. Campbell................ 42 Chairman of the Board, Chief Executive Officer, President
and Director (1996)
R. Neal Melton..................... 36 Vice President Construction-Equipment, Secretary and
Director (1996)
Gregory W. Dunn.................... 36 Executive Vice President
Robert A. Engel, Jr................ 43 Vice President Film and Advertising
Lewis Frazer III................... 31 Vice President, Chief Financial Officer and Treasurer
R. Keith Thompson.................. 34 Vice President Corporate Development and Assistant
Secretary
Susan Seagraves.................... 39 Corporate Controller
Philip D. Borack................... 60 Director (1997)
Michael E. Gellert(2).............. 64 Director (1997)
J. David Grissom(2)................ 57 Director (1998)
William H. Lomicka(1).............. 59 Director (1997)
Herbert S. Sanger, Jr.(2).......... 59 Director (1998)
Jack Tyrrell(1).................... 49 Director (1998)
</TABLE>
- ---------------
(1) Member of the Audit Committee of the Board of Directors.
(2) Member of the Compensation Committee of the Board of Directors.
Under the terms of the Company's Restated Charter, the members of the Board
of Directors are divided into three classes, each of which serves a term of
three years. Each class is to consist, as nearly as practicable, of one-third of
the total number of directors constituting the Board of Directors. Executive
officers of the Company are elected on an annual basis and serve at the
discretion of the Board of Directors.
Michael L. Campbell founded the Company in November 1989 and has served as
Chairman of the Board, President and Chief Executive Officer since inception.
Prior thereto, Mr. Campbell was the Chief Executive Officer of Premiere Cinemas
Corporation ("Premiere"), which he co-founded in 1982, and served in such
capacity until Premiere was sold in October 1989. Mr. Campbell serves on the
Executive Committee of the Board of Directors of the National Association of
Theatre Owners.
R. Neal Melton has served as Vice President Construction-Equipment,
Secretary and a director since 1990. Prior to joining the Company, Mr. Melton
co-founded Premiere with Mr. Campbell and served as Senior Vice President,
Secretary and a director of Premiere from 1982 through 1989.
Gregory W. Dunn has served as Executive Vice President since 1995. From
1991 to 1995, Mr. Dunn was Vice President Marketing and Concessions. From 1989
to 1991, Mr. Dunn was the Purchasing and Operations Manager for Goodrich Quality
Theaters, a Grand Rapids, Michigan based theatre chain. From 1986 to 1989, he
was a film buyer for Tri-State Theatre Service, Inc.
Robert A. Engel, Jr. has served as Vice President Film and Advertising
since 1990. From 1987 through 1989, Mr. Engel was Vice President of Operations
at Premiere and from 1971 to 1987 he worked at Associated Theaters of Kentucky
in various capacities, rising to Vice President of Operations and Film Buying.
Lewis Frazer III is a certified public accountant and has served as Vice
President, Chief Financial Officer and Treasurer since February 1993. From May
1992 to February 1993, Mr. Frazer served as Controller. Prior
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<PAGE> 18
to joining the Company, he served from 1990 to 1992 as Corporate Controller for
Kel-San, Inc., an affiliate of Institutional Jobbers. From June 1986 to July
1990, Mr. Frazer was an auditor with Coopers & Lybrand. Mr. Frazer serves as a
member of the CFO Committee of the National Association of Theatre Owners.
R. Keith Thompson has served as Vice President Corporate Development since
February 1993 and as Assistant Secretary since 1991. Prior thereto, he served as
Vice President Finance since joining the Company in 1991. From June 1984 to July
1991, Mr. Thompson was a Vice President of Corporate Lending at PNC Commercial
Corporation.
Susan Seagraves has served as Corporate Controller since January 1994 when
she joined the Company. Ms. Seagraves is a certified public accountant, a
certified management accountant and a fellow of health care management. From
1990 through 1993, Ms. Seagraves was an adjunct faculty member of Tusculum
College and Bristol University and from 1988 to 1990 she served as Associate
Executive Director of the Thompson Cancer Survival Center. From 1980 to 1988,
Ms. Seagraves was in public accounting.
Philip D. Borack has served as director of Regal since 1989. Since 1971,
Mr. Borack has served as President of Tri-State Theatre Service, Inc. See
"Business -- Film Licensing."
Michael E. Gellert has served as a director of Regal since 1990. Mr.
Gellert has served as the general partner of Windcrest Partners, a New York
investment partnership, since 1967. From 1958 to 1989, Mr. Gellert was
associated with Drexel Burnham Lambert and its predecessors and served as an
Executive Director. Mr. Gellert is a director of Devon Energy Corp., an
independent energy company; The Harvey Group, Inc., a retailer of consumer
electronics; Humana, Inc., a provider of managed care health plans; Seacor
Holdings, Inc., an owner and operator of marine vessels for oil exploration and
development; and Premier Parks, Inc., an owner and operator of mid-sized theme
parks.
J. David Grissom has served as a director of Regal since 1990. Mr. Grissom
is the Chairman and founder of Mayfair Capital, Inc., a private investment firm
founded in 1989. Prior thereto, he served as Chairman and Chief Executive
Officer of Citizens Fidelity Corporation, a bank holding company, from 1978 to
1989 and served as Vice Chairman of PNC Bank Corp. from 1987 to 1989. Mr.
Grissom serves as a director of Providian Corporation, an insurance holding
company; Churchill Downs, Inc.; LG&E Energy Corp., a diversified energy company;
and Columbia/HCA Healthcare Corporation, a health services company.
William H. Lomicka has served as a director of Regal since 1990. Since
1989, he has served as President of Mayfair Capital, Inc. From September 1988
through April 1989, Mr. Lomicka served as acting President of Citizens Security
Life Insurance Company. He was Secretary of Economic Development of the
Commonwealth of Kentucky from 1987 to 1988. From 1986 to 1987 he was President
of Old South Life Insurance Company. Mr. Lomicka serves as a director of Vencor,
Inc., an owner and operator of acute care hospitals, and Advocat Inc., a
long-term care management company, and Trans Advisor Funds, Inc., an open-end
investment company.
Herbert S. Sanger, Jr. has served as a director of Regal since 1990. Mr.
Sanger is a partner in the Knoxville, Tennessee law firm of Wagner, Myers &
Sanger, P.C., and has been a member of the firm since November 1986. Mr. Sanger
was an attorney for the Tennessee Valley Authority ("TVA") from 1961 to 1986,
serving as TVA's general counsel from 1975 to 1986.
Jack Tyrrell has served as a director of Regal since 1991. Mr. Tyrrell is a
managing general partner of Lawrence, Tyrrell, Ortale & Smith, a venture capital
firm founded in 1985, and is a general partner of Richland Ventures, L.P., a
venture capital firm formed in 1994. He also serves as a managing general
partner of Lawrence, Tyrrell, Ortale & Smith II, L.P. Mr. Tyrrell serves as a
director of Premier Parks, Inc., an owner and operator of mid-sized theme parks,
and National Health Investors, Inc., an investor in income-producing health care
facilities.
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<PAGE> 19
UNDERWRITING
Pursuant to the Underwriting Agreement and subject to the terms and
conditions thereof, the Underwriters named below, acting through J.C. Bradford &
Co., Montgomery Securities and Wheat, First Securities, Inc, as representatives
of the several underwriters (the "Representatives") have agreed, severally, to
purchase from the Company, the number of shares of Common Stock set forth below
opposite their respective names.
<TABLE>
<CAPTION>
NUMBER OF
NAME OF UNDERWRITER SHARES
-------------------------------------------------------------------------- ---------
<S> <C>
J.C. Bradford & Co........................................................
Montgomery Securities.....................................................
Wheat, First Securities, Inc..............................................
---------
Total...................................................... 2,500,000
========
</TABLE>
In the Underwriting Agreement, the Underwriters have agreed, subject to the
terms and conditions therein set forth, to purchase all shares of Common Stock
offered hereby if any of such shares are purchased.
The Company has been advised that the Underwriters propose initially to
offer the shares of Common Stock to the public at the public offering price set
forth on the cover page of this Prospectus and to certain dealers at such price
less a concession not in excess of $ per share. The Underwriters may allow
and such dealers may reallow a concession not in excess of $ per share to
certain other dealers. After the initial public offering, the public offering
price and such concessions may be changed by the Underwriters.
The offering of the shares of Common Stock is made for delivery when, as
and if accepted by the Underwriters and subject to prior sale and to withdrawal,
cancellation or modification of the offer without notice. The Underwriters
reserve the right to reject any order for the purchase of the shares.
The Company has granted to the Underwriters an option, exercisable not
later than 30 days from the date of this Prospectus, to purchase up to an
aggregate of 375,000 additional shares of Common Stock to cover over-allotments.
To the extent the Underwriters exercise this option, each of the Underwriters
will have a firm commitment to purchase approximately the same percentage
thereof which the number of shares of Common Stock to be purchased by it shown
in the above table bears to the total and the Company will be obligated,
pursuant to the option, to sell such shares to the Underwriters. The
Underwriters may exercise such option only to cover over-allotments made in
connection with the sale of the shares of Common Stock offered hereby. If
purchased, the Underwriters will sell such additional shares on the same terms
as those on which the shares are being offered.
In connection with this offering, certain Underwriters may engage in
passive market making transactions in the Common Stock on the Nasdaq National
Market immediately prior to the commencement of sales in the offering in
accordance with Rule 10b-6A under the Exchange Act. Passive market making
consists of displaying bids on the Nasdaq National Market limited by the bid
prices of independent market makers and purchases limited by such prices and
effected in response to order flow. Net purchases by a passive market maker on
each day are limited to a specified percentage of the passive market makers'
average daily trading volume in the Common Stock during a specified period and
must be discontinued when such limit is reached. Passive market making may
stabilize the market price of the Common Stock at a level above that which might
otherwise prevail and, if commenced, may be discontinued at any time.
The Company, its executive officers and directors have agreed that they
will not, without the prior written consent of the Representatives, issue, sell,
transfer, assign or otherwise dispose of any shares of the Common Stock or
options, warrants, or rights to acquire Common Stock owned by them prior to
August 1, 1996.
The Underwriting Agreement provides that the Company will indemnify the
Underwriters and controlling persons, if any, against certain liabilities,
including liabilities under the Securities Act, or will contribute to payments
which the Underwriters or any such controlling persons may be required to make
in respect thereof.
18
<PAGE> 20
EXPERTS
The consolidated financial statements of Regal at December 28, 1995 and
December 29, 1994, and for each of the three years in the period ended December
28, 1995 incorporated by reference herein from the Company's Annual Report on
Form 10-K/A for the year ended December 28, 1995, the consolidated financial
statements of GST at December 28, 1995 and December 29, 1994 and for each of the
three years in the period ended December 28, 1995, incorporated by reference
herein and the combined historical summaries of net theatre assets acquired and
direct theatre operating revenues and expenses of Krikorian at and for the year
ended December 31, 1995 incorporated by reference herein, have been audited by
Coopers & Lybrand L.L.P., independent accountants, as stated in their reports
thereon incorporated by reference herein and are incorporated by reference in
reliance upon the authority of said firm as experts in accounting and auditing.
The report of Coopers & Lybrand L.L.P. with respect to Regal's consolidated
financial statements makes reference to the fact that separate financial
statements of Litchfield Theatres, Ltd. reflected in Regal's Consolidated
Statements of Income, Changes in Shareholders' Equity and Cash Flows for the
year ended December 30, 1993 were audited and reported on separately by Deloitte
& Touche LLP, independent auditors. The report of Deloitte & Touche LLP,
independent auditors, has been incorporated herein by reference from the
Company's Annual Report on Form 10-K/A for the year ended December 28, 1995 and
is incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing. The report of
Coopers & Lybrand L.L.P. with respect to Regal's consolidated financial
statements also makes reference to the fact that separate financial statements
of Neighborhood Entertainment, Inc. included in the Consolidated Balance Sheet
as of December 29, 1994 and the Consolidated Statements of Income, Changes in
Shareholders' Equity and Cash Flows for the years ended December 30, 1993 and
December 29, 1994, were audited by Ernst & Young LLP, independent auditors, as
stated in their report dated March 21, 1995. Such financial statements of
Neighborhood Entertainment, Inc. are included in the consolidated financial
statements of Regal in reliance upon said report given upon the authority of
said firm as experts in accounting and auditing.
LEGAL MATTERS
The validity of the issuance of Common Stock offered hereby will be passed
upon for the Company by Bass, Berry & Sims PLC, Nashville, Tennessee. Certain
legal matters with respect to the shares of Common Stock offered hereby will be
passed upon for the Underwriters by Waller Lansden Dortch & Davis, Nashville,
Tennessee.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange
Act and in accordance therewith files reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission").
Copies of such reports, proxy statements and other information may be inspected
and copied at the public reference facilities maintained by the Commission at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the following
Regional Offices of the Commission: 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661; and Seven World Trade Center, New York, New York 10048.
Copies of such material may be obtained at the prescribed rates from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549. The Common Stock is quoted for trading on the Nasdaq National Market and
reports, proxy statements and other information concerning the Company may be
inspected at the offices of the Nasdaq National Market, 1735 K Street, N.W.,
Washington, D.C. 20006.
The Company has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act with respect to the Common Stock offered hereby.
This Prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits and schedules thereto, certain portions
of which have been omitted in accordance with the rules and regulations of the
Commission. For further information with respect to the Company and the Common
Stock, reference is made to the Registration Statement, including the exhibits
and schedules. The Registration Statement, together with its exhibits and
schedules thereto, may
19
<PAGE> 21
be inspected, without charge, at the Commission's principal office at 450 Fifth
Street, N.W., Washington, D.C. 20549, and also at the regional offices of the
Commission listed above. Copies of such material may also be obtained from the
Commission upon the payment of prescribed fees.
Statements contained in the Prospectus as to any contracts, agreements or
other documents filed as an exhibit to or incorporated by reference in the
Registration Statement are qualified in all respects to the copy of such
contract, agreement or other document filed as an exhibit to the Registration
Statement for a full statement of the provisions thereof.
The Company's principal offices are located at 7132 Commercial Park Drive,
Knoxville, Tennessee 37918 and its telephone number is (423) 922-1123.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed with the Commission by the Company
are incorporated herein by reference:
(1) Annual Report on Form 10-K for the fiscal year ended December 28,
1995, as amended by Form 10-K/A as filed on April 29, 1996;
(2) Current Report on Form 8-K dated May 1, 1996;
(3) Current Report on Form 8-K dated May 9, 1996; and
(4) The Registration Statement on Form 8-A with respect to Regal
Common Stock dated May 12, 1994, as amended by Form 8-A/A dated June 21,
1994 and Form 8-A/A dated September 12, 1994.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering contemplated hereby 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. Any statement contained herein or in a
document incorporated or deemed to be 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 other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such earlier statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person to
whom a copy of this Prospectus has been delivered, on the written or oral
request of any such person, a copy of any or all of the documents referred to
above which have been or may be incorporated into the Prospectus by reference,
other than exhibits to such documents (unless such exhibits are specifically
incorporated by reference in such documents). Requests for such copies should be
directed to Lewis Frazer III, Chief Financial Officer, Regal Cinemas, Inc., 7132
Commercial Park Drive, Knoxville, Tennessee 37918, telephone number (423)
922-1123.
20
<PAGE> 22
- ------------------------------------------------------
- ------------------------------------------------------
NO DEALER, SALESPERSON, OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER CONTAINED HEREIN, AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR ANY OF THE UNDERWRITERS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY THE SHARES OF
COMMON STOCK OFFERED HEREBY BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO WHOM IT IS UNLAWFUL TO MAKE SUCH
SOLICITATION OR OFFER. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF.
---------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................... 3
Risk Factors.......................... 7
Price Range of Common Stock and
Dividend Policy..................... 8
Use of Proceeds....................... 9
Capitalization........................ 9
Business.............................. 10
Management............................ 16
Underwriting.......................... 18
Experts............................... 19
Legal Matters......................... 19
Available Information................. 19
Incorporation of Certain Documents By
Reference........................... 20
</TABLE>
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
2,500,000 SHARES
[REGAL CINEMAS LOGO]
COMMON STOCK
-------------------------
PROSPECTUS
-------------------------
J.C. Bradford & Co.
Montgomery Securities
Wheat First Butcher Singer
, 1996
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 23
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<S> <C>
SEC registration fee.............................................................. $ 39,532
NASD fee.......................................................................... 11,965
Accounting fees and expenses...................................................... 50,000*
Legal fees and expenses........................................................... 100,000*
Printing and engraving expenses................................................... 100,000*
Blue Sky fees and expenses........................................................ 10,000*
Miscellaneous expenses............................................................ 38,503
--------
Total.............................................................. $350,000*
========
</TABLE>
- ---------------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Tennessee Business Corporation Act ("TBCA") provides that a corporation
may indemnify any of its directors and officers against liability incurred in
connection with a proceeding if (i) the director or officer acted in good faith,
(ii) in the case of conduct in his or her official capacity with the
corporation, the director or officer reasonably believed such conduct was in the
corporation's best interest, (iii) in all other cases, the director or officer
reasonably believed that his or her conduct was not opposed to the best interest
of the corporation, and (iv) in connection with any criminal proceeding, the
director or officer had no reasonable cause to believe that his or her conduct
was unlawful. In actions brought by or in the right of the corporation, however,
the TBCA provides that no indemnification may be made if the director or officer
was adjudged to be liable to the corporation. In cases where the director or
officer is wholly successful, on the merits or otherwise, in the defense of any
proceeding instigated because of his or her status as an officer or director of
a corporation, the TBCA mandates that the corporation indemnify the director or
officer against reasonable expenses incurred in the proceeding. The TBCA also
provides that in connection with any proceeding charging improper personal
benefit to an officer or director, no indemnification may be made if such
officer or director is adjudged liable on the basis that personal benefit was
improperly received. Notwithstanding the foregoing, the TBCA provides that a
court of competent jurisdiction, upon application, may order that an officer or
director be indemnified for reasonable expenses if, in consideration of all
relevant circumstances, the court determines that such individual is fairly and
reasonably entitled to indemnification, whether or not the standard of conduct
set forth above was met.
Article 8 of the Restated Charter (the "Charter") of the Company and its
Amended and Restated Bylaws (the "Bylaws") provide that the Company shall
indemnify against liability, and advance expenses to, any present or former
director or officer of the Company to the fullest extent allowed by the TBCA, as
amended from time to time, or any subsequent law, rule or regulation adopted in
lieu thereof. Additionally, the Charter provides that no director of the Company
shall be personally liable to the Company or any of its shareholders for
monetary damages for breach of any fiduciary duty except for liability arising
from (i) any breach of a director's duty of loyalty to the Company or its
shareholders, (ii) acts or omissions not in good faith or which involved
intentional misconduct or a knowing violation of law, (iii) any unlawful
distributions, or (iv) receiving any improper personal benefit. The Company has
entered into indemnification agreements with each of the Company's directors and
executive officers.
The proposed form of the Underwriting Agreement filed as Exhibit 1 to this
Registration Statement contains certain provisions relating to the
indemnification of the Company and its controlling persons by the Underwriters
and relating to the indemnification of the Underwriters by the Company and its
controlling persons.
II-1
<PAGE> 24
ITEM 16. EXHIBITS.
The following exhibits are filed as part of the Registration Statement:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ ----------------------------------------------------------------------
<C> <C> <S>
1 -- Form of Underwriting Agreement
3.1 -- Restated Charter of Registrant (incorporated by reference to Exhibit
No. 3.1 to the Registration Statement on Form S-1 (Registration No.
33-62868)).
3.2 -- Restated Bylaws of Registrant (incorporated by reference to Exhibit
No. 3.2 to the Registration Statement on Form S-1 (Registration No.
33-62868)).
4.1 -- Specimen Common Stock certificate (incorporated by reference to
Exhibit No. 4.1 to the Registration Statement on Form S-1
(Registration No. 33-62868)).
4.2 -- Article 5 of the Registrant's Restated Charter (included in Exhibit
3.1).
5 -- Opinion of Bass, Berry & Sims PLC.
23.1 -- Consent of Coopers & Lybrand L.L.P.
23.2 -- Consent of Ernst & Young LLP.
23.3 -- Consent of Deloitte & Touche LLP.
23.4 -- Consent of Counsel (included in opinion filed as Exhibit 5).
24 -- Power of Attorney (included on page II-3).
</TABLE>
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933 ("Securities Act"),
each filing of the Registrant's annual report pursuant to Section 13(a) or 15(d)
of the Exchange Act 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.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities 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 hereunder, 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 that:
(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b) (1) or
(4), or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-2
<PAGE> 25
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Knoxville, Tennessee on May 8, 1996.
REGAL CINEMAS, INC.
By: /s/ MICHAEL L. CAMPBELL
-----------------------------------
Michael L. Campbell
Chairman, President,
Chief Executive Officer and Director
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Michael L. Campbell and Lewis Frazer III,
jointly and severally, his attorneys-in-fact, each with the power of
substitution, for him in any and all capacities, to sign any amendments to this
Registration Statement, (including post-effective amendments and amendments
thereto) and any registration statement relating to the same offering as this
Registration Statement that is to be effective upon filing pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact, or his substitute or substitutes, may do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- -------------------------------- ---------------
<C> <S> <C>
/s/ MICHAEL L. CAMPBELL Chairman of the Board, May 8, 1996
- --------------------------------------------- President, Chief Executive
Michael L. Campbell Officer and Director
(Principal Executive Officer)
/s/ LEWIS FRAZER III Vice President, Financial May 8, 1996
- --------------------------------------------- Officer and Treasurer (Principal
Lewis Frazer III Financial and Accounting
Officer)
/s/ R. NEAL MELTON Vice President May 8, 1996
- --------------------------------------------- Construction -- Equipment,
R. Neal Melton Secretary and Director
/s/ PHILIP D. BORACK Director May 8, 1996
- ---------------------------------------------
Philip D. Borack
/s/ MICHAEL E. GELLERT Director May 8, 1996
- ---------------------------------------------
Michael E. Gellert
/s/ J. DAVID GRISSOM Director May 8, 1996
- ---------------------------------------------
J. David Grissom
/s/ WILLIAM H. LOMICKA Director May 8, 1996
- ---------------------------------------------
William H. Lomicka
/s/ HERBERT S. SANGER, JR. Director May 8, 1996
- ---------------------------------------------
Herbert S. Sanger, Jr.
/s/ JACK TYRRELL Director May 8, 1996
- ---------------------------------------------
Jack Tyrrell
</TABLE>
II-3
<PAGE> 26
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ ----------------------------------------------------------------------
<C> <C> <S>
1 -- Form of Underwriting Agreement
3.1 -- Restated Charter of Registrant (incorporated by reference to Exhibit
No. 3.1 to the Registration Statement on Form S-1 (Registration No.
33-62868)).
3.2 -- Restated Bylaws of Registrant (incorporated by reference to Exhibit
No. 3.2 to the Registration Statement on Form S-1 (Registration No.
33-62868)).
4.1 -- Specimen Common Stock certificate or (incorporated by reference to
Exhibit No. 4.1 to the Registration Statement on Form S-1
(Registration
No. 33-62868)).
4.2 -- Article 5 of the Registrant's Restated Charter (included in Exhibit
3.1).
5 -- Opinion of Bass, Berry & Sims PLC.
23.1 -- Consent of Coopers & Lybrand, L.L.P.
23.2 -- Consent of Ernst & Young LLP.
23.3 -- Consent of Deloitte & Touche LLP.
24 -- Power of Attorney (included on page II-3).
</TABLE>
<PAGE> 27
Appendix A Omitted Graphic and Image Material
The following is a narrative description of graphic and image material
contained in the printed version of the prospectus which has been omitted from
the version filed electronically.
Inside front cover:
1. A map of the United States depicting the Company's screen count
in states where it has theatres. The screen counts are
presented as screens in operation, screens under construction,
screens in announced acquisitions and total screens.
2. A collage of pictures depicting (i) an outside view of the
front of a Regal theatre facility, (ii) a specialty cafe inside
a Regal theatre lobby, (iii) a wide angle view of a Regal theatre
lobby, (iv) an outside view of the entrance to a FunScape and (v)
an inside view of a Regal theatre featuring stadium-style seating.
3. The following text accompanies the pictures described above:
The Company's theatre's and FunScape locations are bright and
inviting, acting as destination points which can expand the
geographic territory of a given market zone.
Prominent and appealing concession stands are designed for
rapid service and efficiency. Through optimizing product mix,
special promotions and cross selling, the Company seeks to maximize
concession revenues.
In many of the Company's theatres, patrons can enjoy specialty
cafes serving non-traditional theatre fare, such as cappuccino,
fruit juices, bottled water, cookies and muffins, soft pretzels and
ice cream.
Stadium-style seating in many of the Company's new theatres
offers the latest in customer comfort and viewing enjoyment.
Inside back cover:
1. A drawing depicting the layout of a typical FunScape centered
among a series of pictures depicting the various features of a
FunScape. Each picture is connected by a broken line to the
section of the layout that it depicts. The following areas of a
FunScape are depicted:
"Stop-N-Play" life size game board, high-tech arcade and
virtual reality, "Krazy Kars," birthday party rooms, "Star" motion
thrill theatre (depicted from inside and outside), "Bridge Street"
eatery (depicted twice), 36 hole miniature golf course, kiddie
redemption arcade and "Power Sports" video batting cages.
2. The following text accompanies the pictures described above:
FunScape is a complete, one-stop family entertainment center.
It features a multi-screen movie theatre adjacent to a family
entertainment facility and branded food court. The complex is a
destination that offers entertainment for patrons of all ages. For
younger children, the park includes a soft play area that
incorporates both physical and creative play. Teens and adults can
enjoy a variety of activities ranging from miniature golf to
virtual reality experiences. The park is totally enclosed for year
round operation.
FunScape debuted in August 1995 in Chesapeake, Virginia, and a
second FunScape opened in Rochester, New York in February 1996.
Two FunScapes are under construction, in Syracuse, New York and
Brandywine, Delaware, and an additional FunScape unit construction
is anticipated to begin in 1996.
3. An external view of the front of a Regal theatre facility.
<PAGE> 1
EXHIBIT 1
REGAL CINEMAS, INC.
2,875,000 Shares
of
Common Stock
UNDERWRITING AGREEMENT
May ____, 1996
J.C. BRADFORD & CO.
MONTGOMERY SECURITIES
WHEAT, FIRST SECURITIES, INC.
As Representatives of
the several Underwriters
c/o J.C. Bradford & Co.
J.C. Bradford Financial Center
330 Commerce Street
Nashville, Tennessee 37201-1809
Ladies and Gentlemen:
Regal Cinemas, Inc., a Tennessee corporation (the "Company"),
confirms its agreement with you and the other Underwriters named in Schedule A
hereto (the "Underwriters," which term shall also include any underwriter
substituted as hereinafter provided in Section 10) for each of whom J.C.
Bradford & Co., Montgomery Securities and Wheat, First Securities, Inc. are
acting as Representatives for the purposes of this Agreement, with respect to
the sale by the Company of 2,500,000 shares (the "Firm Shares"), of the
Company's Common Stock, no par value (the "Common Stock"), and the purchase by
the Underwriters, acting severally and not jointly, of the number of Firm Shares
of Common Stock set forth in Schedule A opposite their names. The Company also
confirms its agreement to sell to the Underwriters, upon the terms and
conditions set forth herein, up to a total of 375,000 additional shares (the
"Additional Shares") of the Common Stock in such manner as described in Section
3. The Firm Shares and the Additional Shares are hereinafter collectively
referred to as the "Shares."
Section 1. Representations and Warranties of the Company. The
Company represents and warrants to each Underwriter and agrees that:
<PAGE> 2
(a) The Company has filed with the Securities and
Exchange Commission (the "Commission") a registration
statement on Form S-3 (No. 333-_________), including a related
preliminary prospectus, for the registration of the Shares in
accordance with the Securities Act of 1933, as amended (the
"Act"), and the published rules and regulations of the
Commission thereunder (the "Regulations"); the Company has
filed such amendments to the registration statement, and such
amended preliminary prospectuses, as may have been required to
the date hereof, and the Company will prepare and proposes to
file prior to the effectiveness of such registration statement
one or more amendments to the registration statement,
including a final form of prospectus. Copies of the
registration statement and any amendments thereto, and all
forms of related prospectuses contained therein, have been
delivered to you. The registration statement and the
prospectus, as amended or supplemented, on file with the
Commission at the time the registration statement becomes
effective, are hereinafter called the "Registration Statement"
and the "Prospectus," respectively. In the event that the
prospectus first filed with the Commission pursuant to Rule
424(b) of the Commission under the Act (the "424(b)
Prospectus") differs from the prospectus on file with the
Commission at the time the Registration Statement becomes
effective, including any prospectus filed with the Commission
that discloses all the information that was omitted from the
prospectus on the effective date pursuant to Rule 430A of the
Regulations, the term "Prospectus" shall mean the 424(b)
Prospectus from and after the time it is filed or mailed to
the Commission for filing.
(b) When the Registration Statement becomes
effective, and at all times subsequent thereto up to and
including the Closing Time (hereinafter defined): (i) the
Registration Statement and the Prospectus and any amendments
or supplements thereto will comply with the provisions of the
Act and the Regulations; (ii) there will be no stop order of
the Commission, any court of competent jurisdiction or the
securities administrator of any state in which the Shares have
been, or are to be, registered or qualified, in effect,
pending or threatened with respect to the effectiveness of the
Registration Statement or the distribution of the Prospectus;
and (iii) neither the Registration Statement nor the
Prospectus will contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading; provided, however, that none of the
representations and warranties in this subsection shall apply
to statements in or omissions from the Registration Statement
or the Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by or on
behalf of any Underwriter through you expressly for use in the
Registration Statement or the Prospectus.
(c) The Company has been duly incorporated and is
validly existing as a corporation under the laws of the State
of Tennessee with corporate power
2
<PAGE> 3
and authority to own, lease and operate its properties and
conduct its business as described in the Registration
Statement. The Company is duly licensed or qualified to do
business as a foreign corporation and is in good standing in
each jurisdiction in which the failure to so qualify would
have a material adverse effect on the conduct of its business
or the ownership or leasing of its properties in such
jurisdiction.
(d) The Company has three subsidiaries, which have
been duly incorporated and are validly existing as
corporations under the laws of the State of South Carolina,
the State of Georgia and the State of Virginia and each is
duly licensed or qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in
which the failure to so qualify would have a material adverse
affect on the conduct of the business or the ownership or
leasing of properties in such jurisdiction of the Company and
its subsidiaries, taken as a whole; all of the issued and
outstanding shares of each such subsidiary have been duly and
validly issued and are fully paid and non-assessable; and, all
of such shares are owned by the Company, free and clear of any
mortgage, pledge, lien, encumbrance, claim or equity.
(e) The Company has an authorized capitalization as
of December 28, 1995 as set forth in the Registration
Statement and, at the time of delivery of the Shares to you
hereunder against payment therefor, the Shares and all other
outstanding shares of Common Stock will have been duly
authorized and issued, will be fully paid and nonassessable,
and will conform to the description thereof contained in the
Prospectus. There are no restrictions upon the transfer of the
Shares pursuant to the Company's Charter, Bylaws or other
governing documents or any agreement or other instrument to
which the Company is a party or by which it may be bound
except as described in the Prospectus. Neither the filing of
the Registration Statement nor the offering or sale of the
Shares as contemplated by this Agreement gives rise to any
rights, other than those which have been waived or satisfied,
for or relating to the registration of any shares of Common
Stock or any other securities of the Company.
(f) All offers and sales of the Company's capital
stock prior to the date hereof, other than pursuant to
effective registration statements under the Act, were at all
relevant times exempt from the registration requirements of
the Act and were duly registered or the subject of an
available exemption from the registration requirements of the
applicable state securities or Blue Sky laws, or the relevant
statutes of limitations have expired, or civil liability
therefor has been eliminated by an offer to rescind.
(g) The financial statements and related notes and
schedules included in the Registration Statement and the
Prospectus or incorporated by reference therein present fairly
the consolidated financial condition of the Company and its
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<PAGE> 4
subsidiaries at the dates indicated and the consolidated
results of their operations for the periods specified. These
financial statements and related notes and schedules have been
prepared in conformity with generally accepted accounting
principles applied on a consistent basis during the periods
involved (except as stated therein). The unaudited pro forma
financial statements included in the Registration Statement
and the Prospectus comply in all material respects with the
applicable accounting requirements of Article II of Regulation
S-X promulgated by the Commission, and the pro forma
adjustments have been applied properly to the historical
financial statements. The other financial and statistical
information set forth in the Registration Statement and the
Prospectus or incorporated by reference therein fairly
presents the information set forth therein on the basis set
forth in the Registration Statement and the Prospectus.
Coopers & Lybrand L.L.P., who have certified certain of the
financial statements of the Company, are independent public
accountants as required by the Act and the Regulations.
Deloitte & Touche LLP, who have certified certain of the
financial statements of Litchfield Theatres, Ltd., and Ernst &
Young LLP, who have certified certain of the financial
statements of Neighborhood Entertainment, Inc., are
independent public accountants as required by the Act and the
Regulations.
(h) This Agreement has been duly authorized, executed
and delivered by, and constitutes the legal, valid and binding
obligation of, the Company.
(i) Since the respective dates as of which
information is given in the Registration Statement and the
Prospectus, except as may otherwise be stated or contemplated
therein: (i) there has not been any material adverse change in
the condition of the Company and its subsidiaries, taken as a
whole, financial or otherwise, or in the earnings, business
prospects or current operations of the Company and its
subsidiaries, taken as a whole, whether or not arising in the
ordinary course of business; (ii) there have not been any
material transactions entered into by the Company or any of
its subsidiaries which are required to be disclosed in the
Registration Statement; (iii) there has been no dividend or
distribution of any kind declared, paid or made by the Company
on any class of its capital stock or any material change in
the capital stock or increase in the long term indebtedness of
the Company; (iv) no action, suit or proceeding at law or in
equity and no governmental or regulatory proceeding has
occurred or is pending or, to the knowledge of the Company,
threatened against or affecting the Company or its
subsidiaries wherein an unfavorable decision, ruling or
finding would have a material adverse effect on the
consummation of this Agreement or the business, operations,
financial condition, income or business prospects of the
Company and its subsidiaries, taken as a whole,; and (v)
neither the Company nor any of its subsidiaries has sustained
a loss of, or damage to, their respective properties (whether
or not insured) that would have a material adverse effect on
the business, operations, financial condition, income or
business prospects of the Company and its subsidiaries, taken
as a whole.
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<PAGE> 5
(j) There are no contracts, instruments or other
documents of the Company or its subsidiaries that are required
by the Act or the Regulations to be described in the
Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that have not been
described or filed as required.
(k) The performance of this Agreement and the
consummation of the transactions herein contemplated will not
result in a breach or violation of any of the terms or
provisions of, or constitute a default by the Company under,
any indenture, mortgage, deed of trust, note or other material
agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound, the Company's Charter or Bylaws, or any
statute, order, rule or regulation of any court or
governmental agency or body having jurisdiction over the
Company, its subsidiaries or any of their respective
properties, which breach, violation or default would have a
material adverse effect on the financial condition or
operations of the Company and its subsidiaries, taken as a
whole; all licenses and other governmental approvals material
to the operation of the facilities owned by, and the conduct
of the business of, the Company and its subsidiaries have been
duly obtained and are in full force and effect; and except
such as may be required under the Act or state securities laws
or by the National Association of Securities Dealers, Inc.
(the "NASD") in connection with the purchase and distribution
of the Shares by you, no consent, approval, authorization or
order of any court or governmental agency or body is required
for the consummation by the Company of the transactions
contemplated by this Agreement.
(l) Each of the Company and each of its subsidiaries
has good and marketable title to all properties and assets
owned by it, free and clear of all liens, charges,
encumbrances, defects or restrictions, except (i) for the
security interest granted to the lenders under the Company's
Credit Facility (as defined in the Prospectus) and (ii) as
otherwise described in the Prospectus or such matters as are
not materially significant to the business of the Company and
its subsidiaries, taken as a whole; all of the leases material
to the business of the Company under which the Company holds
real property are in full force and effect, and neither the
Company nor any of its subsidiaries is in default under any of
the material terms or provisions of any of such leases, and
there is no known claim of any sort that has been asserted by
anyone adverse to the Company's or its subsidiaries' rights as
lessee under any of the leases mentioned above, or affecting
or questioning its right to the continued possession of the
leased premises under any such lease.
(m) The Company's system of internal accounting
controls taken as a whole is sufficient to meet the broad
objectives of internal accounting control insofar as those
objectives pertain to the prevention or detection of errors or
irregularities in amounts that would be material in relation
to the Company's
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<PAGE> 6
financial statements; and, to the knowledge of the Company,
neither the Company nor any of its subsidiaries nor any
employee or agent of the Company has made any payment of funds
of the Company or received or retained any funds in violation
of any law, rule or regulation which payment, receipt or
retention of funds is of a character required to be disclosed
in the Prospectus.
(n) The Company and its subsidiaries operate their business
in conformity in all material respects with and is not in
violation of any applicable statute, law, ordinance,
governmental rule or regulation or court decree to which each
may be subject wherein any such violation would have a
material adverse effect on the financial condition or
operations of the Company and its subsidiaries, taken as a
whole.
(o) All tax returns of the Company and its subsidiaries
required by law to be filed prior to the date hereof have been
filed except for those returns as to which the failure to file
would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole. All taxes, assessments,
fees, penalties, interest and other governmental charges that
are shown to be due and payable with respect to the Company
and its subsidiaries have been paid.
(p) No labor dispute exists with the Company's employees or
is imminent that would materially adversely affect the Company
and its subsidiaries, taken as a whole. The Company is not
aware of any existing or imminent labor disturbance by any of
its employees that would be expected to materially adversely
affect the financial condition or operations of the Company
and its subsidiaries, taken as a whole.
Any certificate signed by any officer of the Company and
delivered to you or to counsel for the Underwriters in connection with the
Closing shall be deemed a representation and warranty by the Company to each
Underwriter as to the matters covered thereby.
Section 2. Representations and Warranties of the Underwriters.
The Representatives, on behalf of the several Underwriters,
represent and warrant to the Company that the information set forth (a) on the
cover page of the Prospectus with respect to the public offering price and the
underwriting discount and (b) the third paragraph and the listing of the names
of and the number of shares to be purchased by the Underwriters in the first
paragraph under "Underwriting" in the Prospectus was furnished to the Company by
and on behalf of the Underwriters for use in connection with the preparation of
the Registration Statement and such information is accurate in all material
respects. The Representatives further represent and warrant to the Company that
such Representatives have the authority to act on behalf of the several
Underwriters in connection with this Agreement and the offering contemplated
hereby.
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<PAGE> 7
Section 3. Purchase by, and Sale and Delivery to, Underwriters
- - Closing Time.
(a) On the basis of the representations, warranties
and covenants herein contained and subject to the terms and
conditions herein set forth, the Company agrees to issue
and/or sell to each Underwriter, and each Underwriter,
severally and not jointly, agrees to purchase from the Company
at $_______ per share, the number of the Firm Shares set forth
in Schedule A opposite the name of each Underwriter.
The Company is advised by you that the Underwriters
propose to make a public offering of the Shares as soon after
the effective date of the Registration Statement as in your
judgment is advisable, and to offer the Shares initially upon
the terms set forth in the Prospectus.
(b) The Company hereby agrees to sell to the several
Underwriters and, upon the basis of the representations,
warranties and covenants herein contained, and subject to the
terms and conditions hereof, the Underwriters shall have the
right to purchase, severally, up to 375,000 Additional Shares
at the purchase price per share stated above, in the manner
described below. Additional Shares may be purchased solely for
the purpose of covering over-allotments made in connection
with the offering of the Firm Shares. If any Additional Shares
are to be purchased, each Underwriter, severally, agrees to
purchase such Additional Shares (in each instance subject to
such adjustments as you may determine to avoid fractional
shares) from the Company that proportion of the number of
Additional Shares, which the number of Firm Shares set forth
opposite the name of each Underwriter in Schedule A hereto (or
such number increased as set forth in Section 10 hereof) bears
to 2,500,000 Shares, up to a total of 375,000 Shares.
The option granted hereby may be exercised as to all
or any part of the Additional Shares at any time (but only
once) within 30 days after the date the Registration Statement
becomes effective. You shall not be under any obligation to
purchase any Additional Shares prior to the exercise of such
option. The option granted hereby may be exercised by your
giving written notice to the Company setting forth the number
of Additional Shares to be purchased and the date and time for
delivery of and payment for such Additional Shares and stating
that the Additional Shares referred to therein are to be used
solely for the purpose of covering over-allotments in
connection with the distribution and sale of the Firm Shares.
If such notice is given prior to the Closing Time, the date
set forth therein for such delivery and payment shall not be
earlier than two full business days thereafter or the Closing
Time, whichever occurs later. If such notice is given on or
after the Closing Time, the date set forth therein for such
delivery and payment shall not be earlier than three full
business days thereafter. In either event, the date so set
forth shall not be more than 15 full business days after the
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<PAGE> 8
date of such notice. The date and time set forth in such
notice is herein called the "Option Closing Time." Upon
exercise of the option, the Company shall become obligated to
sell to you in the manner provided above and, subject to the
terms and conditions herein set forth, you shall become
obligated to purchase from the Company the number of
Additional Shares specified in such notice. Additional Shares
shall be purchased for the accounts of the several
Underwriters in proportion to the number of Firm Shares set
forth opposite such Underwriter's name in Schedule A hereto,
except that the respective purchase obligations of each
Underwriter shall be adjusted so that no Underwriter shall be
obligated to purchase fractional Additional Shares.
(c) Payment of the purchase price for, and delivery
of certificates for, the Shares to be purchased by the
Underwriters shall be made at the offices of Waller Lansden
Dortch & Davis, Nashville City Center, Suite 2100, 511 Union
Street, Nashville, Tennessee 37219, or at such other place as
shall be agreed upon by you and the Company, at 10:00 am.,
Nashville Time, on the third full business day (unless
postponed in accordance with the provisions of Section 10
hereof) following the date this Agreement becomes effective,
or, at the election of the Underwriters, on the fourth full
business day after this Agreement becomes effective, if it
becomes effective after 4:30 p.m. Eastern time, or at such
other time not later than the seventh full business day
thereafter as the Underwriters and the Company may determine
(the "Closing Time"). Payment shall be made to the Company by
certified or official bank check or checks in New York
Clearing House (next day) funds payable to the order of the
Company against delivery by the Company to you for the
respective accounts of the Underwriters of certificates for
the Firm Shares to be purchased by the Underwriters.
Payment of the purchase price for, and delivery of
certificates for, the Additional Shares to be purchased by the
Underwriters shall be made at said offices of Waller Lansden
Dortch & Davis upon such date (the "Option Closing Time"),
which may be the same as the Closing Time but shall in no
event be earlier than the Closing Time nor earlier than three
nor later than ten business days after the giving of written
notice from you to the Company of your determination to
purchase the number of Additional Shares specified in said
notice. Said notice may be given at any time within 30 days
after the date of this Agreement. The Option Closing Time may
be varied by agreement between you and the Company.
Certificates for Additional Shares will be delivered to you
for the respective accounts of the several Underwriters
against payment in the manner specified in the preceding
paragraph.
Certificates for the Shares shall be registered in
such names and denominations as you may request in writing at
least two business days before the Closing Time, or the Option
Closing Time, as the case may be. It is understood that each
Underwriter has authorized you, for the account of such
Underwriter,
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<PAGE> 9
to accept delivery of, receipt for and make payment of the
purchase price for the Shares that it has agreed to purchase.
You may (but shall not be obligated to) make payment of the
purchase price for the Shares to be purchased for any
Underwriter if a check shall not have been received by the
Closing Time, or the Option Closing Time, as the case may be,
for the account of such Underwriter, but any such payment
shall not relieve any such Underwriter from any obligations
hereunder. The Company will permit you, on or before the first
business day prior to the Closing Time, or the Option Closing
Time, as the case may be, to examine and package for delivery
the certificates for the Shares to be purchased by the
Underwriters.
Section 4. Covenants of the Company. The Company covenants and
agrees with each Underwriter that:
(a) The Company will use its best efforts to cause
the Registration Statement and any subsequent amendments
thereto to become effective as promptly as possible, or at
such time as shall be mutually agreeable to the Company and
the Representatives. The Company will comply with the
provisions of and make all requisite filings with the
Commission pursuant to Rules 424 and 430A of the Regulations.
The Company will not at any time, whether before or after the
effective date, file any amendment to the Registration
Statement or supplement to the Prospectus of which the
Representatives shall not previously have been advised and
furnished with a copy a reasonable time prior to the proposed
filing, or to which the Representatives shall have reasonably
objected or which is not in compliance with the Act and the
Regulations. The Company will prepare and file with the
Commission, promptly upon the Representatives' request, any
amendments to the Registration Statement or supplements to the
Prospectus that may be necessary or advisable in connection
with the distribution of the Shares by the several
Underwriters, and will use its best efforts to cause the same
to become effective as promptly as possible, or at such time
as shall be mutually agreeable to the Company and the
Representatives.
(b) The Company will notify the Representatives
immediately (i) of the effectiveness of the Registration
Statement and any amendment thereto, (ii) of the receipt of
any comments from the Commission, (iii) of any request by the
Commission for any amendment to the Registration Statement or
any amendment or supplement to the prospectus or for
additional information with respect thereto, and (iv) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of the
initiation of any proceedings for that purpose. The Company
will make every reasonable effort to prevent the issuance by
the Commission of any stop order, and if any such stop order
shall at any time be issued, to obtain the lifting thereof at
the earliest possible moment.
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<PAGE> 10
(c) The Company will deliver to you, without charge
and as soon as available, two signed copies of the
Registration Statement as originally filed and of each
amendment thereto, together with two sets of exhibits filed
therewith, and will also make available to each of the
Underwriters conformed copies of the Registration Statement as
originally filed and of each amendment thereto (without
exhibits).
(d) The Company will deliver to each Underwriter from
time to time, before the Registration Statement becomes
effective, such number of copies of the preliminary prospectus
as originally filed and any amended preliminary prospectus,
and as soon as the Registration Statement becomes effective
and thereafter, from time to time, during the period when the
Prospectus is required to be delivered under the Act, such
number of copies of the Prospectus, as any Underwriter may
reasonably request.
(e) If, at any time when any of the Underwriters is
required by law to deliver a Prospectus in connection with the
sale of the Shares, any event relating to or affecting the
Company shall occur as a result of which it is necessary, in
the opinion of counsel for the Company or counsel for the
Underwriters, to amend or supplement the Prospectus in order
to make the Prospectus not misleading in the light of the
circumstances existing at the time it is delivered to a
purchaser, the Company will forthwith prepare and furnish to
the Underwriters a reasonable number of copies of an amendment
or amendments to, or a supplement or supplements to, the
Prospectus which will amend or supplement the Prospectus so
that, as so amended or supplemented, it will not contain an
untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the
time the Prospectus is delivered to a purchaser, not
misleading. If any event occurs that leads counsel for the
Underwriters to believe that such an amendment or supplement
may be necessary, the Company will furnish such information
with respect to itself related to such event as you may
reasonably request. If such event shall occur more than nine
months from the date hereof, the Underwriters will reimburse
the Company for its reasonable expenses incurred in complying
with this paragraph.
(f) The Company will endeavor in good faith, in
cooperation with the Underwriters, to register or qualify the
Shares for offering and sale under the applicable securities
laws of such jurisdictions as you may designate; provided,
however, that the Company shall not be obligated to file any
general consent to service or to qualify or be subject to
taxation as a foreign corporation or as a dealer in securities
in any jurisdiction in which it is not so qualified. In each
jurisdiction where any of the Shares shall have been qualified
as above provided, the Company will make and file such
statements and reports as are or may be reasonably required by
the laws of such jurisdiction to continue such qualification
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<PAGE> 11
in effect so long as such qualification is required in
connection with the sale of the Shares in such jurisdiction.
(g) The Company will make generally available to its
security holders as soon as practicable, but no later than 90
days after the close of the period covered thereby, an
earnings statement (in form complying with the provisions of
Section 11(a) of the Act, which need not be certified by
independent public accountants unless required by the Act or
the Regulations) covering a twelve-month period commencing
after the effective date of the Registration Statement but not
later than the first day of the Company's fiscal quarter next
following the effective date of the Registration Statement.
(h) The Company will for a period of five years from
the effective date of the Registration Statement promptly
furnish to you and upon request, to each of the other
Underwriters:
(i) copies of any report, application or
document that the Company shall file with the
Commission or any securities exchange;
(ii) copies of each communication that the
Company shall send to its stockholders as a class;
and
(iii) such other publicly available
information concerning the Company as you may
reasonably request that, in your judgment, affects
the stockholders of the Company.
(i) For a period of 60 days from and after the date
of this Agreement, the Company will not, and each of the
executive officers and directors of the Company will not,
directly or indirectly, without your prior written consent,
sell, transfer, give, pledge, hypothecate or otherwise dispose
of, nor enter into an agreement regarding the same, any shares
of Common Stock or options, warrants or rights to acquire such
Common Stock that such person may beneficially own.
Notwithstanding the foregoing, during such period the Company
(i) may grant stock options pursuant to the Company's 1993
Outside Directors' Stock Option Plan and 1993 Employee Stock
Incentive Plan; (ii) may issue shares of Common Stock upon the
exercise of any warrants described as outstanding in the
Registration Statement; or (iii) may issue shares of Common
Stock in connection with an acquisition or merger.
(j) The Company will cause to be filed with the
Commission and the securities administrators of any state in
which the Shares are registered or qualified, all reports of
sales of the Shares, notices of termination of the offering of
the Shares and any other post-effective filings as may be
required by the Regulations or applicable state securities
laws and regulations.
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<PAGE> 12
(k) The Company will apply the net proceeds from the
sale of the Shares as set forth under the caption "Use of
Proceeds" in the Prospectus.
Section 5. Payment of Expenses. Whether or not this Agreement
becomes effective or the sale of the Shares to the Underwriters is consummated
or this Agreement is terminated, the Company will pay all fees and expenses
incident to the performance of its obligations under this Agreement, including
(i) the printing and filing of the Registration Statement and Prospectus and the
printing of the Agreement Among Underwriters, Underwriting Agreement and
Selected Dealer Agreement, (ii) the issuance and delivery of the Shares to the
Underwriters, including original issue and stock transfer taxes, if any, payable
upon the issue or transfer and sale of the Shares to the Underwriters and
transfer agents' and registrars' fees, (iii) the fees and disbursements of the
Company's counsel and accountants related to the preparation of the Registration
Statement and Prospectus, (iv) the registration or qualification of the Shares
under securities laws in accordance with the provisions of Section 4(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky Memoranda, (v) the printing and delivery to the Underwriters in
quantities as hereinabove stated of copies of the Registration Statement and all
amendments thereto, of any preliminary prospectus, and of the Prospectus and any
amendments or supplements thereto, (vi) the printing and delivery to the
Underwriters of copies of the Blue Sky Memoranda to be prepared by counsel for
the Underwriters, and (vii) the filing fees of the Commission and filing fees
and expenses incident to obtaining any required review by the NASD of the terms
of the sale of the Shares.
If this Agreement is cancelled by you in accordance with the
provisions of Section 6 or is terminated by you prior to the Closing Time in
accordance with the provisions of Section 9(b)(i) or the Company prevents this
Agreement from becoming effective in accordance with the provisions of Section
9(a) prior to the Closing Time, the Company shall reimburse the Underwriters for
all of their out-of-pocket expenses, including the reasonable fees, expenses and
disbursements of counsel for the Underwriters incurred by the Underwriters in
connection with investigating, preparing to market and marketing the Shares and
proposing to purchase the Shares under this Agreement or otherwise incurred by
the Underwriters in connection with their obligations hereunder. The provisions
of this Section shall not affect any agreement that the Company may have for the
payment of such costs and expenses.
Section 6. Conditions of Underwriters' Obligations. The
several obligations of the Underwriters hereunder to purchase the Shares are
subject to the accuracy of and compliance with the representations and
warranties of the Company at and as of the Closing Time and of the Company at
and as of the Option Closing Time, if any, to the performance by the Company of
their respective obligations hereunder, and to the following additional
conditions:
(a) The Registration Statement shall have become
effective not later than 4:30 p.m., Nashville Time, on the
next succeeding business day following the date hereof, or at
such later time and date as shall have been consented to by
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<PAGE> 13
you; all filings required by Rule 424 and Rule 430A of
Regulation C under the Act shall have been made; at the
Closing Time and the Option Closing Time, if any, no stop
order suspending the effectiveness thereof shall have been
issued under the Act or proceedings therefor initiated or
threatened or, to the knowledge of the Company or the
Underwriters, shall be contemplated by the Commission; any
request of the Commission for additional information (to be
included in the Registration Statement or the Prospectus or
otherwise) shall have been complied with to your satisfaction;
and the NASD, upon review of the terms of the public offering
of the Shares, shall not have objected to such offering, such
terms or the Underwriters' participation in the same.
(b) At the Closing Time and the Option Closing Time,
if any, you shall have received:
(1) The favorable opinion, dated as of the
Closing Time, and the Option Closing Time, if any, of
Bass, Berry & Sims PLC, counsel for the Company, in
form and substance satisfactory to you and counsel to
the Underwriters, to the effect that:
(i) The Company has been duly
incorporated and is validly existing as a
corporation under the laws of the State of
Tennessee, with corporate power and
corporate authority under such laws to own,
lease and operate its properties as now
owned, leased or operated and to conduct its
business as now conducted, and is qualified
as a foreign corporation to transact the
business in which it is engaged and is in
good standing as a foreign corporation in
all other jurisdictions where the failure to
be so qualified would have a material
adverse effect upon the Company.
(ii) Each of the subsidiaries of
the Company is validly existing as a
corporation in good standing under the laws
of the jurisdiction of its incorporation,
with corporate power and corporate authority
to own, lease and operate its properties as
now owned, leased or operated and to conduct
its business as now conducted, and each is
duly qualified to do business as a foreign
corporation in good standing in all other
jurisdictions where the failure to so
qualify would have a material adverse affect
on the Company and its subsidiaries, taken
as a whole. The outstanding shares of
capital stock of the subsidiaries of the
Company have been duly authorized and
validly issued, are fully paid and
nonassessable, and to such counsel's actual
knowledge, are owned beneficially by the
Company free and clear of all liens,
encumbrances, equities and claims.
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<PAGE> 14
(iii) The Company had as of
December 28, 1995 an authorized
capitalization as set forth in the
Registration Statement. All of the
outstanding shares of Common Stock have been
duly authorized and validly issued and are
fully paid and nonassessable. The Shares
conform to the description thereof contained
in the Company's Registration Statement on
Form 8-A, as amended, incorporated by
reference in the Registration Statement.
There are no restrictions upon the transfer
of the Shares pursuant to the Company's
Charter or Bylaws or, to such counsel's
actual knowledge, other instrument to which
the Company is a party or by which it may be
bound except as described in the Prospectus.
(iv) No consent, approval,
authorization or other action by or filing
with any federal or state court or
governmental authority is required for the
execution and delivery of this Agreement by
the Company or the consummation by the
Company of the transactions that are the
subject of this Agreement, except such as
have been obtained under the Act and such as
may be required by the NASD and under state
securities laws in connection with the
purchase and distribution of the Shares by
you and except such as will not, if not
obtained, have a material adverse effect on
the transactions contemplated hereby.
Execution and delivery by the Company of,
and performance of its agreements in, this
Agreement will not breach or result in a
default under any material indenture,
mortgage, deed of trust, loan agreement,
lease or other agreement or instrument
actually known to such counsel to which the
Company is a party or to which the Company
or its properties is subject that are filed
as exhibits to the Registration Statement,
violate the constituent documents of the
Company or any judgment, decree or order
actually known to such counsel of any court
or governmental agency or body applicable to
the Company or any of its properties, or
violate any applicable provisions of any
state or federal statutory law or regulation
(except that no opinion need be expressed as
to the securities or Blue Sky laws of any
state and no opinion need be expressed as to
the antifraud provisions of the federal or
state securities laws).
(v) This Agreement has been duly
authorized by all necessary corporate action
on the part of the Company and has been duly
executed and delivered by the Company, and
is enforceable against the Company in
accordance with its terms, except as
enforceability may be limited by applicable
equitable principles or by bankruptcy,
insolvency, moratorium, reorganization or
similar laws from time to time in effect
affecting
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<PAGE> 15
the enforcement of creditors' rights and
except that enforceability of the rights to
indemnity and contribution contained herein
may be limited by federal or state laws and
public policy underlying such laws.
(vi) Such counsel hereby confirms
to you, pursuant to the request set forth
herein, that except as described in the
Prospectus, to the knowledge of such counsel
there is not pending or threatened any
action, suit, proceeding, inquiry or
investigation, to which the Company is a
party, or to which the property of the
Company is subject that, if adversely
determined, would have a material adverse
effect on the business, financial position,
net worth or results of operations, or would
materially adversely affect the properties
or assets, of the Company.
(vii) The Registration Statement
and all post-effective amendments thereto
have become effective under the Act and, to
the knowledge of such counsel, no stop order
suspending the effectiveness of the
Registration Statement has been issued and
no proceedings for that purpose have been
instituted or are threatened, pending or
contemplated by the Commission and all
filings required by Rule 424 and Rule 430A
of the Regulations have been made; the
Registration Statement and the Prospectus,
and any amendments or supplements thereto,
as of their respective effective or issue
dates, complied as to form in all material
respects with the requirements of the Act
and the Regulations; the descriptions in the
Registration Statement and Prospectus of
statutes, regulations, legal and
governmental proceedings, contracts and
other instruments present fairly in all
material respects the information required
to be shown; and such counsel do not know of
any pending or threatened legal or
governmental proceedings, statutes or
regulations required to be described in the
Prospectus that are not described as
required, nor of any contracts, instruments
or documents of a character required to be
described in the Registration Statement or
the Prospectus or to be filed as exhibits to
the Registration Statement that are not
described and filed as required; the
description in the Registration Statement of
the Company's securities and the legal
documents, laws and regulations relating to
or affecting the business of the Company to
the extent they constitute matters of law or
legal conclusions fairly present the
information disclosed therein in all
material respects.
Such opinion also will include a statement that the
limitations inherent in the independent verification of factual matters and the
character of determinations involved in the
15
<PAGE> 16
registration process are such that such counsel has not verified, and, except as
to the description in the Registration Statement and the Prospectus of statutes,
regulations, legal proceedings and contracts and other instruments, is not
passing upon and does not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or Prospectus. Such opinion will also state, however, that such
counsel participated in the preparation of the Registration Statement and the
Prospectus during the course of which, among other things, such counsel examined
various documents and other papers and participated in conferences with
representatives of the Company, with representatives of the Company's
independent public accountants, and with your representatives and your counsel,
at which conferences the contents of the Registration Statement and the
Prospectus and related matters were discussed, and that on the basis of the
information that was developed in the course of such counsel's above-described
participation, considered in the light of such counsel's understanding of the
applicable law and the experience such counsel has gained through such counsel's
practice thereunder, such counsel have no reason to believe that the
Registration Statement or any amendment thereto at the time it became effective
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus or any amendment thereto on the
date of filing thereof or at the Closing Time and the Option Closing Time, if
any, contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, it being understood that such counsel need express no opinion as to
the financial statements and other financial or statistical data included in the
Registration Statement or the Prospectus.
Such opinion may be rendered under and incorporate by
reference the Legal Opinion Accord of the ABA Section of Business Law (1991). In
addition, in rendering the opinions set forth above in subparagraphs (i), (ii),
(iii) [AND (VI), BASS, BERRY & SIMS PLC MAY RELY UPON THE OPINION OF WAGNER,
MYERS & SANGER, P.C.]
(2) At the Closing Time and the Option Closing Time,
if any, you shall have received the opinion, dated as of the
Closing Time, of Waller Lansden Dortch & Davis, counsel for
the Underwriters, with respect to the incorporation of the
Company, the validity of the Shares of Common Stock issued by
the Company, the validity of this Agreement and to the effect
that the Registration Statement has become effective under the
Act, and, to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been
instituted or are threatened, pending or contemplated under
the Act and such counsel believes that the Registration
Statement and the Prospectus and any amendment or supplement
thereto (except for financial statements and schedules
included therein, as to which such counsel need express no
opinion) comply as to form in all material respects with the
Act.
16
<PAGE> 17
(c) At the time of the execution of this Agreement,
you and the Company shall have received from Coopers & Lybrand
a letter dated the effective date of the Registration
Statement, in form and substance satisfactory to you, to the
effect that (i) they are independent public accountants as
required by the Act and the Regulations; (ii) it is their
opinion that the financial statements and schedules included
in the Registration Statement and covered by their opinions
comply as to form in all material respects with the applicable
accounting requirements of the Act and the Regulations; (iii)
based upon limited procedures set forth in such letter,
nothing has come to their attention which causes them to
believe that during the period from December 28, 1995, to a
specified date not more than five days prior to the date of
this Agreement, there has been any change in the capital
stock, or increase in the long term indebtedness, capital
lease obligations, notes payable or any other short-term
indebtedness of the Company or any decrease in working
capital, as compared with the amounts shown on the December
28, 1995 balance sheet, or any decreases, as compared with the
corresponding period in the preceding year, in total revenues,
total or per share net income, total or per share income
before provision for income taxes or in the ratios of income
before provision for income taxes to revenues or net income to
revenues, or any increases in the ratio of operating expenses
to revenues or in the provision for bad debts of the Company,
in each case except as set forth or contemplated in the
Registration Statement; and (iv) they have read in the
Registration Statement and the information incorporated by
reference therein the information previously requested by the
Underwriters and have agreed to and have performed the
procedures set forth in such letter and found such amounts or
information to be in agreement with the relevant accounting,
financial or other records of the Company as described in such
letter.
(d) At the Closing Time and the Option Closing Time,
if any, you and the Company shall have received from Coopers &
Lybrand a letter dated as of the Closing Time, and the Option
Closing Time, if any, in form and substance satisfactory to
you, to the effect that such accountants reaffirm as of such
time and as though made at such time the statements made in
the letter furnished to you by such accountants pursuant to
paragraph (c) of this Section 6, except that the specified
date referred to in clause (iv) of such paragraph (c) shall be
a date within five days prior to such time for the purposes of
this paragraph (d).
(e) At the Closing Time and at the Option Closing
Time, if any, (i) the Company shall not have sustained since
December 28, 1995 any loss or interference with its business
from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree; (ii) since the
respective dates as of which information is given in the
Registration Statement, there shall not have been any material
adverse change in the capital stock of the Company or the
long-term debt, short-term debt, capitalized leases or
operating leases of the Company or a
17
<PAGE> 18
material adverse change, or a development involving a
prospective material adverse change, in or affecting the
general affairs, management, financial position, stockholders'
equity or results of operations of the Company, otherwise than
as set forth or contemplated in the Registration Statement;
(iii) all representations and warranties in Section 1 hereof
shall be true and correct with the same effect as though such
representations and warranties had been expressly made as of
the Closing Time and the Option Closing Time, if any; (iv) no
stop order suspending the effectiveness of the Registration
Statement shall have been issued, and no proceedings for that
purpose shall have been instituted or, to the best knowledge
of the Company's principal executive and financial officers,
threatened under the Act; and (v) all filings required by
Rules 424 and 430A of the Regulations shall have been made.
Compliance with clauses (i) through (iv) of this subsection
shall be evidenced by a certificate, dated the Closing Time,
and the Option Closing Time, if any, of the principal
executive and financial officers of the Company delivered to
you at the Closing Time, and at the Option Closing Time, if
any.
(f) All agreements herein to be performed on the part
of the Company at or prior to the Closing Time and the Option
Closing Time, if any, shall have been so performed.
(g) At the Closing Time and the Option Closing Time,
if any, counsel for the Underwriters shall have been furnished
with such documents and opinions as they may reasonably
require for the purpose of enabling them to pass upon the
issuance and sale of the Shares by the Company as herein
contemplated and related proceedings or in order to evidence
the accuracy and completeness of any of the conditions herein
contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Shares as herein
contemplated shall be satisfactory in form and substance to
you and to counsel for the Underwriters.
If any of the conditions specified in this Section shall not
have been fulfilled when and as required by this Agreement to be fulfilled, this
Agreement and all obligations of the Underwriters hereunder may be cancelled by
you by notifying the Company of such cancellation in writing or by telegram at
any time prior to the Closing Time, or the Option Closing Time, as the case may
be, and any such cancellation shall be without liability of any party to any
other party except as otherwise provided in Section 5 of this Agreement.
Section 6A. Conditions to the Company's Obligations. The
obligations hereunder of the Company to sell the Shares are subject to the
following conditions: The Registration Statement shall have become effective not
later than 4:30 p.m., Nashville Time, on the next succeeding business day
following the date hereof, or at such later time and date as shall have been
consented to by the Company; and at the Closing Time and, with respect to the
Company, the Option Closing Time, if any, no stop order suspending the
effectiveness of the Registration
18
<PAGE> 19
Statement shall have been issued under the Act or proceedings therefor initiated
or threatened or, to the knowledge of the Company or the Underwriters, shall be
contemplated.
Section 7. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act, as follows:
(i) against any and all loss, liability, claim,
damage and expense whatsoever arising out of or based in whole
or in part on any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement,
any preliminary prospectus, the Prospectus or in any
application or other written information furnished by the
Company filed in any state or other jurisdiction in order to
qualify any or all of the Shares under the securities laws
thereof (a "Blue Sky Application"), or in any amendment or
supplement to any such document, or any omission or alleged
omission from the Registration Statement, any preliminary
prospectus, the Prospectus or any Blue Sky Application, or in
any amendment or supplement to any such document, of a
material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances
under which they were made, not misleading, unless such untrue
statement or omission or such alleged untrue statement or
omission was made in reliance upon and in conformity with
written information furnished to the Company by or on behalf
of any Underwriter through you expressly for use in the
Registration Statement, any preliminary prospectus, the
Prospectus or any Blue Sky Application or in any amendment or
supplement to any such document;
(ii) against any and all loss, liability, claim,
damage and expense whatsoever to the extent of the aggregate
amount paid in settlement of any litigation, commenced or
threatened, or of any claim whatsoever based upon any claim or
cause of action described in (i) above, if such settlement is
effected with the written consent of the Company; and
(iii) against any and all expense whatsoever
reasonably incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim
whatsoever based upon any claim or cause of action described
in (i) above, to the extent that any such expense is not paid
under (i) or (ii) above.
In no case shall the Company be liable under this indemnity
agreement with respect to any claim made against any Underwriter or any such
controlling person unless the Company shall be notified in writing of the nature
of the claim within a reasonable time after the assertion thereof, but failure
so to notify the Company shall not relieve it from any liability which it may
have otherwise than on account of this indemnity agreement. The Company shall
19
<PAGE> 20
be entitled to participate at its own expense in the defense of any suit brought
to enforce any such claim, but if the Company elects to assume the defense, such
defense shall be conducted by counsel chosen by the Company and satisfactory to
the Underwriter or Underwriters or controlling person or persons who are
defendant or defendants in any suit so brought. In the event that the Company
elects to assume the defense of any such suit and retains such counsel, the
Underwriter or Underwriters or controlling person or persons, defendant or
defendants in the suit, shall bear the fees and expenses of any additional
counsel thereafter retained by them. The Company agrees to notify you within a
reasonable time of the assertion of any claim against it or any of the Company's
officers or directors or any person who controls the Company within the meaning
of Section 15 of the Act, in connection with the sale of the Shares.
The foregoing indemnity agreement in paragraph (a) is subject
to the condition that, insofar as it relates to any such untrue statement,
alleged untrue statement, omission or alleged omission made in a preliminary
prospectus but eliminated or remedied in the Prospectus, such indemnity
agreement shall not inure to the benefit of any Underwriter from whom the person
asserting any loss, liability, claim or damage purchased the Shares (or to the
benefit of any person who controls such Underwriter) if a copy of the Prospectus
was not furnished to such person at or prior to the time such action is required
by the Act.
(b) Each Underwriter severally agrees that it will indemnify
and hold harmless the Company and each of its officers who signs the
Registration Statement, each of its directors, and each person, if any, who
controls the Company within the meaning of Section 15 of the Act to the same
extent as the foregoing indemnity from the Company, but only with respect to
statements or omissions made in the Registration Statement, any preliminary
prospectus, the Prospectus or any Blue Sky Application, or in any amendment or
supplement to any such document, in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Underwriter through
you expressly for use in the Registration Statement, any such preliminary
prospectus, the Prospectus or any Blue Sky Application, or in any amendment or
supplement to any such document. In case any action shall be brought against the
Company or any other person so indemnified, and in respect of which indemnity
may be sought hereunder against any Underwriter, such Underwriter shall have the
rights and duties given to the Company, and the Company and each person so
indemnified shall have the rights and duties given to the Underwriters, by the
provisions of subsection (a) of this Section 7.
(c) If the Indemnification provided in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) above in respect of any losses, claims, damages, liabilities or
expenses (or actions in respect thereof) referred to herein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Underwriters on the other from the offering of the Shares. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law, then each indemnifying party shall contribute to such amount
paid or payable by such indemnified party in such proportion as is appropriate
to reflect not only such relative
20
<PAGE> 21
benefits but also the relative fault of the Company on the one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or expenses (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Shares (before deducting expenses) received by
the Company bear to the total underwriting discounts and commissions received by
the Underwriters, in each case as set forth in the table on the cover page of
the Prospectus. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Underwriters agree that
it would not be just and equitable if contribution were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities or
expenses (or actions in respect thereof) referred to above shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such claim.
Notwithstanding the provisions of this subsection (c), no Underwriter shall be
required to contribute an amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute are several in
proportion to their respective underwriting obligations and not joint.
In any proceeding relating to the Registration Statement, any
preliminary prospectus, the Prospectus, any Blue Sky Application, or any
supplement or amendment thereto, each party against whom contribution may be
sought under this Section 7 hereby consents to the jurisdiction of any court
having jurisdiction over any other contributing party, agrees that process
issuing from such court may be served upon him or it by any other contributing
party and consents to the service of such process and agrees that any other
contributing party may join him or it as an additional defendant in any such
proceeding in which such other contributing party is a party.
Section 8. Representations, Warranties and Agreements to
Survive Delivery. All representations, warranties and agreements contained in
this Agreement or contained in certificates of officers of the Company submitted
pursuant hereto shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any Underwriter or controlling
person, or by or on behalf of the Company, and shall survive delivery of the
Shares to the Underwriters.
21
<PAGE> 22
Section 9. Effective Date of this Agreement and Termination
Thereof.
(a) This Agreement shall become effective (i) at 10:30 a.m.,
Nashville Time, on the first full business day following the day on which the
Registration Statement becomes effective or (ii) upon the initial public
offering by the Underwriters of any of the Shares after the Registration
Statement becomes effective, whichever shall first occur. The time of the
initial public offering shall mean the time of the release by you for
publication of the first newspaper advertisement which is subsequently published
relating to any of the Shares, or the time at which any of the Shares are first
generally offered by the Underwriters to dealers by letter or telegram,
whichever shall first occur. You or the Company may prevent this Agreement from
becoming effective, without liability of any party except as otherwise provided
in Section 5 with respect to such action by the Company, by giving the notice
indicated below in this Section 9 prior to the time when this Agreement would
otherwise become effective as herein provided. Any such notice shall be
effective only upon receipt.
(b) You shall have the right to terminate this Agreement by
giving the notice indicated below in this Section 9 at any time at or prior to
Closing Time (i) if there shall have been, since the respective dates as of
which information is given in the Registration Statement and Prospectus, any
material adverse change in the condition, financial or otherwise, of the
Company, or in the results of operations or business prospects of the Company,
whether or not arising in the ordinary course of business, or (ii) if there
shall have occurred any national or international calamity or crisis, financial
or otherwise, the effect of which on the financial markets of the United States
shall be material and adverse in nature and shall be such as in your judgment
makes it impractical for the Underwriters to sell the Shares, or (iii) if
trading on the New York Stock Exchange shall have been suspended, or minimum or
maximum prices for trading shall have been fixed, or maximum ranges for prices
of securities shall have been required on said Exchange by order of such
Exchange or of the Commission or any other governmental authority having
jurisdiction, or if a banking moratorium shall have been declared by federal,
Tennessee or New York authorities. If you terminate this Agreement as provided
in this Section, such termination shall be without liability of any party to any
other party except as otherwise provided in Section 5.
If you elect to prevent this Agreement from becoming effective
or to terminate this Agreement as provided in this Section 9, the Company and
each other Underwriter shall be notified promptly by you, by telephone or
telegram, confirmed by letter. If the Company elects to prevent this Agreement
from becoming effective as provided in this Section 9, you shall be notified
promptly by the Company by telephone or telegram, confirmed by letter.
Section 10. Substitution of Underwriters or Increase in
Underwriters' Commitments. If any one or more of the Underwriters shall fail or
refuse to purchase the Shares which it or they have agreed to purchase
hereunder, and the number of Shares which such defaulting Underwriter or
Underwriters agree but fail or refuse to purchase is not more than 10% of the
aggregate number of the Shares, the other Underwriters shall be obligated,
severally, in the proportion which the number of Shares set forth opposite their
respective names in
22
<PAGE> 23
Schedule A hereto bears to the aggregate number of Shares that the nondefaulting
Underwriters have agreed to purchase or in such other proportion as you may
specify in accordance with Section 1 of the Agreement Among Underwriters, to
purchase the shares that such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase. If any Underwriter or Underwriters shall fail or
refuse to purchase Shares and the aggregate number of Shares with respect to
which such default occurs is more than said 10% and arrangements satisfactory to
you and the Company for purchase of such Shares are not made within 24 hours
after such default, this Agreement will terminate without liability on the part
of any non-defaulting Underwriter or the Company, except for the liability to be
borne by the Company and the Underwriters as provided in Section 5 hereof and
the indemnity and contribution agreements in Section 7 hereof. In any such case
either you or the Company shall have the right to postpone the Closing Time, but
in no event for longer than seven days, in order that the required changes, if
any, in the Registration Statement and the Prospectus or any other documents or
arrangements may be effected. Any action taken under this Section 10 shall not
relieve any defaulting Underwriter from liability in respect of any default of
any such Underwriter under this Agreement.
Any notice under this Section 10 may be made by telegraph or
telephone but shall be subsequently confirmed by letter.
Section 11. Notices. Except as otherwise herein provided, all
communications hereunder shall be in writing and, if sent to the Underwriters,
shall be mailed, delivered or telegraphed and confirmed to J.C. Bradford & Co.,
330 Commerce Street, Nashville, Tennessee 37201-1809, Attention: Thomas C. Wylly
II, or if sent to the Company, shall be mailed, delivered or telegraphed and
confirmed to the Company, in care of the Company at 7132 Commercial Park Drive,
Knoxville, Tennessee 37918, Attention: Michael L. Campbell, President.
Section 12. Parties. This Agreement shall inure to the benefit
of and be binding upon the Underwriters, the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
parties hereto and their respective successors, and the controlling persons and
the officers and directors referred to in Section 7, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provisions
herein contained, this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of the parties
hereto and their respective successors, and said controlling persons and said
officers and directors, and for the benefit of no other person, firm or
corporation. No purchaser of Shares from any Underwriter shall be deemed to be a
successor by reason merely of such purchase.
Section 13. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Tennessee.
23
<PAGE> 24
If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to us a counterpart hereof, whereupon this
instrument along with all counterparts will become a binding agreement among the
Company and the Underwriters in accordance with its terms.
Very truly yours,
REGAL CINEMAS, INC.
By:____________________________________________
Michael L. Campbell, President
24
<PAGE> 25
Confirmed and accepted
as of the date first above written:
J.C. BRADFORD & CO.
WHEAT, FIRST SECURITIES, INC.
MONTGOMERY SECURITIES
For themselves and as the Representatives
of the other Underwriters named in
Schedule A hereto.
By: J.C. BRADFORD & CO.
By:_____________________
Partner
25
<PAGE> 26
SCHEDULE A
<TABLE>
<CAPTION>
Number
Underwriter of Shares
- ----------- ---------
<S> <C>
J.C. Bradford & Co....................................................
Wheat, First Securities, Inc..........................................
Montgomery Securities.................................................
--------
Total...............................................
========
</TABLE>
<PAGE> 1
EXHIBIT 5
B A S S, B E R R Y & S I M S P L C
A PROFESSIONAL LIMITED LIABILITY COMPANY
ATTORNEYS AT LAW
2700 FIRST AMERICAN CENTER 1700 RIVERVIEW TOWER
NASHVILLE, TENNESSEE 37238-2700 POST OFFICE BOX 1509
TELEPHONE (615) 742-6200 KNOXVILLE, TENNESSEE 37901-1509
TELECOPIER (615) 742-6293 TELEPHONE (423) 521-6200
TELECOPIER (423) 521-6234
May 9, 1996
Regal Cinemas, Inc.
7132 Commercial Park Drive
Knoxville, Tennessee 37918
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as your counsel in connection with your preparation of a
registration statement on Form S-3 (the "Registration Statement") filed by you
with the Securities and Exchange Commission on May 2, 1996, covering 2,500,000
shares of no par value common stock (the "Common Stock") of Regal Cinemas, Inc.
(the "Company") to be sold by the Company to the underwriters represented by
J.C. Bradford & Co., Wheat, First Securities, Inc. and Montgomery Securities
(the "Underwriters") for public distribution pursuant to the Underwriting
Agreement among the Company and the Underwriters filed as an exhibit to the
Registration Statement.
In connection with this opinion, we have examined and relied upon such
records, documents and other instruments as in our judgment are necessary or
appropriate in order to express the opinions hereinafter set forth and have
assumed the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, and the conformity to original documents of all
documents submitted to us as certified or photostatic copies.
Based on the foregoing and such other matters as we have deemed
relevant, we are of the opinion that the shares of Common Stock to be sold by
the Company, when issued and delivered in the manner and on the terms described
in the Registration Statement (after the same is declared effective), will be
validly issued, fully paid and nonassessable.
We hereby consent to the reference to our law firm in the Registration
Statement under the caption "Legal Matters" and to the use of this opinion as an
exhibit to the Registration Statement.
Very truly yours,
/S/ Bass Berry & Sims PLC
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Regal Cinemas, Inc. on Form S-3 of our report dated February 8, 1996, on our
audits of the consolidated financial statements of Regal Cinemas, Inc. as of
December 29, 1994 and December 28, 1995, and for each of the three years in the
period ended December 28, 1995, which report is included in the Annual Report on
Form 10K-A of Regal Cinemas, Inc. for the year ended December 28, 1995, filed
with the Securities and Exchange Commission. We also consent to the reference to
our firm under the captions "Summary Consolidated Financial and Operating Data"
and "Experts."
/S/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Knoxville, Tennessee
May 1, 1996
<PAGE> 2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement of
Regal Cinemas, Inc. on Form S-3 of our report dated February 23, 1996, on our
audits of the consolidated financial statements of Georgia State Theatres, Inc.
and Subsidiary as of December 29, 1994 and December 28, 1995, and for each of
the three years in the period ended December 28, 1995, which report is included
in the Current Report on Form 8-K of Regal Cinemas, Inc. dated May 1, 1996. We
also consent to the reference to our firm under the caption "Experts."
/S/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Atlanta, Georgia
May 1, 1996
<PAGE> 3
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement of
Regal Cinemas, Inc. on Form S-3 of our report dated March 8, 1996, on our audit
of the combined Historical Summary of Net Theatre Assets to be Acquired by Regal
Cinemas, Inc. from Krikorian Theatres as of December 31, 1995, and the related
combined Historical Summary of Direct Theatre Operating Revenues and Expenses
for the year then ended, which report is included in the Current Report on Form
8-K of Regal Cinemas, Inc. dated May 1, 1996. We also consent to the reference
to our firm under the caption "Experts."
/S/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Los Angeles, California
May 1, 1996
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in this
Registration Statement (Form S-3) and related Prospectus of Regal Cinemas, Inc.
for the registration of 2,875,000 shares of its common stock and to the
incorporation by reference therein of our report dated March 21, 1995 (with
respect to the financial statements of Neighborhood Entertainment, Inc. not
separately presented), included in the Annual Report (Form 10-K/A) of Regal
Cinemas, Inc for the year ended December 28, 1995, filed with the Securities and
Exchange Commission.
/S/ Ernst & Young LLP
Richmond, Virginia
April 30, 1996
<PAGE> 1
EXHIBIT 23.3
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Regal Cinemas, Inc. on Form S-3 of our report dated March 22, 1994 on the
financial statements of Litchfield Theatres, Ltd. for the year ended December
31, 1993, appearing in the Annual Report of Regal Cinemas, Inc. on Form 10-K/A
for the year ended December 28, 1995 and to the reference to Deloitte & Touche
LLP under the heading "Experts" in the prospectus, which is part of this
Registration Statement.
/S/ Deloitte & Touche LLP
Columbia, South Carolina
April 30, 1996
