<PAGE>
REGISTRATION NO. 333-_____
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 15, 1999
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------
FAMILY GOLF CENTERS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 11-3223246
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
DOMINIC CHANG, CHIEF EXECUTIVE OFFICER
FAMILY GOLF CENTERS, INC.
538 BROADHOLLOW ROAD
MELVILLE, NEW YORK 11747
(516) 694-1666
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL
EXECUTIVE OFFICES AND AGENT FOR SERVICE)
FAMILY GOLF CENTERS, INC.
1998 OPTION AND AWARD PLAN
(FULL TITLE OF THE PLAN)
COPY TO:
KENNETH R. KOCH, ESQ.
SQUADRON, ELLENOFF, PLESENT & SHEINFELD, LLP
551 FIFTH AVENUE
NEW YORK, NEW YORK 10176
(212) 661-6500
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -------------------------------- --------------------------------- ----------------------- ------------------ ----------------
TITLE OF SECURITIES AMOUNT PROPOSED PROPOSED AMOUNT OF
TO BE REGISTERED TO BE MAXIMUM MAXIMUM REGISTRATION
REGISTERED (1) OFFERING PRICE AGGREGATE FEE
PER SHARE (2) OFFERING PRICE
- -------------------------------- --------------------------------- ----------------------- ------------------ ----------------
<S> <C> <C>
COMMON STOCK, PAR VALUE $.01 1, 500,000 SHARES (3) $17.313 $25,969,500.00 $7,219.52
PER SHARE
- -------------------------------- --------------------------------- ----------------------- ------------------ ----------------
COMMON STOCK, PAR VALUE $.01 22,500 SHARES (4) $17.875 $389,542.50 $108.29
PER SHARE
- -------------------------------- --------------------------------- ----------------------- ------------------ ----------------
</TABLE>
(1) PLUS SUCH INDETERMINATE NUMBER OF SHARES PURSUANT TO RULE 416 AS MAY BE
ISSUED IN RESPECT OF STOCK SPLITS, STOCK DIVIDENDS AND SIMILAR
TRANSACTIONS.
(2) ESTIMATED SOLELY FOR THE PURPOSE OF CALCULATING THE REGISTRATION FEE
PURSUANT TO RULE 457(H) UNDER THE SECURITIES ACT OF 1933 ON THE AVERAGE
HIGH AND LOW PRICES FOR THE COMMON STOCK, AS REPORTED ON THE NASDAQ
NATIONAL MARKET ON JANUARY 12, 1999.
(3) THE NUMBER OF SHARES OF COMMON STOCK BEING REGISTERED REPRESENTS
1,500,000 SHARES OF COMMON STOCK THAT MAY BE ISSUED ON THE DATE HEREOF
UNDER THE FAMILY GOLF CENTERS, INC. 1998 STOCK OPTION AND AWARD PLAN (THE
"PLAN") PURSUANT TO STOCK AWARDS AND/OR OPTIONS ISSUED OR TO BE ISSUED
UNDER THE PLAN.
(4) THE NUMBER OF SHARES OF COMMON STOCK BEING REGISTERED REPRESENTS 22,500
SHARES OF COMMON STOCK THAT WERE ISSUED TO AN OFFICER OF THE COMPANY AS A
RESTRICTED STOCK AWARD OUTSIDE THE PLAN PURSUANT TO AN EMPLOYMENT
AGREEMENT BETWEEN THE COMPANY AND SUCH OFFICER.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
A PROSPECTUS CONTAINING INFORMATION SPECIFIED BY PART I OF THIS FORM
S-8 REGISTRATION STATEMENT (THE "REGISTRATION STATEMENT") HAS BEEN OR WILL BE
SENT OR GIVEN TO PARTICIPANTS IN THE PLAN AS SPECIFIED IN RULE 428(B)(1)
PROMULGATED BY THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). EACH SUCH
PROSPECTUS SHALL CONSTITUTE A SECTION 10(A) PROSPECTUS AND IS INCORPORATED BY
REFERENCE IN THIS REGISTRATION STATEMENT.
EXPLANATORY NOTE
THIS REGISTRATION STATEMENT INCLUDES A PROSPECTUS, PREPARED IN
ACCORDANCE WITH THE REQUIREMENTS OF PART I OF FORM S-3, WHICH, PURSUANT TO
GENERAL INSTRUCTION C OF FORM S-8, MAY BE USED FOR THE OFFER AND SALE (I) BY
CERTAIN OFFICERS AND DIRECTORS OF THE COMPANY WHO MAY BE DEEMED TO BE
"AFFILIATES" OF THE COMPANY, AS THAT TERM IS DEFINED IN RULE 405 UNDER THE
SECURITIES ACT, OF SECURITIES REGISTERED HEREUNDER AND (II) BY CERTAIN HOLDERS
OF "RESTRICTED SECURITIES," AS THAT TERM IS DEFINED IN RULE 144(A)(3) UNDER THE
SECURITIES ACT, OF SECURITIES REGISTERED HEREUNDER.
<PAGE>
PROSPECTUS
------------------------------------
FAMILY GOLF CENTERS, INC.
------------------------------------
1,522,500 SHARES OF COMMON STOCK
This Prospectus relates to offers and sales of up to 1,500,000 shares
("Plan Shares") of Common Stock, par value $.01 per share (the "Common Stock"),
of Family Golf Centers, Inc., a Delaware corporation (the "Company"), that have
been or will be acquired by certain directors, employees, officers, agents,
consultants and independent contractors of the Company or any subsidiary
thereof (the "Selling Stockholders") some of whom may be deemed to be
"affiliates" of the Company, as defined in Rule 405 under the Securities Act of
1933 (the "Securities Act"), upon the grant of restricted stock awards
("Awards") or the exercise of options (the "Options") granted pursuant to the
Family Golf Centers, Inc. 1998 Stock Option and Award Plan (the "Plan"). In
addition, this Prospectus relates to offers and sales of up to 22,500 shares
("Additional Shares," and together with the Plan Shares, the "Shares") of
Common Stock of the Company that were acquired by an officer of the Company as
a restricted stock award outside the Plan pursuant to an employment agreement
between the Company and such officer. See "Selling Stockholders." The Common
Stock is quoted on the Nasdaq National Market(R) (the "Nasdaq National Market")
under the symbol "FGCI." The closing sales price for the Common Stock on
January 12, 1999 was $17 3/16 per share.
Shares covered by this Prospectus may be offered and sold from time to
time directly by the Selling Stockholders or through brokers on the Nasdaq
National Market or otherwise at prevailing market prices at the time of sale,
prices related to prevailing market prices, or negotiated prices. No
underwriting arrangements have been entered into by the Selling Stockholders.
No specified brokers or dealers have been designated by the Selling
Stockholders, and no agreement has been entered into in respect of brokerage
commissions or for the exclusive or coordinated sale of any securities which
may be offered pursuant to this Prospectus. The distribution of the Shares by
the Selling Stockholders may be effected in one or more transactions that may
take place in the over-the-counter market, including ordinary broker's
transactions, privately negotiated transactions, or through sales to one or
more dealers for resale of such Shares as principals. The net proceeds to the
Selling Stockholders will be the proceeds received by them upon such sales,
less brokerage commissions, if any. The Company will pay all expenses of
preparing and reproducing this Prospectus, but will not receive any of the
proceeds from sales by any of the Selling Stockholders. The Selling
Stockholders, and any broker-dealers, or agents, through whom the Shares are
sold, may be deemed "underwriters" within the meaning of the Securities Act
with respect to securities offered by them, and any profits realized or
commissions received by them may be deemed underwriting compensation. See "Plan
of Distribution."
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.
THE COMMON STOCK OFFERED HEREBY INVOLVES A SUBSTANTIAL DEGREE OF RISK.
SEE "RISK FACTORS" COMMENCING ON PAGE 5.
No dealer, salesman, or any other person has been authorized to give
any information or to make any representation other than as contained or
incorporated by reference herein and, if given or made, such information or
representation must not be relied upon as having been authorized by the
Company. This Prospectus does not constitute an offer to sell or a solicitation
of an offer to buy securities by anyone in any jurisdiction in which such
offering may not lawfully be made. 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 or the information
herein since the date hereof. See "Risk Factors."
-------------------------------------------------------
The date of this Prospectus is January 15, 1999
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission"), 450 Fifth Street, N.W., Washington, D.C. 20549, a Registration
Statement (the "Registration Statement") under the Securities Act with respect
to the offering and sale from time to time of the Shares. This Prospectus does
not contain all the information set forth in the Registration Statement and the
exhibits thereto, as permitted by the rules and regulations of the Commission.
For further information, reference is made to the Registration Statement and to
the exhibits filed therewith. Statements contained in this Prospectus as to the
contents of any contract or other document which has been filed or incorporated
by reference as an exhibit to the Registration Statement are qualified in their
entirety by reference to such exhibits for a complete statement of their terms
and conditions. Additionally, the Company is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and, in accordance therewith, files reports, proxy statements, and other
information statements with the Commission. Copies of such materials may be
inspected without charge at the offices of the Commission, and copies of all or
any part thereof may be obtained from the Commission's public reference
facilities at 450 Fifth Street, N.W., Washington D.C. 20549 or at the regional
offices of the Commission located at 7 World Trade Center, New York, New York
10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661, upon
payment of the fees prescribed by the Commission. In addition, the Commission
maintains a Web Site that contains reports, proxy and information statements
and other information regarding the Company (http://www.sec.gov). The Common
Stock is quoted on the Nasdaq National Market under the symbol "FGCI." Reports
and other information concerning the Company may be inspected at the offices of
the National Association of Securities Dealers, Inc., 1735 K Street, N.W.,
Washington, D.C. 20006.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Incorporated herein by reference and made a part of this Prospectus
are the following: (1) the Company's Annual Report on Form 10-K, for the fiscal
year ended December 31, 1997; (2) the Company's Proxy Statement on Schedule 14A
filed with the Commission on May 15, 1998; (3) the Company's Quarterly Reports
on Form 10-Q for the quarters ended March 31, 1998, June 30, 1998 and September
30, 1998; (4) the Company's Current Reports on Form 8-K dated January 30, 1998,
April 2, 1998, June 16, 1998, June 30, 1998, July 20, 1998 and December 2,
1998; (5) the Company's Amendments to Current Reports on Form 8-K/A dated
January 30, 1998, June 30, 1998 and December 2, 1998 and (6) the description of
the Common Stock which is registered under Section 12 of the Exchange Act,
contained in the Company's Registration Statement on Form 8-A dated November 8,
1994. All documents subsequently filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14, or 15(d) of the Exchange Act after the
date of this Prospectus and prior to the termination of the offering made
hereby will be deemed to be incorporated by reference into this Prospectus and
to be a part hereof from the respective dates of filing of such documents. Any
statement contained in any document incorporated by reference 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 statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Prospectus. All information appearing in this Prospectus is qualified in
its entirety by the information and financial statements (including notes
thereto) appearing in the documents incorporated herein by reference, except to
the extent set forth in the immediately preceding statement.
The Company will provide without charge to each person who receives a
Prospectus, upon written or oral request of such person, a copy of the
information that is incorporated by reference herein (not
- 2 -
<PAGE>
including exhibits to the information that is incorporated by reference
herein). Requests for such information should be directed to: Family Golf
Centers, Inc., 538 Broadhollow Road, Melville, New York 11747; Attention: Chief
Executive Officer. The Company's telephone number is: (516) 694-1666.
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
Certain statements included or incorporated by reference into this
Prospectus constitute "forward-looking statements" within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act. These
statements appear in a number of places in this Prospectus and include
statements regarding the intent, belief or current expectations of the Company
with respect to the Company's acquisition and financing plans, (ii) trends
affecting the Company's financial condition or results of operations, (iii) the
impact of competition and (iv) the expansion of certain operations. Prospective
investors are cautioned that any such forward-looking statements are not
guarantees of future performance and involve risks and uncertainties, and that
actual results may differ materially from those in the forward-looking
statements as a result of various factors. The information contained or
incorporated by reference in this Prospectus, including, without limitation,
the information under "Risk Factors," identifies important factors that could
cause or contribute to such differences.
- 3 -
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by reference to the
more detailed information and the financial statements and the notes thereto
contained or incorporated by reference herein. Unless the context otherwise
requires, references to "Family Golf" and the "Company" are to Family Golf
Centers, Inc. together with its subsidiaries. Unless otherwise indicated, the
information in this Prospectus has been adjusted to give effect to a
three-for-two stock split in the form of a stock dividend (the "Stock Split")
distributed on May 4, 1998. Each prospective investor is urged to read this
Prospectus in its entirety. This Prospectus contains "forward-looking
statements" which involve certain unknown risks and uncertainties which may
cause actual results to differ materially from those in the forward-looking
statements.
THE COMPANY
Family Golf is the leading consolidator and operator of golf centers
in North America. The Company's golf centers provide a wide variety of practice
and play opportunities, including facilities for driving, chipping, putting,
pitching and sand play. The Company's golf centers typically offer full-line
pro shops, golf lessons instructed by PGA-certified golf professionals and
other amenities such as miniature golf and snack bars to encourage family
participation. The Company has a proven track record of successfully
identifying, acquiring and integrating golf centers, having grown from one golf
facility in 1992 to 118 as of December 31, 1998, including 10 facilities under
construction. In addition, in order to generate additional sources of revenue,
attract a more diverse customer base and offset the seasonality of its core
golf business, the Company has selectively acquired, constructed and begun
operating complementary sports and family entertainment facilities, including
ice rinks and "Family Sports Supercenters." Family Sports Supercenters have two
or more sports-related attractions (including at least one of the Company's
core sports-related attractions: golf centers and ice rinks), and may include
other sports-related attractions, as well as a variety of family entertainment
activities. The Company currently operates eight stand-alone ice rink
facilities, manages 16 additional ice rink facilities and operates three Family
Sports Supercenters.
The Company's golf centers are typically larger, more attractive and
offer more amenities than the average golf center. The Company believes that it
attracts customers to its golf centers due to the quality, convenience and
comfort of its facilities and their appeal to the whole family. The Company's
golf centers are designed around a driving range with target greens, bunkers
and sand traps to simulate golf course conditions. Generally, the Company's
ranges are lighted to permit night play and the hitting tees are enclosed or
sheltered in a climate-controlled environment. In certain cases, all or a
portion of the range is enclosed under an air inflated dome to permit
all-weather play. In addition to a driving range, the Company's golf centers
typically include a number of amenities designed to appeal to golfers and their
families. Typical amenities include a 4,000-6,000 square foot clubhouse, a
full-line pro shop stocked with golf merchandise from leading brand-name
manufacturers and the Company's private label products, PGA-certified golf
instructors, landscaped miniature golf courses and a short game practice area
(including a putting green and sand traps). A number of the Company's golf
centers also include golf courses, consisting primarily of executive and par-3
courses.
The Company was incorporated in Delaware in 1994. Its Company's
principal executive offices are located at 538 Broadhollow Road, Melville, New
York 11747 and its telephone number is (516) 694-1666. The Company's World Wide
Web address is http://www.familygolf.com. The contents of the Company's
web-site are not part of this Prospectus.
- 4 -
<PAGE>
RISK FACTORS
Prospective investors should carefully consider the specific factors
set forth below, as well as the other information included in this Prospectus,
before deciding to invest in the Shares offered hereby.
ACQUISITION AND GROWTH STRATEGY; RISKS ASSOCIATED WITH INTEGRATING NEW
FACILITIES
The Company's ability to significantly increase revenue, operating
cash flow and net income over time depends in large part upon its success in
acquiring and enhancing, or constructing, additional facilities at suitable
locations upon satisfactory terms. There can be no assurance that suitable
facility acquisitions or lease opportunities will be available or that the
Company will be able to consummate acquisitions or leasing transactions on
satisfactory terms. In addition, the acquisition of facilities may become more
expensive in the future if demand and competition increase. The likelihood of
the continued success of the Company must be considered in light of the
problems, expenses, difficulties, complications and delays frequently
encountered in connection with the improvement of existing and acquired
facilities and the construction and opening of new facilities, including delays
in obtaining required permits.
To implement its expansion strategy successfully, the Company must
integrate acquired or newly opened facilities into its existing operations,
which may necessitate the implementation of enhanced operational and financial
systems and may require additional employees and management, operational,
financial and other resources. As part of its strategy, the Company has
recently entered the ice rink and family entertainment industries, in which the
Company has only limited experience and which involve all the risks commonly
associated with the establishment of new lines of business. As the Company
grows, there can be no assurance that additional facilities can be readily
integrated into the Company's operating structure. The Company's inability to
efficiently integrate facilities or to successfully operate within the ice rink
and family entertainment industries could have a material adverse effect on the
Company's financial condition and results of operations. In addition, a number
of the facilities which the Company has acquired have, and facilities it may
acquire in the future may have, experienced losses. As a result of the timing
of the Company's acquisitions, the seasonality of the acquired businesses, the
expansion of the Company's business to include ice rinks and Family Sports
Supercenters and other factors, the Company's historical and pro forma results
of operations referred to herein are not necessarily indicative of future
results. There can be no assurance that facilities recently acquired by the
Company or those that the Company may acquire in the future will operate
profitably and will not materially adversely affect the Company's financial
condition and results of operations.
DEPENDENCE ON THE GOLF INDUSTRY AND DISCRETIONARY CONSUMER SPENDING
Although the Company has expanded its business outside the golf
industry, the Company is highly dependent on the golf industry, and the
public's interest in utilizing golf practice centers, for the generation of its
revenues and earnings. Activities such as golf have, in the past, been
susceptible to increases and decreases in popularity that have materially
affected the financial condition and results of operations of companies
dependent on such activities, and there can be no assurance that the golf
industry will not suffer a material decrease in popularity, which would result
in a material adverse effect on the Company's financial condition and results
of operations. The amount spent by consumers on discretionary items, such as
the family entertainment activities offered by the Company, have historically
been dependent upon levels of discretionary income, which may be adversely
affected by general economic conditions. A decrease in consumer spending on
golf and other family entertainment activities could have a material adverse
effect on the Company's financial condition and results of operations.
RESTRICTIONS IMPOSED BY CREDIT FACILITY AND OTHER INDEBTEDNESS
The Credit Agreement, dated December 2, 1998, between the Company, The
Chase Manhattan Bank, as Agent and as a Lender, and the other Lenders named
therein, provides for borrowings by the Company of up to $100 million (the
"Credit Facility"). The Credit Facility as well as certain other instruments
governing the Company's indebtedness include covenants that, among other
things, restrict the ability of the Company to incur additional indebtedness,
dispose of assets, merge or consolidate with another entity, create liens, pay
dividends, or make investments, acquisitions or capital expenditures. Under the
Credit Facility, the Company is also required to maintain certain financial
ratios and meet certain tests and the Credit Facility restricts the Company's
ability to prepay the Company's other indebtedness. The ability of the Company
to comply with such provisions may be affected by events that are beyond the
Company's control. Failure to comply with certain covenants would, among other
things, permit the Company's lenders to accelerate the maturity of the
obligations thereunder and could result in cross-defaults permitting the
acceleration of debt under other Company agreements. Moreover, as a result of
these covenants, the ability of the Company to respond to changing business and
economic conditions and to secure additional financing, if needed, may be
restricted significantly, and the Company may be prevented from engaging in
transactions that might otherwise be considered beneficial to the Company.
- 5 -
<PAGE>
ADDITIONAL FINANCING REQUIREMENTS
The Company anticipates, based on its currently proposed expansion
plans and assumptions relating to its operations, that its available cash,
together with anticipated bank borrowings and cash flow from operations, will
be sufficient to permit the Company to conduct its operations and to carry on
its contemplated expansion through at least the next 12 months. The Company
also anticipates that it will need to raise substantial additional capital in
the future to continue its long term expansion plans. There can be no assurance
that the Company will be able to obtain additional financing on favorable
terms, or at all.
FLUCTUATING OPERATING RESULTS; VULNERABILITY TO WEATHER CONDITIONS AND
SEASONALITY
Historically, the second and third quarters of the calendar year have
accounted for a greater portion of the Company's revenues than have the first
and fourth quarters of the year. This is primarily due to an outdoor playing
season limited by weather. Although most of the Company's driving ranges are
designed to be all-weather facilities, portions of the Company's facilities,
including the miniature golf courses, are outdoors and vulnerable to weather
conditions. In addition, golfers are less inclined to practice when weather
conditions limit their ability to play golf on outdoor courses. The Company
expects its expansion into ice rink facilities and Family Sports Supercenters
to partially offset such seasonality. The timing of new center openings and
acquisitions may also cause the Company's results of operations to vary
significantly from quarter to quarter. Accordingly, period to period
comparisons are not necessarily meaningful and should not be relied on as
indicative of future results. In addition, variability in the Company's results
of operations could cause the price of the Company's securities to fluctuate
following the release of interim results of operations or other information and
may have a material adverse effect on the price of the Company's securities.
COMPETITION
The golf center, ice rink and family entertainment industries are each
highly competitive and include competition from other golf centers, golf
courses, other ice rinks and family entertainment outlets and other
recreational pursuits. In addition, the Company's pro shop business faces
competition from other pro shops, specialty retailers and department stores.
The Company may face imitation and other forms of competition and the Company
cannot prevent others from utilizing a similar operational strategy. Many of
the Company's competitors and potential competitors may have considerably
greater financial and other resources, experience and customer recognition than
does the Company. The Company operates 21 of its golf centers under the name
"Golden Bear" pursuant to a non-exclusive license agreement (the "License
Agreement") with a subsidiary (the "Licensor") of Golden Bear Golf, Inc.
("GBGI"). GBGI, the parent of the Licensor, is a competitor of the Company. The
Licensor is permitted to establish, or license others to establish, Golden Bear
golf centers that compete with the Company's golf centers, including the
Company's Golden Bear golf centers, provided that, with one exception, the
Company has the exclusive right to operate Golden Bear golf centers within a
10-mile radius of the Company's Golden Bear golf centers. There can be no
assurance that competition will not adversely affect the Company's business or
ability to acquire additional properties.
DEPENDENCE ON CERTAIN AGREEMENTS
The future success of the business and operations of the Company is
dependent, in part, upon certain key operating agreements, including its real
property leases, management agreements with respect to certain municipal
facilities and the License Agreement. Certain of these agreements are
terminable at will and others may be terminated prior to their scheduled
expiration should the Company default in its obligations thereunder. The
termination or non-renewal of any of these agreements may have a material
adverse effect
- 6 -
<PAGE>
on the Company. In particular, certain of the Company's management agreements
with municipalities require the Company to make capital improvements to the
facilities under management.
If any of these management agreements are terminated, in most cases
the municipality may retain, and is not obligated to pay the Company for the
value of, such capital improvements. Unless reimbursed, the Company would
immediately have to write-off, for accounting purposes, the undepreciated value
of these capital improvements (which aggregate $7.5 million as of September 30,
1998), which are currently being depreciated and amortized over the life of the
relevant management agreement.
In addition, the Company operates 21 of its golf centers under the
name "Golden Bear" pursuant to the License Agreement with the Licensor.
Termination of the License Agreement could adversely affect the Company's
Golden Bear golf centers and, possibly, the Company. The License Agreement
expires December 31, 2008, subject to termination by the Company effective on
December 31, 2000. The License Agreement is also subject to termination by the
Company or the Licensor under certain other circumstances. The value of the
"Golden Bear" name is dependent, in part, upon the continued popularity of Jack
Nicklaus. Accordingly, the occurrence of any event which diminishes the
reputation of Mr. Nicklaus and the related "Golden Bear" symbol could adversely
affect the Company's Golden Bear golf centers. GBGI has disclosed in its public
filings that it is a defendant in substantial class action litigation involving
claims under the federal securities laws.
ENVIRONMENTAL REGULATION
Operations at the Company's facilities involve the use and limited
storage of various hazardous materials such as pesticides, herbicides, motor
oil, gasoline, heating oil and paint, as well as various chemicals used to
create, refrigerate and maintain the ice at its ice rinks. Under various
federal, state and local laws, ordinances and regulations, an owner or operator
of real property is generally liable for the costs of removal or remediation of
hazardous substances that are released on or in its property regardless of
whether the property owner or operator knew of, or was responsible for, the
release of hazardous materials. The Company has not been informed by any
governmental authority of any material non-compliance or violation by the
Company of any environmental laws, ordinances or regulations and the Company
believes that it is in substantial compliance with all such laws, ordinances
and regulations applicable to its properties or operations. As of the date
hereof, the Company has not incurred material costs of remediation, and the
Company knows of no material environmental liability to which it may become
subject. Although the Company usually hires environmental consultants to
conduct environmental studies, including invasive procedures such as soil
sampling or ground water analysis on facilities it owns, operates or intends to
acquire, in some cases only limited invasive procedures are conducted on such
properties and in a limited number of instances no environmental studies are
conducted. Accordingly, there may be potential environmental liabilities or
conditions of which the Company is not aware.
DEPENDENCE UPON KEY EMPLOYEE; RECRUITMENT OF ADDITIONAL PERSONNEL
The Company is heavily dependent on the services of Dominic Chang, its
Chairman of the Board and Chief Executive Officer. The loss of the services of
Mr. Chang could materially adversely affect the Company. Mr. Chang has entered
into an employment agreement with the Company which terminates on December 31,
2000. The Company owns key person life insurance in the amount of $5.0 million
on the life of Mr. Chang. In addition, it is an event of default under the
certain of the Company's principal credit facilities, including its $100.0
million revolving credit facility, if Mr. Chang is not the Chairman of the
Board and Chief Executive Officer of the Company and if he does not own at
least 5% of the Company's outstanding Common Stock. The Company will also be
required to hire additional personnel and
- 7 -
<PAGE>
professionals to staff the additional facilities it intends to acquire,
lease or construct. There can be no assurance that the Company will be able to
attract and retain qualified personnel.
SIGNIFICANT STOCKHOLDER
As of December 31, 1998, Dominic Chang beneficially owned 3,749,001
shares of Common Stock (including 1,500 shares of Common Stock owned by Mr.
Chang's children and 15,000 shares of Common Stock issuable upon exercise of
options which are currently exercisable), constituting approximately 14.5% of
outstanding shares. Mr. Chang is, therefore, able to exercise significant
influence with respect to the election of the directors of the Company and all
matters submitted to a vote of the stockholders of the Company, including the
acquisition or disposition of material assets.
VOLATILITY OF PRICE OF COMMON STOCK
The trading price of the Company's Common Stock could be subject to
fluctuations in response to variations in quarterly operating results, the gain
or loss of significant contracts, changes in management, future announcements
concerning the Company, general trends in the industry and other events or
factors.
PREFERRED STOCK; POSSIBLE ANTI-TAKEOVER EFFECTS OF CERTAIN CHARTER, BY-LAW AND
CONTRACTUAL PROVISIONS
The Company's Certificate of Incorporation authorizes the Board of
Directors to issue up to 2,000,000 shares of preferred stock, $0.10 par value
per share. The preferred stock may be issued in one or more series, the terms
of which may be determined at the time of issuance by the Board of Directors,
without further action by stockholders. Although no preferred stock is
currently outstanding and the Company currently has no plans for the issuance
of any preferred stock, there can be no assurance that the Company will not do
so in the future. The ability of the Board of Directors to issue preferred
stock could have the effect of delaying, deferring or preventing a change
of control of the Company or the removal of existing management and, as a
result, could prevent the stockholders of the Company from being paid a premium
over the market value for their shares of Common Stock. The Company's By-Laws
contain previous requiring advance notice of stockholder proposals and imposing
certain procedural restrictions on stockholders wishing to call a special
meeting of stockholders. Under certain of the Company's principal credit
facilities it is an event of default if Mr. Chang is not the Chairman of the
Board, Chief Executive Officer and beneficial owner of at least 5% of the
outstanding Common Stock. In addition, the indenture with respect to the
$115 million principal amount of notes (the "Indenture") gives the holders of
the notes the right to have such notes redeemed if there is a Change of Control
(as defined in the Indenture). Accordingly, such provisions could discourage
possible future attempts to gain control of the Company (which attempts, if
stockholders were offered a premium over the market value of their Common
Stock, might be viewed as beneficial to stockholders).
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the shares
of Common Stock offered by the Selling Stockholders hereby. All such proceeds
will be received by the Selling Stockholders.
- 8 -
<PAGE>
SELLING STOCKHOLDERS
The address of each Selling Stockholder is c/o Family Golf Centers,
Inc., 538 Broadhollow Road, Melville, New York 11747. Subject to the following
sentence, the following table sets forth the name and principal position(s)
over the past three years with the Company of each of the Selling Stockholders
and (a) the number of shares of Common Stock each Selling Stockholder
beneficially owned as of December 31, 1998; (b) the number of shares of Common
Stock owned or which may be acquired by each Selling Stockholder upon grant of
Awards or the exercise of Options pursuant to the Plan being registered hereby,
together with the Additional Shares granted outside of the Plan, some or all of
which shares may be sold pursuant to this Prospectus; and (c) the number of
shares of Common Stock and the percentage, if 1% or more, of the total class of
Common Stock outstanding to be beneficially owned by each Selling Stockholder
following this offering, assuming the sale pursuant to this offering of all
Common Stock acquired by such Selling Stockholder pursuant to the Plan and
registered hereby and assuming no additional shares of Common Stock are
acquired or issued. This Prospectus also relates to the reoffers and resales of
Plan Shares by certain unnamed non-affiliates each of whom may sell up to 1,000
of such shares of Common Stock. There is no assurance, however, that any of the
Selling Stockholders, including the unnamed non-affiliates, will sell any or
all of the shares of Common Stock offered by them hereunder.
<TABLE>
<CAPTION>
Number of Shares of
Number of Shares of Number of Shares Common Stock Beneficially
Common Stock of Common Stock Owned after this Offering
Selling Stockholders Position with Company Beneficially Owned Offered Hereby(1) Number Percent
- -------------------- --------------------- ------------------- ----------------- ------ -------
<S> <C> <C> <C> <C> <C>
Krishnan P. Thampi President, Chief 520,719 (2) 200,250 520,719 (2) 2.0%
Operating Officer,
Assistant Secretary,
Treasurer and Director
Jeffrey Key Chief Financial Officer 53,500 (3) 90,000 (4) 53,500 (3) *
Robert J. Krause Senior Vice President - 59,975 (5) 19,500 59,975 (5) *
Strategic Planning and
Development
Margaret M. Santorufo Controller 14,751 (6) 17,250 14,751 (6) *
William Schickler Senior Vice President 93,750 (7) 19,500 93,750 (7) *
Pamela S. Charles Vice President, 19,750 (8) 17,250 19,750 (8) *
Secretary and General
Counsel
Richard Hasslinger Senior Vice President - 41,050 (9) 18,750 41,050 (9) *
Regional Manager
Garrett J. Kelleher Vice President - Finance 13,000 (10) 2,000 13,000 (10) *
Rodger P. Potocki Vice President - 18,307 (11) 2,000 18,307 (11) *
Regional Manager
- --------------------
</TABLE>
* Represents less than 1% of the number of shares outstanding.
(1) Includes shares of Common Stock underlying options which have been
granted to such Selling Stockholders, but which have not yet vested and
are not exercisable within 60 days of the date hereof and also includes
shares of Common Stock granted as Awards which are subject to forfeiture
under certain circumstances.
(2) Includes 212,544 shares of Common Stock issuable upon exercise of options
which are currently exercisable and 170,250 shares of restricted Common
Stock awarded under the Plan. Excludes 132,588 shares of Common Stock
underlying options, including 30,000 underlying Options issued pursuant
to the Plan, which will not become exercisable within 60 days of the date
hereof.
(3) Includes 6,000 shares of Common Stock issuable upon exercise of options
which are currently exercisable, 25,000 shares of restricted Common Stock
awarded under the Plan and 22,500 shares of restricted Common Stock
issued outside of the Plan. Excludes 110,000 shares of Common Stock
underlying options, including 20,000 underlying Options issued pursuant
to the Plan, which will not become exercisable within 60 days of the date
hereof.
- 9 -
<PAGE>
(4) Includes 22,500 of Additional Shares issued outside of the Plan.
(5) Includes 53,975 shares of Common Stock issuable upon exercise of options
which are currently exercisable and 4,500 shares of restricted Common
Stock awarded under the Plan. Excludes 42,500 shares of Common Stock
underlying options, including 15,000 underlying Options issued pursuant
to the Plan, which will not become exercisable within 60 days of the date
hereof.
(6) Includes 12,500 shares of Common Stock issuable upon exercise of options
which are currently exercisable and 2,250 shares of restricted Common
Stock awarded under the Plan. Excludes 30,000 shares of Common Stock
underlying options, including 15,000 underlying Options issued pursuant
to the Plan, which will not become exercisable within 60 days of the date
hereof.
(7) Includes 89,250 shares of Common Stock issuable upon exercise of options
which are currently exercisable and 4,500 shares of restricted Common
Stock awarded under the Plan Excludes 51,000 shares of Common Stock
underlying options, including 15,000 underlying Options issued pursuant
to the Plan, which will not become exercisable within 60 days of the date
hereof.
(8) Includes 17,500 shares of Common Stock issuable upon exercise of options
which are currently exercisable and 2,250 shares of restricted Common
Stock awarded under the Plan. Excludes 40,000 shares of Common Stock
underlying options, including 15,000 underlying Options issued pursuant
to the Plan, which will not become exercisable within 60 days of the date
hereof.
(9) Includes 37,000 shares of Common Stock issuable upon exercise of options
which are currently exercisable and 3,750 shares of restricted Common
Stock awarded under the Plan. Excludes 32,750 shares of Common Stock
underlying options, including 15,000 underlying Options issued pursuant
to the Plan, which will not become exercisable within 60 days of the date
hereof.
(10) Includes 9,000 shares of Common Stock issuable upon exercise of options
which are currently exercisable. Excludes 9,000 shares of Common Stock
underlying options, including 2,000 underlying Options issued pursuant to
the Plan, which will not become exercisable within 60 days of the date
hereof.
(11) Includes 12,607 shares of Common Stock issuable upon exercise of options
which are currently exercisable. Excludes 9,500 shares of Common Stock
underlying options, including 2,000 underlying Options issued pursuant to
the Plan, which will not become exercisable within 60 days of the date
hereof.
As the names and amounts of securities to be sold by additional Selling
Stockholders become known, the following information will be included in a
prospectus supplement, if required: the name and position(s) over the last
three years with the Company of each Selling Stockholder; the number of shares
of Common Stock owned by each Selling Stockholder; the number of shares of
Common Stock owned or which may be acquired under options by each Selling
Stockholder and being registered for resale by the Selling Stockholders; and
the number of shares of Common Stock and the percentage, if 1% or more, of the
total class of Common Stock outstanding to be beneficially owned by each
Selling Stockholder following the offering.
PLAN OF DISTRIBUTION
The Shares offered by this Prospectus may be sold from time to time by the
Selling Stockholders or by transferees thereof. No underwriting arrangements
have been entered into by the Selling Stockholders. The distribution of the
Shares by the Selling Stockholders may be effected in one or more transactions
that may take place in the over-the-counter market, including ordinary broker's
transactions, privately negotiated transactions, or through sales to one or
more dealers for resale of such shares as principals, at prevailing market
prices at the time of sale, prices related to prevailing market prices, or
negotiated prices. Underwriter's discounts and usual and customary or
specifically negotiated brokerage fees or commissions may be paid by a Selling
Stockholder in connection with sales of the Shares.
In order to comply with certain state securities laws, if applicable, the
Shares will be sold in such jurisdictions only through registered or licensed
brokers or dealers. In certain states, the Shares may not be sold unless such
Shares have been registered or qualified for sale in such state or an exemption
from registration or qualification is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any person
engaged in a distribution of the Shares may not simultaneously engage in
market-making activities with respect to such Shares for a period of one or
five business days prior to the commencement of such distribution. In addition
to, and
- 10 -
<PAGE>
without limiting, the foregoing, each of the Selling Stockholders and any other
person participating in a distribution will be subject to the applicable
provisions of the Exchange Act and the rules and regulations thereunder,
including, without limitation, Regulation M, which provisions may limit the
timing of purchases and sales of any of the Shares by the Selling Stockholders
or any such other person. All of the foregoing may affect the marketability of
the Shares. The Company will bear all expenses of the offering, except that the
Selling Stockholders will pay any applicable brokerage fees or commissions and
transfer taxes.
DESCRIPTION OF CAPITAL STOCK
A description of the Company's capital stock is contained in the Company's
registration statement on Form 8-A, which is incorporated by reference herein.
See "Incorporation of Certain Documents by Reference."
LIMITATION OF LIABILITY AND INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Certificate of Incorporation limits the liability of
directors to the maximum extent permitted by Delaware law. Delaware law
provides that directors of a company will not be personally liable for monetary
damages for breach of their fiduciary duties as directors, except for liability
for (i) any breach of their duty of loyalty to the company or its stockholders,
(ii) acts or omissions not in good faith or involving intentional misconduct or
a knowing violation of law, (iii) unlawful payment of dividends or unlawful
stock repurchases or redemptions as provided in Section 174 of the Delaware
General Corporation Law or (iv) any transaction from which the director derived
an improper personal benefit.
The Company's Certificate of Incorporation provides that the Company shall
indemnify its officers, directors, employees and other agents to the fullest
extent permitted by Delaware law.
The Company maintains a policy of insurance under which the directors and
officers of the Company are insured, subject to the limits of the policy,
against certain losses arising from claims made against such directors and
officers by reason of any acts or omissions covered under such policy in their
respective capacities as directors or officers, including liabilities under the
Securities Act. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Company pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable.
LEGAL MATTERS
The validity of the Shares has been passed upon for the Company by
Squadron, Ellenoff, Plesent & Sheinfeld, LLP, 551 Fifth Avenue, New York, New
York 10176. Kenneth R. Koch, Esq. a partner of Squadron, Ellenoff, Plesent &
Sheinfeld, LLP, holds options to purchase shares of the Company's Common Stock.
- 11 -
<PAGE>
EXPERTS
The consolidated financial statements of the Company as at December
31, 1997 and December 31, 1996 and for each of the years in the three-year
period ended December 31, 1997, have been audited by Richard A. Eisner &
Company, LLP, independent auditors, as indicated in their report with respect
thereto and are incorporated by reference herein in reliance upon such report
given upon authority of said firm as experts in accounting and auditing. The
supplemental consolidated financial statements of Family Golf Centers, Inc. and
subsidiaries (reflecting the consolidation of Family Golf Centers, Inc. and
Eagle Quest Golf Centers, Inc.) as at December 31, 1997 and December 31, 1996
and for each of the years in the three-year period ended December 31, 1997,
have been audited by Richard A. Eisner & Company, LLP, independent auditors, as
indicated in their report therein which, is based in part on the report of
other auditors and are incorporated by reference herein in reliance upon such
reports given upon authority of said firms as experts in accounting and
auditing. The consolidated financial statements of MetroGolf Incorporated as at
December 31, 1997 and for the year then ended have been audited by Richard A.
Eisner & Company, LLP, independent auditors, as indicated in their report with
respect thereto and are incorporated by reference herein in reliance upon such
report given upon the authority of said firm as experts in accounting and
auditing. The consolidated financial statements of Eagle Quest Golf Centers
Inc. as at December 31, 1997 and 1996 and for the year ended December 31, 1997
and for the period from incorporation on February 5, 1996 to December 31, 1996
have been incorporated by reference herein in reliance upon the report of
KPMG LLP, independent chartered accountants, incorporated by reference herein
in reliance and upon the authority of said firm as experts in accounting and
auditing. Such report includes additional comments for U.S. readers that cast
substantial doubt as to Eagle Quest's ability to continue as a going concern.
The Eagle Quest financial statements did not include any adjustments that might
result from the outcome of that uncertainty. The consolidated financial
statements of Golden Bear Golf Centers, Inc. at December 31, 1997 and 1996 and
for the years then ended incorporated by reference in this Prospectus and
elsewhere in the registration statement have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their reports giving said
reports with respect thereto, and are incorporated by reference herein in
reliance upon the authority of said firm as experts in giving said reports. The
financial statements of Leisure Complexes, Inc. at and for the year ended
December 31, 1996 are incorporated by reference herein in reliance on the
report of Feldman, Gutterman, Meinberg & Co., independent auditors, given upon
the authority of said firm as experts in accounting and auditing. The
consolidated financial statements of SkateNation Inc. at September 30, 1998 and
1997 and for the years then ended, incorporated by reference in this
prospectus, have been incorporated herein in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
that firm as experts in accounting and auditing.
- 12 -
<PAGE>
===============================================================================
No dealer, salesman, or any other person has been authorized to give any
information or to make any representation not contained in this Prospectus in
connection with the offering made hereby, and, if given or made, such
information or representation must not be relied upon as having been authorized
by the Company. This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, any of the securities offered hereby in any
jurisdiction to any person to whom it is unlawful to make such an offer or
solicitation in such jurisdiction. 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 dates as of which such information is furnished.
--------------------
TABLE OF CONTENTS
Page
----
Available Information ...................................... 2
Incorporation of Certain Documents by Reference ............ 2
Special Note Regarding Forward Looking
Statements .............................................. 3
Prospectus Summary ......................................... 4
Risk Factors ............................................... 5
Use of Proceeds ............................................ 8
Selling Stockholders ....................................... 9
Plan of Distribution ....................................... 10
Description of Capital Stock ............................... 11
Limitation of Liability and Indemnification
of Directors and Officers ............................... 11
Legal Matters .............................................. 11
Experts .................................................... 12
===============================================================================
===============================================================================
1,522,500 SHARES
FAMILY GOLF
CENTERS, INC.
COMMON STOCK
--------------
PROSPECTUS
--------------
JANUARY 15, 1999
===============================================================================
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
- ------
Incorporated herein by reference and made a part of this Prospectus are
the following: (1) the Company's Annual Report on Form 10-K, for the fiscal
year ended December 31, 1997; (2) the Company's Proxy Statement on Schedule 14A
filed with the Commission on May 15, 1998; (3) the Company's Quarterly Reports
on Form 10-Q for the quarters ended March 31, 1998, June 30, 1998 and September
30, 1998; (4) the Company's Current Reports on Form 8-K dated January 30, 1998,
April 2, 1998, June 16, 1998, June 30, 1998, July 20, 1998 and December 2,
1998; (5) the Company's Amendments to Current Reports on Form 8-K/A dated
January 30, 1998, June 30, 1998 and December 2, 1998 and (6) the description of
the Common Stock which is registered under Section 12 of the Exchange Act,
contained in the Company's Registration Statement on Form 8-A dated November 8,
1994. All documents subsequently filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14, or 15(d) of the Exchange Act after the
date of this Prospectus and prior to the termination of the offering made
hereby will be deemed to be incorporated by reference into this Prospectus and
to be a part hereof from the respective dates of filing of such documents. Any
statement contained in any document incorporated by reference 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 statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Prospectus. All information appearing in this Prospectus is qualified in
its entirety by the information and financial statements (including notes
thereto) appearing in the documents incorporated herein by reference, except to
the extent set forth in the immediately preceding statement.
The Company will provide without charge to each person who receives a
Prospectus, upon written or oral request of such person, a copy of the
information that is incorporated by reference herein (not including exhibits to
the information that is incorporated by reference herein). Requests for such
information should be directed to: Family Golf Centers, Inc., 538 Broadhollow
Road, Melville, New York 11747; Attention: Chief Executive Officer. The
Company's telephone number is: (516) 694-1666.
ITEM 4. DESCRIPTION OF SECURITIES
- ------
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
- ------
The validity of the Common Stock issuable upon the exercise of options
granted pursuant to the Plan will be passed upon by Squadron, Ellenoff, Plesent
& Sheinfeld, LLP, 551 Fifth Avenue, New York, New York 10176. Kenneth R. Koch,
Esq., a member of Squadron, Ellenoff, Plesent & Sheinfeld, LLP, holds options
to purchase shares of the Company's Common Stock.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
- ------
Delaware General Corporation Law, Section 102(b)(7), enables a corporation
in its original certificate of incorporation, or an amendment thereto validly
approved by stockholders, to eliminate or limit personal liability of members
of its Board of Directors for violations of a director's fiduciary duty of
care. However,
II-1
<PAGE>
the elimination or limitation shall not apply where there has been a breach of
the duty of loyalty, failure to act in good faith, intentional misconduct or a
knowing violation of a law, the payment of a dividend or approval of a stock
repurchase which is deemed illegal or an improper personal benefit is obtained.
The Company's Certificate of Incorporation includes the following language:
No director of the Corporation shall be liable to the Corporation or any
of its stockholders for monetary damages for breach of fiduciary duty as a
director, provided that this provision does not eliminate the liability of the
director (i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii)
under Section 174 of Title 8 of the Delaware Code, or (iv) for any transaction
from which the director derived an improper personal benefit.
Article Eighth of the Certificate of Incorporation of the Company permits
indemnification of, and advancement of expenses to, among others, officers and
directors of the Corporation. Such Article provides as follows:
"(a) Each person who was or is made a party or is threatened to be made a
party to or is otherwise involved in any action, suit, or proceeding, whether
civil, criminal, administrative, or investigative (hereinafter a "proceeding"),
by reason of the fact that he or she is or was a director, officer, employee,
or agent of the Corporation or any of its direct or indirect subsidiaries or is
or was serving at the request of the Corporation as a director, officer,
employee, or agent of any other corporation of a partnership, joint venture,
trust, or other enterprise, including service with respect to an employee
benefit plan (hereinafter an "indemnitee"), whether the basis of such
proceeding is alleged action in an official capacity as a director, officer,
employee, or agent or in any other capacity while serving as a director,
officer, employee, or agent, shall be indemnified and held harmless by the
Corporation to the fullest extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be amended (but, in the
case of any such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than permitted prior
thereto), against all expense, liability, and loss (including attorneys' fees,
judgments, fines, excise or other taxes assessed with respect to an employee
benefit plan, penalties, and amounts paid in settlement) reasonable incurred or
suffered by such indemnitee in connection therewith, and such indemnification
shall continue as to an indemnitee who has ceased to be a director, officer,
employee, or agent and shall inure to the benefit of the indemnitee's heirs,
executors, and administrators; provided, however, that, except as provided in
paragraph (c) of this Article Eighth with respect to proceedings to enforce
rights to indemnification, the Corporation shall indemnify and such indemnitee
in connection with a proceeding (or part thereof) initiated by such indemnitee
only if such proceeding (or part thereof) was authorized by the Board of
Directors of the Corporation.
(b) The right to indemnification conferred in paragraph (a) of this
Article Eighth shall include the right to be paid by the Corporation the
expenses incurred in defending any proceeding for which such right to
indemnification is applicable in advance of its final disposition (hereinafter
an "advancement of expenses"); provided, however, that, if the Delaware General
Corporation Law requires, an advancement of expenses incurred by an indemnitee
in his or her capacity as a director or officer (and not in any other capacity
in which service was or is rendered by such indemnitee, including, without
limitation, service to an employee benefit plan) shall be made only upon
delivery to the Corporation of an undertaking (hereinafter an "undertaking"),
by or on behalf of such indemnitee, to repay all amounts so advanced if it
shall ultimately be determined by final judicial decision from which there is
not further right to appeal (hereinafter a "final adjudication") that such
indemnitee is not entitled to be indemnified for such expenses under this
Article Eighth or otherwise.
II-2
<PAGE>
(c) The rights to indemnification and to the advancement of expenses
conferred in paragraphs (a) and (b) of this Article Eighth shall be contract
rights. If a claim under paragraph (a) or (b) of this Article Eighth is not
paid in full by the Corporation within sixty days after a written claim has
been received by the Corporation, except in the case of a claim for an
advancement of expenses, in which case the applicable period shall be twenty
days, the indemnitee may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim. If successful in whole
or in part in any such suit, or in a suit brought by the Corporation to recover
an advancement of expenses pursuant to the terms of an undertaking, the
indemnitee shall be entitled to be paid also the expenses of prosecuting or
defending such suit. In (i) any suit brought by the indemnitee to enforce a
right to indemnification hereunder (but not in a suit brought by an indemnitee
to enforce a right to an advancement of expenses) it shall be a defense that,
the indemnitee has not met any applicable standard for indemnification set
forth in the Delaware General Corporation Law, and (ii) any suit by the
Corporation to recover an advancement of expense pursuant to the terms of an
undertaking, the Corporation shall be entitled to recover such expenses upon a
final adjudication that, the indemnitee has not met any applicable standard for
indemnification set forth in the Delaware General Corporation Law. Neither the
failure of the Corporation (including its Board of Directors, independent legal
counsel, or its stockholders) to have made a determination prior to the
commencement of such suit that indemnification of the indemnitee is proper in
the circumstances because the indemnitee has met the applicable standard of
conduct set forth in the Delaware General Corporation Law, nor an actual
determination by the Corporation (including its Board of Directors, independent
legal counsel, or its stockholders) that the indemnitee has not met such
applicable standard of conduct, shall create a presumption that the indemnitee
has not met the applicable standard of conduct or, in the case of such a suit
brought by the indemnitee, be a defense to such suit. In any suit brought by
the indemnitee to enforce a right to indemnification or to an advancement of
expenses hereunder, or by the Corporation to recover an advancement of expenses
pursuant to the terms of an undertaking, the burden of proving that the
indemnitee is not entitled to be indemnified, or to such advancement of
expenses, under this Article Eighth or otherwise, shall be on the Corporation.
(d) The rights to indemnification and to the advancement of expenses
conferred in this Article Eighth shall not be exclusive of any other right
which any person may have or hereafter acquire under any statute, this
certificate of incorporation, by-law, agreement, vote of stockholders or
disinterested directors, or otherwise.
(e) The Corporation may maintain insurance, at its expense, to protect
itself and any director, officer, employee, or agent of the Corporation or
another corporation, partnership, joint venture, trust, or other enterprise
against any expense, liability, or loss, whether or not the Corporation would
have the power to indemnify such person against such expense, liability, or
loss under the Delaware General Corporation Law.
(f) The Corporation's obligation, if any, to indemnify any person who was
or is serving as a director, officer, employee, or agent of any direct or
indirect subsidiary of the Corporation or, at the request of the Corporation,
of any other corporation or of a partnership, joint venture, trust, or other
enterprise shall be reduced by an amount such person may collect as
indemnification from such other corporation, partnership, joint venture, trust
or other enterprise.
(g) Any repeal or modification of the foregoing provisions of this Article
Eighth shall not adversely affect any right or protection hereunder of any
person in respect of any act or omission occurring prior to the time of such
repeal or modification."
The Company maintains a policy of insurance under which the directors and
officers of the Company are insured, subject to the limits of the policy,
against certain losses arising from claims made against such
II-3
<PAGE>
directors and officers by reason of any acts or omissions covered under such
policy in their respective capacities as directors and officers.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
- ------
220,000 of the Shares offered hereby are restricted securities (the
"Restricted Securities") to be reoffered or resold pursuant to this
Registration Statement and were issued without registration in reliance upon
Section 4(2) of the Securities Act. The Restricted Securities were issued to an
aggregate of 14 persons and did not involve any general solicitation. In
addition, each of the recipients of the Restricted Securities has represented
that such recipient understands that the Common Stock may not be sold or
otherwise transferred absent registration under the Act or an exemption
therefrom and each certificate representing shares of such Common Stock bears a
restrictive legend to such effect.
ITEM 8. EXHIBITS
- ------
<TABLE>
<CAPTION>
<S> <C>
*3.1 Certificate of Incorporation, as amended.
**3.2 Amended and Restated Bylaws.
4.1 Form of Stock Certificate
***4.2 1998 Stock Option and Award Plan
5.1 Opinion of Squadron, Ellenoff, Plesent & Sheinfeld, LLP.
23.1 Consent of Squadron, Ellenoff, Plesent & Sheinfeld, LLP (contained in
Opinion filed as Exhibit 5.1).
23.2(A) Consent of Richard A. Eisner & Company, LLP.
23.2(B) Consent of Richard A. Eisner & Company, LLP.
23.3 Consent of KPMG LLP.
23.4 Consent of Feldman, Gutterman, Meinberg & Co.
23.5 Consent of Arthur Andersen, LLP
23.6 Consent of PricewaterhouseCoopers LLP
24.1 Power of Attorney (included on page II-VI, the signature page hereto).
</TABLE>
- --------------------
* Incorporated by reference to exhibit 3.1 filed in Amendment No. 1
to the Company's Registration Statement on Form SB-2 filed on
June 12, 1996 (Registration No. 333-4541).
** Incorporated by reference to exhibit 3.2 to the Company's
Registration Statement on Form SB-2 filed on May 24, 1996
(Registration Statement No. 333-4541).
*** Incorporated by reference to Annex A of the Company's Proxy
Statement on Schedule 14A, filed on May 15, 1998.
II-4
<PAGE>
ITEM 9. UNDERTAKINGS
- ------
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i)To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii)To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the Registration Statement;
(iii)To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
registrant pursuant to Section 13 or Section 15(d) of the Exchange Act
that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 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.
(c) 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 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, 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.
II-5
<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Melville, State of New York, on the
15th day of January, 1999.
FAMILY GOLF CENTERS, INC.
By: /s/ Dominic Chang
--------------------------
Dominic Chang
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Dominic Chang, and Krishnan P. Thampi and
Jeffrey C. Key or any one of them, his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and in his
name, place, and stead, in any and all capacities, to sign any and all pre- or
post-effective amendments to this Registration Statement, and to file the same
with all exhibits thereto, and other documents in connection therewith, with
the Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, or their or his
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Dominic Chang
---------------------- Chairman of the Board and Chief Executive January 15, 1999
Dominic Chang Officer (Principal Executive Officer)
/s/ Krishnan P. Thampi
---------------------- Chief Operating Officer, President, Assistant January 15, 1999
Krishnan P. Thampi Secretary, Treasurer and Director
/s/ James Ganley
---------------------- Director January 15, 1999
James Ganley
---------------------- Director January 15, 1999
Jimmy C.M. Hsu
---------------------- Director January 15, 1999
Yupin Wang
/s/ Jeffrey Key
---------------------- Chief Financial Officer January 15, 1999
Jeffrey Key (Principal Financial Officer)
</TABLE>
II-6
<PAGE>
Exhibit Index
-------------
<TABLE>
<CAPTION>
Exhibit Number Description
-------------- ---------------
<S> <C>
*3.1 Certificate of Incorporation, as amended.
**3.2 Amended and Restated Bylaws.
4.1 Form of Stock Certificate
***4.2 1998 Stock Option and Award Plan
5.1 Opinion of Squadron, Ellenoff, Plesent & Sheinfeld, LLP.
23.1 Consent of Squadron, Ellenoff, Plesent & Sheinfeld, LLP
(contained in Opinion filed as Exhibit 5.1).
23.2(A) Consent of Richard A. Eisner & Company, LLP.
23.2(B) Consent of Richard A. Eisner & Company, LLP.
23.3 Consent of KPMG LLP.
23.4 Consent of Feldman, Gutterman, Meinberg & Co.
23.5 Consent of Arthur Andersen, LLP
23.6 Consent of PricewaterhouseCoopers LLP
24.1 Power of Attorney (included on page II-VI, the signature
page hereto).
</TABLE>
- --------------------
* Incorporated by reference to exhibit 3.1 filed in Amendment No. 1 to
the Company's Registration Statement on Form SB-2 filed on
June 12, 1996 (Registration No. 333-4541).
** Incorporated by reference to exhibit 3.2 to the Company's Registration
Statement on Form SB-2 filed on May 24, 1996 (Registration Statement
No. 333-4541).
*** Incorporated by reference to Annex A of the Company's Proxy
Statement on Schedule 14A, filed on May 15, 1998.
II-7
<PAGE>
EXHIBIT 5.1
-----------
January 15, 1999
Family Golf Centers, Inc.
225 Broadhollow Road
Melville, New York 11747
Re: Registration on Form S-8
------------------------
Ladies and Gentlemen:
We have acted as counsel to Family Golf Centers, Inc., a Delaware
corporation (the "Company"), in connection with the preparation of its
Registration Statement on Form S-8 under the Securities Act of 1933 (the
"Registration Statement"), to which this opinion is to be filed as an exhibit.
The Registration Statement relates to the issuance of up to an aggregate of
1,500,000 shares (the "Plan Shares") of the Company's Common Stock, par value
$.01 per share (the "Common Stock"), pursuant to the Family Golf Centers,
Inc.'s 1998 Stock Option and Award Plan (the "Plan") and 22,500 restricted
shares (the "Additional Shares," and together with the Plan Shares, the
"Shares") issued to an officer of the Company as a restricted stock award
outside the Plan pursuant to an employment agreement (the "Employment
Agreement") between the Company and such officer.
In so acting, we have examined such records and documents, including the
Plan and made such examinations of law as we have deemed relevant in connection
with this opinion. This opinion relates only to the laws of the State of New
York, the corporate laws of the State of Delaware and the federal laws of the
United States of America in force on the date hereof.
Based upon the foregoing, and subject to the qualifications stated herein,
we are of the opinion that, when issued upon the exercise of and in accordance
with the terms of stock options duly and validly granted against payment
therefor, as an award pursuant to the terms of the Plan, or under the
Employment Agreement, the Shares, which are then originally issued by the
Company, will be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the caption
"Legal Matters" in the Registration Statement. In giving this consent, we do
not thereby admit that we are in the category of persons whose consent is
required under Section 7 of the Securities Act of 1933 and the rules and
regulations of the Securities and Exchange Commission thereunder.
Very truly yours,
/s/ Squadron, Ellenoff, Plesent & Sheinfeld, LLP
<PAGE>
EXHIBIT 23.2(A)
INDEPENDENT AUDITORS' CONSENT
We consent to the reference to our firm under the caption "Experts" in this
Registration Statement on Form S-8 and to the incorporation by reference
therein of our reports dated i) March 26, 1998, except as to Notes M and N as
to which the dates are June 30, 1998 and July 21, 1998, respectively, on our
audit of the financial statements of Family Golf Centers, Inc. and
subsidiaries and ii) March 26, 1998 except as to Notes B and P as to which the
dates are June 30, 1998 and July 21, 1998, respectively, on our audit of the
supplemental financial statements of Family Golf Centers, Inc. and subsidiaries
as of December 31, 1997 and 1996 and for each of the years in the three-year
period ended December 31, 1997, included in its Registration Statement on Form
S-3 dated July 23, 1998, filed with the Securities and Exchange Commission.
Richard A. Eisner & Company, LLP
New York, New York
January 15, 1999
<PAGE>
EXHIBIT 23.2(B)
INDEPENDENT AUDITORS' CONSENT
We consent to the reference to our firm under the caption "Experts" in this
Registration Statement on Form S-8 and to the incorporation by reference
therein of our report dated April 10, 1998 on our audit of the financial
statements of MetroGolf Incorporated and subsidiaries as of December 31, 1997
and for the year then ended, included in the Registration Statement of Family
Golf Centers, Inc. on Form S-3 dated July 23, 1998 filed with the Securities
and Exchange Commission.
Richard A. Eisner & Company, LLP
New York, New York
January 15, 1999
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Eagle Quest Golf Centers Inc.
We consent to the use of our report incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the prospectus.
Our report, dated March 13, 1998, except as to note 16(a) which is as of
April 2, 1998, includes additional comments for U.S. readers that cast
substantial doubt as to Eagle Quest's ability to continue as a going concern.
The consolidated financial statements do not include any adjustments that might
result from the outcome of that uncertainty.
KPMG LLP
Chartered Accountants
Vancouver, Canada
January 13, 1999
<PAGE>
[FGM & Co. Letterhead]
CONSENT OF INDEPENDENT AUDITORS
We consent to the inclusion in this Registration Statement on Form S-8 dated
January 15, 1999 of our report dated June 27, 1997 on our audit of the
financial statements of Leisure Complexes, Inc. as at December 31, 1996 and for
the year then ended.
Feldman, Gutterman, Meinberg & Co.
January 15, 1999
Manhasset, New York
<PAGE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
---------------------------------------------------
As independent certified public accountants, we hereby consent to the use of
our reports (and to all references to our Firm) included in or made a part of
this registration statement.
Arthur Andersen, LLP
West Palm Beach, Florida,
January 15, 1999.
<PAGE>
Exhibit 23.6
CONSENT OF PRICEWATERHOUSECOOPERS LLP
We consent to the incorporation by reference in the registration statement of
Family Golf Centers, Inc. on Form S-8 of the Family Golf Centers, Inc. 1998
Option and Award Plan of our report dated November 23, 1998, except as to the
information in Note 12, for which the date is December 2, 1998, on our audits
of the consolidated financial statements of SkateNation Inc. and its
subsidiaries as of September 30, 1998 and 1997, and for the years then ended,
which report is included in the Current Report on Form 8-K/A of Family Golf
Centers, Inc. dated December 2, 1998. We also consent to the reference to our
firm under the caption "Experts."
PricewaterhouseCoopers LLP
Richmond, Virginia
January 15, 1999
