Pre-Effective Amendment to Registration of Securities Issued in a Business-Combination Transaction · Form S-4
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-4/A Pre-Effective Amendment to Registration of 263 1,471K
Securities Issued in a
Business-Combination Transaction
2: EX-5 Opinion re: Legality 3 13K
3: EX-8 Opinion re: Tax Matters 17 39K
4: EX-11 Statement re: Computation of Earnings Per Share 2 17K
5: EX-23.1 Consent of Experts or Counsel 1 8K
6: EX-23.2 Consent of Experts or Counsel 1 5K
7: EX-23.5 Consent of Experts or Counsel 1 6K
8: EX-27 Financial Data Schedule 2 10K
9: EX-99 Form of Proxy Card 2 8K
S-4/A · Pre-Effective Amendment to Registration of Securities Issued in a Business-Combination Transaction
Document Table of Contents
| Page | (sequential) | | | | (alphabetic) | Top |
|---|
| | |
- Alternative Formats (RTF, XML, et al.)
- Accounting Treatment
- Amce
- AMCE Class B Stock
- AMCE Common Stock and Class B Stock
- AMCE Reasons for the Merger
- Amce Special Meeting, The
- Available Information
- Background of the Merger
- Business of DI
- Business of the Company
- Capitalization of the Company
- Capital lease obligations
- Cash and equivalents
- Certain Federal Income Tax Consequences
- Certain Transactions
- Company, The
- Compensation of Management
- Condensed Pro Forma Financial Statements
- Controlling Stockholders
- Conversion
- Convertible Preferred Stock
- Derivative Action Settlement Agreement, The
- Description of AMCE Capital Stock
- Di Pre-Merger Action Plan
- Di Reasons for the Merger
- DI Special Meeting
- Dissenters' Rights
- Dividend and Liquidation Rights
- Dividends and Price Range of AMCE Common Stock
- Durwood, Inc
- Effective Time
- Employment Contracts, Termination of Employment and Change in Control Arrangements
- Exhibits and Financial Statement Schedules
- Expenses
- Experts
- General
- General Effects of the Merger
- Income taxes
- Incorporation by Reference
- Indemnification Agreement
- Indemnification Agreement, The
- Indemnification of Directors and Officers
- Index to Financial Statements
- Information About Di
- Information about the Company
- Interests of Certain Persons in the Merger
- Legal Matters
- Legal Proceedings
- Liquidity and Capital Resources
- Long-Term Incentive Plan
- Management and Operations of AMCE After the Merger
- Management of the Company
- Management's Discussion and Analysis of Financial Condition and Results of Operations
- Market for and Dividends on DI Stock
- Market Values and Dividends
- Material Terms of the Merger
- Merger Agreement, The
- Merger Consideration
- Merger, The
- Note Offering
- Notes to Condensed Pro Forma Financial Statements
- Notes to Consolidated Financial Statements
- Option/SAR Grants in Last Fiscal Year
- Organization and Ownership of AMCE and DI
- Other
- Other Agreements
- Other Indemnification
- Peter C. Brown
- Pro Forma Per Share Data
- Proxies
- Proxy Statement
- Reasons for Recommendations
- Recent Note Offering and Amendment to Credit Facility
- Registration
- Registration Agreement
- Registration Agreement, The
- Registration Expenses
- Report of Independent Accountants
- Report of KPMG
- Reports of Advisors
- Requisite Voting Percentage in General and in Certain Extraordinary Matters
- Risk Factors
- Secondary Offering
- Security Ownership of DI
- Selected Financial Data
- Stanley H. Durwood
- Stock Agreement
- Stock Agreement, The
- Stockholder Proposals
- Subsequent Meetings of the Special Committee
- Summary
- Summary Financial Data
- Synopsis
- Table of Contents
- Tax Matters
- The Amce Special Meeting
- The Company
- The Derivative Action Settlement Agreement
- The Indemnification Agreement
- The Merger
- The Merger Agreement
- The Registration Agreement
- The Stock Agreement
- Undertakings
- Voting Rights
- Years
|
| 1 | 1st Page
|
| " | Peter C. Brown
|
| 5 | Stanley H. Durwood
|
| 8 | Durwood, Inc
|
| 10 | Proxy Statement
|
| 12 | Table of Contents
|
| 14 | Summary
|
| " | Synopsis
|
| 17 | The Merger
|
| " | General
|
| 21 | The Indemnification Agreement
|
| " | The Stock Agreement
|
| 22 | Certain Federal Income Tax Consequences
|
| " | Accounting Treatment
|
| " | AMCE Reasons for the Merger
|
| 23 | Di Reasons for the Merger
|
| " | Dissenters' Rights
|
| 24 | The Derivative Action Settlement Agreement
|
| 25 | The Company
|
| 28 | Recent Note Offering and Amendment to Credit Facility
|
| " | Note Offering
|
| 29 | Market Values and Dividends
|
| 30 | Summary Financial Data
|
| 33 | Amce
|
| 34 | Pro Forma Per Share Data
|
| 35 | Risk Factors
|
| " | Controlling Stockholders
|
| 37 | The Amce Special Meeting
|
| 38 | Proxies
|
| 40 | Background of the Merger
|
| " | Organization and Ownership of AMCE and DI
|
| 43 | Subsequent Meetings of the Special Committee
|
| 46 | Reports of Advisors
|
| 47 | Report of KPMG
|
| " | Reasons for Recommendations
|
| 51 | Material Terms of the Merger
|
| " | The Merger Agreement
|
| " | Effective Time
|
| " | Merger Consideration
|
| 52 | Di Pre-Merger Action Plan
|
| 54 | Expenses
|
| 55 | Secondary Offering
|
| " | Tax Matters
|
| 56 | The Registration Agreement
|
| " | Registration
|
| " | Registration Expenses
|
| 57 | Other Indemnification
|
| 58 | Other Agreements
|
| 59 | General Effects of the Merger
|
| " | AMCE Class B Stock
|
| 61 | Management and Operations of AMCE After the Merger
|
| 62 | Interests of Certain Persons in the Merger
|
| 65 | Capitalization of the Company
|
| 66 | Information about the Company
|
| " | Dividends and Price Range of AMCE Common Stock
|
| 67 | Selected Financial Data
|
| 69 | Management's Discussion and Analysis of Financial Condition and Results of Operations
|
| 73 | Liquidity and Capital Resources
|
| 76 | Other
|
| 77 | Business of the Company
|
| 86 | Legal Proceedings
|
| 88 | Management of the Company
|
| " | Years
|
| 91 | Compensation of Management
|
| 93 | Option/SAR Grants in Last Fiscal Year
|
| 94 | Long-Term Incentive Plan
|
| 97 | Employment Contracts, Termination of Employment and Change in Control Arrangements
|
| 99 | Certain Transactions
|
| 100 | Description of AMCE Capital Stock
|
| " | AMCE Common Stock and Class B Stock
|
| " | Voting Rights
|
| 101 | Dividend and Liquidation Rights
|
| " | Convertible Preferred Stock
|
| 102 | Conversion
|
| 105 | Information About Di
|
| 117 | Business of DI
|
| " | Security Ownership of DI
|
| " | Market for and Dividends on DI Stock
|
| 119 | Requisite Voting Percentage in General and in Certain Extraordinary Matters
|
| 124 | DI Special Meeting
|
| " | Stockholder Proposals
|
| " | Legal Matters
|
| " | Experts
|
| 125 | Incorporation by Reference
|
| 126 | Available Information
|
| 127 | Index to Financial Statements
|
| 128 | Condensed Pro Forma Financial Statements
|
| 131 | Notes to Condensed Pro Forma Financial Statements
|
| 133 | Report of Independent Accountants
|
| 139 | Notes to Consolidated Financial Statements
|
| " | Cash and equivalents
|
| 146 | Capital lease obligations
|
| 171 | Income taxes
|
| 207 | Stock Agreement
|
| 217 | Registration Agreement
|
| 232 | Indemnification Agreement
|
| 250 | Item 20. Indemnification of Directors and Officers
|
| " | Item 21. Exhibits and Financial Statement Schedules
|
| 256 | Item 22. Undertakings
|
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 17, 1997
REGISTRATION NO. 333-25755
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
AMC ENTERTAINMENT INC.
(Exact Name of Registrant as specified in its charter)
· Download Table
DELAWARE 7832 43-1304369
(State of Incorporation) (Primary Standard Industrial (I.R.S. Employer
Classification Code Number) Identification
Number)
106 WEST 14TH STREET
KANSAS CITY, MISSOURI 64105
(816) 221-4000
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
----------------
PETER C. BROWN
PRESIDENT AND CHIEF FINANCIAL OFFICER
AMC ENTERTAINMENT INC.
106 WEST 14TH STREET, SUITE 1700
KANSAS CITY, MISSOURI 64105
(816) 221-4000
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
----------------
WITH A COPY TO:
RAYMOND F. BEAGLE, JR.
LATHROP & GAGE L.C.
2345 GRAND AVENUE, SUITE 2800
KANSAS CITY, MISSOURI 64108-2684
(816) 292-2000
----------------
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, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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AMC ENTERTAINMENT INC.
CROSS-REFERENCE SHEET
PURSUANT TO ITEM 501(B) OF
REGULATION S-K SHOWING LOCATION IN PROSPECTUS
OF INFORMATION REQUIRED BY ITEMS OF FORM S-4
· Enlarge/Download Table
FORM S-4 REGISTRATION
STATEMENT ITEM NUMBER AND CAPTION LOCATION OR CAPTION IN PROSPECTUS
------------------------------------------------------------------------ --------------------------------------------------
A. Information about the Transaction
1. Forepart of the Registration Statement and Outside
Front Cover Page of Prospectus................... Front of Registration Statement; Outside Front
Cover of Proxy Information Statement/Prospectus
2. Inside Front and Outside Back Cover Pages of
Prospectus....................................... Available Information; Table of Contents;
Incorporation by Reference
3. Risk Factors, Ratio of Earnings to Fixed Charges
and Other Information............................ Summary; Selected Financial Data: Risk Factors
4. Terms of the Transaction.......................... The Merger; Information about the
Company--Description of AMCE Capital Stock;
Comparison of Rights of Holders of AMCE Stock and
DI Stock
5. Pro Forma Financial Information................... Index to Financial Statements
6. Material Contacts with the Company Being
Acquired......................................... The Merger--Background of the Merger
7. Additional Information Required for Reoffering by
Persons and Parties Deemed to be Underwriters.... Not Applicable
8. Interests of the Named Experts and Counsel........ Experts; Legal Matters
9. Disclosure of Commission Position on
Indemnification for Securities Act Liabilities... Comparison of Rights of Holders of AMCE Stock and
DI Stock--The Board of Directors
B. Information about the Registrant
10. Information with Respect to
S-3 Registrants.................................. Not Applicable
11. Incorporation of Certain Information by
Reference........................................ Not Applicable
i
AMC ENTERTAINMENT INC.
CROSS-REFERENCE SHEET (CONTINUED)
PURSUANT TO ITEM 501(B) OF
REGULATION S-K SHOWING LOCATION IN PROSPECTUS
OF INFORMATION REQUIRED BY ITEMS OF FORM S-4
· Enlarge/Download Table
FORM S-4 REGISTRATION
STATEMENT ITEM NUMBER AND CAPTION LOCATION OR CAPTION IN PROSPECTUS
------------------------------------------------------------------------ --------------------------------------------------
12. Information with Respect to S-2 or S-3
Registrants...................................... Summary; Information about the Company--Business
of the Company-- Dividends and Price Range of
Common Stock--Selected Financial Data--
Management's Discussion and Analysis of Financial
Condition and Results of Operations; Index to
Financial Statements
13. Incorporation of Certain Information by
Reference........................................ Incorporation by Reference
14. Information with Respect to Registrants Other Than
S-2 or S-3 Registrants........................... Not Applicable
C. Information about the Company Being Acquired
15. Information with Respect to
S-3 Companies.................................... Not Applicable
16. Information with Respect to S-2 and S-3
Companies........................................ Not Applicable
17. Information with Respect to Companies Other Than
S-2 or S-3 Companies............................. Information about DI--Business--Selected Financial
Data--Management's Discussion and Analysis of
Financial Condition and Results of Operations;
Index to Financial Statements
D. Voting and Management Information
18. Information if Proxies, Consents or Authorizations
are to be Solicited.............................. The AMCE Special Meeting; The Merger-- Dissenters'
Rights--Interests of Certain Persons in the
Merger; Information about the Company--Management
of the Company--Certain Transactions; Information
about DI--Security Ownership; DI Special Meeting
19. Information if Proxies, Consents or Authorizations
are not to be Solicited, or in an Exchange
Offer............................................ Not Applicable
ii
AMC ENTERTAINMENT INC.
106 WEST 14TH STREET
KANSAS CITY, MISSOURI 64105
June 25, 1997
To Our Stockholders:
On behalf of the Board of Directors, I cordially invite you to attend a
special meeting of the stockholders (the "AMCE Special Meeting") of AMC
Entertainment Inc. ("AMCE" or the "Company") to be held at 2:00 p.m., local time
on July 29, 1997, at the offices of Lathrop & Gage L.C., 2345 Grand Avenue, 24th
Floor, Kansas City, Missouri.
At the AMCE Special Meeting, you will be asked to approve and adopt an
Agreement and Plan of Merger and Reorganization dated as of March 31, 1997 (the
"Merger Agreement") by and between AMCE and Durwood, Inc. ("DI"), pursuant to
which DI will be merged into AMCE, with AMCE remaining as the surviving
corporation (the "Merger"). DI, which is wholly owned by the Durwood family, is
the majority stockholder of AMCE, owning 2,641,951, or 38.8%, of the outstanding
shares of AMCE Common Stock, and 11,157,000, or 100%, of the outstanding shares
of AMCE Class B Stock. In the aggregate, these shares represent 96.5% of the
combined voting power of AMCE's outstanding shares of voting stock as of May 19,
1997.
The Merger was proposed to AMCE by the Durwood family in connection with our
efforts to dissolve DI and a family partnership, American Associated Enterprises
("AAE"), that owns shares of DI Class B Stock, so that we may hold our interests
in AMCE directly in the form of a marketable security instead of indirectly
through DI and AAE. The accompanying notice and Proxy Statement describe the
effect that the Merger would have on my family's interest in AMCE.
SHARES OF AMCE STOCK HELD BY STOCKHOLDERS OTHER THAN DI WILL REMAIN ISSUED
AND OUTSTANDING AND WILL NOT BE EXCHANGED IN THE MERGER. HOLDERS OF AMCE STOCK
SHOULD NOT SURRENDER THEIR SHARES IN CONNECTION WITH THE MERGER.
Pursuant to the Merger Agreement and a settlement of a stockholders'
derivative suit in which my son, Mr. Edward D. Durwood, and I are defendants
and/or agreements with AMCE, I and members of my family have agreed to seek the
Merger and to sell at least 3,000,000 shares of AMCE Common Stock within one
year after the closing of the Merger in a public secondary offering (which will
be made only by means of a prospectus).
The AMCE Board of Directors believes that the Merger, which would have no
tax effect on AMCE or its public stockholders, would be beneficial to AMCE and
its stockholders because, among other reasons, it would increase the voting
interest of the stockholders who are not members of my family and simplify the
corporate structure of AMCE. In addition, the sale by members of my family of
AMCE shares in the public secondary offering contemplated to occur following the
Merger will increase the public "float" and liquidity of the AMCE Common Stock
and, as a result, may reduce the volatility of daily stock price changes, narrow
the bid/asked spread and increase the interest of institutional investors in the
AMCE Common Stock. These effects, over time, may enhance shareholder value.
If the Merger is consummated, based on shares outstanding as of May 19,
1997, unaffiliated stockholders (i.e., persons other than members of the Durwood
family) will own approximately 4.2 million, or 32.3%, of AMCE's outstanding
shares of Common Stock, and their voting interest in AMCE will have increased
from 3.5% to 6.6%. If, after the Merger, the secondary offering is consummated,
unaffiliated stockholders will own approximately 7.2 million, or 53.4%, of
AMCE's outstanding shares of Common Stock, based on shares outstanding as of May
19, 1997, and their voting interest in AMCE will have increased from 6.6% after
the Merger to 12.3% after the secondary offering. The enclosed Proxy Statement
describes the effect of these transactions on the Durwood family's interest in
AMCE and also
1
describes how the voting interest of unaffiliated stockholders in AMCE will
increase further if shares of AMCE's $1.75 Cumulative Convertible Preferred
Stock are fully converted.
The accompanying Proxy Statement also describes provisions of an agreement
between me and my children that could result in post-Merger adjustments pursuant
to which I would deliver additional shares to them. Generally, I have agreed to
pay them up to $20 million in shares of AMCE Common Stock if the price they
receive for the 2.5 million shares to be sold by them in the secondary offering
is less than $18 per share. I have also agreed to indemnify them from any
unexpected gift tax and other matters related to the Merger and secondary
offering.
Upon the recommendation of a special committee of the Board of Directors
consisting of Messrs. Charles J. Egan, Jr. and Paul E. Vardeman (the "Special
Committee"), our new outside directors, Messrs. William T. Grant, II and John P.
Mascotte, and the full AMCE Board of Directors has unanimously approved the
Agreement and Plan of Merger and Reorganization and is requesting your approval.
The Board of Directors and the Special Committee believe that the Merger is
fair and in the best interest of AMCE and its unaffiliated stockholders and
recommend that you vote FOR the proposal to approve the Merger Agreement.
Furman Selz LLC, the Special Committee's financial advisor, has rendered an
opinion to the Special Committee to the effect that, as of the date of its
opinion, the consideration to be paid by AMCE is fair, from a financial point of
view, to AMCE.
Details of the Merger and other important information concerning AMCE in the
Merger and DI appear in the accompanying Notice and Proxy Statement. Please give
this material your careful attention. If you have questions concerning the AMCE
Special Meeting, please feel free to contact D.F. King & Co., Inc. our proxy
solicitors, at (800) 290-6431.
A CONDITION TO THE MERGER IS THAT THE MERGER AGREEMENT BE APPROVED BY THE
AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF SHARES OF AMCE COMMON STOCK
PRESENT OR REPRESENTED BY PROXY AND VOTING AT THE SPECIAL MEETING, OTHER THAN
DI, MEMBERS OF MY FAMILY AND DIRECTORS AND OFFICERS OF AMCE. THEREFORE, YOUR
VOTE IS IMPORTANT. Whether or not you plan to attend the AMCE Special Meeting,
please complete, sign and date the accompanying proxy card and return it in the
enclosed postage prepaid envelope. If you attend the AMCE Special Meeting, you
may vote in person even if you have previously returned your proxy card. Your
prompt cooperation will be greatly appreciated.
I am gratified by your continued support of the Company.
Sincerely,
Stanley H. Durwood
Chairman and Chief Executive Officer
Enclosures
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NO MATTER HOW MANY OR FEW SHARES YOU OWN, YOUR VOTE IS IMPORTANT. PLEASE SIGN,
DATE AND MAIL THE ENCLOSED PROXY CARD TODAY!
2
AMC ENTERTAINMENT INC.
106 WEST 14TH STREET
KANSAS CITY, MISSOURI 64105
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 29, 1997
To the Stockholders of AMC ENTERTAINMENT INC.
Notice is hereby given that a special meeting of stockholders of AMC
Entertainment Inc., a Delaware corporation ("AMCE" or the "Company"), will be
held at the offices of Lathrop & Gage L.C., 2345 Grand Avenue, 24th Floor,
Kansas City, Missouri, on July 29, 1997, at 2:00 p.m., local time for the
following purposes:
1. To consider and vote upon a proposal to approve and adopt an Agreement
and Plan of Merger and Reorganization dated March 31, 1997 by and between AMCE
and Durwood, Inc. ("DI"), pursuant to which DI will be merged into AMCE, with
AMCE remaining as the surviving corporation (the "Merger"). In the Merger, (i)
shares of AMCE Common Stock and AMCE $1.75 Cumulative Convertible Preferred
Stock held by AMCE stockholders other than DI will remain issued and outstanding
and will not be exchanged, (ii) each share of AMCE Common Stock and AMCE Class B
Stock held by DI will be canceled, (iii) each share of DI Class A Stock
presently held by Mr. Stanley H. Durwood, the trust created pursuant to the
Revocable Trust Agreement of Mr. Stanley H. Durwood dated August 14, 1989, as
amended (the "1989 Trust"), or the 1992 Durwood, Inc. Voting Trust dated
December 12, 1992 (the "1992 Trust") will be converted into and exchanged for
32.142857 shares of AMCE Class B Stock, so that the 119,500 shares of DI Class A
Stock presently held by Mr. Stanley H. Durwood, the 1989 Trust or the 1992 Trust
will be convertible into and exchangeable for an aggregate of 3,841,071 shares
of AMCE Class B Stock, (iv) each share of DI Class A Stock presently held by or
for the benefit of persons other than Mr. Stanley H. Durwood, the 1989 Trust or
the 1992 Trust will be converted into and exchanged for 32.142857 shares of AMCE
Common Stock, so that the 500 shares of DI Class A Stock presently held by
persons other than Mr. Stanley H. Durwood, the 1989 Trust or the 1992 Trust will
be convertible into and exchangeable for an aggregate of 16,071 shares of AMCE
Common Stock, (v) each share of DI Class B Stock to be held by Mr. Stanley H.
Durwood, the 1989 Trust or the 1992 Trust will be converted into and exchanged
for 243.767528 shares of AMCE Class B Stock, so that the 4,818.4664 shares of DI
Class B Stock to be held by Mr. Stanley H. Durwood, the 1989 Trust or the 1992
Trust will be convertible into and exchangeable for an aggregate of 1,174,586
shares of AMCE Class B Stock, and (vi) each share of DI Class B Stock to be held
by the children of Mr. Stanley H. Durwood will be converted into and exchanged
for 243.767341 shares of AMCE Common Stock, so that the 35,965.5336 shares of DI
Class B Stock to be held by the children of Mr. Stanley H. Durwood will be
convertible into and exchangeable for an aggregate of 8,767,223 shares of AMCE
Common Stock, all as more fully described in the accompanying Proxy Statement;
and
2. To transact such other business as may properly come before the meeting
or any adjournment or adjournments thereof.
DI, which is wholly owned by the Durwood family, is the majority stockholder
of AMCE, owning 2,641,951, or 38.8%, of the outstanding shares of AMCE Common
Stock as of May 19, 1997, and 11,157,000, or 100%, of the outstanding shares of
AMCE Class B Stock as of such date.
Holders of AMCE Common Stock and Class B Stock at the close of business on
June 19, 1997, are entitled to notice of and to vote at the special meeting, or
any adjournment or adjournments thereof. A complete list of such stockholders
will be open to the examination of any stockholder at AMCE's principal executive
offices at 106 West 14th Street, Kansas City, Missouri 64105, for a period of
ten
3
(10) days prior to the meeting. The meeting may be adjourned from time to time
without notice other than by announcement at the meeting.
A CONDITION TO THE MERGER IS THAT THE MERGER AGREEMENT BE APPROVED BY THE
AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF SHARES OF AMCE COMMON STOCK
PRESENT OR REPRESENTED BY PROXY AND VOTING AT THE SPECIAL MEETING, OTHER THAN
DI, MEMBERS OF THE DURWOOD FAMILY AND DIRECTORS AND OFFICERS OF AMCE. THEREFORE,
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER OF
SHARES YOU HOLD. WHETHER OR NOT YOU PLAN TO BE PRESENT AT THE MEETING IN PERSON,
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND MAIL IT PROMPTLY IN
THE ENCLOSED RETURN ENVELOPE. EACH PROXY GRANTED MAY BE REVOKED BY THE
STOCKHOLDER APPOINTING SUCH PROXY AT ANY TIME BEFORE IT IS VOTED. IF YOU RECEIVE
MORE THAN ONE PROXY CARD BECAUSE YOUR SHARES ARE REGISTERED IN DIFFERENT NAMES
OR ADDRESSES, EACH SUCH PROXY CARD SHOULD BE SIGNED AND RETURNED TO ASSURE THAT
ALL YOUR SHARES WILL BE VOTED.
The Notice, the accompanying Proxy Statement and the Proxy enclosed herewith
were sent to you by order of the Board of Directors of AMCE.
Nancy L. Gallagher
Vice President and Secretary
Kansas City, Missouri
June 25, 1997
4
DURWOOD, INC.
106 WEST 14TH STREET
KANSAS CITY, MISSOURI 64105
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 29, 1997
To the Shareholders of Durwood, Inc.:
A special meeting of the shareholders of Durwood, Inc. ("DI") will be held
at the corporate headquarters of DI, 106 West 14th Street, Kansas City, Missouri
on July 29, 1997, at 1:00 p.m. local time to consider and vote upon a proposal
to approve and adopt an Agreement and Plan of Merger and Reorganization dated
March 31, 1997 by and between AMC Entertainment Inc. ("AMCE" or the "Company")
and DI, pursuant to which DI will be merged into AMCE, with AMCE remaining as
the surviving corporation (the "Merger").
In the Merger, (i) shares of AMCE Common Stock and AMCE $1.75 Cumulative
Convertible Preferred Stock held by AMCE stockholders other than DI will remain
issued and outstanding and will not be exchanged, (ii) each share of AMCE Common
Stock and AMCE Class B Stock held by DI will be canceled, (iii) each share of DI
Class A Stock presently held by Mr. Stanley H. Durwood, the trust created
pursuant to the Revocable Trust Agreement of Mr. Stanley H. Durwood dated August
14, 1989, as amended (the "1989 Trust"), or the 1992 Durwood, Inc. Voting Trust
dated December 12, 1992 (the "1992 Trust") will be converted into and exchanged
for 32.142857 shares of AMCE Class B Stock, so that the 119,500 shares of DI
Class A Stock presently held by Mr. Stanley H. Durwood, the 1989 Trust or the
1992 Trust will be convertible into and exchangeable for an aggregate of
3,841,071 shares of AMCE Class B Stock, (iv) each share of DI Class A Stock
presently held by or for the benefit of persons other than Mr. Stanley H.
Durwood, the 1989 Trust or the 1992 Trust will be converted into and exchanged
for 32.142857 shares of AMCE Common Stock, so that the 500 shares of DI Class A
Stock presently held by persons other than Mr. Stanley H. Durwood, the 1989
Trust and the 1992 Trust will be convertible into and exchangeable for an
aggregate of 16,071 shares of AMCE Common Stock, (v) each share of DI Class B
Stock to be held by Mr. Stanley H. Durwood, the 1989 Trust or the 1992 Trust
will be converted into and exchanged for 243.767528 shares of AMCE Class B
Stock, so that the 4,818.4664 shares of DI Class B Stock to be held by Mr.
Stanley H. Durwood, the 1989 Trust or the 1992 Trust will be convertible into
and exchangeable for an aggregate of 1,174,586 shares of AMCE Class B Stock, and
(vi) each share of DI Class B Stock to be held by the children of Mr. Stanley H.
Durwood will be converted into and exchanged for 243.767341 shares of AMCE
Common Stock, so that the 35,965.5336 shares of DI Class B Stock to be held by
the children of Mr. Stanley H. Durwood will be convertible into and exchangeable
for an aggregate of 8,767,223 shares of AMCE Common Stock, all as more fully
described in the accompanying Information Statement/Prospectus.
The close of business on June 19, 1997, has been designated as the record
date for the determination of shareholders entitled to notice of and to vote at
the special meeting or any adjournment thereof.
By Order of the Board of Directors
Kansas City, Missouri
June 25, 1997
5
SUBJECT TO COMPLETION
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.
PRELIMINARY PROXY--INFORMATION STATEMENT/PROSPECTUS
DATED JUNE 17, 1997
AMC ENTERTAINMENT INC.
---------
PROXY STATEMENT
For Special Meeting of Stockholders of AMC Entertainment Inc.
to be Held on July 29, 1997,
and
INFORMATION STATEMENT
For Special Meeting of Shareholders of Durwood, Inc.
to be Held on July 29, 1997
and
PROSPECTUS FOR 8,783,294 SHARES OF AMC ENTERTAINMENT INC.
COMMON STOCK, PAR VALUE 66 2/3 CENTS PER SHARE, AND 5,015,657 SHARES OF AMC
ENTERTAINMENT INC. CLASS B STOCK, PAR VALUE 66 2/3 CENTS PER SHARE
-------------
This Proxy--Information Statement/Prospectus is being furnished as a proxy
statement to holders of Common Stock, par value 66 2/3 CENTS per share ("AMCE
Common Stock" or "Common Stock"), of AMC Entertainment Inc., a Delaware
corporation ("AMCE" or the "Company"), in connection with the solicitation of
proxies by the AMCE Board of Directors (the "AMCE Board") for use at a special
meeting of AMCE stockholders (the "AMCE Special Meeting") to be held on July 29,
1997, at the offices of Lathrop & Gage L.C., 2345 Grand Avenue, 24th Floor,
Kansas City, Missouri, commencing at 2:00 p.m., local time, and at any
adjournments, postponements or continuations thereof.
This Proxy--Information Statement/Prospectus is also being furnished as an
information statement and prospectus to holders of Class A Common Stock, par
value $100 per share ("DI Class A Stock"), and Class B Common Stock, par value
$100 per share ("DI Class B Stock"), of Durwood, Inc., a Missouri corporation
("DI"), in connection with a special meeting of DI shareholders (the "DI Special
Meeting"), to be held on July 29, 1997, at the corporate headquarters of DI, 106
West 14th Street, Kansas City, Missouri, commencing at 1:00 p.m., local time,
and at any adjournments, postponements or continuations thereof.
This Proxy--Information Statement/Prospectus relates to the proposed merger
of DI into AMCE (the "Merger"). DI, which is wholly owned by the Durwood family,
is the majority stockholder of AMCE, owning 2,641,951, or 38.8%, of the
outstanding shares of AMCE Common Stock as of May 19, 1997, and 11,157,000, or
100%, of the outstanding shares of AMCE Class B Stock as of such date. The
Merger will be effected pursuant to the terms of an Agreement and Plan of Merger
and Reorganization dated as of March 31, 1997, between AMCE and DI (the "Merger
Agreement"), pursuant to which DI will be merged into AMCE, with AMCE remaining
as the surviving corporation. SHARES OF AMCE STOCK HELD BY STOCKHOLDERS OTHER
THAN DI WILL REMAIN ISSUED AND OUTSTANDING AND WILL NOT BE EXCHANGED IN THE
MERGER. HOLDERS OF AMCE STOCK SHOULD NOT SURRENDER THEIR SHARES IN CONNECTION
WITH THE MERGER.
Immediately prior to the Merger, DI will convert 6,141,343 shares of AMCE
Class B Stock into shares of AMCE Common Stock, so that at the Effective Time
(as defined herein) of the Merger, DI will own 5,015,657 shares of AMCE Class B
Stock and 8,783,294 shares of AMCE Common Stock. In the Merger, (i) each share
of AMCE Common Stock and AMCE Class B Stock held by DI will be canceled, (ii)
each share of DI Class A Stock presently held by Mr. Stanley H. Durwood, the
trust created pursuant to the Revocable Trust Agreement of Mr. Stanley H.
Durwood dated August 14, 1989, as amended (the "1989 Trust"), or the 1992
Durwood, Inc. Voting Trust dated December 12, 1992 (the "1992 Trust") will be
converted into and exchanged for 32.142857 shares of AMCE's Class B Stock, par
value 66 2/3 CENTS per share ("AMCE Class B Stock" or "Class B Stock"), so that
the 119,500 shares of DI Class A Stock presently held by Mr. Stanley H. Durwood,
the 1989 Trust or the 1992 Trust will be convertible into and exchangeable for
an aggregate of 3,841,071 shares of AMCE Class B Stock, (iii) each share of DI
Class A Stock presently held by or for the benefit of persons other than Mr.
Stanley H. Durwood, the 1989 Trust or the 1992 Trust will be converted into and
exchanged for 32.142857 shares of AMCE Common Stock, so that the 500
(CONTINUED ON NEXT PAGE)
SEE "RISK FACTORS" AT PAGE 22 FOR A DISCUSSION OF CERTAIN MATTERS.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROXY STATEMENT/PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Proxy--Information Statement/Prospectus is , 1997.
(CONTINUED FROM PREVIOUS PAGE)
shares of DI Class A Stock presently held by persons other than Mr. Stanley H.
Durwood, the 1989 Trust or the 1992 Trust will be convertible into and
exchangeable for an aggregate of 16,071 shares of AMCE Common Stock, (iv) each
share of DI Class B Stock to be held by Mr. Stanley H. Durwood, the 1989 Trust
or the 1992 Trust will be converted into and exchanged for 243.767528 shares of
AMCE Class B Stock, so that the 4,818.4664 shares of DI Class B Stock to be held
by Mr. Stanley H. Durwood, the 1989 Trust or the 1992 Trust will be convertible
into and exchangeable for an aggregate of 1,174,586 shares of AMCE Class B
Stock, and (v) each share of DI Class B Stock to be held by the children of Mr.
Stanley H. Durwood will be converted into and exchanged for 243.767341 shares of
AMCE Common Stock, so that the 35,965.5336 shares of DI Class B Stock to be held
by the children of Mr. Stanley H. Durwood will be convertible into and
exchangeable for an aggregate of 8,767,223 shares of AMCE Common Stock.
In connection with the Merger, AMCE has filed a Registration Statement on
Form S-4 (the "Registration Statement"), of which this Proxy--Information
Statement/Prospectus is a part, with the Securities and Exchange Commission (the
"Commission") pursuant to the Securities Act of 1933, as amended (the
"Securities Act"), covering the AMCE Common Stock and AMCE Class B Stock
issuable in the Merger to holders of shares of DI Class A Stock and DI Class B
Stock.
Holders of AMCE Common Stock and AMCE Class B Stock generally vote as a
class on all matters other than the election of directors, with each share of
AMCE Common Stock having one vote per share and each share of AMCE Class B Stock
having ten votes per share. Subject to provisions of AMCE's Amended and Restated
Certificate of Incorporation ("Certificate of Incorporation") which apply if
outstanding shares of AMCE Class B Stock cease to represent in excess of 12 1/2%
of the combined number of outstanding shares of AMCE Common Stock and AMCE Class
B Stock, holders of AMCE Class B Stock are entitled to elect, voting as a class,
75% of the AMCE Board of Directors, and holders of AMCE Common Stock are
entitled to elect, voting as a class, 25% of the AMCE Board of Directors. Each
share of AMCE Class B Stock is convertible into one share of AMCE Common Stock.
Subject to the prior rights of holders of shares of AMCE $1.75 Cumulative
Convertible Preferred Stock ("Convertible Preferred Stock"), holders of AMCE
Common Stock and AMCE Class B Stock are entitled to receive, pro rata per share,
such dividends as may be declared by the AMCE Board. Holders of AMCE Common
Stock and AMCE Class B Stock are entitled to receive, pro rata per share,
consideration of equal value in any merger or consolidation. See "Information
about the Company--Description of AMCE Capital Stock."
This Proxy--Information Statement/Prospectus is first being mailed on or
about June 25, 1997 to all stockholders of AMCE of record on June 19, 1997 (the
"AMCE Record Date"), whether or not such stockholders are entitled to vote at
the AMCE Special Meeting.
This Proxy--Information Statement/Prospectus and accompanying form of proxy
are first being mailed on or about June 25, 1997 to all shareholders of DI of
record on June 19, 1997 (the "DI Record Date").
----------------
THIS PROXY--INFORMATION STATEMENT/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. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROXY--INFORMATION STATEMENT/ PROSPECTUS IN CONNECTION WITH THE OFFERING MADE
HEREBY, AND, IF GIVEN OR MADE, SUCH INFORMATION AND REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY AMCE, DI OR ANY OTHER PERSON. NEITHER
THE DELIVERY OF THIS PROXY--INFORMATION STATEMENT/PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF AMCE OR DI SINCE SUCH DATE. ALL INFORMATION
REGARDING AMCE IN THIS PROXY--INFORMATION STATEMENT/PROSPECTUS HAS BEEN SUPPLIED
BY AMCE, AND ALL INFORMATION REGARDING DI HAS BEEN SUPPLIED BY DI.
----------------
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON REQUEST FROM
MS. NANCY L. GALLAGHER, VICE PRESIDENT AND SECRETARY OF AMCE, 106 WEST 14TH
STREET, KANSAS CITY, MISSOURI 64105 (TELEPHONE: (816) 221-4000). IN ORDER TO
ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE BY JULY 22,
1997.
2
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TABLE OF CONTENTS
SUMMARY............................................................................. 1
Synopsis...................................................................... 1
The Merger.................................................................... 4
The Company................................................................... 12
Recent Note Offering and Amendment to Credit Facility......................... 15
Durwood, Inc.................................................................. 16
Market Values and Dividends................................................... 16
Summary Financial Data........................................................ 17
Pro Forma Per Share Data...................................................... 21
RISK FACTORS........................................................................ 22
THE AMCE SPECIAL MEETING............................................................ 24
THE MERGER.......................................................................... 27
Background of the Merger...................................................... 27
Reports of Advisors........................................................... 33
Reasons for Recommendation.................................................... 34
Material Terms of the Merger.................................................. 38
The Merger Agreement........................................................ 38
The Stock Agreement......................................................... 42
The Registration Agreement.................................................. 43
The Indemnification Agreement............................................... 44
General Effects of the Merger................................................. 46
Management and Operations of AMCE After the Merger............................ 48
Certain Federal Income Tax Consequences....................................... 48
Interests of Certain Persons in the Merger.................................... 49
Dissenters' Rights............................................................ 50
Accounting Treatment.......................................................... 51
CAPITALIZATION OF THE COMPANY....................................................... 52
INFORMATION ABOUT THE COMPANY....................................................... 53
Dividends and Price Range of AMCE Common Stock................................ 53
Selected Financial Data....................................................... 54
Management's Discussion and Analysis of Financial Condition and Results of
Operations................................................................... 56
Business of the Company....................................................... 64
Management of the Company..................................................... 75
Certain Transactions.......................................................... 86
Description of AMCE Capital Stock............................................. 87
INFORMATION ABOUT DI................................................................ 92
Selected Financial Data....................................................... 92
Management's Discussion and Analysis of Financial Condition and Results of
Operations................................................................... 95
Business of DI................................................................ 104
Security Ownership of DI...................................................... 104
Market for and Dividends on DI Stock.......................................... 104
COMPARISON OF AND RIGHTS OF HOLDERS OF AMCE COMMON AND CLASS B STOCK AND DI STOCK... 105
DI SPECIAL MEETING.................................................................. 111
STOCKHOLDER PROPOSALS............................................................... 111
LEGAL MATTERS....................................................................... 111
EXPERTS............................................................................. 111
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TABLE OF CONTENTS
INCORPORATION BY REFERENCE.......................................................... 112
AVAILABLE INFORMATION............................................................... 113
INDEX TO FINANCIAL STATEMENTS....................................................... F-1
Annex 1 - Agreement and Plan of Merger and Reorganization (the "Merger Agreement") A1-1
Exhibit A to Merger Agreement - DI Pre-Merger Action Plan A1-20
Exhibit B to Merger Agreement - Stock Agreement A1-21
Exhibit C to Merger Agreement - Registration Agreement A1-31
Exhibit D to Merger Agreement - Indemnification Agreement A1-46
Exhibit B to Indemnification Agreement - Escrow Agreement A1-55
Annex 2 - Opinion of Furman Selz LLC A2-1
ii
SUMMARY
THE FOLLOWING IS NOT INTENDED TO BE COMPLETE AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO THE MORE DETAILED INFORMATION AND CONSOLIDATED
FINANCIAL STATEMENTS, INCLUDING THE NOTES THERETO, CONTAINED ELSEWHERE IN THIS
PROXY-- INFORMATION STATEMENT/PROSPECTUS AND THE EXHIBITS HERETO. STOCKHOLDERS
ARE URGED TO READ THIS PROXY--INFORMATION STATEMENT/PROSPECTUS, INCLUDING
EXHIBITS, IN ITS ENTIRETY. COPIES OF THE MERGER AGREEMENT, THE REGISTRATION
AGREEMENT, THE STOCK AGREEMENT AND THE INDEMNIFICATION AGREEMENT REFERRED TO
HEREIN ARE SET FORTH IN ANNEX 1 HERETO, AND THE SUMMARIES OF SUCH DOCUMENTS
CONTAINED HEREIN ARE QUALIFIED IN THEIR ENTIRETY BY REFERENCE TO THE FULL TEXTS
OF SUCH AGREEMENTS.
AS USED HEREIN, THE TERM "COMPANY" MEANS AMC ENTERTAINMENT INC. ("AMCE")
AND, UNLESS THE CONTEXT OTHERWISE REQUIRES, ITS SUBSIDIARIES, INCLUDING AMERICAN
MULTI-CINEMA, INC. ("AMC") AND ITS SUBSIDIARIES. REFERENCES TO (I) "MR. STANLEY
H. DURWOOD" INCLUDE, IF THE CONTEXT REQUIRES, MR. STANLEY H. DURWOOD
INDIVIDUALLY AND AS TRUSTEE OF THE 1992 DURWOOD, INC. VOTING TRUST DATED
DECEMBER 12, 1992 (THE "1992 TRUST") AND AS TRUSTEE OF THE TRUST CREATED
PURSUANT TO THE REVOCABLE TRUST AGREEMENT OF MR. STANLEY H. DURWOOD DATED AUGUST
14, 1989, AS AMENDED (THE "1989 TRUST"), (II) "DURWOOD FAMILY STOCKHOLDERS"
MEANS MR. STANLEY H. DURWOOD AND HIS CHILDREN, MRS. CAROL D. JOURNAGAN, MR.
EDWARD D. DURWOOD, MR. THOMAS A. DURWOOD, MRS. ELISSA D. GRODIN, MR. BRIAN H.
DURWOOD AND MR. PETER J. DURWOOD (COLLECTIVELY, THE "DURWOOD CHILDREN"), (III)
"UNAFFILIATED STOCKHOLDERS" MEANS STOCKHOLDERS OF AMCE OTHER THAN THE DURWOOD
FAMILY STOCKHOLDERS, (IV) "DI" MEANS DURWOOD, INC., A MISSOURI CORPORATION, (V)
"DELTA" MEANS DELTA PROPERTIES, INC., A MISSOURI CORPORATION AND A SUBSIDIARY OF
DI, (VI) "AAE" MEANS AMERICAN ASSOCIATED ENTERPRISES, A MISSOURI LIMITED
PARTNERSHIP, AND (VI) THE PERCENTAGE "VOTING INTEREST" OR "VOTING POWER" OF A
STOCKHOLDER OR GROUP OF STOCKHOLDERS OF AMCE MEANS THE PERCENTAGE DERIVED BY
DIVIDING THE NUMBER OF VOTES ATTRIBUTABLE TO SHARES OF AMCE COMMON STOCK OR AMCE
CLASS B STOCK OWNED BY THAT STOCKHOLDER OR GROUP BY THE NUMBER OF VOTES
ATTRIBUTABLE TO ALL OUTSTANDING SHARES OF AMCE COMMON STOCK AND CLASS B STOCK,
WITH EACH SHARE OF AMCE COMMON STOCK HAVING ONE VOTE PER SHARE AND EACH SHARE OF
AMCE CLASS B STOCK HAVING TEN VOTES PER SHARE.
Except as otherwise noted, stockholdings and voting interests in AMCE are
based on shares outstanding as of May 19, 1997 and do not reflect any
conversions into AMCE Common Stock of the 3,175,800 shares of Convertible
Preferred Stock outstanding on such date. Shares of Convertible Preferred Stock
are presently convertible into Common Stock at the ratio of 1.724 shares of
Common Stock for each share of Convertible Preferred Stock.
SYNOPSIS
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THE COMPANY..................... The Company is primarily engaged in the theatrical
exhibition business. As of April 3, 1997, it operated 228
theatres with an aggregate of 1,957 screens located in 23
states, the District of Columbia, Portugal and Japan.
DURWOOD, INC.................... DI is a holding company whose principal shareholders are
Mr. Stanley H. Durwood and AAE. Mr. Stanley H. Durwood
owns 119,500, or 99%, of the 120,000 outstanding shares of
DI Class A Stock, representing approximately 75% of the
voting power of DI, and AAE owns 40,784, or 100%, of the
outstanding shares of DI Class B Stock, representing
approximately 25% of the voting power of DI. AAE's
partners are Mr. Stanley H. Durwood and the Durwood
Children. Mr. Stanley H. Durwood is the sole director of
DI and his son, Mr. Edward D. Durwood, is the managing
general partner of AAE. DI's principal asset consists of
AMCE stock and at
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present it has no significant business activity other than
the ownership of such AMCE stock.
DI, which is wholly owned by the Durwood family, is the
majority stockholder of AMCE, owning 2,641,951, or 38.8%,
of the outstanding shares of AMCE Common Stock as of May
19, 1997, and 11,157,000, or 100%, of the outstanding
shares of AMCE Class B Stock as of such date.
DATE, TIME AND PLACE OF AMCE
SPECIAL MEETING............... The AMCE Special Meeting will be held on Tuesday, July 29,
1997 at 2:00 p.m., local time, at the offices of Lathrop &
Gage L.C., 2345 Grand Avenue, 24th Floor, Kansas City,
Missouri.
AMCE RECORD DATE; STOCKHOLDERS
ENTITLED TO VOTE.............. The AMC Board has set June 19, 1997 as the record date for
the AMCE Special Meeting (the "AMCE Record Date"). Holders
of AMCE Common Stock and AMCE Class B Stock on the AMCE
Record Date will be entitled to vote at the AMCE Special
Meeting. On the AMCE Record Date, there were [6,804,296]
shares of AMCE Common Stock outstanding, each of which
will be entitled to one vote on each matter properly
submitted to stockholders at the AMCE Special Meeting, and
11,157,000 shares of AMCE Class B Stock outstanding, each
of which will be entitled to ten votes on each matter
properly submitted to stockholders at the AMCE Special
Meeting.
DATE, TIME AND PLACE OF DI
SPECIAL MEETING............... The DI Special Meeting will be held on July 29, 1997 at
1:00 p.m., local time, at the corporate headquarters of
DI, 106 West 14th Street, Kansas City, Missouri.
DI RECORD DATE; SHAREHOLDERS
ENTITLED TO VOTE.............. The record date for the DI Special Meeting is June 19,
1997 (the "DI Record Date"). Holders of DI Class A stock
and DI Class B Stock on the DI Record Date will be
entitled to vote at the DI Special Meeting. Each share of
DI Class A Stock and DI Class B Stock will be entitled to
one vote on each matter properly submitted for vote to DI
shareholders at the DI Special Meeting.
PURPOSE OF SPECIAL MEETINGS..... At the Special Meetings, stockholders of AMCE and DI will
be asked to approve the Merger Agreement between AMCE and
its controlling stockholder, DI.
THE MERGER...................... If the Merger Agreement is approved, DI will be merged
into AMCE, and AMCE will be the surviving corporation in
the Merger. In the Merger, shares of DI stock will be
exchanged for shares of AMCE stock. There will be no
increase in the aggregate number of outstanding shares of
AMCE as a result of the Merger, although the number of
outstanding shares of AMCE Common Stock will increase and
the number of outstanding shares of AMCE Class B Stock
will decrease. The percentage of shares of outstanding
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AMCE Common Stock held by unaffiliated stockholders will
decrease from 61.2% before the Merger to 32.3% after the
Merger, based on shares outstanding as of May 19, 1997,
but the voting interest in AMCE of unaffiliated
stockholders will increase from 3.5% before the Merger to
6.6% after the Merger. SHARES OF AMCE STOCK HELD BY
STOCKHOLDERS OTHER THAN DI WILL REMAIN ISSUED AND
OUTSTANDING AND WILL NOT BE EXCHANGED IN THE MERGER. See
"--The Merger--General."
The Merger has been approved by a Special Committee of the
AMCE Board consisting of Messrs. Charles J. Egan, Jr. and
Paul E. Vardeman (the "Special Committee"), by the New
Independent Directors of AMCE (as defined herein under
"--The Derivative Action Settlement Agreement") and by the
full AMCE Board. The Merger has also been approved by Mr.
Stanley H. Durwood, as sole director of DI.
AMCE REASONS FOR THE MERGER..... The Special Committee of the AMCE Board has concluded that
the Merger is fair to, and in the best interests of, AMCE
and its unaffiliated stockholders because (i) it will
increase the voting interest in AMCE of unaffiliated
stockholders, (ii) it will simplify the corporate
structure of AMCE, (iii) it will be accounted for as a
corporate reorganization, will not affect AMCE's total
capitalization and will have no tax effect on unaffiliated
stockholders, and (iv) the Durwood Family Stockholders
have agreed to sell a portion of the shares they receive
in the Merger in a registered secondary offering, which
will increase the public "float" and liquidity of AMCE
Common Stock, as a result of which the volatility of daily
stock price changes may be reduced, the bid/ asked spread
for AMCE Common Stock may narrow and the interest of
institutional investors in the AMCE Common Stock may
increase. These effects, over time, may enhance
shareholder value. Because AMCE will be reimbursed by Mr.
Stanley H. Durwood and certain related trusts and entities
for 50% and, in certain instances, 100% of its expenses in
connection with the Merger and subsequent secondary
offering by the Durwood Family Stockholders, the Special
Committee concluded that all of these benefits are
possible without substantial cost to AMCE or its
unaffiliated stockholders. The AMCE Board has adopted the
reasons of the Special Committee for approving the Merger.
See "--AMCE Reasons for the Merger" and "The
Merger--Certain Federal Income Tax Consequences."
DI REASONS FOR THE MERGER....... The Merger will permit the Durwood Family Stockholders to
hold their interests in AMCE directly instead of
indirectly through DI and AAE, thereby enhancing their
liquidity through ownership of a marketable security.
VOTE REQUIRED................... Under the Delaware General Corporation Law (the "DGCL")
and AMCE's Certificate of Incorporation, the Merger
Agreement requires the approval of the holders of a
majority of the votes of
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shares of AMCE Common Stock and AMCE Class B Stock
outstanding on the AMCE Record Date, with such shares
voting together as a single class and with each share of
AMCE Common Stock being entitled to one vote and each
share of AMCE Class B Stock being entitled to ten votes.
DI owned all outstanding shares of AMCE Class B Stock and
2,641,951, or 38.8%, of the outstanding shares of AMCE
Common Stock as of the AMCE Record Date. As of the AMCE
Record Date, other directors and executive officers of
AMCE were entitled to vote 19,418 shares of AMCE Common
Stock. DI has indicated its intention to vote the shares
of AMCE Stock which it owns in favor of the Merger
Agreement.
The Merger Agreement also requires the approval of the
holders of two-thirds of the outstanding shares of DI
Class A Stock and DI Class B Stock, voting together as a
single class, and of the holders of a majority of the
shares of DI Class A Stock and DI Class B Stock,
respectively, each voting as a separate class. Mr. Stanley
H. Durwood and the Durwood children (provided the Merger
occurs before September 30, 1997) have indicated their
intention to cause the shares of DI stock which they
beneficially own to be voted in favor of the Merger
Agreement.
Upon the recommendation of the Special Committee, a
condition to the Merger is that the Merger Agreement also
receive approval of the holders of a majority of shares of
AMCE Common Stock present or represented by proxy and
voting at the AMCE Special Meeting, other than those
shares held by DI, the Durwood Family Stockholders, their
spouses, their children living in the same household and
directors and officers of AMCE.
THE MERGER
GENERAL
The Merger has been sought by the Durwood Family Stockholders so that they
may hold their interests in AMCE directly instead of indirectly through DI and
AAE. AMCE was asked to consider engaging in the Merger and related transactions,
and the Special Committee was appointed to consider and review the Merger. If
the Special Committee considered the Merger to be in the best interests of AMCE
and its unaffiliated stockholders, it was to negotiate the terms of the Merger
and related transactions and make recommendations to the full AMCE Board in this
connection. The Special Committee was given the full power and authority of the
AMCE Board to reject the Merger. After its investigation and analysis and
negotiations, the Special Committee has recommended the approval of the Merger
Agreement and related transactions. Each of the New Independent Directors and
the full AMCE Board have also voted to approve the Merger Agreement and related
transactions. See "The Merger--Background of the Merger." Consummation of the
Merger also has been made a condition of settlement of the Derivative Action (as
defined herein) to which the Company and certain of its current and former
directors are parties. See "--The Derivative Action" and "Information About the
Company--Business of the Company--Legal Proceedings."
Immediately prior to the Merger, AAE will be liquidated and DI will convert
6,141,343 shares of AMCE Class B Stock into shares of AMCE Common Stock, so that
at the Effective Time of the Merger, DI will own 5,015,657 shares of AMCE Class
B Stock and 8,783,294 shares of AMCE Common Stock. Pursuant
4
to the terms and subject to the conditions of the Merger Agreement, upon
consummation of the Merger (i) each share of AMCE Common Stock and AMCE Class B
Stock held by DI will be canceled, (ii) each share of DI Class A Stock presently
held by Mr. Stanley H. Durwood, the 1989 Trust or the 1992 Trust will be
converted into and exchanged for 32.142857 shares of AMCE Class B Stock, so that
the 119,500 shares of DI Class A Stock presently held by Mr. Stanley H. Durwood,
the 1989 Trust or the 1992 Trust will be convertible into and exchangeable for
an aggregate of 3,841,071 shares of AMCE Class B Stock, (iii) each share of DI
Class A Stock presently held by persons other than Mr. Stanley H. Durwood, the
1989 Trust or the 1992 Trust will be converted into and exchanged for 32.142857
shares of AMCE Common Stock, so that the 500 shares of DI Class A Stock
presently held by persons other than Mr. Stanley H. Durwood, the 1989 Trust or
the 1992 Trust will be convertible into and exchangeable for an aggregate of
16,071 shares of AMCE Common Stock, (iv) each share of DI Class B Stock to be
held by Mr. Stanley H. Durwood, the 1989 Trust or the 1992 Trust will be
converted into and exchanged for 243.767528 shares of AMCE Class B Stock, so
that the 4,818.4664 shares of DI Class B Stock to be held by Mr. Stanley H.
Durwood, the 1989 Trust or the 1992 Trust will be convertible into and
exchangeable for an aggregate of 1,174,586 shares of AMCE Class B Stock, and (v)
each share of DI Class B Stock to be held by the Durwood Children will be
converted into and exchanged for 243.767341 shares of AMCE Common Stock, so that
the 35,965.5336 shares of DI Class B Stock to be held by the Durwood Children
will be convertible into and exchangeable for an aggregate of 8,767,223 shares
of AMCE Common Stock.
SHARES OF AMCE STOCK HELD BY STOCKHOLDERS OTHER THAN DI WILL REMAIN ISSUED
AND OUTSTANDING AND WILL NOT BE EXCHANGED IN THE MERGER. HOLDERS OF AMCE STOCK
OTHER THAN DI SHOULD NOT SURRENDER THEIR SHARES IN CONNECTION WITH THE MERGER.
After giving effect to the liquidation of AAE and the Merger, there will be
issued and outstanding 5,015,657 shares of AMCE Class B Stock, all of which will
be beneficially owned by Mr. Stanley H. Durwood, and (based on the number of
such shares outstanding as of May 19, 1997) 12,945,639 shares of AMCE Common
Stock, of which 8,767,223 will be beneficially owned by the Durwood Children.
The following table shows the percentage of the ownership and voting
interests of AMCE held by the Durwood Family Stockholders and unaffiliated
stockholders of AMCE before the Merger and after the Merger, based on shares
outstanding as of May 19, 1997, assuming first no conversion of Convertible
Preferred Stock outstanding on that date and then assuming full conversion into
AMCE Common Stock of Convertible Preferred Stock outstanding on that date.
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PRE-MERGER
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DURWOOD FAMILY
STOCKHOLDERS UNAFFILIATED STOCKHOLDERS
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FULLY FULLY
UNCONVERTED CONVERTED UNCONVERTED CONVERTED
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PERCENTAGE HELD
Class B Stock.............................................. 100.0% 100.0% -- --
Common Stock............................................... 38.8% 21.5% 61.2% 78.5%
Voting Interest............................................ 96.5% 92.2% 3.5% 7.8%
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POST-MERGER
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STANLEY H. DURWOOD DURWOOD CHILDREN UNAFFILIATED STOCKHOLDERS
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FULLY FULLY FULLY
UNCONVERTED CONVERTED UNCONVERTED CONVERTED UNCONVERTED CONVERTED
------------- ----------- ------------- ----------- ------------- -----------
PERCENTAGE HELD
Class B Stock.................. 100.0% 100.0% -- -- -- --
Common Stock................... -- -- 67.7% 47.6% 32.3% 52.4%
Voting Interest................ 79.5% 73.1% 13.9% 12.8% 6.6% 14.1%
5
Prior to the Effective Time of the Merger (as defined herein under "The
Merger--Material Terms of the Merger--The Merger Agreement"), all of DI's assets
(other than its equity interest in AMCE), consisting primarily of life insurance
policies, cash and notes of the Durwood Children and a former officer of the
Company, will be contributed to Delta. In addition, DI's other subsidiaries,
other than AMCE and its subsidiaries, have been merged into Delta and Delta has
agreed to assume DI's liabilities. Delta's stock will be distributed to DI's
shareholders, so that at the Effective Time DI's sole assets will consist of
stock of AMCE and its beneficial interest in certain tax credits and operating
loss carryforwards. (As a result of certain provisions of the Merger Agreement
and related agreements described below, AMCE will not benefit from such tax
credits and operating loss carryforwards.)
If the Merger occurs, Mr. Stanley H. Durwood will indemnify AMCE for all
losses resulting from any breach by DI of the Merger Agreement or resulting from
any l