-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EvAaqJqV3lIKuduFOM9OnTksnPQ/JfV7bUCFMohHL0sFWPNH1AFMpzr1EFdyKpsp WkkHDDgzLN6/t/gu/61HyQ== 0000950144-96-002022.txt : 19960510 0000950144-96-002022.hdr.sgml : 19960510 ACCESSION NUMBER: 0000950144-96-002022 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 19960509 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: REGAL CINEMAS INC CENTRAL INDEX KEY: 0000905035 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MOTION PICTURE THEATERS [7830] IRS NUMBER: 621412720 STATE OF INCORPORATION: TN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-03397 FILM NUMBER: 96558752 BUSINESS ADDRESS: STREET 1: 7132 COMMERCIAL PARK DR CITY: KNOXVILLE STATE: TN ZIP: 37918 BUSINESS PHONE: 4239221123 MAIL ADDRESS: STREET 1: 7132 COMMERCIAL PARK DR CITY: KNOXVILLE STATE: TN ZIP: 37918 S-3 1 REGAL CINEMAS, INC. FORM S-3 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 9, 1996 REGISTRATION NO. 333- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------------- REGAL CINEMAS, INC. (Exact Name of Registrant as Specified in its Charter) --------------------- TENNESSEE 62-1412720 (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification Number)
7132 COMMERCIAL PARK DRIVE, KNOXVILLE, TENNESSEE 37918 (423) 922-1123 (Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices) --------------------- HERBERT S. SANGER, JR. 1801 PLAZA TOWER KNOXVILLE, TENNESSEE 37929 (423) 525-4600 (Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service) COPIES TO: F. MITCHELL WALKER, JR. KEVIN D. NORWOOD BASS, BERRY & SIMS PLC WALLER LANSDEN DORTCH & DAVIS FIRST AMERICAN CENTER 511 UNION STREET NASHVILLE, TENNESSEE 37238 SUITE 2100 (615) 742-6200 NASHVILLE, TENNESSEE 37219 (615) 244-6380
--------------------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after the effective date of this Registration Statement. If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. / / If the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. / / If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / / ________________ If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / / ________________ If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. / / --------------------- CALCULATION OF REGISTRATION FEE
================================================================================================== PROPOSED PROPOSED MAXIMUM TITLE OF EACH AMOUNT MAXIMUM AGGREGATE AMOUNT OF CLASS OF SECURITIES TO BE OFFERING PRICE OFFERING REGISTRATION TO BE REGISTERED REGISTERED(1) PER SHARE(2) PRICE(2) FEE - -------------------------------------------------------------------------------------------------- Common Stock, no par value per share....................... 2,875,000 $39.875 $114,640,625 $39,532 - -------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------
(1) Includes 375,000 shares of Common Stock (at a proposed maximum aggregate offering price of $14,953,125) which the Underwriters have the option to purchase to cover over-allotments, if any. (2) Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(c) based upon the average of the high and low reported prices of the Common Stock as reported on The Nasdaq Stock Market's National Market on May 7, 1996. --------------------- THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY DETERMINE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. SUBJECT TO COMPLETION, DATED MAY 9, 1996 PROSPECTUS 2,500,000 SHARES [REGAL CINEMAS LOGO] COMMON STOCK The shares of Common Stock offered hereby are being sold by Regal Cinemas, Inc. (the "Company"). The Company's Common Stock is traded on The Nasdaq Stock Market's National Market (the "Nasdaq National Market") under the symbol "REGL." On May 8, 1996, the last reported sale price of the Common Stock on the Nasdaq National Market was $41.125 per share. SEE "RISK FACTORS" APPEARING ON PAGES 7 THROUGH 8 FOR MATTERS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SHARES OFFERED HEREBY. --------------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ PRICE TO UNDERWRITING PROCEEDS TO PUBLIC DISCOUNT(1) COMPANY(2) - ------------------------------------------------------------------------------------------------ Per Share.................................... $ $ $ - ------------------------------------------------------------------------------------------------ Total(3)..................................... $ $ $ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------
(1) The Company has agreed to indemnify the Underwriters against certain civil liabilities, including liabilities under the Securities Act of 1933, as amended. See "Underwriting." (2) Before deducting estimated expenses of $350,000 payable by the Company. (3) The Company has granted to the Underwriters an over-allotment option to purchase up to 375,000 additional shares of Common Stock on the same terms and conditions as set forth above. If all such shares are purchased by the Underwriters, total Price to Public will be $ , total Underwriting Discount will be $ , and total Proceeds to Company will be $ . See "Underwriting." --------------------- The shares of Common Stock are offered subject to receipt and acceptance by the several Underwriters, to prior sale and to the Underwriters' right to reject any order in whole or in part and to withdraw, cancel or modify the offer without notice. It is expected that certificates for the shares will be available for delivery on or about , 1996. --------------------- J.C. Bradford & Co. Montgomery Securities Wheat First Butcher Singer , 1996 3 IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. IN CONNECTION WITH THIS OFFERING, CERTAIN UNDERWRITERS AND SELLING GROUP MEMBERS (IF ANY) MAY ENGAGE IN PASSIVE MARKET MAKING TRANSACTIONS IN THE COMPANY'S COMMON STOCK ON THE NASDAQ NATIONAL MARKET IN ACCORDANCE WITH RULE 10B-6A UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT"). SEE "UNDERWRITING." 2 4 PROSPECTUS SUMMARY The following is a summary of certain information contained elsewhere or incorporated by reference in this Prospectus. This summary is not intended to be complete and is qualified in its entirety by reference to, and should be read in conjunction with, the detailed information appearing elsewhere or incorporated by reference in this Prospectus. Except as otherwise noted, all information in this Prospectus assumes no exercise of the Underwriters' over-allotment option. All share and per share data contained herein have been restated to give retroactive effect to the Company's 50% stock dividends in each of December 1994 and December 1995. THE COMPANY Regal Cinemas, Inc. (the "Company" or "Regal") is the eighth largest motion picture exhibitor in the United States based upon the number of screens in operation. The Company currently operates 128 multi-screen theatres with an aggregate of 1,006 screens. Regal also has 14 new theatres with 162 screens under construction, 19 screens under construction at existing theatres and two pending acquisitions of 18 theatres with 137 screens. The Company's strategy is to develop, acquire and operate multi-screen theatres in mid-size metropolitan markets and suburban growth areas of larger metropolitan markets. The Company averages 7.9 screens per location, as compared to an average of 4.8 screens per location for the industry and 5.4 screens per location for the five largest U.S. motion picture exhibitors, as of May 1, 1995. Management believes that the Company's multi-screen theatres, substantially all of which show first run movies, promote increased attendance and maximize operating efficiencies through reduced labor costs and improved utilization of theatre capacity. Centralized decision making, including accounting, film licensing and concession purchasing, as well as management incentives based on controlling theatre-level costs, contribute to the Company's cost-efficient operations. The Company's growth has come through the acquisition of existing theatres and the development of new theatres. Since its inception, Regal has acquired a net of 98 theatres with 630 screens, which has served to establish and enhance the Company's presence in selected geographic markets. Regal anticipates that its future growth will result from the development of new theatres, the addition of screens to existing theatres, strategic acquisitions of theatre circuits and the development of entertainment concepts that complement the Company's theatres. The Company currently plans to develop 150 to 175 screens annually for the next several years. The Company intends to locate theatres in markets that it believes are underscreened because of changing demographic trends or that are served by older theatre facilities or by theatres having an insufficient number of screens. The Company seeks to locate each theatre where it will be the sole or dominant exhibitor within a particular geographic film licensing zone. Management believes that approximately 66% of the Company's theatres are located in film licensing zones in which Regal is the sole exhibitor. Regal emphasizes patron satisfaction by providing convenient locations, comfortable seating, spacious neon-enhanced lobby and concession areas and a wide variety of film selections. Regal's theatre complexes feature clean, modern auditoriums with high quality projection and digital stereo surround-sound systems. Regal's theatres typically contain auditoriums having 100 to 500 seats, allowing the Company to exhibit films profitably for longer periods by shifting films from larger to smaller auditoriums within the same complex to accommodate changing attendance levels. In addition, the Company promotes patron loyalty through specialized marketing programs for its theatres and feature films. To complement the Company's theatre development, Regal opened its first FunScape(TM) comprehensive entertainment complex in Chesapeake, Virginia in August 1995 and its second FunScape in Rochester, New York in February 1996. Each complex includes a 13 screen theatre and a 50,000 square foot comprehensive family entertainment center. The Company currently has two additional FunScape complexes under construction and may seek to develop additional FunScape complexes at strategic locations. 3 5 RECENT DEVELOPMENTS Pending Acquisitions Georgia State Theatres, Inc. Merger. Regal has entered into a definitive Agreement and Plan of Merger (the "Merger Agreement") to acquire Georgia State Theatres, Inc. ("GST") for approximately 912,000 shares of Regal Common Stock in a pooling of interests transaction. GST, headquartered in Atlanta, Georgia, has 10 first run theatres with 68 screens, including one drive-in theatre, located in the metropolitan Atlanta, Georgia area and a partnership in Gainesville, Georgia. Provided shareholder approval of the Merger Agreement is obtained, the parties intend to close the transaction and effect the merger (the "GST Merger") promptly following the special meeting of shareholders scheduled for May 30, 1996. Krikorian Asset Acquisition. Regal has entered into an agreement to acquire assets consisting of eight theatres with 69 screens in California (the "Krikorian Acquisition") from an individual, George Krikorian, and corporations controlled by him (collectively, "Krikorian"). Consideration for the transaction is anticipated to be approximately 470,000 shares of Regal Common Stock and approximately $14.1 million to be paid in cash at closing. The Company anticipates closing this acquisition during the second quarter of 1996. THE OFFERING Common Stock offered....................................... 2,500,000 shares Common Stock to be outstanding after the offering.......... 20,024,379 shares(1) Use of proceeds............................................ To repay indebtedness Nasdaq National Market symbol.............................. REGL
- --------------- (1) Excludes 2,026,407 shares of Common Stock reserved for issuance upon exercise of options granted pursuant to the Company's existing stock option plans, 156,512 shares issuable upon the exercise of outstanding warrants and an estimated 1,382,000 shares to be issued upon consummation of the GST Merger and the Krikorian Acquisition. 4 6 SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA (IN THOUSANDS, EXCEPT PER SHARE AND OPERATING DATA) The summary consolidated financial data set forth below as of and for each of the fiscal years ended December 30, 1993, December 29, 1994 and December 28, 1995, are derived from the financial statements of Regal. Regal began operations in 1990 and operates on a fiscal year ending on the Thursday closest to December 31. This information should be read in conjunction with the historical financial statements and notes thereto contained in the Regal Annual Report on Form 10-K/A which are incorporated by reference herein. See "Available Information" and "Incorporation of Certain Information by Reference." The pro forma summary financial data set forth below have been prepared on a consolidated basis based upon the historical financial statements of Regal and GST. The pro forma information gives effect to the GST Merger accounted for as a pooling of interests, based upon an assumed conversion of 912,000 shares of Regal Common Stock for all shares of GST Common Stock outstanding. In addition, the pro forma statement of income data and pro forma operating data give effect to the Krikorian Acquisition as if the acquisition had occurred at the beginning of the period. Pro forma balance sheet data as of December 28, 1995, also give effect to the Krikorian Acquisition.
PRO FORMA FISCAL YEAR ENDED FISCAL YEAR ------------------------------------------ ENDED DECEMBER 30, DECEMBER 29, DECEMBER 28, DECEMBER 28, 1993 1994 1995 1995 ------------ ------------ ------------ ------------ STATEMENT OF INCOME DATA(1): Revenues........................................ $119,905 $159,665 $190,093 $226,043 Operating income................................ 14,096 19,464 32,967 36,166 Income before extraordinary item................ 6,436 9,620 17,685 18,488(2) Extraordinary item net of tax: Gain (loss) on extinguishment of debt......... 190 (1,752) (448) ------------ ------------ ------------ Net income...................................... 6,626 7,868 17,237 Preferred stock dividends....................... (430) (50) -- ------------ ------------ ------------ Net income applicable to common stock........... $ 6,196 $ 7,818 $ 17,237 ============ ============ ============ Earnings per common share: Primary....................................... $ .50 $ .46 $ .96 $ .95(3) Fully diluted................................. $ .46 $ .46 $ .95 $ .94(3) Weighted average shares and equivalents outstanding: Primary....................................... 12,320 16,832 18,042 19,478 Fully diluted................................. 14,320 16,947 18,156 19,592 OPERATING DATA(1)(4): Theatre locations............................... 94 117 125 143 Screens......................................... 630 803 972 1,109 Average screens per location.................... 6.7 6.9 7.8 7.8 Theatre level cash flow (in thousands)(5)....... $ 26,753 $ 38,554 $ 51,429 $ 58,030
AS OF DECEMBER 28, 1995 --------------------------- PRO FORMA ACTUAL AS ADJUSTED(6) -------- -------------- BALANCE SHEET DATA: Total assets.......................................................... $235,159 $275,284 Total long-term debt, including current maturities.................... 102,250 22,017 Total shareholders' equity............................................ 102,053 217,636
- --------------- (1) 1993 and 1994 results are restated to give retroactive effect to the Company's mergers with Litchfield Theatres, Inc. in 1994 (the "Litchfield Merger") and Neighborhood Entertainment, Inc. in 1995 (the "Neighborhood Merger"), each of which were accounted for as a pooling of interests. 1995 results are restated to give retroactive effect to the Neighborhood Merger. 5 7 (2) The pro forma consolidated statements of income do not reflect certain estimated non-recurring charges aggregating approximately $1.5 million (approximately $1.1 million after tax) with respect to expenses associated with the GST Merger, costs associated with refinancing GST's indebtedness and amounts payable under compensation arrangements with certain GST officers. Regal expects that those expenses will be reflected in its results of operations for the period in which the GST Merger is consummated. (3) Pro forma primary and fully diluted per share data are based on pro forma income from continuing operations. (4) Theatre locations and screens are stated at the end of the respective periods. (5) Theatre level cash flow represents total revenues less film rental and booking costs, cost of concessions and theatre operating expenses. Theatre level cash flow is included because the Company believes that certain investors find it useful in analyzing companies in the motion picture exhibition industry. (6) Adjusted to reflect the sale by the Company of 2,500,000 shares of Common Stock offered hereby and the application of the estimated net proceeds therefrom. See "Use of Proceeds." 6 8 RISK FACTORS In addition to the other information included or incorporated by reference in this Prospectus, the following factors should be considered carefully in evaluating an investment in the Common Stock offered hereby. Growth Rate and Integration of Acquisitions. Regal has experienced substantial growth since its formation through the acquisition of existing theatres and development of new theatres. During 1995, the Company added a net of 169 screens. In addition, the Company has two pending acquisitions pursuant to which the Company expects to acquire 18 theatres with an aggregate of 137 screens during 1996. The closing of each acquisition is subject to certain customary conditions, including approval of the GST Merger by GST shareholders. Given the magnitude of these acquisitions, there can be no assurance that the challenge of assimilating the acquisitions and managing the larger overall business operations will not have an adverse effect on Regal's results of operations, especially in the short term. See "Business -- Growth Strategy." Expansion Plans. Regal's continued ability to expand will depend on a number of factors, including the selection and availability of suitable locations, the hiring and training of skilled management and personnel, the availability of adequate financing and other factors, some of which are beyond the control of the Company. There is no assurance that Regal will be able to open all of its planned new theatres or that, if opened, those theatres can be operated profitably. See "Business -- Growth Strategy." Dependence on Films. The ability of Regal to operate successfully depends upon a number of factors, the most important of which is the availability of marketable motion pictures. Poor relationships with distributors, a disruption in the production of motion pictures or poor commercial success of motion pictures could have a material adverse effect upon Regal's business. See "Business -- Film Licensing." Fluctuations in Quarterly Results of Operations. Regal's revenues have been seasonal, coinciding with the timing of releases of motion pictures by the major distributors. Generally, the most marketable motion pictures have been released during the summer and the Thanksgiving through year-end holiday season. The unexpected emergence of a hit film during other periods can alter the traditional trend. The timing of such releases can have a significant effect on Regal's results of operations, and the results of one quarter are not necessarily indicative of results for the next quarter. Competition. The motion picture exhibition industry is highly competitive, particularly with respect to licensing films, attracting patrons and finding new theatre sites. There are a number of well-established competitors. Many of Regal's competitors have been in existence significantly longer than Regal and may be better established in the markets where Regal's theatres are or may be located. In recent years, alternative motion picture exhibition delivery systems have been developed for the exhibition of filmed entertainment, including cable and satellite television, video cassettes and pay per view. An expansion of such delivery systems could have a material adverse effect upon Regal's business. See "Business -- Competition." Dependence on Senior Management. Regal's success depends upon the continued contributions of its senior management, including Michael L. Campbell, Chairman and Chief Executive Officer of the Company. The loss of the services of one or more of Regal's senior management could have a material adverse effect upon its business and development. Regal's loan agreement provides that Mr. Campbell or a successor reasonably acceptable to Regal's lenders must be employed as Chief Executive Officer. Regal has an employment agreement with Mr. Campbell. Volatility of Market Price. From time to time, there may be significant volatility in the market price for the Common Stock. Quarterly operating results of Regal or of other motion picture exhibitors, changes in general conditions in the economy, the financial markets or the motion picture industry, natural disasters or other developments affecting Regal or its competitors could cause the market price of the Common Stock to fluctuate substantially. In addition, in recent years the stock market has experienced extreme price and volume fluctuations. This volatility has had a significant effect on the market prices of securities issued by many companies for reasons unrelated to their operating performance. 7 9 Legislative Initiatives. The Clinton Administration continues to analyze and propose new legislation that could adversely impact the entire business community. Minimum wage increases, if passed, could increase Regal's operating costs. Regal would attempt to offset increased costs through additional improvements in operating efficiencies and ticket and concession price increases. Risks Associated with the 1996 Summer Olympic Games. The Olympics are being held in and around Atlanta, Georgia in the summer of 1996. The Company believes that the Olympics may have an adverse impact on the motion picture exhibition industry generally during that time frame as well as on the Company's theatre locations in Atlanta, Georgia particularly. Summer months generally constitute one of the heaviest periods of attendance at movies. To the extent that the Olympics detract from theatre attendance generally, there could be an adverse impact on the Company's business during one of its busiest seasons. In addition, following consummation of the GST Merger, the Company will have 16 theatres in the Atlanta, Georgia area. The traffic congestion, scheduling conflicts and other factors associated with the Olympics could result in a reduction in attendance for the Company's Atlanta area theatres during the summer of 1996. PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY The Company's Common Stock is listed on the Nasdaq National Market under the symbol "REGL." The following table sets forth, for the periods indicated, the high and low sale prices for the Common Stock as reported by the Nasdaq National Market.
1994 HIGH LOW ------------------------------------------------------- ------ ------ First Quarter.......................................... $12.00 $ 9.00 Second Quarter......................................... 14.78 10.44 Third Quarter.......................................... 17.11 11.78 Fourth Quarter......................................... 17.33 14.56 1995 First Quarter.......................................... $17.50 $11.33 Second Quarter......................................... 22.67 15.50 Third Quarter.......................................... 28.67 19.50 Fourth Quarter......................................... 28.75 24.00 1996 First Quarter.......................................... $37.88 $26.75 Second Quarter (through May 8, 1996)................... 44.88 36.25
On May 8, 1996, the last reported sale price for the Company's Common Stock on the Nasdaq National Market was $41.125 per share. At April 30, 1996, there were approximately 280 holders of record of the Company's Common Stock. The Company has never declared or paid a cash dividend on its Common Stock. It is the present policy of the Board of Directors to retain all earnings to support operations and to finance expansion; therefore, the Company does not anticipate declaring or paying cash dividends on the Common Stock in the foreseeable future. The declaration and payment of dividends in the future will be determined based on a number of factors, including the Company's earnings, financial condition and requirements, restrictions in financing agreements and other factors deemed relevant by the Board of Directors. Pursuant to the Company's credit facility, the Company is limited on the payment of material cash dividends on its outstanding Common Stock. 8 10 USE OF PROCEEDS The net proceeds to the Company from the sale of the Common Stock offered hereby at an assumed price of $41.125 per share are estimated to be $97.7 million ($112.4 million if the Underwriters' over-allotment option is exercised in full) after deducting the estimated underwriting discount and offering expenses payable by the Company. The Company will utilize the net proceeds to repay amounts outstanding under its credit facility (the "Credit Facility"). The indebtedness under the Credit Facility has been incurred primarily to finance acquisitions and to construct theatres. Borrowings thereunder currently bear interest at 6.44%, which is the London Inter-Bank Offering Rate (LIBOR) plus 1%, and the facility matures in June 2001. Currently, the borrowings under the Credit Facility are $114.0 million. Upon application of the net proceeds of the offering to repay a portion of the Credit Facility, the balance of the Credit Facility will continue to be available for borrowing pursuant to the terms thereof. CAPITALIZATION The following table sets forth the current indebtedness and capitalization of the Company as of December 28, 1995, the pro forma current indebtedness and capitalization of the Company after giving effect to the GST Merger and the Krikorian Acquisition, and as adjusted to reflect the sale by the Company of the 2,500,000 shares of Common Stock offered hereby and the application of the estimated net proceeds therefrom as described under "Use of Proceeds."
AS OF DECEMBER 28, 1995 ------------------------------------ PRO FORMA ACTUAL PRO FORMA AS ADJUSTED -------- --------- ----------- (DOLLARS IN THOUSANDS) Current maturities of long-term debt..................... $ 9,800 $ 13,200 $ -- ======== ========= =========== Total long-term debt, excluding current maturities....... $ 92,450 $106,550 $ 22,017 -------- --------- ----------- Shareholders' equity: Preferred Stock, no par value; 1,000,000 shares authorized, none outstanding........................ -- -- -- Common Stock, no par value, 50,000,000 shares authorized; 17,503,986 shares issued and outstanding; 18,885,986 shares issued and outstanding, pro forma; 21,385,986 shares issued and outstanding, pro forma as adjusted(1)............... 73,832 88,584 186,317 Retained earnings...................................... 28,221 31,319 31,319 -------- --------- ----------- Total shareholders' equity..................... 102,053 119,903 217,636 -------- --------- ----------- Total capitalization...................... $194,503 $226,453 $ 239,653 ======== ========= ===========
- --------------- (1) Excludes (i) 2,026,407 shares of Common Stock reserved for issuance upon exercise of options granted pursuant to the Company's existing stock option plans at a weighted average exercise price of $13.10 per share and (ii) 156,512 shares of Common Stock reserved for issuance upon exercise of outstanding warrants to purchase Common Stock. 9 11 BUSINESS Regal is the eighth largest motion picture exhibitor in the United States based upon the number of screens in operation. Since its founding, Regal's growth has come through the acquisition of a net of 98 theatres with 630 screens, the development of 30 theatres with 336 screens and the addition of 40 screens to existing theatres. Operations began with the acquisition of Regal's first theatre in January 1990. Regal currently operates 128 multi-screen theatres with an aggregate of 1,006 screens. Regal also has 14 new theatres with 162 screens under construction, 19 screens under construction at existing theatres, and two pending acquisitions of 18 theatres with 137 screens. INDUSTRY OVERVIEW The domestic motion picture exhibition industry is comprised of approximately 300 exhibitors, 120 of which operate 10 or more total screens. At May 1, 1995, the five largest exhibitors operated approximately 34% of the total screens in operation with no one exhibitor operating more than 9% of the total screens. From 1986 through 1995 the net number of screens in operation in the United States increased from approximately 21,000 to approximately 27,000 and admissions revenues increased from approximately $3.9 billion to approximately $5.4 billion. In an effort to realize greater operating efficiencies, operators of multi-theatre circuits have emphasized the development of larger multi-screen complexes. This trend is evidenced by the increase in the average number of screens per location for the industry from approximately 3.5 screens in 1986 to approximately 4.8 screens in 1995. Theatrical motion picture exhibition is the primary launch vehicle for filmed entertainment. Management believes that the emergence of new forms of home entertainment, such as cable and satellite television, video cassettes and pay per view, has not adversely affected theatre admissions or the number of films released for theatrical exhibition. Overall attendance has remained relatively stable over the past ten years, with no single year varying more than approximately 10% from the industry average of 1.1 billion during that period. Management believes the number of films released for theatrical exhibition will remain relatively stable or increase because a film's initial theatrical exhibition success establishes the value of the film throughout its life cycle in ancillary markets. In recent years, there has been an increasing consolidation of the major film production companies. During 1995, films distributed by the eight largest film production companies accounted for approximately 91% of the domestic admissions revenues and included 49 of the top 50 grossing films. Films are licensed through film distributors, who typically establish geographic film licensing zones and allocate each available film to one theatre within that zone. See "Film Licensing." Historically, the motion picture exhibition industry has experienced some seasonality, as major film distributors generally have released the films expected to have the greatest commercial appeal during the summer and the Thanksgiving through year-end holiday season. The seasonality of motion picture exhibition, however, has become less pronounced in recent years as studios have begun to release major motion pictures somewhat more evenly throughout the year. OPERATING STRATEGY The following are the key elements of the Company's operating strategy: - Multi-Screen Theatres. The Company's multi-screen theatres enable it to offer a diverse selection of films; stagger movie starting times; increase management's flexibility in determining the number of weeks that a film will run and the size of the auditorium in which it is shown; and serve patrons from common support facilities. These factors result in increased attendance, improved utilization of theatre seating capacity and operating efficiencies. - Cost Control. Regal has designed prototype theatres adaptable to a variety of locations, which management believes result in construction and operating cost savings. The shifting of films to smaller auditoriums within a theatre to accommodate changing attendance levels allows the Company to exhibit films for extended periods, resulting in lower film rental costs as a percentage of admission 10 12 revenues. In addition, a significant component of theatre level management's compensation is based on controlling operating expenses at the theatre level. - Patron Satisfaction/Quality Control. Regal's theatres are conveniently located and are modern, high quality facilities that offer a wide variety of films. To maintain quality and consistency within the Company's theatres, Regal conducts regular inspections of each theatre and operates a "mystery shopper" program. To enhance the movie going experience, the Company invests in high quality projection and stereo sound equipment, including the latest digital stereo surround-sound systems. - Centralized Corporate Decision Making/Decentralized Operations. Functions centralized through the Company's corporate office include film licensing and concession purchasing, as well as decisions on theatre construction and configuration. Cost controls at the theatre level include close monitoring of concession, advertising and payroll expenses. Regal devotes significant resources to training its theatre managers, who are responsible for most aspects of its theatres' day-to-day operations. - Marketing. Regal actively markets its theatres through grand opening promotions, including "VIP" preopening parties, direct mail campaigns, television commercials in certain markets and promotional activities, such as live music, spotlights and skydivers, which frequently generate media coverage. Regal develops patron loyalty through a number of marketing programs such as a summer children's film series in which children's films are shown at reduced rates during the morning hours. Regal also utilizes special marketing programs for specific films and concession items. GROWTH STRATEGY The following are the key elements of the Company's growth strategy: - Develop New Theatres in Existing and Target Markets. The Company currently has 14 theatres with 162 screens under construction, and currently plans to develop 150 to 175 screens annually for the next several years. Regal generally will seek to develop multi-screen theatres with at least 12 to 16 screens in both its existing markets and in other mid-sized metropolitan markets and suburban growth areas of larger metropolitan markets. Management will continue to locate theatres in areas that are underscreened because of changing demographic trends or that are served by older theatre facilities or by theatres having an insufficient number of screens. Regal targets theatre locations with high visibility and convenient roadway access in geographic film licensing zones in which it will be the sole exhibitor. Regal continually reviews potential sites for theatres, including both new construction and the conversion of existing retail space. - Add Screens to Existing Theatres. To enhance profitability and maintain competitiveness at existing theatres, the Company will continue to add additional screens where appropriate. The Company currently has 19 screens under construction at existing theatre facilities and anticipates the addition of 15 to 25 screens to certain of its recently acquired theatres. The addition of screens to existing theatres is designed not to disrupt operations at the theatres. - Acquire Theatres. While management believes that a significant portion of its future growth will come through the development of new theatres, Regal will continue to consider strategic acquisitions of complementary theatres or theatre circuits at which Regal can improve profitability and increase screen counts. Since its inception, Regal has acquired a net of 98 theatres with 630 screens, which has served to establish and enhance the Company's presence in selected geographic markets. - Develop Complementary Theatre Concepts. To complement the Company's theatre development, Regal opened its first FunScape comprehensive family entertainment complex in Chesapeake, Virginia, in August 1995 and its second FunScape in Rochester, New York in February 1996. Each complex includes a 13 screen theatre and a 50,000 square foot comprehensive family entertainment center. The Company currently has two additional FunScape complexes under construction and may seek to develop additional FunScape complexes at strategic locations. 11 13 THEATRE OPERATIONS Regal currently operates 128 multi-screen theatres with an aggregate of 1,006 screens in 18 states. Regal averages 7.9 screens per location, as compared to an average of 4.8 screens per location for the industry and an average for the five largest domestic motion picture exhibitors of approximately 5.4 screens at May 1, 1995. Multi-screen theatres enable the Company to offer a wide selection of films attractive to a diverse group of patrons residing within the drawing area of a particular theatre complex. Varied auditorium seating capacities within the same theatre enable the Company to reduce film rental costs by exhibiting films for a longer period of time by shifting films to smaller auditoriums to meet changing attendance levels. In addition, operating efficiencies are realized through the economies of having common box office, concession, projection, lobby and restroom facilities, which enable the Company to spread certain costs, such as payroll, advertising and rent, over a higher revenue base. Staggered movie starting times also minimize staffing requirements, reduce lobby congestion and contribute to more desirable parking and traffic flow patterns. Regal has designed prototype theatres, adaptable to a variety of locations, which management believes result in construction and operating cost savings. Regal's multi-screen theatre complexes, which typically contain auditoriums having from 100 to 500 seats each, feature wall-to-wall screens, digital stereo surround-sound, multi-station concessions, computerized ticketing systems, plush seating with cup holders, neon-enhanced interiors and exteriors, and video game areas adjacent to the theatre lobby. In addition, the Company updates its theatres as needed to maintain clean, comfortable and modern facilities. Management believes that maintaining a theatre circuit consisting primarily of modern multi-screen theatres also enhances the Company's ability to license commercially successful modern films from distributors. See "Film Licensing." Functions centralized at the Company's corporate office include site selection, lease negotiation, theatre design and construction, coordination of film selection, concession purchasing, advertising and financial and accounting activities. Regal's theatre operations are under the supervision of its Executive Vice President and are divided into two geographic divisions, each of which is headed by a Vice President supervising several district theatre supervisors. The district theatre supervisors are responsible for implementing the Company's operating policies and supervising the managers of the individual theatres, who are responsible for most of the day-to-day operations of the Company's theatres. Regal seeks theatre managers with experience in the motion picture exhibition industry and requires all new managers to complete a training program at designated training theatres. The program is designed to encompass all phases of theatre operations, including the Company's philosophy, management strategy, policies, procedures and operating standards. Management closely monitors the Company's operations and cash flow through daily reports generated from computerized box office terminals located in each theatre. These reports permit the Company to maintain an accurate and immediate count of admissions by film title and show times and provide management with the information necessary to manage effectively and efficiently the Company's theatre operations. To maintain quality and consistency within the Company's theatre circuit, the district supervisors regularly inspect each theatre, and the Company operates a "mystery shopper" program, which involves unannounced visits by unidentified customers who report on the quality of service, film presentation and cleanliness at individual theatres. Regal has implemented an incentive compensation program for theatre level management which rewards managers for controlling theatre level operating expenses while complying with the Company's operating standards. In addition to revenues from box office admissions, Regal receives revenues from concession sales and video games located adjacent to the theatre lobby. Concession sales constituted 28.4% of total revenues for 1995. Regal emphasizes prominent and appealing concession stations designed for rapid service and efficiency. Although popcorn, candy and soft drinks remain the best selling concession items, the Company's theatres offer a wide range of concession choices. Regal continually seeks to increase concession sales through optimizing product mix, introducing special promotions from time to time and training staff to cross sell products. In addition to traditional concession stations, certain of the Company's existing theatres and theatres currently under development feature specialty concession cafes serving items such as cappuccino, fruit juices, 12 14 cookies and muffins, soft pretzels and ice cream. Management negotiates directly with manufacturers for many of its concession items to ensure adequate supplies and to obtain competitive prices. Regal relies upon advertisements and movie schedules published in newspapers to inform its patrons of film selections and show times. Newspaper advertisements are typically displayed in a single grouping for all of the Company's theatres located in the newspaper's circulation area. Primary multi-media advertising campaigns for major film releases are carried out and paid for by the film distributors. The Company conducts marketing efforts throughout the year to promote specific films, concession items and its theatre complexes. Regal markets its new theatres through grand opening promotions, including "VIP" preopening parties, direct mail campaigns, radio and television commercials in certain markets and promotional activities such as live music, spotlights and skydivers, which frequently generate media coverage. Regal's theatres also exhibit previews of coming attractions and films presently playing on the Company's other screens in the same market area. Regal operates 10 discount theatres with an aggregate of 62 screens, which exhibit second run movies and charge lower admission prices (typically $1.50). These movies are the same high quality features shown at all of Regal's theatres. The terminology "second run" is an industry term for the showing of movies after they have been shown for varying periods of time at other theatres. Regal believes that the increased attendance resulting from lower admission prices and the lower film rental costs of second run movies compensate for the lower admission prices and slightly higher operating costs as a percentage of admission revenues at the Company's discount theatres. The design, construction and equipment in the Company's discount theatres are of the same high quality as its first run theatres. Regal's discount theatres generate theatre level cash flows similar to its first run theatres. Management does not anticipate an increase in the percentage of discount theatres in its theatre circuit. Regal operates 87 of its 128 theatres pursuant to lease agreements, owns the land and buildings for 26 theatres and operates pursuant to ground leases at 15 theatre locations. Of the 128 theatres operated by Regal, 98 were acquired as existing theatres and 30 have been developed by Regal. FILM LICENSING Regal licenses films from distributors on a film-by-film and theatre-by-theatre basis. Film buyers negotiate directly with film distributors on behalf of the Company. Prior to negotiating for a film license, the Company and its film buyers evaluate the prospects for upcoming films. Criteria considered for each film include cast, director, plot, performance of similar films, estimated film rental costs and expected Motion Picture Association of America rating. Successful licensing depends greatly upon the exhibitor's knowledge of trends and historical film preferences of the residents in markets served by each theatre, as well as on the availability of commercially successful motion pictures. Currently, Tri-State Theatre Service, Inc., an independent film booking agency which is controlled by a director of the Company ("Tri-State"), provides film licenses for Regal. In November 1995, Regal determined to have film licensing services performed internally. The Company's head film buyer is an employee of the Company, and several Tri-State film buyers will relocate to Knoxville and become employees of Regal. Tri-State will continue to provide consulting services on film recognition and strategy. Films are licensed from film distributors owned by major film production companies and from independent film distributors that generally distribute films for smaller production companies. Film distributors typically establish geographic film licensing zones and allocate each available film to one theatre within that zone. Film zones generally encompass a radius of three to five miles in metropolitan and suburban markets, depending primarily upon population density. Regal believes that approximately 66% of its theatres are now located in film licensing zones in which they are now the sole exhibitors, permitting the Company to exhibit many of the most commercially successful films in these zones. In film zones where Regal is the sole exhibitor, the Company obtains film licenses by selecting a film from among those offered and negotiating directly with the distributor. In film zones where there is competition, a distributor will either require the exhibitors in the zone to bid for a film or will allocate its films 13 15 among the exhibitors in the zone. When films are licensed under the allocation process, a distributor will choose which exhibitor is offered a movie, and then that exhibitor will negotiate film rental terms directly with the distributor for the film. Over the past several years, distributors have generally used the allocation rather than bidding process to license their films. When films are licensed through a bidding process, exhibitors compete for licenses based upon economic terms. Regal currently does not bid for films in any of its markets, although it may be required to do so in the future. Although Regal predominantly licenses "first run" films, if a film has substantial remaining potential following its first run, the Company may license it for a "second run." Film distributors establish second run availability on a national or market-by-market basis after the release from first run theatres. Film licenses entered into in either a negotiated or bidding process typically specify rental fees based on the higher of a gross receipts formula or theatre admissions revenue formula. Under a gross receipts formula, the distributor receives a specified percentage of box office receipts, with the percentage declining over the term of the film run. First run film rental fees usually begin at 70% of admission revenues and gradually decline to as low as 30% over a period of four to seven weeks. Second run film rental fees typically begin at 35% of admission revenues and often decline to 30% after the first week. Under a theatre admissions revenue formula, the distributor receives a specified percentage of the excess of admission revenues over a negotiated allowance for theatre expenses. In addition, Regal is occasionally required to pay non-refundable guarantees of film rental fees or to make refundable advance payments of film rental fees or both in order to obtain a license for a film. Rental fees paid by the Company generally are adjusted subsequent to the exhibition of a film in a process known as settlement. The commercial success of a film relative to original distributor expectations is the primary factor taken into account in the settlement process; secondarily, the past performance of other films in a specific theatre is a factor. To date the settlement process has not resulted in material adjustments in the film rental fees accrued by the Company. Regal's business is dependent upon the availability of marketable motion pictures and its relationships with distributors. Many distributors provide quality first run movies to the motion picture exhibition industry; however, eight distributors accounted for approximately 91% of industry admission revenues during 1995, and 49 of the top 50 grossing films. No single distributor dominates the market. Disruption in the production of motion pictures by the major studios and/or independent producers or lack of commercial success of motion pictures would have a material adverse effect upon the Company's business. Regal licenses films from each of the major distributors and believes that its and Tri-State's relationships with distributors are good. From year to year, the revenues attributable to individual distributors will vary widely depending upon the number and quality of films each distributes. Based on industry statistics, Regal believes that in 1995 no single distributor accounted for more than 20% of the films licensed by the Company, or films producing more than 20% of the Company's admission revenues. ENTERTAINMENT CENTER To complement the Company's theatre development, Regal opened its first FunScape comprehensive entertainment complex located in Chesapeake, Virginia in August 1995 and its second FunScape in Rochester, New York in February 1996. Each complex includes a 13 screen theatre and a 50,000 square foot comprehensive family entertainment center. The theatre facility exhibits first run films, is equipped with the latest Dolby and DTS digital sound systems, and features an oversized lobby with two concession stands and a specialty cafe. A food court connects the theatres to the entertainment center and features nationally recognized brand name pizza, taco, sandwich and dessert restaurants. The entertainment center generally will feature a 36-hole, tropical-themed miniature golf course, a children's soft play and exercise area, multi-level laser tag, video batting cages, a video golf course, helmet type and motion simulator virtual reality units and a high-tech video arcade. In addition, the center contains eight party rooms for various social gatherings. The two-level family entertainment center is totally enclosed and under roof for year-round operation. Each theatre and entertainment center totals approximately 95,000 square feet, and management believes the facility is a comprehensive entertainment destination. The Company currently has two additional FunScape complexes under construction and may seek to develop additional FunScape complexes at strategic 14 16 locations. The $4.5 to $5.0 million estimated cost of construction of each entertainment center is comparable to the cost of constructing the adjacent theatre complex. The Company is financing the construction of entertainment centers and the attached theatre facilities through cash flow from operations and borrowings available under its Credit Facility. COMPETITION The motion picture exhibition industry is highly competitive, particularly with respect to licensing films, attracting patrons and finding new theatre sites. Theatres operated by national and regional circuits and by smaller independent exhibitors compete with the Company's theatres. Management believes that the principal competitive factors with respect to film licensing include licensing terms, the seating capacity, location and reputation of an exhibitor's theatres, the quality of projection and sound equipment at the theatres and the exhibitor's ability and willingness to promote the films. Competition for patrons is dependent upon factors such as the availability of popular films, the location of theatres, the comfort and quality of theatres and ticket prices. Regal believes that it competes favorably with respect to each of these factors. There are approximately 300 participants in the domestic motion picture exhibition industry. Industry participants vary substantially in size, from small independent operators of a single screen theatre to large national chains of multi-screen theatres affiliated with entertainment conglomerates. Many of the Company's competitors have been in existence significantly longer than Regal and may be better established in certain of the markets where the Company's theatres are located. Certain of Regal's competitors also have sought to increase the number of theatres and screens in operation. Such increases may cause certain local markets or portions thereof to become overscreened, resulting in a negative impact on the earnings of the theatres involved and thus on the Company's theatres in those markets. Concurrent with the increase in the number of screens, there has been a reduction in the number of theatre locations and a consolidation among exhibitors. At May 1, 1995, the five largest motion picture exhibition companies operated approximately 34% of the total screens, the largest of which operated less than 9% of the total screens. The motion picture exhibition industry faces competition from a number of motion picture exhibition delivery systems. In recent years alternative delivery systems have been developed for the exhibition of filmed entertainment, including cable television, video cassettes and pay per view. While the impact of such delivery systems on movie theatres is difficult to determine precisely, there can be no assurance that they will not adversely impact attendance at the Company's theatres. Movie theatres also face competition from other forms of entertainment competing for the public's leisure time and disposable income. PENDING ACQUISITIONS Georgia State Theatres, Inc. Merger. Regal has entered into a definitive Agreement and Plan of Merger to acquire Georgia State Theatres, Inc. for 912,000 shares of Regal Common Stock in a pooling of interests transaction. GST, headquartered in Atlanta, Georgia, has 10 first run theatres with 68 screens, including one drive-in theatre, located in the metropolitan Atlanta, Georgia area and a partnership in Gainesville, Georgia. Provided shareholder approval of the Merger Agreement is obtained, the parties intend to close the transaction and effect the GST Merger promptly following the special meeting of shareholders scheduled for May 30, 1996. Krikorian Asset Acquisition. Regal has entered into an agreement to acquire assets consisting of eight theatres with 69 screens in California from an individual, George Krikorian, and corporations controlled by him. Consideration for the Krikorian Acquisition is anticipated to be approximately 470,000 shares of Regal Common Stock and approximately $14.1 million to be paid in cash at closing. The Company anticipates closing this acquisition during the second quarter of 1996. Although the Company's operations have historically focused on the eastern United States, the Company believes that the theatres in California provide an opportunity for the Company to establish a presence on the West Coast and expand its operations nationally. In addition, this acquisition includes a sufficient number of theatres and screens to give the Company a sufficient presence to cover the incremental costs of managing theatres on the West Coast. 15 17 MANAGEMENT The following table sets forth certain information concerning the directors and executive officers of the Company as of the date of this Prospectus.
NAME AGE POSITION (EXPIRATION OF TERM AS A DIRECTOR) - ----------------------------------- --- ---------------------------------------------------------- Michael L. Campbell................ 42 Chairman of the Board, Chief Executive Officer, President and Director (1996) R. Neal Melton..................... 36 Vice President Construction-Equipment, Secretary and Director (1996) Gregory W. Dunn.................... 36 Executive Vice President Robert A. Engel, Jr................ 43 Vice President Film and Advertising Lewis Frazer III................... 31 Vice President, Chief Financial Officer and Treasurer R. Keith Thompson.................. 34 Vice President Corporate Development and Assistant Secretary Susan Seagraves.................... 39 Corporate Controller Philip D. Borack................... 60 Director (1997) Michael E. Gellert(2).............. 64 Director (1997) J. David Grissom(2)................ 57 Director (1998) William H. Lomicka(1).............. 59 Director (1997) Herbert S. Sanger, Jr.(2).......... 59 Director (1998) Jack Tyrrell(1).................... 49 Director (1998)
- --------------- (1) Member of the Audit Committee of the Board of Directors. (2) Member of the Compensation Committee of the Board of Directors. Under the terms of the Company's Restated Charter, the members of the Board of Directors are divided into three classes, each of which serves a term of three years. Each class is to consist, as nearly as practicable, of one-third of the total number of directors constituting the Board of Directors. Executive officers of the Company are elected on an annual basis and serve at the discretion of the Board of Directors. Michael L. Campbell founded the Company in November 1989 and has served as Chairman of the Board, President and Chief Executive Officer since inception. Prior thereto, Mr. Campbell was the Chief Executive Officer of Premiere Cinemas Corporation ("Premiere"), which he co-founded in 1982, and served in such capacity until Premiere was sold in October 1989. Mr. Campbell serves on the Executive Committee of the Board of Directors of the National Association of Theatre Owners. R. Neal Melton has served as Vice President Construction-Equipment, Secretary and a director since 1990. Prior to joining the Company, Mr. Melton co-founded Premiere with Mr. Campbell and served as Senior Vice President, Secretary and a director of Premiere from 1982 through 1989. Gregory W. Dunn has served as Executive Vice President since 1995. From 1991 to 1995, Mr. Dunn was Vice President Marketing and Concessions. From 1989 to 1991, Mr. Dunn was the Purchasing and Operations Manager for Goodrich Quality Theaters, a Grand Rapids, Michigan based theatre chain. From 1986 to 1989, he was a film buyer for Tri-State Theatre Service, Inc. Robert A. Engel, Jr. has served as Vice President Film and Advertising since 1990. From 1987 through 1989, Mr. Engel was Vice President of Operations at Premiere and from 1971 to 1987 he worked at Associated Theaters of Kentucky in various capacities, rising to Vice President of Operations and Film Buying. Lewis Frazer III is a certified public accountant and has served as Vice President, Chief Financial Officer and Treasurer since February 1993. From May 1992 to February 1993, Mr. Frazer served as Controller. Prior 16 18 to joining the Company, he served from 1990 to 1992 as Corporate Controller for Kel-San, Inc., an affiliate of Institutional Jobbers. From June 1986 to July 1990, Mr. Frazer was an auditor with Coopers & Lybrand. Mr. Frazer serves as a member of the CFO Committee of the National Association of Theatre Owners. R. Keith Thompson has served as Vice President Corporate Development since February 1993 and as Assistant Secretary since 1991. Prior thereto, he served as Vice President Finance since joining the Company in 1991. From June 1984 to July 1991, Mr. Thompson was a Vice President of Corporate Lending at PNC Commercial Corporation. Susan Seagraves has served as Corporate Controller since January 1994 when she joined the Company. Ms. Seagraves is a certified public accountant, a certified management accountant and a fellow of health care management. From 1990 through 1993, Ms. Seagraves was an adjunct faculty member of Tusculum College and Bristol University and from 1988 to 1990 she served as Associate Executive Director of the Thompson Cancer Survival Center. From 1980 to 1988, Ms. Seagraves was in public accounting. Philip D. Borack has served as director of Regal since 1989. Since 1971, Mr. Borack has served as President of Tri-State Theatre Service, Inc. See "Business -- Film Licensing." Michael E. Gellert has served as a director of Regal since 1990. Mr. Gellert has served as the general partner of Windcrest Partners, a New York investment partnership, since 1967. From 1958 to 1989, Mr. Gellert was associated with Drexel Burnham Lambert and its predecessors and served as an Executive Director. Mr. Gellert is a director of Devon Energy Corp., an independent energy company; The Harvey Group, Inc., a retailer of consumer electronics; Humana, Inc., a provider of managed care health plans; Seacor Holdings, Inc., an owner and operator of marine vessels for oil exploration and development; and Premier Parks, Inc., an owner and operator of mid-sized theme parks. J. David Grissom has served as a director of Regal since 1990. Mr. Grissom is the Chairman and founder of Mayfair Capital, Inc., a private investment firm founded in 1989. Prior thereto, he served as Chairman and Chief Executive Officer of Citizens Fidelity Corporation, a bank holding company, from 1978 to 1989 and served as Vice Chairman of PNC Bank Corp. from 1987 to 1989. Mr. Grissom serves as a director of Providian Corporation, an insurance holding company; Churchill Downs, Inc.; LG&E Energy Corp., a diversified energy company; and Columbia/HCA Healthcare Corporation, a health services company. William H. Lomicka has served as a director of Regal since 1990. Since 1989, he has served as President of Mayfair Capital, Inc. From September 1988 through April 1989, Mr. Lomicka served as acting President of Citizens Security Life Insurance Company. He was Secretary of Economic Development of the Commonwealth of Kentucky from 1987 to 1988. From 1986 to 1987 he was President of Old South Life Insurance Company. Mr. Lomicka serves as a director of Vencor, Inc., an owner and operator of acute care hospitals, and Advocat Inc., a long-term care management company, and Trans Advisor Funds, Inc., an open-end investment company. Herbert S. Sanger, Jr. has served as a director of Regal since 1990. Mr. Sanger is a partner in the Knoxville, Tennessee law firm of Wagner, Myers & Sanger, P.C., and has been a member of the firm since November 1986. Mr. Sanger was an attorney for the Tennessee Valley Authority ("TVA") from 1961 to 1986, serving as TVA's general counsel from 1975 to 1986. Jack Tyrrell has served as a director of Regal since 1991. Mr. Tyrrell is a managing general partner of Lawrence, Tyrrell, Ortale & Smith, a venture capital firm founded in 1985, and is a general partner of Richland Ventures, L.P., a venture capital firm formed in 1994. He also serves as a managing general partner of Lawrence, Tyrrell, Ortale & Smith II, L.P. Mr. Tyrrell serves as a director of Premier Parks, Inc., an owner and operator of mid-sized theme parks, and National Health Investors, Inc., an investor in income-producing health care facilities. 17 19 UNDERWRITING Pursuant to the Underwriting Agreement and subject to the terms and conditions thereof, the Underwriters named below, acting through J.C. Bradford & Co., Montgomery Securities and Wheat, First Securities, Inc, as representatives of the several underwriters (the "Representatives") have agreed, severally, to purchase from the Company, the number of shares of Common Stock set forth below opposite their respective names.
NUMBER OF NAME OF UNDERWRITER SHARES -------------------------------------------------------------------------- --------- J.C. Bradford & Co........................................................ Montgomery Securities..................................................... Wheat, First Securities, Inc.............................................. --------- Total...................................................... 2,500,000 ========
In the Underwriting Agreement, the Underwriters have agreed, subject to the terms and conditions therein set forth, to purchase all shares of Common Stock offered hereby if any of such shares are purchased. The Company has been advised that the Underwriters propose initially to offer the shares of Common Stock to the public at the public offering price set forth on the cover page of this Prospectus and to certain dealers at such price less a concession not in excess of $ per share. The Underwriters may allow and such dealers may reallow a concession not in excess of $ per share to certain other dealers. After the initial public offering, the public offering price and such concessions may be changed by the Underwriters. The offering of the shares of Common Stock is made for delivery when, as and if accepted by the Underwriters and subject to prior sale and to withdrawal, cancellation or modification of the offer without notice. The Underwriters reserve the right to reject any order for the purchase of the shares. The Company has granted to the Underwriters an option, exercisable not later than 30 days from the date of this Prospectus, to purchase up to an aggregate of 375,000 additional shares of Common Stock to cover over-allotments. To the extent the Underwriters exercise this option, each of the Underwriters will have a firm commitment to purchase approximately the same percentage thereof which the number of shares of Common Stock to be purchased by it shown in the above table bears to the total and the Company will be obligated, pursuant to the option, to sell such shares to the Underwriters. The Underwriters may exercise such option only to cover over-allotments made in connection with the sale of the shares of Common Stock offered hereby. If purchased, the Underwriters will sell such additional shares on the same terms as those on which the shares are being offered. In connection with this offering, certain Underwriters may engage in passive market making transactions in the Common Stock on the Nasdaq National Market immediately prior to the commencement of sales in the offering in accordance with Rule 10b-6A under the Exchange Act. Passive market making consists of displaying bids on the Nasdaq National Market limited by the bid prices of independent market makers and purchases limited by such prices and effected in response to order flow. Net purchases by a passive market maker on each day are limited to a specified percentage of the passive market makers' average daily trading volume in the Common Stock during a specified period and must be discontinued when such limit is reached. Passive market making may stabilize the market price of the Common Stock at a level above that which might otherwise prevail and, if commenced, may be discontinued at any time. The Company, its executive officers and directors have agreed that they will not, without the prior written consent of the Representatives, issue, sell, transfer, assign or otherwise dispose of any shares of the Common Stock or options, warrants, or rights to acquire Common Stock owned by them prior to August 1, 1996. The Underwriting Agreement provides that the Company will indemnify the Underwriters and controlling persons, if any, against certain liabilities, including liabilities under the Securities Act, or will contribute to payments which the Underwriters or any such controlling persons may be required to make in respect thereof. 18 20 EXPERTS The consolidated financial statements of Regal at December 28, 1995 and December 29, 1994, and for each of the three years in the period ended December 28, 1995 incorporated by reference herein from the Company's Annual Report on Form 10-K/A for the year ended December 28, 1995, the consolidated financial statements of GST at December 28, 1995 and December 29, 1994 and for each of the three years in the period ended December 28, 1995, incorporated by reference herein and the combined historical summaries of net theatre assets acquired and direct theatre operating revenues and expenses of Krikorian at and for the year ended December 31, 1995 incorporated by reference herein, have been audited by Coopers & Lybrand L.L.P., independent accountants, as stated in their reports thereon incorporated by reference herein and are incorporated by reference in reliance upon the authority of said firm as experts in accounting and auditing. The report of Coopers & Lybrand L.L.P. with respect to Regal's consolidated financial statements makes reference to the fact that separate financial statements of Litchfield Theatres, Ltd. reflected in Regal's Consolidated Statements of Income, Changes in Shareholders' Equity and Cash Flows for the year ended December 30, 1993 were audited and reported on separately by Deloitte & Touche LLP, independent auditors. The report of Deloitte & Touche LLP, independent auditors, has been incorporated herein by reference from the Company's Annual Report on Form 10-K/A for the year ended December 28, 1995 and is incorporated herein by reference in reliance upon such report given upon the authority of such firm as experts in accounting and auditing. The report of Coopers & Lybrand L.L.P. with respect to Regal's consolidated financial statements also makes reference to the fact that separate financial statements of Neighborhood Entertainment, Inc. included in the Consolidated Balance Sheet as of December 29, 1994 and the Consolidated Statements of Income, Changes in Shareholders' Equity and Cash Flows for the years ended December 30, 1993 and December 29, 1994, were audited by Ernst & Young LLP, independent auditors, as stated in their report dated March 21, 1995. Such financial statements of Neighborhood Entertainment, Inc. are included in the consolidated financial statements of Regal in reliance upon said report given upon the authority of said firm as experts in accounting and auditing. LEGAL MATTERS The validity of the issuance of Common Stock offered hereby will be passed upon for the Company by Bass, Berry & Sims PLC, Nashville, Tennessee. Certain legal matters with respect to the shares of Common Stock offered hereby will be passed upon for the Underwriters by Waller Lansden Dortch & Davis, Nashville, Tennessee. AVAILABLE INFORMATION The Company is subject to the informational requirements of the Exchange Act and in accordance therewith files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Copies of such reports, proxy statements and other information may be inspected and copied at the public reference facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the following Regional Offices of the Commission: 500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and Seven World Trade Center, New York, New York 10048. Copies of such material may be obtained at the prescribed rates from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. The Common Stock is quoted for trading on the Nasdaq National Market and reports, proxy statements and other information concerning the Company may be inspected at the offices of the Nasdaq National Market, 1735 K Street, N.W., Washington, D.C. 20006. The Company has filed with the Commission a Registration Statement on Form S-3 under the Securities Act with respect to the Common Stock offered hereby. This Prospectus does not contain all of the information set forth in the Registration Statement and the exhibits and schedules thereto, certain portions of which have been omitted in accordance with the rules and regulations of the Commission. For further information with respect to the Company and the Common Stock, reference is made to the Registration Statement, including the exhibits and schedules. The Registration Statement, together with its exhibits and schedules thereto, may 19 21 be inspected, without charge, at the Commission's principal office at 450 Fifth Street, N.W., Washington, D.C. 20549, and also at the regional offices of the Commission listed above. Copies of such material may also be obtained from the Commission upon the payment of prescribed fees. Statements contained in the Prospectus as to any contracts, agreements or other documents filed as an exhibit to or incorporated by reference in the Registration Statement are qualified in all respects to the copy of such contract, agreement or other document filed as an exhibit to the Registration Statement for a full statement of the provisions thereof. The Company's principal offices are located at 7132 Commercial Park Drive, Knoxville, Tennessee 37918 and its telephone number is (423) 922-1123. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents previously filed with the Commission by the Company are incorporated herein by reference: (1) Annual Report on Form 10-K for the fiscal year ended December 28, 1995, as amended by Form 10-K/A as filed on April 29, 1996; (2) Current Report on Form 8-K dated May 1, 1996; (3) Current Report on Form 8-K dated May 9, 1996; and (4) The Registration Statement on Form 8-A with respect to Regal Common Stock dated May 12, 1994, as amended by Form 8-A/A dated June 21, 1994 and Form 8-A/A dated September 12, 1994. All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the termination of the offering contemplated hereby shall be deemed to be incorporated by reference into this Prospectus and to be a part hereof from the date of filing of such documents. Any statement contained herein or in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such earlier statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. The Company hereby undertakes to provide without charge to each person to whom a copy of this Prospectus has been delivered, on the written or oral request of any such person, a copy of any or all of the documents referred to above which have been or may be incorporated into the Prospectus by reference, other than exhibits to such documents (unless such exhibits are specifically incorporated by reference in such documents). Requests for such copies should be directed to Lewis Frazer III, Chief Financial Officer, Regal Cinemas, Inc., 7132 Commercial Park Drive, Knoxville, Tennessee 37918, telephone number (423) 922-1123. 20 22 - ------------------------------------------------------ - ------------------------------------------------------ NO DEALER, SALESPERSON, OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER CONTAINED HEREIN, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY OF THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY THE SHARES OF COMMON STOCK OFFERED HEREBY BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO WHOM IT IS UNLAWFUL TO MAKE SUCH SOLICITATION OR OFFER. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF. --------------------- TABLE OF CONTENTS
PAGE ---- Prospectus Summary.................... 3 Risk Factors.......................... 7 Price Range of Common Stock and Dividend Policy..................... 8 Use of Proceeds....................... 9 Capitalization........................ 9 Business.............................. 10 Management............................ 16 Underwriting.......................... 18 Experts............................... 19 Legal Matters......................... 19 Available Information................. 19 Incorporation of Certain Documents By Reference........................... 20
- ------------------------------------------------------ - ------------------------------------------------------ - ------------------------------------------------------ - ------------------------------------------------------ 2,500,000 SHARES [REGAL CINEMAS LOGO] COMMON STOCK ------------------------- PROSPECTUS ------------------------- J.C. Bradford & Co. Montgomery Securities Wheat First Butcher Singer , 1996 - ------------------------------------------------------ - ------------------------------------------------------ 23 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. SEC registration fee.............................................................. $ 39,532 NASD fee.......................................................................... 11,965 Accounting fees and expenses...................................................... 50,000* Legal fees and expenses........................................................... 100,000* Printing and engraving expenses................................................... 100,000* Blue Sky fees and expenses........................................................ 10,000* Miscellaneous expenses............................................................ 38,503 -------- Total.............................................................. $350,000* ========
- --------------- * Estimated ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Tennessee Business Corporation Act ("TBCA") provides that a corporation may indemnify any of its directors and officers against liability incurred in connection with a proceeding if (i) the director or officer acted in good faith, (ii) in the case of conduct in his or her official capacity with the corporation, the director or officer reasonably believed such conduct was in the corporation's best interest, (iii) in all other cases, the director or officer reasonably believed that his or her conduct was not opposed to the best interest of the corporation, and (iv) in connection with any criminal proceeding, the director or officer had no reasonable cause to believe that his or her conduct was unlawful. In actions brought by or in the right of the corporation, however, the TBCA provides that no indemnification may be made if the director or officer was adjudged to be liable to the corporation. In cases where the director or officer is wholly successful, on the merits or otherwise, in the defense of any proceeding instigated because of his or her status as an officer or director of a corporation, the TBCA mandates that the corporation indemnify the director or officer against reasonable expenses incurred in the proceeding. The TBCA also provides that in connection with any proceeding charging improper personal benefit to an officer or director, no indemnification may be made if such officer or director is adjudged liable on the basis that personal benefit was improperly received. Notwithstanding the foregoing, the TBCA provides that a court of competent jurisdiction, upon application, may order that an officer or director be indemnified for reasonable expenses if, in consideration of all relevant circumstances, the court determines that such individual is fairly and reasonably entitled to indemnification, whether or not the standard of conduct set forth above was met. Article 8 of the Restated Charter (the "Charter") of the Company and its Amended and Restated Bylaws (the "Bylaws") provide that the Company shall indemnify against liability, and advance expenses to, any present or former director or officer of the Company to the fullest extent allowed by the TBCA, as amended from time to time, or any subsequent law, rule or regulation adopted in lieu thereof. Additionally, the Charter provides that no director of the Company shall be personally liable to the Company or any of its shareholders for monetary damages for breach of any fiduciary duty except for liability arising from (i) any breach of a director's duty of loyalty to the Company or its shareholders, (ii) acts or omissions not in good faith or which involved intentional misconduct or a knowing violation of law, (iii) any unlawful distributions, or (iv) receiving any improper personal benefit. The Company has entered into indemnification agreements with each of the Company's directors and executive officers. The proposed form of the Underwriting Agreement filed as Exhibit 1 to this Registration Statement contains certain provisions relating to the indemnification of the Company and its controlling persons by the Underwriters and relating to the indemnification of the Underwriters by the Company and its controlling persons. II-1 24 ITEM 16. EXHIBITS. The following exhibits are filed as part of the Registration Statement:
EXHIBIT NUMBER DESCRIPTION - ------ ---------------------------------------------------------------------- 1 -- Form of Underwriting Agreement 3.1 -- Restated Charter of Registrant (incorporated by reference to Exhibit No. 3.1 to the Registration Statement on Form S-1 (Registration No. 33-62868)). 3.2 -- Restated Bylaws of Registrant (incorporated by reference to Exhibit No. 3.2 to the Registration Statement on Form S-1 (Registration No. 33-62868)). 4.1 -- Specimen Common Stock certificate (incorporated by reference to Exhibit No. 4.1 to the Registration Statement on Form S-1 (Registration No. 33-62868)). 4.2 -- Article 5 of the Registrant's Restated Charter (included in Exhibit 3.1). 5 -- Opinion of Bass, Berry & Sims PLC. 23.1 -- Consent of Coopers & Lybrand L.L.P. 23.2 -- Consent of Ernst & Young LLP. 23.3 -- Consent of Deloitte & Touche LLP. 23.4 -- Consent of Counsel (included in opinion filed as Exhibit 5). 24 -- Power of Attorney (included on page II-3).
ITEM 17. UNDERTAKINGS. The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933 ("Securities Act"), each filing of the Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange Act that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered hereunder, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. The undersigned Registrant hereby undertakes that: (1) For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b) (1) or (4), or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective. (2) For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-2 25 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Knoxville, Tennessee on May 8, 1996. REGAL CINEMAS, INC. By: /s/ MICHAEL L. CAMPBELL ----------------------------------- Michael L. Campbell Chairman, President, Chief Executive Officer and Director POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Michael L. Campbell and Lewis Frazer III, jointly and severally, his attorneys-in-fact, each with the power of substitution, for him in any and all capacities, to sign any amendments to this Registration Statement, (including post-effective amendments and amendments thereto) and any registration statement relating to the same offering as this Registration Statement that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE - --------------------------------------------- -------------------------------- --------------- /s/ MICHAEL L. CAMPBELL Chairman of the Board, May 8, 1996 - --------------------------------------------- President, Chief Executive Michael L. Campbell Officer and Director (Principal Executive Officer) /s/ LEWIS FRAZER III Vice President, Financial May 8, 1996 - --------------------------------------------- Officer and Treasurer (Principal Lewis Frazer III Financial and Accounting Officer) /s/ R. NEAL MELTON Vice President May 8, 1996 - --------------------------------------------- Construction -- Equipment, R. Neal Melton Secretary and Director /s/ PHILIP D. BORACK Director May 8, 1996 - --------------------------------------------- Philip D. Borack /s/ MICHAEL E. GELLERT Director May 8, 1996 - --------------------------------------------- Michael E. Gellert /s/ J. DAVID GRISSOM Director May 8, 1996 - --------------------------------------------- J. David Grissom /s/ WILLIAM H. LOMICKA Director May 8, 1996 - --------------------------------------------- William H. Lomicka /s/ HERBERT S. SANGER, JR. Director May 8, 1996 - --------------------------------------------- Herbert S. Sanger, Jr. /s/ JACK TYRRELL Director May 8, 1996 - --------------------------------------------- Jack Tyrrell
II-3 26 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION - ------ ---------------------------------------------------------------------- 1 -- Form of Underwriting Agreement 3.1 -- Restated Charter of Registrant (incorporated by reference to Exhibit No. 3.1 to the Registration Statement on Form S-1 (Registration No. 33-62868)). 3.2 -- Restated Bylaws of Registrant (incorporated by reference to Exhibit No. 3.2 to the Registration Statement on Form S-1 (Registration No. 33-62868)). 4.1 -- Specimen Common Stock certificate or (incorporated by reference to Exhibit No. 4.1 to the Registration Statement on Form S-1 (Registration No. 33-62868)). 4.2 -- Article 5 of the Registrant's Restated Charter (included in Exhibit 3.1). 5 -- Opinion of Bass, Berry & Sims PLC. 23.1 -- Consent of Coopers & Lybrand, L.L.P. 23.2 -- Consent of Ernst & Young LLP. 23.3 -- Consent of Deloitte & Touche LLP. 24 -- Power of Attorney (included on page II-3).
27 Appendix A Omitted Graphic and Image Material The following is a narrative description of graphic and image material contained in the printed version of the prospectus which has been omitted from the version filed electronically. Inside front cover: 1. A map of the United States depicting the Company's screen count in states where it has theatres. The screen counts are presented as screens in operation, screens under construction, screens in announced acquisitions and total screens. 2. A collage of pictures depicting (i) an outside view of the front of a Regal theatre facility, (ii) a specialty cafe inside a Regal theatre lobby, (iii) a wide angle view of a Regal theatre lobby, (iv) an outside view of the entrance to a FunScape and (v) an inside view of a Regal theatre featuring stadium-style seating. 3. The following text accompanies the pictures described above: The Company's theatre's and FunScape locations are bright and inviting, acting as destination points which can expand the geographic territory of a given market zone. Prominent and appealing concession stands are designed for rapid service and efficiency. Through optimizing product mix, special promotions and cross selling, the Company seeks to maximize concession revenues. In many of the Company's theatres, patrons can enjoy specialty cafes serving non-traditional theatre fare, such as cappuccino, fruit juices, bottled water, cookies and muffins, soft pretzels and ice cream. Stadium-style seating in many of the Company's new theatres offers the latest in customer comfort and viewing enjoyment. Inside back cover: 1. A drawing depicting the layout of a typical FunScape centered among a series of pictures depicting the various features of a FunScape. Each picture is connected by a broken line to the section of the layout that it depicts. The following areas of a FunScape are depicted: "Stop-N-Play" life size game board, high-tech arcade and virtual reality, "Krazy Kars," birthday party rooms, "Star" motion thrill theatre (depicted from inside and outside), "Bridge Street" eatery (depicted twice), 36 hole miniature golf course, kiddie redemption arcade and "Power Sports" video batting cages. 2. The following text accompanies the pictures described above: FunScape is a complete, one-stop family entertainment center. It features a multi-screen movie theatre adjacent to a family entertainment facility and branded food court. The complex is a destination that offers entertainment for patrons of all ages. For younger children, the park includes a soft play area that incorporates both physical and creative play. Teens and adults can enjoy a variety of activities ranging from miniature golf to virtual reality experiences. The park is totally enclosed for year round operation. FunScape debuted in August 1995 in Chesapeake, Virginia, and a second FunScape opened in Rochester, New York in February 1996. Two FunScapes are under construction, in Syracuse, New York and Brandywine, Delaware, and an additional FunScape unit construction is anticipated to begin in 1996. 3. An external view of the front of a Regal theatre facility. EX-1 2 FORM OF UNDERWRITING AGREEMENT 1 EXHIBIT 1 REGAL CINEMAS, INC. 2,875,000 Shares of Common Stock UNDERWRITING AGREEMENT May ____, 1996 J.C. BRADFORD & CO. MONTGOMERY SECURITIES WHEAT, FIRST SECURITIES, INC. As Representatives of the several Underwriters c/o J.C. Bradford & Co. J.C. Bradford Financial Center 330 Commerce Street Nashville, Tennessee 37201-1809 Ladies and Gentlemen: Regal Cinemas, Inc., a Tennessee corporation (the "Company"), confirms its agreement with you and the other Underwriters named in Schedule A hereto (the "Underwriters," which term shall also include any underwriter substituted as hereinafter provided in Section 10) for each of whom J.C. Bradford & Co., Montgomery Securities and Wheat, First Securities, Inc. are acting as Representatives for the purposes of this Agreement, with respect to the sale by the Company of 2,500,000 shares (the "Firm Shares"), of the Company's Common Stock, no par value (the "Common Stock"), and the purchase by the Underwriters, acting severally and not jointly, of the number of Firm Shares of Common Stock set forth in Schedule A opposite their names. The Company also confirms its agreement to sell to the Underwriters, upon the terms and conditions set forth herein, up to a total of 375,000 additional shares (the "Additional Shares") of the Common Stock in such manner as described in Section 3. The Firm Shares and the Additional Shares are hereinafter collectively referred to as the "Shares." Section 1. Representations and Warranties of the Company. The Company represents and warrants to each Underwriter and agrees that: 2 (a) The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-3 (No. 333-_________), including a related preliminary prospectus, for the registration of the Shares in accordance with the Securities Act of 1933, as amended (the "Act"), and the published rules and regulations of the Commission thereunder (the "Regulations"); the Company has filed such amendments to the registration statement, and such amended preliminary prospectuses, as may have been required to the date hereof, and the Company will prepare and proposes to file prior to the effectiveness of such registration statement one or more amendments to the registration statement, including a final form of prospectus. Copies of the registration statement and any amendments thereto, and all forms of related prospectuses contained therein, have been delivered to you. The registration statement and the prospectus, as amended or supplemented, on file with the Commission at the time the registration statement becomes effective, are hereinafter called the "Registration Statement" and the "Prospectus," respectively. In the event that the prospectus first filed with the Commission pursuant to Rule 424(b) of the Commission under the Act (the "424(b) Prospectus") differs from the prospectus on file with the Commission at the time the Registration Statement becomes effective, including any prospectus filed with the Commission that discloses all the information that was omitted from the prospectus on the effective date pursuant to Rule 430A of the Regulations, the term "Prospectus" shall mean the 424(b) Prospectus from and after the time it is filed or mailed to the Commission for filing. (b) When the Registration Statement becomes effective, and at all times subsequent thereto up to and including the Closing Time (hereinafter defined): (i) the Registration Statement and the Prospectus and any amendments or supplements thereto will comply with the provisions of the Act and the Regulations; (ii) there will be no stop order of the Commission, any court of competent jurisdiction or the securities administrator of any state in which the Shares have been, or are to be, registered or qualified, in effect, pending or threatened with respect to the effectiveness of the Registration Statement or the distribution of the Prospectus; and (iii) neither the Registration Statement nor the Prospectus will contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that none of the representations and warranties in this subsection shall apply to statements in or omissions from the Registration Statement or the Prospectus made in reliance upon and in conformity with information furnished to the Company in writing by or on behalf of any Underwriter through you expressly for use in the Registration Statement or the Prospectus. (c) The Company has been duly incorporated and is validly existing as a corporation under the laws of the State of Tennessee with corporate power 2 3 and authority to own, lease and operate its properties and conduct its business as described in the Registration Statement. The Company is duly licensed or qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect on the conduct of its business or the ownership or leasing of its properties in such jurisdiction. (d) The Company has three subsidiaries, which have been duly incorporated and are validly existing as corporations under the laws of the State of South Carolina, the State of Georgia and the State of Virginia and each is duly licensed or qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which the failure to so qualify would have a material adverse affect on the conduct of the business or the ownership or leasing of properties in such jurisdiction of the Company and its subsidiaries, taken as a whole; all of the issued and outstanding shares of each such subsidiary have been duly and validly issued and are fully paid and non-assessable; and, all of such shares are owned by the Company, free and clear of any mortgage, pledge, lien, encumbrance, claim or equity. (e) The Company has an authorized capitalization as of December 28, 1995 as set forth in the Registration Statement and, at the time of delivery of the Shares to you hereunder against payment therefor, the Shares and all other outstanding shares of Common Stock will have been duly authorized and issued, will be fully paid and nonassessable, and will conform to the description thereof contained in the Prospectus. There are no restrictions upon the transfer of the Shares pursuant to the Company's Charter, Bylaws or other governing documents or any agreement or other instrument to which the Company is a party or by which it may be bound except as described in the Prospectus. Neither the filing of the Registration Statement nor the offering or sale of the Shares as contemplated by this Agreement gives rise to any rights, other than those which have been waived or satisfied, for or relating to the registration of any shares of Common Stock or any other securities of the Company. (f) All offers and sales of the Company's capital stock prior to the date hereof, other than pursuant to effective registration statements under the Act, were at all relevant times exempt from the registration requirements of the Act and were duly registered or the subject of an available exemption from the registration requirements of the applicable state securities or Blue Sky laws, or the relevant statutes of limitations have expired, or civil liability therefor has been eliminated by an offer to rescind. (g) The financial statements and related notes and schedules included in the Registration Statement and the Prospectus or incorporated by reference therein present fairly the consolidated financial condition of the Company and its 3 4 subsidiaries at the dates indicated and the consolidated results of their operations for the periods specified. These financial statements and related notes and schedules have been prepared in conformity with generally accepted accounting principles applied on a consistent basis during the periods involved (except as stated therein). The unaudited pro forma financial statements included in the Registration Statement and the Prospectus comply in all material respects with the applicable accounting requirements of Article II of Regulation S-X promulgated by the Commission, and the pro forma adjustments have been applied properly to the historical financial statements. The other financial and statistical information set forth in the Registration Statement and the Prospectus or incorporated by reference therein fairly presents the information set forth therein on the basis set forth in the Registration Statement and the Prospectus. Coopers & Lybrand L.L.P., who have certified certain of the financial statements of the Company, are independent public accountants as required by the Act and the Regulations. Deloitte & Touche LLP, who have certified certain of the financial statements of Litchfield Theatres, Ltd., and Ernst & Young LLP, who have certified certain of the financial statements of Neighborhood Entertainment, Inc., are independent public accountants as required by the Act and the Regulations. (h) This Agreement has been duly authorized, executed and delivered by, and constitutes the legal, valid and binding obligation of, the Company. (i) Since the respective dates as of which information is given in the Registration Statement and the Prospectus, except as may otherwise be stated or contemplated therein: (i) there has not been any material adverse change in the condition of the Company and its subsidiaries, taken as a whole, financial or otherwise, or in the earnings, business prospects or current operations of the Company and its subsidiaries, taken as a whole, whether or not arising in the ordinary course of business; (ii) there have not been any material transactions entered into by the Company or any of its subsidiaries which are required to be disclosed in the Registration Statement; (iii) there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock or any material change in the capital stock or increase in the long term indebtedness of the Company; (iv) no action, suit or proceeding at law or in equity and no governmental or regulatory proceeding has occurred or is pending or, to the knowledge of the Company, threatened against or affecting the Company or its subsidiaries wherein an unfavorable decision, ruling or finding would have a material adverse effect on the consummation of this Agreement or the business, operations, financial condition, income or business prospects of the Company and its subsidiaries, taken as a whole,; and (v) neither the Company nor any of its subsidiaries has sustained a loss of, or damage to, their respective properties (whether or not insured) that would have a material adverse effect on the business, operations, financial condition, income or business prospects of the Company and its subsidiaries, taken as a whole. 4 5 (j) There are no contracts, instruments or other documents of the Company or its subsidiaries that are required by the Act or the Regulations to be described in the Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement that have not been described or filed as required. (k) The performance of this Agreement and the consummation of the transactions herein contemplated will not result in a breach or violation of any of the terms or provisions of, or constitute a default by the Company under, any indenture, mortgage, deed of trust, note or other material agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound, the Company's Charter or Bylaws, or any statute, order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company, its subsidiaries or any of their respective properties, which breach, violation or default would have a material adverse effect on the financial condition or operations of the Company and its subsidiaries, taken as a whole; all licenses and other governmental approvals material to the operation of the facilities owned by, and the conduct of the business of, the Company and its subsidiaries have been duly obtained and are in full force and effect; and except such as may be required under the Act or state securities laws or by the National Association of Securities Dealers, Inc. (the "NASD") in connection with the purchase and distribution of the Shares by you, no consent, approval, authorization or order of any court or governmental agency or body is required for the consummation by the Company of the transactions contemplated by this Agreement. (l) Each of the Company and each of its subsidiaries has good and marketable title to all properties and assets owned by it, free and clear of all liens, charges, encumbrances, defects or restrictions, except (i) for the security interest granted to the lenders under the Company's Credit Facility (as defined in the Prospectus) and (ii) as otherwise described in the Prospectus or such matters as are not materially significant to the business of the Company and its subsidiaries, taken as a whole; all of the leases material to the business of the Company under which the Company holds real property are in full force and effect, and neither the Company nor any of its subsidiaries is in default under any of the material terms or provisions of any of such leases, and there is no known claim of any sort that has been asserted by anyone adverse to the Company's or its subsidiaries' rights as lessee under any of the leases mentioned above, or affecting or questioning its right to the continued possession of the leased premises under any such lease. (m) The Company's system of internal accounting controls taken as a whole is sufficient to meet the broad objectives of internal accounting control insofar as those objectives pertain to the prevention or detection of errors or irregularities in amounts that would be material in relation to the Company's 5 6 financial statements; and, to the knowledge of the Company, neither the Company nor any of its subsidiaries nor any employee or agent of the Company has made any payment of funds of the Company or received or retained any funds in violation of any law, rule or regulation which payment, receipt or retention of funds is of a character required to be disclosed in the Prospectus. (n) The Company and its subsidiaries operate their business in conformity in all material respects with and is not in violation of any applicable statute, law, ordinance, governmental rule or regulation or court decree to which each may be subject wherein any such violation would have a material adverse effect on the financial condition or operations of the Company and its subsidiaries, taken as a whole. (o) All tax returns of the Company and its subsidiaries required by law to be filed prior to the date hereof have been filed except for those returns as to which the failure to file would not have a material adverse effect on the Company and its subsidiaries, taken as a whole. All taxes, assessments, fees, penalties, interest and other governmental charges that are shown to be due and payable with respect to the Company and its subsidiaries have been paid. (p) No labor dispute exists with the Company's employees or is imminent that would materially adversely affect the Company and its subsidiaries, taken as a whole. The Company is not aware of any existing or imminent labor disturbance by any of its employees that would be expected to materially adversely affect the financial condition or operations of the Company and its subsidiaries, taken as a whole. Any certificate signed by any officer of the Company and delivered to you or to counsel for the Underwriters in connection with the Closing shall be deemed a representation and warranty by the Company to each Underwriter as to the matters covered thereby. Section 2. Representations and Warranties of the Underwriters. The Representatives, on behalf of the several Underwriters, represent and warrant to the Company that the information set forth (a) on the cover page of the Prospectus with respect to the public offering price and the underwriting discount and (b) the third paragraph and the listing of the names of and the number of shares to be purchased by the Underwriters in the first paragraph under "Underwriting" in the Prospectus was furnished to the Company by and on behalf of the Underwriters for use in connection with the preparation of the Registration Statement and such information is accurate in all material respects. The Representatives further represent and warrant to the Company that such Representatives have the authority to act on behalf of the several Underwriters in connection with this Agreement and the offering contemplated hereby. 6 7 Section 3. Purchase by, and Sale and Delivery to, Underwriters - - Closing Time. (a) On the basis of the representations, warranties and covenants herein contained and subject to the terms and conditions herein set forth, the Company agrees to issue and/or sell to each Underwriter, and each Underwriter, severally and not jointly, agrees to purchase from the Company at $_______ per share, the number of the Firm Shares set forth in Schedule A opposite the name of each Underwriter. The Company is advised by you that the Underwriters propose to make a public offering of the Shares as soon after the effective date of the Registration Statement as in your judgment is advisable, and to offer the Shares initially upon the terms set forth in the Prospectus. (b) The Company hereby agrees to sell to the several Underwriters and, upon the basis of the representations, warranties and covenants herein contained, and subject to the terms and conditions hereof, the Underwriters shall have the right to purchase, severally, up to 375,000 Additional Shares at the purchase price per share stated above, in the manner described below. Additional Shares may be purchased solely for the purpose of covering over-allotments made in connection with the offering of the Firm Shares. If any Additional Shares are to be purchased, each Underwriter, severally, agrees to purchase such Additional Shares (in each instance subject to such adjustments as you may determine to avoid fractional shares) from the Company that proportion of the number of Additional Shares, which the number of Firm Shares set forth opposite the name of each Underwriter in Schedule A hereto (or such number increased as set forth in Section 10 hereof) bears to 2,500,000 Shares, up to a total of 375,000 Shares. The option granted hereby may be exercised as to all or any part of the Additional Shares at any time (but only once) within 30 days after the date the Registration Statement becomes effective. You shall not be under any obligation to purchase any Additional Shares prior to the exercise of such option. The option granted hereby may be exercised by your giving written notice to the Company setting forth the number of Additional Shares to be purchased and the date and time for delivery of and payment for such Additional Shares and stating that the Additional Shares referred to therein are to be used solely for the purpose of covering over-allotments in connection with the distribution and sale of the Firm Shares. If such notice is given prior to the Closing Time, the date set forth therein for such delivery and payment shall not be earlier than two full business days thereafter or the Closing Time, whichever occurs later. If such notice is given on or after the Closing Time, the date set forth therein for such delivery and payment shall not be earlier than three full business days thereafter. In either event, the date so set forth shall not be more than 15 full business days after the 7 8 date of such notice. The date and time set forth in such notice is herein called the "Option Closing Time." Upon exercise of the option, the Company shall become obligated to sell to you in the manner provided above and, subject to the terms and conditions herein set forth, you shall become obligated to purchase from the Company the number of Additional Shares specified in such notice. Additional Shares shall be purchased for the accounts of the several Underwriters in proportion to the number of Firm Shares set forth opposite such Underwriter's name in Schedule A hereto, except that the respective purchase obligations of each Underwriter shall be adjusted so that no Underwriter shall be obligated to purchase fractional Additional Shares. (c) Payment of the purchase price for, and delivery of certificates for, the Shares to be purchased by the Underwriters shall be made at the offices of Waller Lansden Dortch & Davis, Nashville City Center, Suite 2100, 511 Union Street, Nashville, Tennessee 37219, or at such other place as shall be agreed upon by you and the Company, at 10:00 am., Nashville Time, on the third full business day (unless postponed in accordance with the provisions of Section 10 hereof) following the date this Agreement becomes effective, or, at the election of the Underwriters, on the fourth full business day after this Agreement becomes effective, if it becomes effective after 4:30 p.m. Eastern time, or at such other time not later than the seventh full business day thereafter as the Underwriters and the Company may determine (the "Closing Time"). Payment shall be made to the Company by certified or official bank check or checks in New York Clearing House (next day) funds payable to the order of the Company against delivery by the Company to you for the respective accounts of the Underwriters of certificates for the Firm Shares to be purchased by the Underwriters. Payment of the purchase price for, and delivery of certificates for, the Additional Shares to be purchased by the Underwriters shall be made at said offices of Waller Lansden Dortch & Davis upon such date (the "Option Closing Time"), which may be the same as the Closing Time but shall in no event be earlier than the Closing Time nor earlier than three nor later than ten business days after the giving of written notice from you to the Company of your determination to purchase the number of Additional Shares specified in said notice. Said notice may be given at any time within 30 days after the date of this Agreement. The Option Closing Time may be varied by agreement between you and the Company. Certificates for Additional Shares will be delivered to you for the respective accounts of the several Underwriters against payment in the manner specified in the preceding paragraph. Certificates for the Shares shall be registered in such names and denominations as you may request in writing at least two business days before the Closing Time, or the Option Closing Time, as the case may be. It is understood that each Underwriter has authorized you, for the account of such Underwriter, 8 9 to accept delivery of, receipt for and make payment of the purchase price for the Shares that it has agreed to purchase. You may (but shall not be obligated to) make payment of the purchase price for the Shares to be purchased for any Underwriter if a check shall not have been received by the Closing Time, or the Option Closing Time, as the case may be, for the account of such Underwriter, but any such payment shall not relieve any such Underwriter from any obligations hereunder. The Company will permit you, on or before the first business day prior to the Closing Time, or the Option Closing Time, as the case may be, to examine and package for delivery the certificates for the Shares to be purchased by the Underwriters. Section 4. Covenants of the Company. The Company covenants and agrees with each Underwriter that: (a) The Company will use its best efforts to cause the Registration Statement and any subsequent amendments thereto to become effective as promptly as possible, or at such time as shall be mutually agreeable to the Company and the Representatives. The Company will comply with the provisions of and make all requisite filings with the Commission pursuant to Rules 424 and 430A of the Regulations. The Company will not at any time, whether before or after the effective date, file any amendment to the Registration Statement or supplement to the Prospectus of which the Representatives shall not previously have been advised and furnished with a copy a reasonable time prior to the proposed filing, or to which the Representatives shall have reasonably objected or which is not in compliance with the Act and the Regulations. The Company will prepare and file with the Commission, promptly upon the Representatives' request, any amendments to the Registration Statement or supplements to the Prospectus that may be necessary or advisable in connection with the distribution of the Shares by the several Underwriters, and will use its best efforts to cause the same to become effective as promptly as possible, or at such time as shall be mutually agreeable to the Company and the Representatives. (b) The Company will notify the Representatives immediately (i) of the effectiveness of the Registration Statement and any amendment thereto, (ii) of the receipt of any comments from the Commission, (iii) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the prospectus or for additional information with respect thereto, and (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of the initiation of any proceedings for that purpose. The Company will make every reasonable effort to prevent the issuance by the Commission of any stop order, and if any such stop order shall at any time be issued, to obtain the lifting thereof at the earliest possible moment. 9 10 (c) The Company will deliver to you, without charge and as soon as available, two signed copies of the Registration Statement as originally filed and of each amendment thereto, together with two sets of exhibits filed therewith, and will also make available to each of the Underwriters conformed copies of the Registration Statement as originally filed and of each amendment thereto (without exhibits). (d) The Company will deliver to each Underwriter from time to time, before the Registration Statement becomes effective, such number of copies of the preliminary prospectus as originally filed and any amended preliminary prospectus, and as soon as the Registration Statement becomes effective and thereafter, from time to time, during the period when the Prospectus is required to be delivered under the Act, such number of copies of the Prospectus, as any Underwriter may reasonably request. (e) If, at any time when any of the Underwriters is required by law to deliver a Prospectus in connection with the sale of the Shares, any event relating to or affecting the Company shall occur as a result of which it is necessary, in the opinion of counsel for the Company or counsel for the Underwriters, to amend or supplement the Prospectus in order to make the Prospectus not misleading in the light of the circumstances existing at the time it is delivered to a purchaser, the Company will forthwith prepare and furnish to the Underwriters a reasonable number of copies of an amendment or amendments to, or a supplement or supplements to, the Prospectus which will amend or supplement the Prospectus so that, as so amended or supplemented, it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time the Prospectus is delivered to a purchaser, not misleading. If any event occurs that leads counsel for the Underwriters to believe that such an amendment or supplement may be necessary, the Company will furnish such information with respect to itself related to such event as you may reasonably request. If such event shall occur more than nine months from the date hereof, the Underwriters will reimburse the Company for its reasonable expenses incurred in complying with this paragraph. (f) The Company will endeavor in good faith, in cooperation with the Underwriters, to register or qualify the Shares for offering and sale under the applicable securities laws of such jurisdictions as you may designate; provided, however, that the Company shall not be obligated to file any general consent to service or to qualify or be subject to taxation as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified. In each jurisdiction where any of the Shares shall have been qualified as above provided, the Company will make and file such statements and reports as are or may be reasonably required by the laws of such jurisdiction to continue such qualification 10 11 in effect so long as such qualification is required in connection with the sale of the Shares in such jurisdiction. (g) The Company will make generally available to its security holders as soon as practicable, but no later than 90 days after the close of the period covered thereby, an earnings statement (in form complying with the provisions of Section 11(a) of the Act, which need not be certified by independent public accountants unless required by the Act or the Regulations) covering a twelve-month period commencing after the effective date of the Registration Statement but not later than the first day of the Company's fiscal quarter next following the effective date of the Registration Statement. (h) The Company will for a period of five years from the effective date of the Registration Statement promptly furnish to you and upon request, to each of the other Underwriters: (i) copies of any report, application or document that the Company shall file with the Commission or any securities exchange; (ii) copies of each communication that the Company shall send to its stockholders as a class; and (iii) such other publicly available information concerning the Company as you may reasonably request that, in your judgment, affects the stockholders of the Company. (i) For a period of 60 days from and after the date of this Agreement, the Company will not, and each of the executive officers and directors of the Company will not, directly or indirectly, without your prior written consent, sell, transfer, give, pledge, hypothecate or otherwise dispose of, nor enter into an agreement regarding the same, any shares of Common Stock or options, warrants or rights to acquire such Common Stock that such person may beneficially own. Notwithstanding the foregoing, during such period the Company (i) may grant stock options pursuant to the Company's 1993 Outside Directors' Stock Option Plan and 1993 Employee Stock Incentive Plan; (ii) may issue shares of Common Stock upon the exercise of any warrants described as outstanding in the Registration Statement; or (iii) may issue shares of Common Stock in connection with an acquisition or merger. (j) The Company will cause to be filed with the Commission and the securities administrators of any state in which the Shares are registered or qualified, all reports of sales of the Shares, notices of termination of the offering of the Shares and any other post-effective filings as may be required by the Regulations or applicable state securities laws and regulations. 11 12 (k) The Company will apply the net proceeds from the sale of the Shares as set forth under the caption "Use of Proceeds" in the Prospectus. Section 5. Payment of Expenses. Whether or not this Agreement becomes effective or the sale of the Shares to the Underwriters is consummated or this Agreement is terminated, the Company will pay all fees and expenses incident to the performance of its obligations under this Agreement, including (i) the printing and filing of the Registration Statement and Prospectus and the printing of the Agreement Among Underwriters, Underwriting Agreement and Selected Dealer Agreement, (ii) the issuance and delivery of the Shares to the Underwriters, including original issue and stock transfer taxes, if any, payable upon the issue or transfer and sale of the Shares to the Underwriters and transfer agents' and registrars' fees, (iii) the fees and disbursements of the Company's counsel and accountants related to the preparation of the Registration Statement and Prospectus, (iv) the registration or qualification of the Shares under securities laws in accordance with the provisions of Section 4(f) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Underwriters in connection therewith and in connection with the preparation of the Blue Sky Memoranda, (v) the printing and delivery to the Underwriters in quantities as hereinabove stated of copies of the Registration Statement and all amendments thereto, of any preliminary prospectus, and of the Prospectus and any amendments or supplements thereto, (vi) the printing and delivery to the Underwriters of copies of the Blue Sky Memoranda to be prepared by counsel for the Underwriters, and (vii) the filing fees of the Commission and filing fees and expenses incident to obtaining any required review by the NASD of the terms of the sale of the Shares. If this Agreement is cancelled by you in accordance with the provisions of Section 6 or is terminated by you prior to the Closing Time in accordance with the provisions of Section 9(b)(i) or the Company prevents this Agreement from becoming effective in accordance with the provisions of Section 9(a) prior to the Closing Time, the Company shall reimburse the Underwriters for all of their out-of-pocket expenses, including the reasonable fees, expenses and disbursements of counsel for the Underwriters incurred by the Underwriters in connection with investigating, preparing to market and marketing the Shares and proposing to purchase the Shares under this Agreement or otherwise incurred by the Underwriters in connection with their obligations hereunder. The provisions of this Section shall not affect any agreement that the Company may have for the payment of such costs and expenses. Section 6. Conditions of Underwriters' Obligations. The several obligations of the Underwriters hereunder to purchase the Shares are subject to the accuracy of and compliance with the representations and warranties of the Company at and as of the Closing Time and of the Company at and as of the Option Closing Time, if any, to the performance by the Company of their respective obligations hereunder, and to the following additional conditions: (a) The Registration Statement shall have become effective not later than 4:30 p.m., Nashville Time, on the next succeeding business day following the date hereof, or at such later time and date as shall have been consented to by 12 13 you; all filings required by Rule 424 and Rule 430A of Regulation C under the Act shall have been made; at the Closing Time and the Option Closing Time, if any, no stop order suspending the effectiveness thereof shall have been issued under the Act or proceedings therefor initiated or threatened or, to the knowledge of the Company or the Underwriters, shall be contemplated by the Commission; any request of the Commission for additional information (to be included in the Registration Statement or the Prospectus or otherwise) shall have been complied with to your satisfaction; and the NASD, upon review of the terms of the public offering of the Shares, shall not have objected to such offering, such terms or the Underwriters' participation in the same. (b) At the Closing Time and the Option Closing Time, if any, you shall have received: (1) The favorable opinion, dated as of the Closing Time, and the Option Closing Time, if any, of Bass, Berry & Sims PLC, counsel for the Company, in form and substance satisfactory to you and counsel to the Underwriters, to the effect that: (i) The Company has been duly incorporated and is validly existing as a corporation under the laws of the State of Tennessee, with corporate power and corporate authority under such laws to own, lease and operate its properties as now owned, leased or operated and to conduct its business as now conducted, and is qualified as a foreign corporation to transact the business in which it is engaged and is in good standing as a foreign corporation in all other jurisdictions where the failure to be so qualified would have a material adverse effect upon the Company. (ii) Each of the subsidiaries of the Company is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, with corporate power and corporate authority to own, lease and operate its properties as now owned, leased or operated and to conduct its business as now conducted, and each is duly qualified to do business as a foreign corporation in good standing in all other jurisdictions where the failure to so qualify would have a material adverse affect on the Company and its subsidiaries, taken as a whole. The outstanding shares of capital stock of the subsidiaries of the Company have been duly authorized and validly issued, are fully paid and nonassessable, and to such counsel's actual knowledge, are owned beneficially by the Company free and clear of all liens, encumbrances, equities and claims. 13 14 (iii) The Company had as of December 28, 1995 an authorized capitalization as set forth in the Registration Statement. All of the outstanding shares of Common Stock have been duly authorized and validly issued and are fully paid and nonassessable. The Shares conform to the description thereof contained in the Company's Registration Statement on Form 8-A, as amended, incorporated by reference in the Registration Statement. There are no restrictions upon the transfer of the Shares pursuant to the Company's Charter or Bylaws or, to such counsel's actual knowledge, other instrument to which the Company is a party or by which it may be bound except as described in the Prospectus. (iv) No consent, approval, authorization or other action by or filing with any federal or state court or governmental authority is required for the execution and delivery of this Agreement by the Company or the consummation by the Company of the transactions that are the subject of this Agreement, except such as have been obtained under the Act and such as may be required by the NASD and under state securities laws in connection with the purchase and distribution of the Shares by you and except such as will not, if not obtained, have a material adverse effect on the transactions contemplated hereby. Execution and delivery by the Company of, and performance of its agreements in, this Agreement will not breach or result in a default under any material indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument actually known to such counsel to which the Company is a party or to which the Company or its properties is subject that are filed as exhibits to the Registration Statement, violate the constituent documents of the Company or any judgment, decree or order actually known to such counsel of any court or governmental agency or body applicable to the Company or any of its properties, or violate any applicable provisions of any state or federal statutory law or regulation (except that no opinion need be expressed as to the securities or Blue Sky laws of any state and no opinion need be expressed as to the antifraud provisions of the federal or state securities laws). (v) This Agreement has been duly authorized by all necessary corporate action on the part of the Company and has been duly executed and delivered by the Company, and is enforceable against the Company in accordance with its terms, except as enforceability may be limited by applicable equitable principles or by bankruptcy, insolvency, moratorium, reorganization or similar laws from time to time in effect affecting 14 15 the enforcement of creditors' rights and except that enforceability of the rights to indemnity and contribution contained herein may be limited by federal or state laws and public policy underlying such laws. (vi) Such counsel hereby confirms to you, pursuant to the request set forth herein, that except as described in the Prospectus, to the knowledge of such counsel there is not pending or threatened any action, suit, proceeding, inquiry or investigation, to which the Company is a party, or to which the property of the Company is subject that, if adversely determined, would have a material adverse effect on the business, financial position, net worth or results of operations, or would materially adversely affect the properties or assets, of the Company. (vii) The Registration Statement and all post-effective amendments thereto have become effective under the Act and, to the knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are threatened, pending or contemplated by the Commission and all filings required by Rule 424 and Rule 430A of the Regulations have been made; the Registration Statement and the Prospectus, and any amendments or supplements thereto, as of their respective effective or issue dates, complied as to form in all material respects with the requirements of the Act and the Regulations; the descriptions in the Registration Statement and Prospectus of statutes, regulations, legal and governmental proceedings, contracts and other instruments present fairly in all material respects the information required to be shown; and such counsel do not know of any pending or threatened legal or governmental proceedings, statutes or regulations required to be described in the Prospectus that are not described as required, nor of any contracts, instruments or documents of a character required to be described in the Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement that are not described and filed as required; the description in the Registration Statement of the Company's securities and the legal documents, laws and regulations relating to or affecting the business of the Company to the extent they constitute matters of law or legal conclusions fairly present the information disclosed therein in all material respects. Such opinion also will include a statement that the limitations inherent in the independent verification of factual matters and the character of determinations involved in the 15 16 registration process are such that such counsel has not verified, and, except as to the description in the Registration Statement and the Prospectus of statutes, regulations, legal proceedings and contracts and other instruments, is not passing upon and does not assume any responsibility for, the accuracy, completeness or fairness of the statements contained in the Registration Statement or Prospectus. Such opinion will also state, however, that such counsel participated in the preparation of the Registration Statement and the Prospectus during the course of which, among other things, such counsel examined various documents and other papers and participated in conferences with representatives of the Company, with representatives of the Company's independent public accountants, and with your representatives and your counsel, at which conferences the contents of the Registration Statement and the Prospectus and related matters were discussed, and that on the basis of the information that was developed in the course of such counsel's above-described participation, considered in the light of such counsel's understanding of the applicable law and the experience such counsel has gained through such counsel's practice thereunder, such counsel have no reason to believe that the Registration Statement or any amendment thereto at the time it became effective contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus or any amendment thereto on the date of filing thereof or at the Closing Time and the Option Closing Time, if any, contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, it being understood that such counsel need express no opinion as to the financial statements and other financial or statistical data included in the Registration Statement or the Prospectus. Such opinion may be rendered under and incorporate by reference the Legal Opinion Accord of the ABA Section of Business Law (1991). In addition, in rendering the opinions set forth above in subparagraphs (i), (ii), (iii) [AND (VI), BASS, BERRY & SIMS PLC MAY RELY UPON THE OPINION OF WAGNER, MYERS & SANGER, P.C.] (2) At the Closing Time and the Option Closing Time, if any, you shall have received the opinion, dated as of the Closing Time, of Waller Lansden Dortch & Davis, counsel for the Underwriters, with respect to the incorporation of the Company, the validity of the Shares of Common Stock issued by the Company, the validity of this Agreement and to the effect that the Registration Statement has become effective under the Act, and, to the best knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are threatened, pending or contemplated under the Act and such counsel believes that the Registration Statement and the Prospectus and any amendment or supplement thereto (except for financial statements and schedules included therein, as to which such counsel need express no opinion) comply as to form in all material respects with the Act. 16 17 (c) At the time of the execution of this Agreement, you and the Company shall have received from Coopers & Lybrand a letter dated the effective date of the Registration Statement, in form and substance satisfactory to you, to the effect that (i) they are independent public accountants as required by the Act and the Regulations; (ii) it is their opinion that the financial statements and schedules included in the Registration Statement and covered by their opinions comply as to form in all material respects with the applicable accounting requirements of the Act and the Regulations; (iii) based upon limited procedures set forth in such letter, nothing has come to their attention which causes them to believe that during the period from December 28, 1995, to a specified date not more than five days prior to the date of this Agreement, there has been any change in the capital stock, or increase in the long term indebtedness, capital lease obligations, notes payable or any other short-term indebtedness of the Company or any decrease in working capital, as compared with the amounts shown on the December 28, 1995 balance sheet, or any decreases, as compared with the corresponding period in the preceding year, in total revenues, total or per share net income, total or per share income before provision for income taxes or in the ratios of income before provision for income taxes to revenues or net income to revenues, or any increases in the ratio of operating expenses to revenues or in the provision for bad debts of the Company, in each case except as set forth or contemplated in the Registration Statement; and (iv) they have read in the Registration Statement and the information incorporated by reference therein the information previously requested by the Underwriters and have agreed to and have performed the procedures set forth in such letter and found such amounts or information to be in agreement with the relevant accounting, financial or other records of the Company as described in such letter. (d) At the Closing Time and the Option Closing Time, if any, you and the Company shall have received from Coopers & Lybrand a letter dated as of the Closing Time, and the Option Closing Time, if any, in form and substance satisfactory to you, to the effect that such accountants reaffirm as of such time and as though made at such time the statements made in the letter furnished to you by such accountants pursuant to paragraph (c) of this Section 6, except that the specified date referred to in clause (iv) of such paragraph (c) shall be a date within five days prior to such time for the purposes of this paragraph (d). (e) At the Closing Time and at the Option Closing Time, if any, (i) the Company shall not have sustained since December 28, 1995 any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree; (ii) since the respective dates as of which information is given in the Registration Statement, there shall not have been any material adverse change in the capital stock of the Company or the long-term debt, short-term debt, capitalized leases or operating leases of the Company or a 17 18 material adverse change, or a development involving a prospective material adverse change, in or affecting the general affairs, management, financial position, stockholders' equity or results of operations of the Company, otherwise than as set forth or contemplated in the Registration Statement; (iii) all representations and warranties in Section 1 hereof shall be true and correct with the same effect as though such representations and warranties had been expressly made as of the Closing Time and the Option Closing Time, if any; (iv) no stop order suspending the effectiveness of the Registration Statement shall have been issued, and no proceedings for that purpose shall have been instituted or, to the best knowledge of the Company's principal executive and financial officers, threatened under the Act; and (v) all filings required by Rules 424 and 430A of the Regulations shall have been made. Compliance with clauses (i) through (iv) of this subsection shall be evidenced by a certificate, dated the Closing Time, and the Option Closing Time, if any, of the principal executive and financial officers of the Company delivered to you at the Closing Time, and at the Option Closing Time, if any. (f) All agreements herein to be performed on the part of the Company at or prior to the Closing Time and the Option Closing Time, if any, shall have been so performed. (g) At the Closing Time and the Option Closing Time, if any, counsel for the Underwriters shall have been furnished with such documents and opinions as they may reasonably require for the purpose of enabling them to pass upon the issuance and sale of the Shares by the Company as herein contemplated and related proceedings or in order to evidence the accuracy and completeness of any of the conditions herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Shares as herein contemplated shall be satisfactory in form and substance to you and to counsel for the Underwriters. If any of the conditions specified in this Section shall not have been fulfilled when and as required by this Agreement to be fulfilled, this Agreement and all obligations of the Underwriters hereunder may be cancelled by you by notifying the Company of such cancellation in writing or by telegram at any time prior to the Closing Time, or the Option Closing Time, as the case may be, and any such cancellation shall be without liability of any party to any other party except as otherwise provided in Section 5 of this Agreement. Section 6A. Conditions to the Company's Obligations. The obligations hereunder of the Company to sell the Shares are subject to the following conditions: The Registration Statement shall have become effective not later than 4:30 p.m., Nashville Time, on the next succeeding business day following the date hereof, or at such later time and date as shall have been consented to by the Company; and at the Closing Time and, with respect to the Company, the Option Closing Time, if any, no stop order suspending the effectiveness of the Registration 18 19 Statement shall have been issued under the Act or proceedings therefor initiated or threatened or, to the knowledge of the Company or the Underwriters, shall be contemplated. Section 7. Indemnification and Contribution. (a) The Company agrees to indemnify and hold harmless each Underwriter and each person, if any, who controls any Underwriter within the meaning of Section 15 of the Act, as follows: (i) against any and all loss, liability, claim, damage and expense whatsoever arising out of or based in whole or in part on any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, any preliminary prospectus, the Prospectus or in any application or other written information furnished by the Company filed in any state or other jurisdiction in order to qualify any or all of the Shares under the securities laws thereof (a "Blue Sky Application"), or in any amendment or supplement to any such document, or any omission or alleged omission from the Registration Statement, any preliminary prospectus, the Prospectus or any Blue Sky Application, or in any amendment or supplement to any such document, of a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, unless such untrue statement or omission or such alleged untrue statement or omission was made in reliance upon and in conformity with written information furnished to the Company by or on behalf of any Underwriter through you expressly for use in the Registration Statement, any preliminary prospectus, the Prospectus or any Blue Sky Application or in any amendment or supplement to any such document; (ii) against any and all loss, liability, claim, damage and expense whatsoever to the extent of the aggregate amount paid in settlement of any litigation, commenced or threatened, or of any claim whatsoever based upon any claim or cause of action described in (i) above, if such settlement is effected with the written consent of the Company; and (iii) against any and all expense whatsoever reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever based upon any claim or cause of action described in (i) above, to the extent that any such expense is not paid under (i) or (ii) above. In no case shall the Company be liable under this indemnity agreement with respect to any claim made against any Underwriter or any such controlling person unless the Company shall be notified in writing of the nature of the claim within a reasonable time after the assertion thereof, but failure so to notify the Company shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. The Company shall 19 20 be entitled to participate at its own expense in the defense of any suit brought to enforce any such claim, but if the Company elects to assume the defense, such defense shall be conducted by counsel chosen by the Company and satisfactory to the Underwriter or Underwriters or controlling person or persons who are defendant or defendants in any suit so brought. In the event that the Company elects to assume the defense of any such suit and retains such counsel, the Underwriter or Underwriters or controlling person or persons, defendant or defendants in the suit, shall bear the fees and expenses of any additional counsel thereafter retained by them. The Company agrees to notify you within a reasonable time of the assertion of any claim against it or any of the Company's officers or directors or any person who controls the Company within the meaning of Section 15 of the Act, in connection with the sale of the Shares. The foregoing indemnity agreement in paragraph (a) is subject to the condition that, insofar as it relates to any such untrue statement, alleged untrue statement, omission or alleged omission made in a preliminary prospectus but eliminated or remedied in the Prospectus, such indemnity agreement shall not inure to the benefit of any Underwriter from whom the person asserting any loss, liability, claim or damage purchased the Shares (or to the benefit of any person who controls such Underwriter) if a copy of the Prospectus was not furnished to such person at or prior to the time such action is required by the Act. (b) Each Underwriter severally agrees that it will indemnify and hold harmless the Company and each of its officers who signs the Registration Statement, each of its directors, and each person, if any, who controls the Company within the meaning of Section 15 of the Act to the same extent as the foregoing indemnity from the Company, but only with respect to statements or omissions made in the Registration Statement, any preliminary prospectus, the Prospectus or any Blue Sky Application, or in any amendment or supplement to any such document, in reliance upon and in conformity with written information furnished to the Company by or on behalf of such Underwriter through you expressly for use in the Registration Statement, any such preliminary prospectus, the Prospectus or any Blue Sky Application, or in any amendment or supplement to any such document. In case any action shall be brought against the Company or any other person so indemnified, and in respect of which indemnity may be sought hereunder against any Underwriter, such Underwriter shall have the rights and duties given to the Company, and the Company and each person so indemnified shall have the rights and duties given to the Underwriters, by the provisions of subsection (a) of this Section 7. (c) If the Indemnification provided in this Section 7 is unavailable or insufficient to hold harmless an indemnified party under subsection (a) above in respect of any losses, claims, damages, liabilities or expenses (or actions in respect thereof) referred to herein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other from the offering of the Shares. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative 20 21 benefits but also the relative fault of the Company on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or expenses (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering of the Shares (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover page of the Prospectus. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or the Underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or expenses (or actions in respect thereof) referred to above shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such claim. Notwithstanding the provisions of this subsection (c), no Underwriter shall be required to contribute an amount in excess of the amount by which the total price at which the Shares underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations to contribute are several in proportion to their respective underwriting obligations and not joint. In any proceeding relating to the Registration Statement, any preliminary prospectus, the Prospectus, any Blue Sky Application, or any supplement or amendment thereto, each party against whom contribution may be sought under this Section 7 hereby consents to the jurisdiction of any court having jurisdiction over any other contributing party, agrees that process issuing from such court may be served upon him or it by any other contributing party and consents to the service of such process and agrees that any other contributing party may join him or it as an additional defendant in any such proceeding in which such other contributing party is a party. Section 8. Representations, Warranties and Agreements to Survive Delivery. All representations, warranties and agreements contained in this Agreement or contained in certificates of officers of the Company submitted pursuant hereto shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or controlling person, or by or on behalf of the Company, and shall survive delivery of the Shares to the Underwriters. 21 22 Section 9. Effective Date of this Agreement and Termination Thereof. (a) This Agreement shall become effective (i) at 10:30 a.m., Nashville Time, on the first full business day following the day on which the Registration Statement becomes effective or (ii) upon the initial public offering by the Underwriters of any of the Shares after the Registration Statement becomes effective, whichever shall first occur. The time of the initial public offering shall mean the time of the release by you for publication of the first newspaper advertisement which is subsequently published relating to any of the Shares, or the time at which any of the Shares are first generally offered by the Underwriters to dealers by letter or telegram, whichever shall first occur. You or the Company may prevent this Agreement from becoming effective, without liability of any party except as otherwise provided in Section 5 with respect to such action by the Company, by giving the notice indicated below in this Section 9 prior to the time when this Agreement would otherwise become effective as herein provided. Any such notice shall be effective only upon receipt. (b) You shall have the right to terminate this Agreement by giving the notice indicated below in this Section 9 at any time at or prior to Closing Time (i) if there shall have been, since the respective dates as of which information is given in the Registration Statement and Prospectus, any material adverse change in the condition, financial or otherwise, of the Company, or in the results of operations or business prospects of the Company, whether or not arising in the ordinary course of business, or (ii) if there shall have occurred any national or international calamity or crisis, financial or otherwise, the effect of which on the financial markets of the United States shall be material and adverse in nature and shall be such as in your judgment makes it impractical for the Underwriters to sell the Shares, or (iii) if trading on the New York Stock Exchange shall have been suspended, or minimum or maximum prices for trading shall have been fixed, or maximum ranges for prices of securities shall have been required on said Exchange by order of such Exchange or of the Commission or any other governmental authority having jurisdiction, or if a banking moratorium shall have been declared by federal, Tennessee or New York authorities. If you terminate this Agreement as provided in this Section, such termination shall be without liability of any party to any other party except as otherwise provided in Section 5. If you elect to prevent this Agreement from becoming effective or to terminate this Agreement as provided in this Section 9, the Company and each other Underwriter shall be notified promptly by you, by telephone or telegram, confirmed by letter. If the Company elects to prevent this Agreement from becoming effective as provided in this Section 9, you shall be notified promptly by the Company by telephone or telegram, confirmed by letter. Section 10. Substitution of Underwriters or Increase in Underwriters' Commitments. If any one or more of the Underwriters shall fail or refuse to purchase the Shares which it or they have agreed to purchase hereunder, and the number of Shares which such defaulting Underwriter or Underwriters agree but fail or refuse to purchase is not more than 10% of the aggregate number of the Shares, the other Underwriters shall be obligated, severally, in the proportion which the number of Shares set forth opposite their respective names in 22 23 Schedule A hereto bears to the aggregate number of Shares that the nondefaulting Underwriters have agreed to purchase or in such other proportion as you may specify in accordance with Section 1 of the Agreement Among Underwriters, to purchase the shares that such defaulting Underwriter or Underwriters agreed but failed or refused to purchase. If any Underwriter or Underwriters shall fail or refuse to purchase Shares and the aggregate number of Shares with respect to which such default occurs is more than said 10% and arrangements satisfactory to you and the Company for purchase of such Shares are not made within 24 hours after such default, this Agreement will terminate without liability on the part of any non-defaulting Underwriter or the Company, except for the liability to be borne by the Company and the Underwriters as provided in Section 5 hereof and the indemnity and contribution agreements in Section 7 hereof. In any such case either you or the Company shall have the right to postpone the Closing Time, but in no event for longer than seven days, in order that the required changes, if any, in the Registration Statement and the Prospectus or any other documents or arrangements may be effected. Any action taken under this Section 10 shall not relieve any defaulting Underwriter from liability in respect of any default of any such Underwriter under this Agreement. Any notice under this Section 10 may be made by telegraph or telephone but shall be subsequently confirmed by letter. Section 11. Notices. Except as otherwise herein provided, all communications hereunder shall be in writing and, if sent to the Underwriters, shall be mailed, delivered or telegraphed and confirmed to J.C. Bradford & Co., 330 Commerce Street, Nashville, Tennessee 37201-1809, Attention: Thomas C. Wylly II, or if sent to the Company, shall be mailed, delivered or telegraphed and confirmed to the Company, in care of the Company at 7132 Commercial Park Drive, Knoxville, Tennessee 37918, Attention: Michael L. Campbell, President. Section 12. Parties. This Agreement shall inure to the benefit of and be binding upon the Underwriters, the Company and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the parties hereto and their respective successors, and the controlling persons and the officers and directors referred to in Section 7, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provisions herein contained, this Agreement and all conditions and provisions hereof being intended to be and being for the sole and exclusive benefit of the parties hereto and their respective successors, and said controlling persons and said officers and directors, and for the benefit of no other person, firm or corporation. No purchaser of Shares from any Underwriter shall be deemed to be a successor by reason merely of such purchase. Section 13. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Tennessee. 23 24 If the foregoing is in accordance with your understanding of our agreement, kindly sign and return to us a counterpart hereof, whereupon this instrument along with all counterparts will become a binding agreement among the Company and the Underwriters in accordance with its terms. Very truly yours, REGAL CINEMAS, INC. By:____________________________________________ Michael L. Campbell, President 24 25 Confirmed and accepted as of the date first above written: J.C. BRADFORD & CO. WHEAT, FIRST SECURITIES, INC. MONTGOMERY SECURITIES For themselves and as the Representatives of the other Underwriters named in Schedule A hereto. By: J.C. BRADFORD & CO. By:_____________________ Partner 25 26 SCHEDULE A
Number Underwriter of Shares - ----------- --------- J.C. Bradford & Co.................................................... Wheat, First Securities, Inc.......................................... Montgomery Securities................................................. -------- Total............................................... ========
EX-5 3 OPINION OF BASS BERRY & SIMS PLC 1 EXHIBIT 5 B A S S, B E R R Y & S I M S P L C A PROFESSIONAL LIMITED LIABILITY COMPANY ATTORNEYS AT LAW 2700 FIRST AMERICAN CENTER 1700 RIVERVIEW TOWER NASHVILLE, TENNESSEE 37238-2700 POST OFFICE BOX 1509 TELEPHONE (615) 742-6200 KNOXVILLE, TENNESSEE 37901-1509 TELECOPIER (615) 742-6293 TELEPHONE (423) 521-6200 TELECOPIER (423) 521-6234 May 9, 1996 Regal Cinemas, Inc. 7132 Commercial Park Drive Knoxville, Tennessee 37918 Re: Registration Statement on Form S-3 Ladies and Gentlemen: We have acted as your counsel in connection with your preparation of a registration statement on Form S-3 (the "Registration Statement") filed by you with the Securities and Exchange Commission on May 2, 1996, covering 2,500,000 shares of no par value common stock (the "Common Stock") of Regal Cinemas, Inc. (the "Company") to be sold by the Company to the underwriters represented by J.C. Bradford & Co., Wheat, First Securities, Inc. and Montgomery Securities (the "Underwriters") for public distribution pursuant to the Underwriting Agreement among the Company and the Underwriters filed as an exhibit to the Registration Statement. In connection with this opinion, we have examined and relied upon such records, documents and other instruments as in our judgment are necessary or appropriate in order to express the opinions hereinafter set forth and have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, and the conformity to original documents of all documents submitted to us as certified or photostatic copies. Based on the foregoing and such other matters as we have deemed relevant, we are of the opinion that the shares of Common Stock to be sold by the Company, when issued and delivered in the manner and on the terms described in the Registration Statement (after the same is declared effective), will be validly issued, fully paid and nonassessable. We hereby consent to the reference to our law firm in the Registration Statement under the caption "Legal Matters" and to the use of this opinion as an exhibit to the Registration Statement. Very truly yours, /S/ Bass Berry & Sims PLC EX-23.1 4 CONSENT OF COOPERS & LYBRAND, L.L.P. 1 EXHIBIT 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in the registration statement of Regal Cinemas, Inc. on Form S-3 of our report dated February 8, 1996, on our audits of the consolidated financial statements of Regal Cinemas, Inc. as of December 29, 1994 and December 28, 1995, and for each of the three years in the period ended December 28, 1995, which report is included in the Annual Report on Form 10K-A of Regal Cinemas, Inc. for the year ended December 28, 1995, filed with the Securities and Exchange Commission. We also consent to the reference to our firm under the captions "Summary Consolidated Financial and Operating Data" and "Experts." /S/ Coopers & Lybrand L.L.P. COOPERS & LYBRAND L.L.P. Knoxville, Tennessee May 1, 1996 2 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in this registration statement of Regal Cinemas, Inc. on Form S-3 of our report dated February 23, 1996, on our audits of the consolidated financial statements of Georgia State Theatres, Inc. and Subsidiary as of December 29, 1994 and December 28, 1995, and for each of the three years in the period ended December 28, 1995, which report is included in the Current Report on Form 8-K of Regal Cinemas, Inc. dated May 1, 1996. We also consent to the reference to our firm under the caption "Experts." /S/ Coopers & Lybrand L.L.P. COOPERS & LYBRAND L.L.P. Atlanta, Georgia May 1, 1996 3 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in this registration statement of Regal Cinemas, Inc. on Form S-3 of our report dated March 8, 1996, on our audit of the combined Historical Summary of Net Theatre Assets to be Acquired by Regal Cinemas, Inc. from Krikorian Theatres as of December 31, 1995, and the related combined Historical Summary of Direct Theatre Operating Revenues and Expenses for the year then ended, which report is included in the Current Report on Form 8-K of Regal Cinemas, Inc. dated May 1, 1996. We also consent to the reference to our firm under the caption "Experts." /S/ Coopers & Lybrand L.L.P. COOPERS & LYBRAND L.L.P. Los Angeles, California May 1, 1996 EX-23.2 5 CONSENT OF ERNST & YOUNG LLP 1 EXHIBIT 23.2 CONSENT OF INDEPENDENT AUDITORS We consent to the reference to our firm under the caption "Experts" in this Registration Statement (Form S-3) and related Prospectus of Regal Cinemas, Inc. for the registration of 2,875,000 shares of its common stock and to the incorporation by reference therein of our report dated March 21, 1995 (with respect to the financial statements of Neighborhood Entertainment, Inc. not separately presented), included in the Annual Report (Form 10-K/A) of Regal Cinemas, Inc for the year ended December 28, 1995, filed with the Securities and Exchange Commission. /S/ Ernst & Young LLP Richmond, Virginia April 30, 1996 EX-23.3 6 CONSENT OF DELOITTE & TOUCHE LLP 1 EXHIBIT 23.3 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Registration Statement of Regal Cinemas, Inc. on Form S-3 of our report dated March 22, 1994 on the financial statements of Litchfield Theatres, Ltd. for the year ended December 31, 1993, appearing in the Annual Report of Regal Cinemas, Inc. on Form 10-K/A for the year ended December 28, 1995 and to the reference to Deloitte & Touche LLP under the heading "Experts" in the prospectus, which is part of this Registration Statement. /S/ Deloitte & Touche LLP Columbia, South Carolina April 30, 1996 -----END PRIVACY-ENHANCED MESSAGE-----