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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE TO
TENDER OFFER STATEMENT
UNDER SECTION 14(d)(1) OR 13(e)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
ASCENT ENTERTAINMENT GROUP, INC.
(Name of Subject Company (issuer))
LIBERTY AEG ACQUISITION, INC.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
LIBERTY MEDIA CORPORATION
(Names of Filing Persons (offerors))
COMMON STOCK, PAR VALUE $.01 PER SHARE
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
(Title of Class of Securities)
043628106
(CUSIP Number)
CHARLES Y. TANABE, ESQ.
LIBERTY MEDIA CORPORATION
9197 SOUTH PEORIA STREET
ENGLEWOOD, COLORADO 80112
(720) 875-5400
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
Copy to:
JOSEPH A. CIALONE, II
BAKER BOTTS L.L.P.
ONE SHELL PLAZA
910 LOUISIANA
HOUSTON, TEXAS 77002-4995
(713) 229-1234
CALCULATION OF FILING FEE
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TRANSACTION VALUATION* AMOUNT OF FILING FEE**
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$453,391,650 $90,678.33
</TABLE>
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* For purposes of calculating the filing fee pursuant to Rule 0-11(d), the
Transaction Valuation was calculated on the basis of (i) the purchase of
29,730,600 shares of common stock, par value $.01 per share, of Ascent
Entertainment Group, Inc. (the "Common Stock"), including the associated
Preferred Share Purchase Rights (the "Rights" and together with the Common
Stock, the "Shares"), at (ii) the tender offer price of $15.25 per Share.
** The filing fee, calculated in accordance with Rule 0-11 of the Securities
Exchange Act of 1934, is 1/50th of one percent of the aggregate Transaction
Valuation.
[ ] Check the box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
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Amount Previously Paid: Filing Party:
Form or Registration No.: Date Filed:
</TABLE>
[ ] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which
the statement relates:
[X] third-party tender offer subject to Rule 14d-1.
[ ] issuer tender offer subject to Rule 13e-4.
[ ] going-private transaction subject to Rule 13e-3.
[ ] amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the results
of the tender offer: [ ]
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This Tender Offer Statement on Schedule TO (this "Schedule TO") relates to
the offer by Liberty AEG Acquisition, Inc. ("Purchaser"), a Delaware corporation
and an indirect wholly owned subsidiary of Liberty Media Corporation, a Delaware
corporation ("Parent"), to purchase all the outstanding shares of common stock,
par value $.01 per share (the "Common Stock") of Ascent Entertainment Group,
Inc. (the "Company") including the associated Preferred Share Purchase Rights
(the "Rights" and, together with the Common Stock, the "Shares"), which are not
owned by Parent or its affiliates, at a purchase price of $15.25 per Share, net
to the seller in cash, without interest thereon, upon the terms and subject to
the conditions set forth in the Offer to Purchase dated February 29, 2000 (the
"Offer to Purchase") and in the related letter of Transmittal (which, together
with any amendments or supplements thereto, collectively constitute the "Offer")
which are annexed to and filed with this Schedule TO as Exhibits (a)(1)(A) and
(a)(1)(B), respectively. This Schedule TO is being filed on behalf of Purchaser
and Parent.
All information set forth in the Offer to Purchase filed as Exhibit
(a)(1)(A) to this Schedule TO is incorporated by reference in answer to Items 1
through 11 in this Schedule TO, except those items as to which information is
specifically provided herein.
ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON.
(C)(3) AND (C)(4) None of Liberty Media, Purchaser or, to the best
knowledge of such corporations, any of the persons listed on Schedules I or II
to the Offer to Purchase has during the last five years (i) been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
(ii) been a party to any judicial or administrative proceeding (except for
matters that were dismissed without sanction or settlement) that resulted in a
judgment, decree or final order enjoining the person from future violations of,
or prohibiting activities subject to, federal or state securities laws or
finding any violation of such laws.
ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(D) Not Applicable.
ITEM 10. FINANCIAL STATEMENTS.
Not applicable.
ITEM 12. MATERIALS TO BE FILED AS EXHIBITS.
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<S> <C>
(a)(1)(A) -- Offer to Purchase, dated February 29, 2000
(a)(1)(B) -- Form of Letter of Transmittal
(a)(1)(C) -- Form of Notice of Guaranteed Delivery
(a)(1)(D) -- Form of Letter to Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees
(a)(1)(E) -- Form of Letter to Clients for Use by Brokers, Dealers,
Commercial Banks, Trust Companies and other Nominees
(a)(1)(F) -- Guidelines for Certification of taxpayer Identification
Number on Substitute Form W-9
(a)(1)(G) -- Text of press release issued by Liberty Media Corporation
on February 22, 2000
(a)(1)(H) -- Text of press release issued by Liberty Media Corporation
on February 28, 2000
(a)(1)(I) -- Summary Advertisement, published February 29, 2000
(b) -- None.
(d) -- Agreement and Plan of Merger dated as of February 22,
2000 among the Purchaser, Liberty Media Corporation and
the Company
(g) -- None.
</TABLE>
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: February 29, 2000
LIBERTY AEG ACQUISITION, INC.
By: /s/ Charles Y. Tanabe
----------------------------------
Charles Y. Tanabe
Senior Vice President
LIBERTY MEDIA CORPORATION
By: /s/ Charles Y. Tanabe
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Charles Y. Tanabe
Senior Vice President
3
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INDEX OF EXHIBITS
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<CAPTION>
EXHIBIT
NO. DOCUMENT
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(a)(1)(A) -- Offer to Purchase, dated February 29, 2000
(a)(1)(B) -- Form of Letter of Transmittal
(a)(1)(C) -- Form of Notice of Guaranteed Delivery
(a)(1)(D) -- Form of Letter to Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees
(a)(1)(E) -- Form of Letter to Clients for Use by Brokers, Dealers,
Commercial Banks, Trust Companies
(a)(1)(F) -- Guidelines for Certification of taxpayer Identification
Number on Substitute Form W-9
(a)(1)(G) -- Text of press release issued by Liberty Media Corporation
on February 22, 2000
(a)(1)(H) -- Text of press release issued by Liberty Media Corporation
on February 28, 2000
(a)(1)(I) -- Summary Advertisement, published February 29, 2000
(b) -- None.
(d) -- Agreement and Plan of Merger dated as of February 22,
2000, among the Purchaser, Liberty Media Corporation and
the Company
(g) -- None.
</TABLE>
<PAGE> 1
EXHIBIT (a)(1)(A)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
ASCENT ENTERTAINMENT GROUP, INC.
AT
$15.25 NET PER SHARE
BY
LIBERTY AEG ACQUISITION, INC.,
an indirect wholly owned subsidiary of
Liberty Media Corporation
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THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON MONDAY, MARCH 27, 2000,
UNLESS THE OFFER IS EXTENDED.
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THE BOARD OF DIRECTORS OF ASCENT ENTERTAINMENT GROUP, INC. HAS APPROVED THE
MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT,
INCLUDING THE OFFER AND THE MERGER, AND DETERMINED THAT THE TERMS OF THE OFFER
AND THE MERGER AND THE OTHER TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT
ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF ASCENT AND
RECOMMENDS THAT THE STOCKHOLDERS OF ASCENT ACCEPT AND TENDER THEIR SHARES
PURSUANT TO THE OFFER.
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THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION DATE THAT NUMBER OF
SHARES THAT, TOGETHER WITH ANY SHARES OWNED BY THE PURCHASER, LIBERTY MEDIA AND
LIBERTY MEDIA'S OTHER DIRECT OR INDIRECT SUBSIDIARIES, WOULD CONSTITUTE AT LEAST
A MAJORITY OF ALL OUTSTANDING SHARES ON A FULLY DILUTED BASIS ON THE DATE OF
PURCHASE, (2) ANY APPLICABLE WAITING PERIOD UNDER THE HART-SCOTT-RODINO
ANTITRUST IMPROVEMENTS ACT OF 1976 HAVING EXPIRED OR BEEN TERMINATED, AND (3)
LIBERTY MEDIA HAVING OBTAINED SPECIAL TEMPORARY AUTHORIZATION OR APPROVAL FROM
THE FEDERAL COMMUNICATIONS COMMISSION FOR THE TRANSFER OF CONTROL OF CERTAIN FCC
LICENSES. SEE SECTIONS 14 AND 15 OF THE OFFER TO PURCHASE.
THE DEALER MANAGER FOR THE OFFER IS
J.P. MORGAN & CO.
February 29, 2000
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IMPORTANT
If you wish to tender all or any portion of your Shares, you must take the
steps set forth in either (i) or (ii) below prior to the Expiration Date:
(i) (a) complete and sign the Letter of Transmittal (or a facsimile
thereof) in accordance with the instructions in the Letter of Transmittal,
have your signature thereon guaranteed if required by Instruction 1 to the
Letter of Transmittal, deliver the Letter of Transmittal (or such
facsimile), or, in the case of a book-entry transfer effected pursuant to
the procedure set forth in Section 2, an Agent's Message, and any other
required documents to the Depositary, and
(b) deliver the certificates for such Shares to the Depositary
along with the Letter of Transmittal (or facsimile), deliver such Shares
pursuant to the procedure for book-entry transfer set forth in Section 2
or, if such Shares are Direct Registration Shares or are held through
BuyDIRECT, Ascent's dividend reinvestment plan, simply ensure that the
Direct Registration Shares or BuyDIRECT box, as applicable, of the Letter
of Transmittal that you deliver to the Depositary is properly completed; or
(ii) request your broker, dealer, bank, trust company or other nominee
to effect the transaction for you.
If you have Shares registered in the name of a broker, dealer, bank, trust
company or other nominee, you must contact such broker, dealer, bank, trust
company or other nominee if you desire to tender your Shares.
The Rights are presently evidenced by the certificates for the Common
Stock, and a tender by you of your Shares will also constitute a tender of the
associated Rights.
If you wish to tender Shares and your certificates for Shares are not
immediately available or the procedure for book-entry transfer cannot be
completed on a timely basis, or time will not permit all required documents to
reach the Depositary prior to the Expiration Date, your tender may be effected
by following the procedure for guaranteed delivery set forth in Section 2.
Questions and requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed
Delivery may be directed to D.F. King & Co., Inc. (the "Information Agent") or
to J.P. Morgan Securities Inc. (the "Dealer Manager") at their respective
addresses and telephone numbers set forth on the back cover of this Offer to
Purchase.
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TABLE OF CONTENTS
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PAGE
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SUMMARY TERM SHEET.......................................... 1
INTRODUCTION................................................ 5
THE TENDER OFFER............................................ 7
1. TERMS OF THE OFFER..................................... 7
2. PROCEDURE FOR TENDERING SHARES......................... 9
3. WITHDRAWAL RIGHTS...................................... 12
4. ACCEPTANCE FOR PAYMENT AND PAYMENT..................... 12
5. CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES........... 13
6. PRICE RANGE OF THE SHARES; DIVIDENDS ON THE SHARES..... 14
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; SHARE
QUOTATION; EXCHANGE ACT REGISTRATION; MARGIN
REGULATIONS............................................ 15
8. CERTAIN INFORMATION CONCERNING ASCENT.................. 16
9. CERTAIN INFORMATION CONCERNING THE PURCHASER AND
LIBERTY MEDIA.......................................... 19
10. SOURCE AND AMOUNT OF FUNDS............................. 19
11. CONTACTS AND TRANSACTIONS WITH ASCENT; BACKGROUND OF
THE OFFER.............................................. 20
12. PURPOSE OF THE OFFER; PLANS FOR ASCENT; ASCENT
INDENTURE; THE MERGER AGREEMENT........................ 23
13. DIVIDENDS AND DISTRIBUTIONS............................ 28
14. CERTAIN CONDITIONS OF THE OFFER........................ 29
15. CERTAIN LEGAL MATTERS.................................. 30
16. FEES AND EXPENSES...................................... 33
17. MISCELLANEOUS.......................................... 33
SCHEDULE I -- DIRECTORS AND EXECUTIVE OFFICERS OF LIBERTY
MEDIA CORPORATION AND THE PURCHASER....................... S-1
SCHEDULE II -- INFORMATION CONCERNING AT&T CORP. AND THE
DIRECTORS AND EXECUTIVE OFFICERS OF AT&T CORP. ........... S-5
SCHEDULE III -- LIBERTY MEDIA'S INTERESTS IN SHARES; RECENT
TRANSACTIONS IN SHARES.................................... S-9
</TABLE>
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SUMMARY TERM SHEET
Liberty AEG Acquisition, Inc., which is referred to in this offer to
purchase as the "Purchaser," is offering to purchase all of the outstanding
shares of common stock of Ascent Entertainment Group, Inc., which is referred to
in this offer to purchase as "Ascent," for $15.25 per share in cash. The
following are some of the questions you, as a stockholder of Ascent, may have
and answers to those questions. We urge you to read the remainder of this offer
to purchase and the letter of transmittal carefully because the information in
this summary is not complete and additional important information is contained
in the remainder of this offer to purchase and the letter of transmittal.
WHO IS OFFERING TO BUY MY SHARES?
Liberty AEG Acquisition, Inc. is a Delaware corporation formed for the
purpose of making this tender offer. Liberty AEG Acquisition, Inc. is an
indirect wholly owned subsidiary of Liberty Media Corporation, a Delaware
corporation, which is referred to in this offer to purchase as "Liberty Media."
See Section 9 of this offer to purchase -- "CERTAIN INFORMATION CONCERNING THE
PURCHASER AND LIBERTY MEDIA."
WHAT SHARES ARE BEING SOUGHT IN THE OFFER?
We are offering to purchase all of the outstanding shares of common stock
of Ascent that Liberty Media and its affiliates do not already own. Liberty
Media and its affiliates now own 25,000 shares, or about 0.1% of the outstanding
shares. See "INTRODUCTION" and Section 1 of this offer to purchase -- "TERMS OF
THE OFFER."
HOW MUCH ARE YOU OFFERING TO PAY, WHAT IS THE FORM OF PAYMENT AND WILL I HAVE TO
PAY ANY FEES OR COMMISSIONS?
We are offering to pay $15.25 per share, net to you, in cash. If you are
the record owner of your shares and you tender your shares to us in the offer,
you will not have to pay brokerage fees or similar expenses. If you own your
shares through a broker or other nominee, and your broker tenders your shares on
your behalf, your broker or nominee may charge you a fee for doing so. You
should consult your broker or nominee to determine whether any charges will
apply. See "INTRODUCTION" and Section 1 of this offer to purchase -- "TERMS OF
THE OFFER."
DO YOU HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT?
Liberty Media and one or more of its affiliates will provide the Purchaser
with sufficient funds from their own resources to acquire all tendered shares or
shares to be acquired in the merger which is expected to follow the successful
completion of the offer. The offer is not conditioned upon any financing
arrangements. See Section 10 of this offer to purchase -- "SOURCE AND AMOUNT OF
FUNDS."
IS YOUR FINANCIAL CONDITION RELEVANT TO MY DECISION TO TENDER IN THE OFFER?
We do not think our financial condition is relevant to your decision
whether to tender shares and accept the offer because:
- the offer is being made for all outstanding shares solely for cash that
we have on hand,
- the offer is not subject to any financing condition, and
- if we consummate the offer, we will acquire all remaining shares for the
same cash price in the merger.
HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER?
You will have at least until 12:00 midnight, New York City time, on Monday,
March 27, 2000, to decide whether to tender your shares in the offer. Further,
if you cannot deliver everything that is required in order to make a valid
tender by that time, you may be able to use a guaranteed delivery procedure,
which is described later in this offer to purchase. See Sections 1 and 2 of this
offer to purchase -- "TERMS OF THE OFFER" and -- "PROCEDURE FOR TENDERING
SHARES -- Guaranteed Delivery."
<PAGE> 5
CAN THE OFFER BE EXTENDED AND UNDER WHAT CIRCUMSTANCES?
Yes. We have agreed with Ascent that we may extend the offer if at the time
the offer is scheduled to expire (including at the end of an earlier extension)
any of the offer conditions is not satisfied (or waived by us) or if we are
required to extend the offer by the rules of the Securities and Exchange
Commission. See Section 1 of this offer to purchase -- "TERMS OF THE OFFER."
We may also elect to provide a "subsequent offering period" for the offer.
A subsequent offering period, if one is included, will be an additional period
of time beginning after we have purchased shares tendered during the offer,
during which stockholders may tender their shares and receive the offer
consideration. We do not currently intend to include a subsequent offering
period, although we reserve the right to do so. See Section 1 of this offer to
purchase -- "TERMS OF THE OFFER."
HOW WILL I BE NOTIFIED IF THE OFFER IS EXTENDED?
If we extend the offer, we will inform The Bank of New York (which is the
depositary for the offer) of that fact and will make a public announcement of
the extension, by not later than 9:00 a.m., New York City time, on the day after
the day on which the offer was scheduled to expire.
WHAT ARE THE MOST SIGNIFICANT CONDITIONS TO THE OFFER?
We are not obligated to purchase any tendered shares unless the number of
tendered shares, when added to the shares then owned by the Purchaser, Liberty
Media and Liberty Media's other direct and indirect subsidiaries, equals at
least a majority of the shares of Ascent outstanding on a fully diluted basis.
The waiting period under the Hart-Scott-Rodino Act must have expired or been
terminated. The offer is also subject to a number of other conditions. See
Section 14 of this offer to purchase -- "CERTAIN CONDITIONS OF THE OFFER." See
also Section 15 of this offer to purchase -- "CERTAIN LEGAL MATTERS -- FCC
Approvals and Regulation," for a discussion of the special temporary
authorization or approval for the transfer of certain FCC licenses that must be
obtained from the FCC prior to the consummation of the offer.
HOW DO I TENDER MY SHARES?
To tender shares, you must take the steps set forth in either (i) or (ii)
below prior to the expiration of the tender offer:
(i) (a) complete, sign and deliver the letter of transmittal or, in
the case of a book-entry transfer, deliver an "agent's message," and
deliver any other required documents to the depositary, and
(b) deliver the certificates for your shares to the depositary,
deliver your shares pursuant to the procedure for book-entry transfer or,
if your shares are direct registration shares or are held through
BuyDIRECT, simply ensure that the direct registration shares or BuyDIRECT
portion, as applicable, of the letter of transmittal is properly completed;
or
(ii) request your broker, dealer, bank, trust company or other nominee
to effect the transaction for you.
If your shares are held in street name, the shares can be tendered only by
your nominee through The Depository Trust Company.
If you cannot deliver something that is required to the depositary by the
expiration of the tender offer, you may get a little extra time to do so by
having a broker, a bank or other fiduciary, which is a member of the Securities
Transfer Agents Medallion Program or other eligible institution, guarantee that
the missing items will be received by the depositary within three Nasdaq
National Market trading days. However, the depositary must receive the missing
items within that three trading day period. See Section 2 of this offer to
purchase -- "PROCEDURE FOR TENDERING SHARES."
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<PAGE> 6
HOW DO I TENDER MY SHARES HELD IN BUYDIRECT?
You may instruct the administrator of BuyDIRECT, Ascent's dividend
reinvestment plan, to tender all or part of the shares credited to your
BuyDIRECT account by following the instructions and completing the appropriate
provisions of the letter of transmittal and delivering it to the depositary in
accordance with those instructions.
HOW DO I TENDER MY DIRECT REGISTRATION SHARES?
You may tender all or part of the shares that you hold as direct
registration shares by following the instructions and completing the appropriate
provisions of the letter of transmittal and delivering it to the depositary in
accordance with those instructions.
UNTIL WHAT TIME CAN I WITHDRAW PREVIOUSLY TENDERED SHARES?
You can withdraw shares at any time until the offer has expired and, if we
have not by April 29, 2000, agreed to accept your shares for payment, you can
withdraw them at any time after such time until we accept shares for payment. If
we decide to provide a subsequent offering period, we will accept shares
tendered during that period immediately and thus you will not be able to
withdraw shares tendered in the offer during any subsequent offering period. See
Sections 1 and 3 of this offer to purchase -- "TERMS OF THE OFFER" and
"WITHDRAWAL RIGHTS."
HOW DO I WITHDRAW PREVIOUSLY TENDERED SHARES?
To withdraw shares, you must deliver a written notice of withdrawal, or a
facsimile of one, with the required information to the depositary while you
still have the right to withdraw the shares. See Sections 1 and 3 of this offer
to purchase -- "TERMS OF THE OFFER" and "WITHDRAWAL RIGHTS."
WHAT DOES THE ASCENT BOARD OF DIRECTORS THINK OF THE OFFER?
The Purchaser is making the offer pursuant to a merger agreement with
Ascent. The Board of Directors of Ascent approved the merger agreement, the
Purchaser's tender offer and its proposed merger with Ascent. The Ascent Board
has determined that the offer and the merger are fair to, and in the best
interests of, Ascent's stockholders and it recommends that stockholders accept
the offer and tender their shares. See Section 11 of this offer to
purchase -- "CONTACTS AND TRANSACTIONS WITH ASCENT; BACKGROUND OF THE OFFER."
Ascent has prepared a Solicitation and Recommendation Statement containing
additional information regarding the Ascent Board's determination and
recommendation, which is being sent to stockholders contemporaneously with this
offer to purchase.
WILL THE TENDER OFFER BE FOLLOWED BY A MERGER IF ALL THE SHARES ARE NOT TENDERED
IN THE OFFER?
If we purchase in the offer at least the number of shares which, when added
to the shares then owned by the Purchaser, Liberty Media and Liberty Media's
direct and indirect subsidiaries, equals at least a majority of the shares of
Ascent outstanding on a fully diluted basis, the Purchaser will be merged with
Ascent. If that merger takes place, we will own all of the shares of Ascent and
all other stockholders of Ascent will receive the same price paid in the offer,
that is, $15.25 per share in cash (or any other higher price per share which is
paid in the offer). See "INTRODUCTION" and Section 12 of this offer to
purchase -- "PURPOSE OF THE OFFER; PLANS FOR ASCENT; ASCENT INDENTURE; THE
MERGER AGREEMENT." There are no appraisal rights available in connection with
the offer. However, if the merger takes place, stockholders who have not sold
their shares in the offer will have appraisal rights under Delaware law. See
Section 12 of this offer to purchase -- "PURPOSE OF THE OFFER; PLANS FOR ASCENT;
ASCENT INDENTURE; THE MERGER AGREEMENT -- Appraisal Rights."
IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY SHARES?
If the merger takes place, stockholders who do not tender in the offer will
receive in the merger the same amount of cash per share which they would have
received had they tendered their shares in the offer. Therefore, if the merger
takes place, the only difference to you between tendering shares and not
tendering shares is that you will
3
<PAGE> 7
be paid earlier if you tender your shares. However, until the merger is
consummated or if the merger were not to take place for some reason, the number
of stockholders of Ascent and the shares of Ascent which are still in the hands
of the public may be so small that there no longer will be an active public
trading market (or, possibly, any public trading market) for the shares. Also,
the shares may no longer be eligible to be traded through the Nasdaq National
Market or any other securities exchange, and Ascent may cease making filings
with the Commission or otherwise cease being required to comply with the
Commission's rules relating to publicly held companies. See Sections 7 and 12 of
the offer to purchase -- "EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES;
SHARE QUOTATION; EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS" and "PURPOSE OF
THE OFFER; PLANS FOR ASCENT; ASCENT INDENTURE; THE MERGER AGREEMENT."
WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE?
On February 18, 2000, the last trading day before Liberty Media and Ascent
announced that they had signed the merger agreement, the last sale price of the
shares reported by The Nasdaq National Market was $10.125 per share. On February
28, 2000, the last trading day before we commenced our tender offer, the last
sale price of the shares was $15.1875. We advise you to obtain a recent
quotation for shares of Ascent in deciding whether to tender your shares. See
Section 6 of this offer to purchase -- "PRICE RANGE OF THE SHARES; DIVIDENDS ON
THE SHARES."
WHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE TENDER OFFER?
You can call D.F. King & Co., Inc. toll free at (888) 242-8153. D.F. King &
Co., Inc. is acting as the information agent for our tender offer. See the back
cover of this offer to purchase.
4
<PAGE> 8
To the Holders of Common Stock (including the Associated Preferred Stock
Purchase Rights)
of Ascent Entertainment Group, Inc.
INTRODUCTION
Liberty AEG Acquisition, Inc., a Delaware corporation (the "Purchaser") and
an indirect wholly owned subsidiary of Liberty Media Corporation, a Delaware
corporation ("Liberty Media"), hereby offers to purchase all the issued and
outstanding shares (the "Shares") of Common Stock, par value $.01 per share (the
"Common Stock"), of Ascent Entertainment Group, Inc., a Delaware corporation
("Ascent"), including the associated preferred share purchase rights (the
"Rights") issued pursuant to the Rights Agreement dated as of June 27, 1997, as
amended (the "Rights Agreement"), between Ascent and The Bank of New York, as
Rights Agent (the "Rights Agent"), at a purchase price of $15.25 per Share, net
to the seller in cash, without interest thereon (the "Offer Price"), upon the
terms and subject to the conditions set forth in this Offer to Purchase and in
the related Letter of Transmittal (which, together with any amendments or
supplements hereto or thereto, collectively constitute the "Offer"). All
references herein to Rights shall include all benefits that may inure to holders
of the Rights pursuant to the Rights Agreement and, unless the context otherwise
requires, all references herein to Shares shall include the Rights.
If you participate in Ascent's BuyDIRECT Plan ("BuyDIRECT"), Ascent's
dividend reinvestment plan, you may tender part or all of the Shares held in
your account. If you hold Direct Registration Shares, you may tender part or all
of such Shares. See Section 2. Direct Registration Shares and Shares held in a
BuyDIRECT account as to which the Depositary has not received instructions
through timely delivery of a properly completed Letter of Transmittal will not
be deemed tendered. See Section 1.
You will not be obligated to pay brokerage fees or commissions or, except
as set forth in Instruction 6 of the Letter of Transmittal, transfer taxes on
the purchase of Shares pursuant to the Offer. The Purchaser will pay all fees
and expenses of J.P. Morgan Securities Inc., which is acting as Dealer Manager
(the "Dealer Manager"), The Bank of New York, which is acting as the Depositary
(the "Depositary"), and D. F. King & Co., Inc., which is acting as the
Information Agent (the "Information Agent"), incurred in connection with the
Offer. See Section 16.
THE BOARD OF DIRECTORS OF ASCENT (THE "ASCENT BOARD") HAS APPROVED THE
MERGER AGREEMENT (AS DEFINED HEREIN) AND THE OTHER TRANSACTIONS CONTEMPLATED BY
THE MERGER AGREEMENT, INCLUDING THE OFFER AND THE MERGER, AND DETERMINED THAT
THE TERMS OF THE OFFER AND THE MERGER AND THE OTHER TRANSACTIONS CONTEMPLATED BY
THE MERGER AGREEMENT ARE FAIR TO, AND IN THE BEST INTERESTS OF, STOCKHOLDERS OF
ASCENT AND RECOMMENDS THAT STOCKHOLDERS OF ASCENT ACCEPT THE OFFER AND TENDER
THEIR SHARES PURSUANT TO THE OFFER. THE FACTORS CONSIDERED BY THE ASCENT BOARD
IN ARRIVING AT ITS DECISION TO APPROVE THE MERGER AGREEMENT AND THE OTHER
TRANSACTIONS CONTEMPLATED THEREBY AND TO RECOMMEND THAT STOCKHOLDERS OF ASCENT
ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER WILL BE DESCRIBED
IN ASCENT'S SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9 (THE
"SCHEDULE 14D-9") TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE
"COMMISSION").
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION ("DLJ") HAS ACTED AS
ASCENT'S FINANCIAL ADVISOR. THE OPINION OF DLJ DATED FEBRUARY 22, 2000, THAT, AS
OF SUCH DATE, THE CONSIDERATION TO BE RECEIVED IN THE OFFER AND THE MERGER BY
ASCENT'S STOCKHOLDERS IS FAIR TO THE HOLDERS OF SHARES FROM A FINANCIAL POINT OF
VIEW, WILL BE SET FORTH IN FULL AS AN ANNEX TO THE SCHEDULE 14D-9. YOU ARE URGED
TO, AND SHOULD, READ SUCH OPINION CAREFULLY IN ITS ENTIRETY.
WE ARE NOT REQUIRED TO PURCHASE SHARES UNLESS, AMONG OTHER THINGS, (I)
THERE IS VALIDLY TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION
DATE (AS DEFINED IN SECTION 1) THAT NUMBER OF SHARES THAT, TOGETHER WITH ANY
SHARES OWNED BY THE PURCHASER, LIBERTY MEDIA AND LIBERTY MEDIA'S OTHER DIRECT OR
INDIRECT SUBSIDIARIES, WOULD CONSTITUTE AT LEAST A MAJORITY OF ALL OUTSTANDING
SHARES ON A FULLY DILUTED BASIS ON THE DATE OF PURCHASE (THE "MINIMUM
CONDITION"), AND (II) ANY APPLICABLE WAITING PERIOD UNDER THE HART-SCOTT-RODINO
ANTITRUST IMPROVEMENTS ACT OF 1976 (THE "HSR ACT") HAS EXPIRED OR BEEN
TERMINATED (THE "HSR CONDITION").
Ascent holds a number of Federal Communications Commission ("FCC") licenses
in connection with its ANS operations and is therefore subject to regulation by
the FCC. The Communications Act of 1934 (the "Communica-
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tions Act") prohibits the transfer of control of a corporation holding such
licenses without the prior approval of the FCC. The consummation of the Offer
would constitute a change of control that requires such prior approval.
ACCORDINGLY, TO SATISFY THE CONDITIONS OF THE OFFER SET FORTH IN SECTION 14,
LIBERTY MEDIA AND ASCENT MUST EITHER (I) OBTAIN FROM THE FCC A SPECIAL TEMPORARY
AUTHORIZATION (AN "STA"), ON TERMS AND CONDITIONS SATISFACTORY TO THE PURCHASER
AND LIBERTY MEDIA, PERMITTING THE PURCHASER TO CONSUMMATE THE OFFER AND
PERMITTING THE PARTIES TO OPERATE THE LICENSED FACILITIES ON A TEMPORARY BASIS
PENDING APPROVAL OF A "LONG FORM" APPLICATION FOR FCC CONSENT TO THE PURCHASER'S
ACQUISITION OF CONTROL OF ASCENT ("LONG FORM APPROVAL"), OR (II) IF SUCH STA IS
NOT GRANTED, OBTAIN LONG FORM APPROVAL. Liberty Media and Ascent have submitted
to the FCC an application for Long Form Approval, as well as a request for an
STA. If, by the initial Expiration Date, the FCC has not granted the parties'
request for an STA, Purchaser will extend the Offer, subject to the terms of the
Offer and the Merger Agreement (in which case the acceptance for payment and
payment for tendered Shares would be delayed), and Purchaser will attempt to
obtain Long Form Approval. If such Long Form Approval is not obtained, the
Purchaser will not purchase the Shares, unless Liberty Media is otherwise
satisfied, in its sole discretion, that the Shares can be purchased without
violating the Communications Act. For a further discussion of the FCC regulatory
considerations, see Section 15 "CERTAIN LEGAL MATTERS -- FCC Approvals and
Regulation."
Ascent has informed us that, as of February 22, 2000, there were 29,755,600
shares issued and outstanding (25,000 of which are held by Liberty Media) and
256,000 shares reserved for issuance upon the exercise of outstanding options or
other rights to purchase Shares from Ascent. Based upon the foregoing and
assuming that no Shares are otherwise issued after February 22, 2000, there
would be 30,011,600 shares outstanding on a fully diluted basis and the Minimum
Condition will be satisfied if at least 14,980,801 shares are validly tendered
and not withdrawn prior to the Expiration Date.
We made the filing pursuant to the HSR Act applicable to the Offer on
February 25, 2000. Accordingly, the waiting period under the HSR Act should
expire on March 11, 2000, unless the waiting period is extended as described in
Section 15.
The Offer is being made pursuant to an Agreement and Plan of Merger dated
as of February 22, 2000 (the "Merger Agreement"), among the Purchaser, Liberty
Media and Ascent. The Merger Agreement provides, among other things, for the
making of the Offer by the Purchaser and further provides that, following the
consummation of the Offer, upon the terms and subject to the conditions of the
Merger Agreement and the General Corporation Law of the State of Delaware (the
"DGCL"), the Purchaser will be merged with and into Ascent (the "Merger") with
Ascent surviving the Merger as an indirect wholly owned subsidiary of Liberty
Media. In the Merger, each issued Share (other than Shares owned by Liberty
Media, the Purchaser or Ascent or any other subsidiary of Liberty Media or
Ascent, or by stockholders, if any, who are entitled to and properly exercise
appraisal rights under Delaware law) will be converted into the right to receive
an amount in cash equal to the price per Share paid pursuant to the Offer,
without interest thereon.
If the Minimum Condition and other conditions to the Offer are satisfied
and the Offer is consummated, we will own a sufficient number of Shares to
ensure that the Merger will be approved and will be able to cause the Merger to
occur without the consent of any other of Ascent's stockholders or the holding
of a meeting of stockholders.
Certain U.S. federal income tax consequences of the sale of Shares pursuant
to the Offer and the conversion of Shares pursuant to the Merger are described
in Section 5.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION THAT SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
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THE TENDER OFFER
1. TERMS OF THE OFFER
Upon the terms and subject to the conditions of the Offer, we will accept
for payment and pay for all Shares validly tendered prior to the Expiration Date
and not theretofore withdrawn in accordance with Section 3. The term "Expiration
Date" means 12:00 midnight, New York City time, on Monday, March 27, 2000 unless
and until we shall have extended the period of time during which the Offer is
open, in which event the term "Expiration Date" shall mean the latest time and
date on which the Offer, as so extended by us, will expire. As used in this
Offer to Purchase, "business day" has the meaning set forth in Rule l4d-1 under
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
In the Merger Agreement, we agreed that we will not (a) decrease the price
per Share payable in the Offer, (b) reduce the maximum number of Shares to be
purchased in the Offer, (c) impose conditions to the Offer in addition to those
set forth in Section 14, (d) amend or change the terms and conditions of the
Offer in any manner adverse to the holders of Shares (other than us or our
direct or indirect subsidiaries), (e) change or waive the Minimum Condition, (f)
change the form of consideration payable in the Offer or (g) except as set forth
in the following sentence or required by any rule, regulation, interpretation or
position of the Commission applicable to the Offer, change the Expiration Date.
However, the Merger Agreement provides that, without the consent of Ascent, we
may (i) extend the Offer, if at the scheduled expiration date of the Offer any
of the conditions set forth in Section 14 shall not be satisfied or waived,
until such time as such conditions are satisfied or waived, (ii) extend the
Offer for any period required by any rule, regulation, interpretation or
position of the Commission applicable to the Offer and (iii) extend the Offer to
provide for a Subsequent Offering Period (as defined herein) for an aggregate
period of not more than 20 business days (for all such extensions) beyond the
latest expiration date that would otherwise be permitted under clause (i) or
(ii) of this sentence. In addition, we have agreed that we will from time to
time extend the Offer, if requested by Ascent, (i) if at the Expiration Date,
any of the conditions to the Offer other than the Minimum Condition shall not
have been waived or satisfied, and the Minimum Condition shall have been
satisfied, until (taking into account all such extensions) the earlier of August
31, 2000 or such earlier date upon which any such condition shall not be
reasonably capable of being satisfied prior to August 31, 2000; or (ii) if at
the Expiration Date, all of the conditions to the Offer other than the Minimum
Condition shall have been waived or satisfied and the Minimum Condition shall
not have been satisfied, until the earlier of ten business days after such
Expiration Date or August 31, 2000.
Subject to the terms of the Merger Agreement (which, as described above,
prohibit certain amendments) and the applicable rules and regulations of the
Commission, the Purchaser reserves the right (but shall not be obligated except
as described in this Section 1), at any time and from time to time, and
regardless of whether or not any of the events or facts set forth in Section 14
shall have occurred, (a) to extend the period of time during which the Offer is
open, and thereby delay acceptance for payment of and the payment for any
Shares, by giving oral or written notice of such extension to the Depositary,
(b) to elect to provide a Subsequent Offering Period for the Offer in accordance
with Rule 14d-11 under the Exchange Act, and (c) to amend the Offer in any other
respect by giving oral or written notice of such amendment to the Depositary.
UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE FOR TENDERED
SHARES, WHETHER OR NOT THE PURCHASER EXERCISES ITS RIGHT TO EXTEND THE OFFER.
If by 12:00 midnight, New York City time, on Monday, March 27, 2000 (or any
date or time then set as the Expiration Date), any or all of the conditions to
the Offer have not been satisfied or waived, we reserve the right (but shall not
be obligated except as described in this Section 1), subject to the terms and
conditions contained in the Merger Agreement and to the applicable rules and
regulations of the Commission, (a) to terminate the Offer and not accept for
payment or pay for any Shares and return all tendered Shares to tendering
stockholders, (b) to elect to provide a Subsequent Offering Period for the
Offer, (c) to waive all the unsatisfied conditions and accept for payment and
pay for all Shares validly tendered prior to the Expiration Date and not
theretofore withdrawn, (d) to extend the Offer and, subject to the right of
stockholders to withdraw Shares until the Expiration Date, retain the Shares
that have been tendered during the period or periods for which the Offer is
extended or (e) to amend the Offer.
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<PAGE> 11
Any extension, waiver, amendment or termination will be followed as
promptly as practicable by public announcement thereof. In the case of an
extension, Rule 14e-l(d) under the Exchange Act requires that the announcement
be issued no later than 9:00 a.m., New York City time, on the next business day
after the previously scheduled Expiration Date in accordance with the public
announcement requirements of Rule 14d-4(d) under the Exchange Act. Subject to
applicable law (including Rules 14d-4(d) and 14d-6(c) under the Exchange Act,
which require that any material change in the information published, sent or
given to stockholders in connection with the Offer be promptly disseminated to
stockholders in a manner reasonably designed to inform stockholders of such
change) and without limiting the manner in which we may choose to make any
public announcement, we will not have any obligation to publish, advertise or
otherwise communicate any such public announcement other than by making a
release to the Dow Jones News Service.
If we extend the Offer or if we are delayed in our acceptance for payment
of or payment (whether before or after our acceptance for payment of Shares) for
Shares or we are unable to pay for Shares pursuant to the Offer for any reason,
then, without prejudice to our rights under the Offer, the Depositary may retain
tendered Shares on behalf of us, and such Shares may not be withdrawn except to
the extent tendering stockholders are entitled to withdrawal rights as described
in Section 3. However, our ability to delay the payment for Shares that we have
accepted for payment is limited by Rule 14e-l(c) under the Exchange Act, which
requires that a bidder pay the consideration offered or return the securities
deposited by or on behalf of holders of securities promptly after the
termination or withdrawal of such bidder's offer, and by the terms of the Merger
Agreement, which require that we pay for Shares accepted for payment as soon as
reasonably practicable after the Expiration Date.
If we make a material change in the terms of the Offer or the information
concerning the Offer or waive a material condition of the Offer, we will
disseminate additional tender offer materials and extend the Offer to the extent
required by Rules 14d-4(d), 14d-6(c) and l4e-1 under the Exchange Act. The
minimum period during which an offer must remain open following material changes
in the terms of such offer or information concerning such offer, other than a
change in price or a change in the percentage of securities sought, will depend
upon the facts and circumstances then existing, including the relative
materiality of the changed terms or information. In the Commission's view, an
offer should remain open for a minimum of five business days from the date the
material change is first published, sent or given to stockholders, and, if
material changes are made with respect to information that approaches the
significance of price and the percentage of securities sought, a minimum of ten
business days may be required to allow for adequate dissemination and investor
response. With respect to a change in price, a minimum ten-business-day period
from the date of the change is generally required to allow for adequate
dissemination to stockholders.
Pursuant to Rule 14d-11 under the Exchange Act, we may, subject to certain
conditions, provide a subsequent offering period of from three business days to
20 business days in length following the expiration of the Offer on the
Expiration Date ("Subsequent Offering Period"). A Subsequent Offering Period
would be an additional period of time, following the expiration of the Offer and
the purchase of Shares in the Offer, during which stockholders may tender Shares
not tendered into the Offer. A Subsequent Offering Period, if one is included,
is not an extension of the Offer, which already will have been completed.
During a Subsequent Offering Period, tendering stockholders will not have
withdrawal rights and we will promptly purchase and pay for any Shares tendered
at the same price paid in the Offer. Rule 14d-11 provides that we may provide a
Subsequent Offering Period so long as, among other things, (i) the initial 20
business day period of the Offer has expired, (ii) we offer the same form and
amount of consideration for Shares in the Subsequent Offering Period as in the
initial Offer, (iii) we accept and promptly pay for all securities tendered
during the Offer prior to its expiration, (iv) we announce the results of the
Offer, including the approximate number and percentage of Shares deposited in
the Offer, no later than 9:00 a.m. Eastern time on the next business day after
the Expiration Date and immediately begin the Subsequent Offering Period and (v)
we immediately accept and promptly pay for Shares as they are tendered during
the Subsequent Offering Period. We will be able to provide a Subsequent Offering
Period, if it satisfies the conditions above, after March 27, 2000.
WE DO NOT CURRENTLY INTEND TO PROVIDE A SUBSEQUENT OFFERING PERIOD FOR THE
OFFER, ALTHOUGH WE RESERVE THE RIGHT TO DO SO IN OUR SOLE DISCRETION. PURSUANT
TO RULE 14D-7 UNDER THE EXCHANGE ACT, NO WITHDRAWAL RIGHTS APPLY TO SHARES
TENDERED
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DURING A SUBSEQUENT OFFERING PERIOD AND NO WITHDRAWAL RIGHTS APPLY DURING THE
SUBSEQUENT OFFERING PERIOD WITH RESPECT TO SHARES TENDERED IN THE OFFER AND
ACCEPTED FOR PAYMENT. THE SAME CONSIDERATION, THE SHARE PRICE, WILL BE PAID TO
STOCKHOLDERS TENDERING SHARES IN THE OFFER OR IN A SUBSEQUENT OFFERING PERIOD,
IF ONE IS INCLUDED.
Ascent has provided us with Ascent's stockholder lists and security
position listing for the purpose of disseminating the Offer to holders of
Shares. We will mail this Offer to Purchase, the related Letter of Transmittal
and other relevant materials to record holders of Shares, and will furnish the
same to brokers, dealers, banks, trust companies and similar persons whose
names, or the names of whose nominees, appear on the stockholder lists, or, if
applicable, who are listed as participants in a clearing agency's security
position listing, for subsequent transmittal to beneficial owners of Shares. The
Schedule 14D-9 will also be included in the package of materials.
2. PROCEDURE FOR TENDERING SHARES
Valid Tender. In order for you to validly tender Shares pursuant to the
Offer, you must take the steps set forth in either (i) or (ii) below before the
Expiration Date:
the Depositary must receive, at one of its addresses set forth on the back cover
of this Offer to Purchase, prior to the Expiration Date:
(i) (a) a Letter of Transmittal (or a facsimile thereof), properly
completed and duly executed, together with any required signature
guarantees, or, in the case of a book-entry transfer effected pursuant to
the procedure set forth in this Section 2, an Agent's Message, and any
other required documents, and
(b) the certificates for your Shares, or you must cause your
Shares to be delivered pursuant to the procedure for book-entry transfer
set forth in this Section 2 (and a Book-Entry Confirmation (as defined
below) must be received by the Depositary) or, if your Shares are Direct
Registration Shares or are held through BuyDIRECT, you must ensure that the
Direct Registration Shares or BuyDIRECT box, as applicable, of the Letter
of Transmittal that is delivered to the Depositary is properly completed;
or
(ii) If you cannot timely perform (i) above, you must comply with the
guaranteed delivery procedures described below.
Until the close of business on the Distribution Date (as described in
Section 8), the Rights will be transferred with and only with the certificates
for Common Stock, and your surrender for tender of any certificates for Common
Stock will also constitute your tender of the Rights associated with the Common
Stock represented by such certificate.
Book-Entry Transfer. The Depositary will establish an account with respect
to the Shares at The Depository Trust Company (the "Book-Entry Transfer
Facility") for purposes of the Offer within two business days after the date of
this Offer to Purchase. Any financial institution that is a participant in the
Book-Entry Transfer Facility's system may make book-entry delivery of Shares by
causing the Book-Entry Transfer Facility to transfer such Shares into the
Depositary's account in accordance with the Book-Entry Transfer Facility's
procedures for such transfer. However, although you may cause delivery of Shares
to be effected through book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility, the Letter of Transmittal (or a facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, or an Agent's Message, and any other required documents, must, in
any case, be transmitted to, and received by, the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase prior to the
Expiration Date, or you must comply with the guaranteed delivery procedures
described below. The confirmation of a book-entry transfer of Shares into the
Depositary's account at the Book-Entry Transfer Facility as described above is
referred to herein as a "Book-Entry Confirmation." DELIVERY OF DOCUMENTS TO THE
BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH THE BOOK-ENTRY TRANSFER
FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering
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<PAGE> 13
the Shares that such participant has received and agrees to be bound by the
terms of the Letter of Transmittal and that we may enforce such agreement
against the participant.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY,
IS AT YOUR SOLE ELECTION AND RISK. YOUR SHARES WILL BE DEEMED DELIVERED ONLY
WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE OF A BOOK-ENTRY
TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY MAIL, REGISTERED MAIL
WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES,
YOU SHOULD ALLOW SUFFICIENT TIME TO ENSURE TIMELY DELIVERY.
Signature Guarantees. Signatures on your Letter of Transmittal must be
guaranteed unless (a) the Letter of Transmittal is signed by the registered
holder(s) (which term, for purposes of this Section 2, includes any participant
in the Book-Entry Transfer Facility's system whose name appears on a security
position listing as the owner of the Shares) of Shares tendered therewith and
such registered holder has not completed either the box entitled "Special
Delivery Instructions" or the box entitled "Special Payment Instructions" on the
Letter of Transmittal or (b) your Shares are tendered for the account of a
financial institution (including most commercial banks, savings and loan
associations and brokerage houses) that is a participant in the Security
Transfer Agents Medallion Program, the New York Stock Exchange Medallion
Signature Guarantee Program or the Stock Exchange Medallion Program (such
participant, an "Eligible Institution"). If a signature is required, it must be
provided by an Eligible Institution. See Instructions 1 and 5 to the Letter of
Transmittal. If the certificates for Shares are registered in the name of a
person other than the signer of the Letter of Transmittal, or if payment is to
be made or certificates for Shares not tendered or not accepted for payment are
to be returned to a person other than the registered holder of the certificates
surrendered, the tendered certificates must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name or names of
the registered holders or owners appear on the certificates, with the signatures
on the certificates or stock powers guaranteed as aforesaid. See Instructions 1
and 5 to the Letter of Transmittal.
Guaranteed Delivery. If you wish to tender Shares pursuant to the Offer and
your certificates for Shares are not immediately available or you cannot
complete the procedures for book-entry transfer on a timely basis or time will
not permit all required documents to reach the Depositary prior to the
Expiration Date, your tender may be effected if all the following conditions are
met:
(i) your tender is made by or through an Eligible Institution;
(ii) you ensure that a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form provided by us, is received
by the Depositary, as provided below, prior to the Expiration Date; and
(iii) you ensure that the certificates for all tendered Shares, in
proper form for transfer (or a Book-Entry Confirmation with respect to all
such Shares), together with a Letter of Transmittal (or a facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, or, in the case of a book-entry transfer, an Agent's Message,
and any other required documents are received by the Depositary within
three trading days after the date of execution of such Notice of Guaranteed
Delivery. A "trading day" is any day on which the Nasdaq National Market
(the "Nasdaq National Market") operated by the National Association of
Securities Dealers, Inc. (the "NASD") is open for business.
You may deliver the Notice of Guaranteed Delivery to the Depositary by hand
or transmit it by telegram, facsimile transmission or mail to the Depositary.
You must include a guarantee by an Eligible Institution in the form set forth in
such Notice of Guaranteed Delivery.
The valid tender of Shares by you pursuant to one of the procedures
described above will constitute a binding agreement between you and the
Purchaser upon the terms and subject to the conditions of the Offer.
BuyDIRECT. The participants in BuyDIRECT will receive all documents
furnished to stockholders generally in connection with the Offer. A stockholder
participating in BuyDIRECT who wishes to tender Shares held in such
participant's account may use the Letter of Transmittal to instruct the plan
administrator regarding the Offer by
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completing the box entitled "BuyDIRECT Shares." Each participant may direct that
all, some or none of the Shares credited to such participant's account be
tendered. Any BuyDIRECT Shares tendered but not purchased will be returned to
the participant's BuyDIRECT account. If a participant tenders all of his or her
Shares held in a BuyDIRECT account and all such Shares are purchased by the
Purchaser pursuant to the Offer, such tender will be deemed to be an
authorization and written notice to the plan administrator to terminate such
stockholder's participation in BuyDIRECT, subject to such stockholder's right to
recommence participation in accordance with the terms of BuyDIRECT.
Direct Registration Shares. Holders of Direct Registration Shares will
receive all documents furnished to stockholders generally in connection with the
Offer. A stockholder who wishes to tender Direct Registration Shares may use the
Letter of Transmittal to tender such Shares by completing the box entitled
"Direct Registration Shares." Each holder of Direct Registration Shares may
tender all, some or none of such stockholder's Direct Registration Shares. Any
Direct Registration Shares tendered but not purchased will be credited back to
such stockholder's Direct Registration Shares account.
HOLDERS OF DIRECT REGISTRATION SHARES AND PARTICIPANTS IN BUYDIRECT ARE
URGED TO READ THIS OFFER TO PURCHASE, THE LETTER OF TRANSMITTAL AND THE RELATED
MATERIALS CAREFULLY.
Appointment. By executing a Letter of Transmittal (or a facsimile thereof),
you will irrevocably appoint our designees as your attorneys-in-fact and proxies
in the manner set forth in the Letter of Transmittal, each with full power of
substitution, to the full extent of your rights with respect to the Shares
tendered by you and accepted for payment by us and with respect to any and all
other Shares or other securities or rights issued or issuable in respect of such
Shares on or after February 22, 2000. All such proxies will be considered
coupled with an interest in the tendered Shares. Such appointment will be
effective when, and only to the extent that, we accept for payment Shares
tendered by you as provided herein. Upon such appointment, all prior powers of
attorney, proxies and consents given by you with respect to such Shares or other
securities or rights will, without further action, be revoked and you may not
give any subsequent powers of attorney, proxies, consents or revocations (which,
if given, will not be effective). Our designees will thereby be empowered to
exercise all your voting and other rights with respect to such Shares and other
securities or rights in respect of any annual, special or adjourned meeting of
the stockholders of Ascent, actions by written consent in lieu of any such
meeting or otherwise, as they in their sole discretion deem proper. We reserve
the right to require that, in order for Shares to be deemed validly tendered,
immediately upon our acceptance for payment of such Shares, we must be able to
exercise full voting, consent and other rights with respect to such Shares and
other securities or rights, including voting at any meeting of stockholders.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of any tender of Shares
will be determined by us in our sole discretion, which determination will be
final and binding. We reserve the absolute right to reject any or all tenders
that we determine are not in proper form or the acceptance for payment of or
payment for which may, in the opinion of our counsel, be unlawful. We also
reserve the absolute right to waive any defect or irregularity in the tender of
any Shares of any particular stockholder whether or not similar defects or
irregularities are waived in the case of other stockholders. No tender of Shares
will be deemed to have been validly made until all defects or irregularities
relating thereto have been cured or waived. None of the Purchaser, Liberty
Media, the Depositary, the Information Agent, the Dealer Manager or any other
person will be under any duty to give notification of any defects or
irregularities in tenders or incur any liability for failure to give any such
notification. Our interpretation of the terms and conditions of the Offer
(including the Letter of Transmittal and the instructions thereto) will be final
and binding.
Backup Withholding. In order to avoid "backup withholding" of U.S. federal
income tax on payments of cash pursuant to the Offer, when surrendering Shares
in the Offer, you must, unless an exemption applies, provide the Depositary with
your correct taxpayer identification number ("TIN") on a Substitute Form W-9 and
certify under penalties of perjury that such TIN is correct and that you are not
subject to backup withholding. If you do not provide your correct TIN or fail to
provide the certifications described above, the Internal Revenue Service (the
"IRS") may impose a penalty on you and payment of cash to you pursuant to the
Offer may be subject to backup withholding of 31%. If you surrender Shares
pursuant to the Offer you should complete and sign the main signature form and
the Substitute Form W-9 included as part of the Letter of Transmittal to provide
the information and
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<PAGE> 15
certification necessary to avoid backup withholding (unless an applicable
exemption exists and is proved in a manner satisfactory to us and the
Depositary). Certain stockholders (including, among others, all corporations and
certain foreign individuals and entities) are not subject to backup withholding.
Noncorporate foreign stockholders should complete and sign the main signature
form and a Form W-8, Certificate of Foreign Status, a copy of which may be
obtained from the Depositary, in order to avoid backup withholding. See
Instruction 9 to the Letter of Transmittal.
3. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 3, tenders of Shares are
irrevocable. You may withdraw Shares that you have previously tendered pursuant
to the Offer pursuant to the procedures set forth below at any time prior to the
Expiration Date and, unless theretofore accepted for payment and paid for by us
pursuant to the Offer, you may also withdraw your previously tendered Shares at
any time after April 29, 2000.
In order for your withdrawal to be effective, a written notice of
withdrawal must be timely received by the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase. Any such notice must specify
the name of the person having tendered the Shares to be withdrawn, the number of
Shares to be withdrawn and the name of the registered holder of the Shares to be
withdrawn, if different from the name of the person who tendered the Shares. If
certificates for Shares have been delivered or otherwise identified to the
Depositary, then, prior to the physical release of such certificates, you must
submit the serial numbers shown on the particular certificates to be withdrawn
to the Depositary and, unless such Shares have been tendered by an Eligible
Institution, the signatures on the notice of withdrawal must be guaranteed by an
Eligible Institution. If your Shares were delivered pursuant to the procedures
for book-entry transfer described in Section 2, your notice of withdrawal must
also specify the name and number of the account at the Book-Entry Transfer
Facility to be credited with the withdrawn Shares and otherwise comply with the
Book-Entry Transfer Facility's procedures. If you are withdrawing Direct
Registration Shares or shares held through BuyDIRECT, you must specify that on
your notice of withdrawal. You may not rescind a withdrawal of tenders of
Shares, and any Shares that you properly withdraw will thereafter be deemed not
validly tendered for purposes of the Offer. However, you may retender withdrawn
Shares by again following one of the procedures described in Section 2 at any
time prior to the Expiration Date.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by us in our sole discretion, which
determination will be final and binding. None of the Purchaser, Liberty Media,
the Depositary, the Information Agent, the Dealer Manager or any other person
will be under any duty to give you notification of any defects or irregularities
in your notice of withdrawal or incur any liability for failure to give any such
notification.
In the event we provide a Subsequent Offering Period following the Offer,
no withdrawal rights will apply to Shares tendered during such Subsequent
Offering Period or to Shares tendered in the Offer and accepted for payment.
4. ACCEPTANCE FOR PAYMENT AND PAYMENT
Upon the terms and subject to the conditions of the Offer (including, if we
extend or amend the Offer, the terms and conditions of any such extension or
amendment), we will accept for payment and will pay as soon as reasonably
practicable after the Expiration Date for all Shares validly tendered prior to
the Expiration Date and not properly withdrawn in accordance with Section 3. We
expressly reserve the right to delay acceptance for payment of or payment for
Shares in order to comply in whole or in part with any applicable law,
including, without limitation, the HSR Act. Any such delays will be effected in
compliance with Rule 14e-l(d) under the Exchange Act (relating to a bidder's
obligation to pay for or return tendered securities promptly after the
termination or withdrawal of such bidder's offer).
We filed a Notification and Report Form with respect to the Offer under the
HSR Act on February 25, 2000. Accordingly, the waiting period under the HSR Act
with respect to the Offer should expire at 11:59 p.m., New York City time, on
March 11, 2000. However, the Antitrust Division of the Department of Justice
(the "Antitrust Division") or the Federal Trade Commission (the "FTC") may
extend the waiting period by requesting us to provide additional information or
documentary material. If such a request is made, such waiting period will expire
at
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<PAGE> 16
11:59 p.m., New York City time, on the 10th day after substantial compliance by
us with such request. See Section 15 for additional information concerning the
HSR Act and the applicability of United States antitrust laws to the Offer.
In all cases, we will pay for Shares accepted for payment pursuant to the
Offer only after timely receipt by the Depositary of (a) certificates for (or a
timely Book-Entry Confirmation with respect to) such Shares, or, in the case of
Direct Registration Shares and Shares held through BuyDIRECT, a Letter of
Transmittal including properly completed portions for Direct Registration Shares
or Shares held through BuyDIRECT, as applicable, (b) a Letter of Transmittal (or
a facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or, in the case of a book-entry transfer, an Agent's
Message, with respect to such Shares and (c) any other documents required by the
Letter of Transmittal. The per Share consideration paid to any stockholder
pursuant to the Offer will be the highest per Share consideration paid to any
other stockholder pursuant to the Offer. Accordingly, tendering stockholders may
be paid at different times depending upon when certificates for Shares or
Book-Entry Confirmations with respect to Shares are actually received by the
Depositary.
For purposes of the Offer, we will be deemed to have accepted for payment,
and thereby purchased, Shares properly tendered and not withdrawn as, if and
when we give oral or written notice to the Depositary of our acceptance for
payment of such Shares. We will pay for Shares accepted for payment pursuant to
the Offer by depositing the purchase price therefor with the Depositary. The
Depositary will act as an agent for tendering stockholders for the purpose of
receiving payment from us, and transmitting payment to tendering stockholders.
UNDER NO CIRCUMSTANCES WILL WE PAY INTEREST ON THE PURCHASE PRICE FOR THE
SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH
PAYMENT.
If we do not purchase any Shares tendered by you pursuant to the Offer for
any reason, we will return the certificates for any such Shares, without expense
to you (or, in the case of Shares delivered by book-entry transfer of such
Shares into the Depositary's account at the Book-Entry Transfer Facility
pursuant to the procedures described in Section 2, such Shares will be credited
to an account maintained at the Book-Entry Transfer Facility), as promptly as
reasonably practicable after the expiration or termination of the Offer.
The Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to Liberty Media, or to one or more direct or indirect
wholly owned subsidiaries of Liberty Media, the right to purchase Shares
tendered pursuant to the Offer, but any such transfer or assignment will not
relieve the Purchaser of its obligations under the Offer and will in no way
prejudice the rights of tendering stockholders to receive payment for Shares
validly tendered and accepted for payment pursuant to the Offer.
5. CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
Your receipt of cash pursuant to the Offer or the Merger will be a taxable
transaction for U.S. federal income tax purposes, and may also be a taxable
transaction under applicable state, local or foreign income or other tax laws.
Generally, for U.S. federal income tax purposes, if you sell or exchange your
Shares in the Offer or the Merger, you will recognize gain or loss equal to the
difference between the amount of cash received pursuant to the Offer or the
Merger and your tax basis in the Shares tendered by you and purchased pursuant
to the Offer or converted into cash in the Merger, as the case may be. Gain or
loss will be calculated separately for each block of Shares tendered and
purchased pursuant to the Offer or converted into cash in the Merger, as the
case may be.
If Shares are held by you as capital assets, gain or loss recognized by you
will be capital gain or loss, which will be long-term capital gain or loss if
your holding period for the Shares exceeds one year. If you are an individual,
the maximum rate of tax on long-term capital gain will be 20%. The deduction of
capital losses is subject to certain limitations. Stockholders should consult
their own tax advisors in this regard.
If you tender Shares you may be subject to 31% backup withholding unless
you provide your TIN and certify that such number is correct or properly certify
that you are awaiting a TIN, or unless an exemption applies. Exemptions are
available for stockholders that are corporations and for certain foreign
individuals and entities. If you do not furnish a required TIN you may be
subject to a penalty imposed by the IRS. See "Backup Withholding" under Section
2.
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<PAGE> 17
If backup withholding applies to you, the Depositary is required to
withhold 31% from payments to you. Backup withholding is not an additional tax.
Rather, the amount of the backup withholding can be credited against the U.S.
federal income tax liability of the person subject to the backup withholding,
provided that the required information is given to the IRS. If backup
withholding results in an overpayment of tax, a refund can be obtained by the
stockholder by filing a federal income tax return.
THE FOREGOING U.S. FEDERAL INCOME TAX DISCUSSION MAY NOT BE APPLICABLE WITH
RESPECT TO SHARES RECEIVED PURSUANT TO THE EXERCISE OF EMPLOYEE STOCK OPTIONS OR
OTHERWISE AS COMPENSATION OR WITH RESPECT TO HOLDERS OF SHARES WHO ARE SUBJECT
TO SPECIAL TAX TREATMENT UNDER THE CODE, SUCH AS NON-U.S. PERSONS, LIFE
INSURANCE COMPANIES, TAX-EXEMPT ORGANIZATIONS AND FINANCIAL INSTITUTIONS, AND
MAY NOT APPLY TO A HOLDER OF SHARES IN LIGHT OF INDIVIDUAL CIRCUMSTANCES. THE
DISCUSSION IS BASED UPON PRESENT LAW, WHICH IS SUBJECT TO CHANGE, POSSIBLY WITH
RETROACTIVE EFFECT. YOU ARE URGED TO CONSULT YOUR OWN TAX ADVISOR TO DETERMINE
THE PARTICULAR TAX CONSEQUENCES OF THE OFFER AND THE MERGER TO YOU (INCLUDING
THE APPLICATION AND EFFECT OF THE ALTERNATIVE MINIMUM TAX AND OF STATE, LOCAL OR
FOREIGN INCOME AND OTHER TAX LAWS).
6. PRICE RANGE OF THE SHARES; DIVIDENDS ON THE SHARES
The Shares are traded in the over-the-counter market and prices are quoted
on the Nasdaq National Market under the symbol "GOAL." The following table sets
forth, for each of the periods indicated, the high and low sales quotations per
Share as reported by the Nasdaq National Market based on published financial
sources.
ASCENT ENTERTAINMENT GROUP, INC.
<TABLE>
<CAPTION>
SALES QUOTATION
----------------
HIGH LOW
------ -------
<S> <C> <C>
Fiscal Year Ended December 31, 1998:
First Quarter............................................. $11 $ 9 11/16
Second Quarter............................................ $12 3/4 $10 5/16
Third Quarter............................................. $11 5/16 $ 7 3/8
Fourth Quarter............................................ $ 9 3/16 $ 5 11/16
Fiscal Year Ended December 31, 1999:
First Quarter............................................. $12 3/8 $ 7 1/4
Second Quarter............................................ $14 3/16 $ 8 3/4
Third Quarter............................................. $15 $12 1/4
Fourth Quarter............................................ $17 1/2 $11 1/2
Fiscal Year Ended December 31, 2000:
First Quarter (through February 28, 2000)................. $15 5/16 $ 9 15/16
</TABLE>
The Rights trade together with the Common Stock. On February 18, 2000, the
last full trading day before the first public announcement of the intention to
commence the Offer, the last reported sale quotation of the Shares on the Nasdaq
National Market was $10.125 per Share. On February 22, 2000, prior to the
commencement of trading, Liberty Media announced the intention to commence the
Offer. On February 28, which was the last full trading day before commencement
of the Offer, the last reported sale quotation of the Shares on the Nasdaq
National Market was $15.1875 per share. YOU ARE URGED TO OBTAIN CURRENT MARKET
QUOTATIONS FOR THE SHARES.
According to Ascent's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998 (the "Ascent 1998 10-K"), Ascent has never paid any dividends
on the Shares.
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<PAGE> 18
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; SHARE QUOTATION; EXCHANGE
ACT REGISTRATION; MARGIN REGULATIONS
Market for the Shares. The purchase of Shares pursuant to the Offer will
reduce the number of holders of Shares and the number of Shares that might
otherwise trade publicly and could adversely affect the liquidity and market
value of the remaining Shares held by the public.
Share Quotation. Depending upon the number of Shares purchased pursuant to
the Offer, the Shares may no longer meet the requirements for continued
inclusion in the Nasdaq National Market. If, as a result of the purchase of
Shares pursuant to the Offer, the Shares no longer meet the criteria for
continuing inclusion in the Nasdaq National Market, the market for the Shares
could be adversely affected. According to the Nasdaq National Market's published
guidelines, the Shares would not be eligible for continued listing if, among
other things, the number of Shares publicly held falls below 750,000, the number
of beneficial holders of Shares falls below 400 (round lot holders) or the
aggregate market value of such publicly held Shares does not exceed $5 million.
If the Shares were no longer eligible for inclusion in the Nasdaq National
Market, they may nevertheless continue to be included in the Nasdaq SmallCap
Market unless, among other things, the public float was less than 500,000
shares, or there were fewer than 300 stockholders (round lot holders) in total,
or the market value of the public float was less than $1 million.
In the event that the Shares no longer meet the requirements of the NASD
for continued inclusion in any tier of the Nasdaq Stock Market, it is possible
that the Shares would continue to trade in the over-the-counter market and that
price quotations would be reported by other sources. The extent of the public
market for the Shares and the availability of such quotations would, however,
depend upon the number of holders of Shares remaining at such time, the
interests in maintaining a market in Shares on the part of securities firms, the
possible termination of registration of the Shares under the Exchange Act, as
described below, and other factors.
Exchange Act Registration. The Shares are currently registered under the
Exchange Act. Registration of the Shares under the Exchange Act may be
terminated upon application of Ascent to the Commission if the Shares are
neither listed on a national securities exchange nor held by 300 or more holders
of record. Termination of registration of the Shares under the Exchange Act
would substantially reduce the information required to be furnished by Ascent to
its stockholders and to the Commission and would make certain provisions of the
Exchange Act no longer applicable to Ascent, such as the short-swing profit
recovery provisions of Section 16(b) of the Exchange Act, the requirement of
furnishing a proxy statement pursuant to Section 14(a) of the Exchange Act in
connection with stockholders' meetings and the related requirement of furnishing
an annual report to stockholders and the requirements of Rule 13e-3 under the
Exchange Act with respect to "going private" transactions. Furthermore, the
ability of "affiliates" of Ascent and persons holding "restricted securities" of
Ascent to dispose of such securities pursuant to Rule 144 or 144A promulgated
under the Securities Act of 1933 may be impaired or eliminated. The Purchaser
intends to seek to cause Ascent to apply for termination of registration of the
Shares under the Exchange Act as soon after the completion of the Offer as the
requirements for such termination are met.
If registration of the Shares is not terminated prior to the Merger, then
the Shares will be delisted from all stock exchanges and the registration of the
Shares under the Exchange Act will be terminated following the consummation of
the Merger.
Margin Regulations. The Shares are currently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which has the effect, among other things, of allowing
brokers to extend credit on the collateral of the Shares. Depending upon factors
similar to those described above regarding listing and market quotations, it is
possible that, following the Offer, the Shares would no longer constitute
"margin securities" for the purposes of the margin regulations of the Federal
Reserve Board and therefore could no longer be used as collateral for loans made
by brokers.
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<PAGE> 19
8. CERTAIN INFORMATION CONCERNING ASCENT
Ascent is a Delaware corporation with its executive offices at 1225
Seventeenth Street, Suite 1800, Denver, Colorado 80202. According to the Ascent
1998 10-K, Ascent operates diversified media and entertainment production and
distribution businesses characterized by well-known franchises. Ascent conducts
its business in three reportable segments, Multimedia Distribution,
Entertainment and Network Services.
In Ascent's Multimedia Distribution segment, Ascent's approximately 57%
owned publicly traded subsidiary, On Command Corporation ("On Command" or
"OCC"), is the leading provider (by number of hotel rooms served) of in-room
on-demand video entertainment and information services to the domestic lodging
industry. OCC generally provides its in-room video entertainment services
pursuant to exclusive long-term contracts, primarily with large national
business and luxury hotel chains such as Marriott, Hilton, Hyatt, Doubletree,
Fairmont, Embassy Suites, The Four Seasons and Holiday Inn. These hotels
generally have higher occupancy rates than economy and budget hotels, which is
an important factor contributing to higher buy rates for pay-per-view service.
As of December 31, 1998, OCC had an installed room base of approximately 929,000
rooms (of which 829,000 were served by on-demand pay-per-view systems and
100,000 were served only by scheduled pay-per-view systems) in approximately
3,220 hotels worldwide.
Ascent's Entertainment segment is comprised of: (i) two professional sports
franchises, the National Hockey League ("NHL") Colorado Avalanche (the
"Avalanche") and the National Basketball Association ("NBA") Denver Nuggets (the
"Nuggets") and (ii) the Pepsi Center, a new state-of-the-art sports and
entertainment center in downtown Denver, which is owned and operated through
Ascent's subsidiary Ascent Arena Company, LLC ("Ascent Arena").
The Pepsi Center was completed in 1999 and is being used in the 1999-2000
NHL and NBA seasons. In 1997, Ascent entered into an Arena Agreement with the
City and County of Denver setting forth the terms on which Ascent, through
Ascent Arena, constructed and owns and manages the new Pepsi Center. Ascent
purchased the land on which the arena is situated and is obligated to contribute
the land to the City of Denver, which will then lease it back to Ascent at a
nominal cost. At the end of the 23-year lease (with a possible two-year
extension), the City of Denver will contribute the property back to Ascent.
Ascent's Network Services segment is comprised of its Ascent Network
Services ("ANS") division. ANS is the primary provider of satellite distribution
support services that link the National Broadcasting Company ("NBC") television
network with 181 of its affiliated stations nationwide.
Set forth below is certain selected financial information with respect to
Ascent and its subsidiaries excerpted from the information contained in the
Ascent 1998 10-K, Ascent's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1999 (the "Ascent 1999 Third Quarter 10-Q"), and Ascent's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1998 (the
"Ascent 1998 Third Quarter 10-Q"). More comprehensive financial information is
included in the Ascent 1998 10-K, the Ascent 1999 Third Quarter 10-Q, the Ascent
1998 Third Quarter 10-Q and other documents filed by Ascent with the Commission,
and the following summary is qualified in its entirety by reference to the
Ascent 1998 10-K, the Ascent 1999 Third Quarter 10-Q, the Ascent 1998 Third
Quarter 10-Q and such other documents and all the financial information
(including any related notes) contained therein. The Ascent 1998 10-K, the
Ascent 1999 Third Quarter 10-Q, the Ascent 1998 Third Quarter 10-Q and such
other documents should be available for inspection and copies thereof should be
obtainable in the manner set forth below under "-- Available Information."
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<PAGE> 20
ASCENT ENTERTAINMENT GROUP, INC.
SELECTED HISTORICAL FINANCIAL INFORMATION(1)
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE INFORMATION)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, (1) YEAR ENDED DECEMBER 31,
------------------- ------------------------------
1999 1998 1998 1997 1996
-------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Income (loss) from continuing
operations............................ $(29,667) $(23,913) $(39,993) $(44,116) $(34,650)
Net loss................................ (39,704) (40,471) (49,725) (41,514) (36,034)
Net loss per common share............... (1.33) (1.36) (1.67) (1.40) (1.21)
BALANCE SHEET DATA:
Total assets............................ $609,093 $880,846 $863,741 $728,926 $689,020
Total long-term debt.................... 332,461 438,358 441,707 259,958 50,000
Stockholders' equity.................... 137,712 185,774 176,526 227,698 269,585
</TABLE>
(1) Ascent began accounting for its sports-related business (the Nuggets, the
Avalanche and Ascent Arena) as discontinued operations during the first
quarter of 1999. The information presented in the table above for the years
ended December 31, 1998, 1997 and 1996 has not been restated to reflect such
results as discontinued operations. Reference should be made to Ascent's
1998 financial statements contained in the Ascent 1998 10-K and
specifically, Note 12-Business Segment Information, for the results of the
sports-related business during 1998, 1997 and 1996.
The information presented in the table above for the nine-months ended
September 30, 1999 and 1998 reflects the sports-related business as
discontinued operations, with the exception of the balance sheet data
captions relating to total assets and long-term debt as of September 30,
1998.
The Rights. Set forth below is a summary description of the Rights and the
Rights Agreement derived from Ascent's Registration Statement on Form 8-A dated
July 1, 1997 (the "Ascent 8-A").
On June 27, 1997, the Ascent Board declared a dividend of one Right for
each Share. The dividend was payable on July 10, 1997 to the stockholders of
record on that date. Each Right entitles the registered holder to purchase from
Ascent one one-hundredth of a share of Series A Junior Participating Preferred
Stock, par value $.01 per share (the "Preferred Shares"), of Ascent at a price
of $40.00 per one one-hundredth of a Preferred Share (the "Purchase Price"),
subject to adjustment.
Until the earlier to occur of (i) 10 days following a public announcement
that a person or group of affiliated or associated persons (an "Acquiring
Person") has acquired beneficial ownership of 15% or more of the outstanding
Shares (such announcement date being the "Shares Acquisition Date") or (ii) 10
business days (or such later date as may be determined by action of the Board of
Directors prior to such time as any person or group of affiliated persons
becomes an Acquiring Person) following the commencement of, or announcement of
an intention to make, a tender offer or an exchange offer the consummation of
which would result in the beneficial ownership by a person or group of 15% or
more of the outstanding Shares (the earlier of such dates being the
"Distribution Date"), the Rights will be evidenced, with respect to any of the
Share certificates outstanding as of July 10, 1997, by such Share certificate
with a copy of the Summary of Rights attached thereto.
The Rights Agreement provides that, until the Distribution Date (or earlier
redemption or expiration of the Rights), the Rights will be transferred with and
only with the Shares. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any certificates for
Shares will also constitute the transfer of the Rights associated with the
Shares represented by such certificate. The Rights Agreement also provides that
as soon as practicable following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to holders of record
of the Shares as of the close of business on the Distribution Date and such
separate Right Certificates alone will evidence the Rights.
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<PAGE> 21
The Rights are not exercisable until the Distribution Date. The Rights will
expire on July 10, 2007 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by Ascent, in each case, as described below.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1 per share but will be entitled to an aggregate
dividend of 100 times the dividend declared per Share. In the event of
liquidation, the holders of the Preferred Shares will be entitled to a minimum
preferential liquidation payment of $100 per share but will be entitled to an
aggregate payment of 100 times the payment made per Share. Each Preferred Share
will have 100 votes, voting together with the Shares. Finally, in the event of
any merger, consolidation or other transaction in which Shares are exchanged,
each Preferred Share will be entitled to receive 100 times the amount received
per Share.
In the event that Ascent is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold after a person or group has become an Acquiring Person, the
Rights Agreement requires that proper provision will be made so that each holder
of a Right will thereafter have the right to receive, upon the exercise thereof
at the then current exercise price of the Right, that number of shares of common
stock of the acquiring company which at the time of such transaction will have a
market value of two times the exercise price of the Right. In the event that any
person or group of affiliated or associated persons becomes an Acquiring Person,
the Rights Agreement requires that proper provision shall be made so that each
holder of a Right, other than Rights beneficially owned by the Acquiring Person
(which will thereafter be void), will thereafter have the right to receive upon
exercise that number of Shares having a market value of two times the exercise
price of the Right.
The Rights Agreement provides that at any time after any person or group
becomes an Acquiring Person and prior to the acquisition by such person or group
of 50% or more of the outstanding Shares, the Ascent Board may exchange the
Rights (other than Rights owned by such person or group which will have become
void), in whole or in part, at an exchange ratio of one Share, or one
one-hundredth of a Preferred Share (or of a share of a class or series of
Ascent's preferred stock having equivalent rights, preferences and privileges),
per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-hundredth of a Preferred
Share, which may, at the election of Ascent, be evidenced by depositary
receipts) and, in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Shares on the last trading day prior to the date
of exercise.
The Rights Agreement provides that at any time prior to the acquisition by
a person or group of affiliated or associated persons of beneficial ownership of
15% or more of the outstanding Shares, the Ascent Board may redeem the Rights,
in whole but not in part, at a price of $.01 per Right (the "Redemption Price").
The redemption of the Rights may be made effective at such time on such basis
with such conditions as the Board of Directors, in its sole discretion, may
establish. Immediately upon any redemption of the Rights, the right to exercise
the Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
The Rights Agreement provides that the terms of the Rights may be amended
by the Ascent Board without the consent of the holders of the Rights, including
an amendment to lower certain thresholds described above to not less than the
greater of (i) the sum of .001% and the largest percentage of the outstanding
Shares then known to Ascent to be beneficially owned by any person or group of
affiliated or associated persons and (ii) 10%, except that from and after such
time as any person or group of affiliated or associated persons becomes an
Acquiring Person no such amendment may adversely affect the interests of the
holders of the Rights.
The foregoing summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement
and other documents included in the Ascent 8-A. The Ascent 8-A should be
available for inspection and copies thereof should be obtainable in the manner
set forth below under "-- Available Information."
On February 22, 2000, in connection with the execution and delivery of the
Merger Agreement, the Ascent Board approved an amendment to the Rights Agreement
(the "Amendment to the Rights Agreement"), in order to, among other things, (i)
prevent Liberty Media or the Purchaser from becoming or being deemed an
Acquiring
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<PAGE> 22
Person, and (ii) prevent a Distribution Date or Shares Acquisition Date from
occurring, in each case, as a result of (a) the approval, execution or delivery
of the Merger Agreement or any amendments thereof approved in advance by the
Ascent Board or (b) the commencement or, prior to termination of the Merger
Agreement, in consummation of any of the transactions contemplated by the Merger
Agreement in accordance with the provisions of the Merger Agreement, including
the Offer and the Merger.
Available Information. Ascent is subject to the informational requirements
of the Exchange Act and, in accordance therewith, is required to file reports
relating to its business, financial condition and other matters. Information as
of particular dates concerning Ascent's directors and officers, their
remuneration, stock options and other matters, the principal holders of Ascent's
securities and any material interest of such persons in transactions with Ascent
is required to be disclosed in Ascent's proxy statements distributed to Ascent's
stockholders and filed with the Commission. Such information should be available
for inspection at the public reference facilities of the Commission at 450 Fifth
Street, N.W., Washington, DC 20549, and at the regional offices of the
Commission located at Seven World Trade Center, 13th Floor, New York, NY 10048
and Citicorp Center, 500 West Madison Street (Suite 1400), Chicago, IL 60661.
Copies of such information should be obtainable, by mail, upon payment of the
Commission's customary charges, by writing to the Commission's principal office
at 450 Fifth Street, N.W., Washington, DC 20549. The Commission maintains a Web
site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the Commission.
Such reports, proxy and information statements and other information may be
found on the Commission's Web site address, http://www.sec.gov. Such material
should also be available for inspection at the offices of Nasdaq Operations,
1735 K Street, N.W., Washington, DC 20006.
Except as otherwise stated in this Offer to Purchase, the information
concerning Ascent contained herein has been taken from or based upon publicly
available documents on file with the Commission and other publicly available
information. Although the Purchaser and Liberty Media do not have any knowledge
that any such information is untrue, neither the Purchaser nor Liberty Media
takes any responsibility for the accuracy or completeness of such information or
for any failure by Ascent to disclose events that may have occurred and may
affect the significance or accuracy of any such information.
9. CERTAIN INFORMATION CONCERNING THE PURCHASER AND LIBERTY MEDIA
The Purchaser, a Delaware corporation which is an indirect wholly owned
subsidiary of Liberty Media, was organized to acquire Ascent and has not
conducted any unrelated activities since its organization. The principal office
of the Purchaser is located at the principal office of Liberty Media. All
outstanding shares of capital stock of the Purchaser are indirectly owned by
Liberty Media.
Liberty Media is a Delaware corporation with its principal offices located
at 9197 South Peoria Street, Englewood, Colorado 80112. Liberty Media is a
leading media, entertainment and communications company with interests in a
diverse group of public and private companies that are market leaders in their
respective industries. Liberty Media has been an indirect wholly owned
subsidiary of AT&T Corp. ("AT&T") since March 1999.
Available Information. Liberty Media recently became subject to the
informational requirements of the Exchange Act and, in accordance therewith,
will file reports relating to its business, financial condition and other
matters. Information, as of particular dates, concerning Liberty Media's
directors and officers, their remuneration, stock options and other matters, the
principal holders of Liberty Media's securities and any material interest of
such persons in transactions with Liberty Media is required to be disclosed in
the Annual Report on Form 10-K, which will be filed with the Commission. Such
reports and other information will be available for inspection at the Commission
and copies thereof will be obtainable from the Commission in the same manner as
is set forth with respect to Ascent in Section 8.
10. SOURCE AND AMOUNT OF FUNDS
The Purchaser estimates that the total amount of funds required to purchase
pursuant to the Offer the number of Shares that are outstanding on a fully
diluted basis (excluding those held by Liberty Media) and to pay other costs,
fees and expenses related to the Offer and the Merger will be approximately $470
million. The Purchaser plans to obtain all funds needed for the Offer through a
capital contribution from Liberty Media to the Purchaser at
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the time Shares tendered pursuant to the Offer are accepted for payment. In
Amendment No. 1 to its Registration Statement on Form S-1 filed February 9,
2000, Liberty Media reported over $2.4 billion in working capital as of
September 30, 1999. Liberty Media has available cash on hand sufficient to make
this capital contribution.
11. CONTACTS AND TRANSACTIONS WITH ASCENT; BACKGROUND OF THE OFFER
In August 1997, Fox Sports Rocky Mountain ("Fox Sports"), a partnership
between Liberty Media and Fox News Corporation, entered into a seven-year
agreement with Ascent for the local television rights (over-the-air and cable)
for the Nuggets and the Avalanche, commencing with the 1997-1998 playing season.
In November 1997, Liberty Denver Arena, LLC ("LDA"), a subsidiary of
Liberty Media, invested $15 million in Ascent Arena. Through that investment,
LDA acquired an interest in the capital of Ascent Arena and a profits interest
of approximately 6.5% representing the right to receive distributions from
Ascent Arena measured by defined distributions received from the Nuggets and the
Avalanche. LDA has no management or operating rights with respect to Ascent
Arena, the Nuggets or the Avalanche. LDA has certain put rights beginning in
July 2005 to require Ascent to purchase from LDA its then current ownership
interest at its fair market value. Likewise, Ascent has certain call rights
beginning in July 2005 to purchase the LDA ownership interest at its then fair
market value.
From time to time during late 1998 and early 1999, Liberty Media and Ascent
discussed the possibility of engaging in various business transactions that
would involve certain of Liberty Media's programing capabilities and OCC's hotel
operations. During this period, Liberty Media also considered the possibility of
an acquisition of OCC, although Liberty Media was never able to develop an
acceptable tax-efficient proposal to acquire Ascent's OCC position. In April
1999, Liberty Media executed customary confidentiality agreements with Ascent
and OCC in furtherance of such discussions.
During April and early May of 1999, representatives of Liberty Media had
meetings and telephone conversations with representatives of Ascent and OCC in
order to provide Liberty Media with certain requested information regarding OCC
and ANS.
On April 25, 1999, Ascent executed a definitive agreement (the "Laurie
Agreement") providing for the sale of Ascent's sports-related businesses,
including the Nuggets, the Avalanche and Ascent Arena (the "Sports Assets"), to
two partnerships controlled by William J. and Nancy Walton Laurie for $400
million. Under the Laurie Agreement, Ascent would purchase LDA's interest in
Ascent Arena immediately prior to closing.
In May 1999, representatives of Liberty Media met with members of Ascent's
management to describe a proposal pursuant to which Liberty Media would acquire
Ascent in a taxable stock-for-stock transaction. The proposal was conditioned on
the completion of due diligence and negotiation and execution of a definitive
agreement.
On June 22, 1999, Ascent entered into a definitive agreement providing for
the settlement of three lawsuits filed by stockholders in the Delaware Chancery
Court that had challenged the proposed sale of the Sports Assets under the
Laurie Agreement. The settlement agreement provided for Ascent to conduct an
open auction for the Sports Assets. Ascent retained Wasserstein Perella & Co.
("Wasserstein") as a new co-advisor with the prior advisor and Allen & Company
Incorporated ("Allen") to conduct the auction. As part of the settlement, Ascent
entered into a new purchase and sale agreement with the Laurie entities that
provided that the Lauries could participate in the auction, and that they would
purchase the Sports Assets for $400 million in the event that the auction did
not produce a superior transaction.
During late June and early July, representatives of DLJ had telephone
conversations with representatives of Liberty Media. On July 14, 1999, Liberty
Media sent a letter to Ascent outlining a revised proposal that contemplated a
tax-free stock-for-stock transaction in which each Share would be exchanged for
.4399 shares of Class A Liberty Media Group Common Stock ("LMGA"), or a value of
approximately $16.24 per Share at that time. The exchange ratio was subject to
adjustment based upon actual cash remaining after consummation of the sale of
the Sports Assets. The revised proposal was still conditioned on the completion
of due diligence and negotiation and execution of a definitive agreement, but
contemplated that the definitive agreement would permit Ascent to solicit offers
for the purchase of the Shares or Ascent's assets for a period of 60 days after
execution of the definitive
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agreement. The revised proposal also provided that Liberty Media would be paid a
break-up fee of $15 million if Ascent terminated the definitive agreement to
pursue an alternative transaction.
At the conclusion of the auction process, on July 27, 1999, Ascent and LDA
executed a definitive agreement (the "Sturm Agreement") with the high bidder,
The Sturm Group, a Denver-based private investment firm owned by Donald L.
Sturm, for the purchase and sale of the Sports Assets for $461 million.
On August 19, 1999, Liberty Media sent a revised term sheet to Ascent
describing a transaction that contemplated a tax-free stock-for-stock
transaction in which each Share would be exchanged for that number of shares of
LMGA equal to $16.45 divided by the average closing price for LMGA over a
specified trading period. The exchange ratio was not subject to adjustment based
upon actual cash remaining after consummation of the sale of the Sports Assets,
but the term sheet contemplated that Ascent would make a representation as to
the amount of such cash. The term sheet proposal was still conditioned on the
completion of due diligence and negotiation and execution of a definitive
agreement. The term sheet provided that Ascent could solicit third party offers
for a period of 60 days after execution of the definitive agreement, and
provided that Liberty Media would be paid a break-up fee of $10 million if
Ascent terminated the definitive agreement to pursue an alternative transaction,
subject to a decrease if the merger was not approved by Ascent's stockholders
after a significant decline in the market price of LMGA shares. Later that
month, the parties executed the term sheet.
On August 23, 1999, Liberty Media sent to Ascent an extensive financial and
operating information request list. During late August and early September,
Ascent, with the assistance of management of OCC, assembled all of the requested
material and made it available to Liberty Media. In early September,
representatives of Liberty Media also met with members of management of Ascent
and OCC to discuss the financial and operating condition and prospects of OCC
and ANS.
In early September 1999, Liberty Media's legal advisors provided Ascent
with a draft merger agreement generally based on the executed term sheet.
Representatives of each of Ascent, DLJ and Ascent's legal advisors commenced
negotiating the terms of the merger agreement with Liberty Media and its legal
advisors.
On September 18, 1999, a representative of Liberty Media contacted Ascent
and indicated that Liberty Media would not finalize negotiations of the
definitive merger agreement on the terms contemplated by the term sheet. The
representative indicated that Liberty Media desired to pursue a transaction to
acquire a significant competitor of OCC, and therefore Liberty Media would not
agree to a merger agreement on the previously contemplated terms.
On September 21, 1999, a representative of Liberty Media contacted Ascent
to indicate that Liberty Media might still be willing to pursue a transaction
under two new alternative proposals. The first proposal was to keep the current
transaction structure as between Liberty Media and Ascent, but Liberty Media
would have 30 days after entering into a definitive agreement to pursue an
agreement with OCC's competitor. The second proposal was to keep the current
transaction structure but to increase the certainty for Liberty Media by
eliminating Ascent's ability to solicit other acquirors, and by providing a
lock-up agreement with 10 percent of Ascent's stockholders, an option for
Liberty Media to purchase 10 percent of Ascent's common stock at the deal price
and retention of the proposed break-up fee. Negotiations between representatives
of Liberty Media and Ascent continued during the following week.
On September 28, 1999, Liberty Media sent a letter to Ascent outlining a
revised proposal to acquire Ascent. This revised proposal contemplated that
Liberty Media and Ascent would complete the merger agreement substantially as
negotiated prior to September 21, with the following principal exceptions: (i)
the price per Share used to determine the exchange ratio was increased from
$16.45 to $17.00; (ii) Ascent would only be permitted to respond to unsolicited
third-party offers as may be required to comply with the Ascent Board's
fiduciary duties with respect to a superior proposal; (iii) Ascent would
represent that before the date of the merger agreement, the OCC board of
directors (the "OCC Board") had approved Liberty Media as an "interested
stockholder" of OCC within the meaning of Section 203 of the DGCL; and (iv)
Ascent would grant Liberty Media an option to purchase approximately 10 percent
of the Shares on a fully diluted basis.
On October 1, 1999, Ascent sent a letter to Liberty Media indicating its
willingness to finalize a definitive merger agreement substantially as outlined
in the September 28 letter, without the option. During October 1999,
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management and Ascent's legal advisors negotiated with representatives of
Liberty Media, AT&T and their respective legal advisors
On October 20, 1999, Liberty Media, AT&T and Ascent executed a definitive
merger agreement (the "October Merger Agreement") pursuant to which Liberty
Media would acquire Ascent in an all-stock merger transaction. In the merger,
each Share was to be converted into 0.4626 shares of LGMA. The transaction was
conditioned upon the sale of the Sports Assets to The Sturm Group pursuant to
the Sturm Agreement.
After the execution of the October Merger Agreement, the agreement between
Ascent and The Sturm Group was renegotiated. In connection with such
renegotiation, on October 31, 1999, Liberty Media agreed not to terminate the
October Merger Agreement while Liberty Media and Ascent continued to renegotiate
the October Merger Agreement in light of the changes to the sale of the Sports
Assets. In late November, as the likelihood increased that the sale of the
Sports Assets would not occur, representatives of Liberty Media and Ascent
attempted to negotiate a mutually acceptable transaction in which Liberty Media
could acquire OCC even if Ascent did not sell the Sports Assets.
On November 29, 1999, Liberty Media informed Ascent that it was electing to
terminate the October Merger Agreement. On this same date, Ascent set a deadline
of December 1, 1999 for The Sturm Group to reach an agreement with the City on
all outstanding issues related to the sale of the Sports Assets.
On December 1, 1999, Ascent announced that the Sturm Agreement had been
terminated.
On December 21, 1999, Ascent announced that it was continuing to seek a
qualified buyer for the Sports Assets with the continued assistance of Allen and
Wasserstein. Ascent also announced that it was exploring other strategic
alternatives in response to the termination of the October Merger Agreement,
which alternatives could include a sale of OCC or ANS, other transactions
involving OCC or other transactions involving the entire company with the
continued assistance of DLJ.
In early 2000, Liberty Media was approached by several parties expressing
an interest in acquiring the Sports Assets but not Ascent's other operations,
including its OCC position. In light of those discussions and its interest in
Ascent's OCC interest and other assets, Liberty Media decided to try to
formulate a plan to acquire Ascent and then sell the Sports Assets. Liberty
Media concluded that such a transaction was feasible and that it could
successfully consummate a sale of the Sports Assets, although no such
transaction has been agreed to.
On Friday, February 18, 2000, representatives of Liberty Media met with
representatives of Ascent, including Charles Neinas, Ascent's chairman, and DLJ.
Liberty Media's representatives delivered a letter outlining a transaction in
which Liberty Media would acquire all of the Shares for $14.00 in cash in a
two-step transaction contemplating a first-step tender offer. Liberty Media's
representatives also said that if Ascent was not prepared to negotiate a
definitive merger agreement on the terms set forth in the proposal by the
opening of the public markets on Tuesday, February 22, 2000 (Monday being a
holiday), then Liberty Media would announce a tender offer for up to 14% of the
Shares. DLJ and Ascent's representatives then spoke with Liberty Media's
representatives but were unable to reach an agreement that both parties were
prepared to accept. Liberty Media's representatives departed and indicated that
they would be available over the weekend if Ascent wanted to reopen the
negotiations.
On February 19, representatives of Ascent requested an increase in the cash
consideration being offered and also requested that Liberty Media's offer to
purchase would not be conditioned on the absence of a subsequent material
adverse change to Ascent. Liberty Media agreed to increase the consideration to
$15.25 per Share and stated that there would not be a material adverse change
condition. Through the holiday weekend of February 19-21, 2000, representatives
of Liberty Media and Ascent held discussions that led to the negotiation of a
definitive agreement. On February 22, 2000, Liberty Media and Ascent executed
the Merger Agreement under which Liberty Media will acquire Ascent as described
herein.
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12. PURPOSE OF THE OFFER; PLANS FOR ASCENT; ASCENT INDENTURE; THE MERGER
AGREEMENT
PURPOSE
The purpose of the Offer and the Merger is to acquire control of, and the
entire equity interest in, Ascent. The Offer, as the first step in the
acquisition of Ascent, is intended to facilitate the acquisition of all
outstanding Shares. The purpose of the Merger is to acquire all of the capital
stock of Ascent not purchased pursuant to the Offer or otherwise. If the
Purchaser owns a majority of the issued and outstanding Shares following the
consummation of the Offer, it will have the ability under the DGCL to approve
the Merger without the approval of the holders of any other Shares.
PLANS FOR ASCENT
In connection with the Offer, Liberty Media has reviewed, and will continue
to review, various possible business strategies that Ascent may pursue in the
event that the Purchaser acquires control of Ascent, whether pursuant to the
Offer, the Merger or otherwise. Such strategies could include, among other
things, changes in Ascent's business, corporate structure, capitalization or
management.
The Purchaser and Liberty Media intend to continue discussions with
potential buyers of the Sports Assets with a view to consummating such a sale
within the foreseeable future. The Purchaser and Liberty Media believe that a
transaction can be achieved, but if that process is not successful, the
Purchaser and Liberty Media will consider other business strategies respecting
the Sports Assets. Any such sale would require the consents of the NBA and the
NHL, and depending on the manner in which it is structured, the City and County
of Denver.
ASCENT INDENTURE
Ascent is a party to an Indenture dated as of December 22, 1997 with The
Bank of New York, as trustee (the "Indenture"). Pursuant to the Indenture,
Ascent has outstanding $225 million aggregate principal amount at maturity of
11 7/8% Senior Secured Discount Notes Due 2004 (the "Notes"). Under the
Indenture, if a "change of control" (as defined in the Indenture) of Ascent
occurs, Ascent is required to make an offer to repurchase the Notes at 101% of
Accreted Value (as defined in the Indenture) within 90 days of the change of
control. At June 15, 2000, Accreted Value will be $749.5 per $1,000 aggregate
principal amount. A change of control (as defined in the Indenture) will occur
if the Minimum Condition is satisfied and the Purchaser purchases the tendered
Shares.
THE MERGER AGREEMENT
The Merger Agreement provides that, following the satisfaction or waiver of
the conditions described below under "-- Conditions to the Merger," the
Purchaser will be merged with and into Ascent, and each issued Share (other than
(i) Shares owned by Liberty Media, the Purchaser, Ascent or any other subsidiary
of Liberty Media or Ascent, or (ii) dissenting Shares) will be cancelled and
converted into the right to receive from the Surviving Corporation an amount in
cash equal to $15.25. The "Surviving Corporation" of the Merger will be Ascent.
Vote Required To Approve Merger. The DGCL requires the Ascent Board and the
holders of a majority of the outstanding Shares (including those owned by us) to
approve the Merger and the Merger Agreement. The Ascent Board has given its
approval; consequently, only the approval by Ascent's stockholders is required.
Under the DGCL and Ascent's charter, if we acquire, through the Offer or
otherwise, at least a majority of the outstanding Shares (which will be the case
if the Minimum Condition is satisfied and we accept for payment the Shares
tendered pursuant to the Offer), we would have sufficient voting power to effect
the Merger through our sole written consent and without the affirmative vote of
any other stockholder of Ascent or the holding of a meeting of stockholders.
Conditions to the Merger. The Merger Agreement provides that the respective
obligations of each of the Purchaser, Liberty Media and Ascent to effect the
Merger are subject to the satisfaction or waiver of the following conditions:
(a) the Merger Agreement and the Merger having been approved and adopted by the
requisite vote of the stockholders of Ascent to the extent required by the DGCL
and Ascent's charter; (b) any applicable waiting period under the HSR Act having
expired or been terminated; (c) no injunction, restraining order or decree
issued or entered by any governmental authority, or other legal restraint or
prohibition, shall be in effect preventing or
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materially restraining consummation of the Merger Agreement; and (d) the
Purchaser shall have purchased all Shares validly tendered and not withdrawn
pursuant to the Offer, provided, however, that neither Liberty Media nor the
Purchaser may invoke this last condition if the Purchaser fails to purchase any
Shares validly tendered and not withdrawn pursuant to the Offer in violation of
the terms of the Merger Agreement or the Offer.
Termination of the Merger Agreement. The Merger Agreement may be terminated
at any time prior to the effective time of the Merger (the "Effective Time")
notwithstanding any prior approval by the stockholders of Ascent:
(i) by mutual written consent duly authorized by the Board of
Directors of Liberty Media, the Purchaser and the Ascent Board prior to
date of the election or appointment of the Purchaser's designees to the
Ascent Board as set forth below under "-- Board of Directors" (the
"Purchaser's Election Date"); or
(ii) by Liberty Media or Ascent if
(a) the Minimum Condition has not been satisfied during a 10
business day extension of the Offer following the initial Expiration
Date, but all other conditions have been satisfied; or
(b) any court of competent jurisdiction in the United States or
other governmental authority shall have issued an order, decree, ruling
or taken any other action restraining, enjoining or otherwise
prohibiting acceptance for payment of, or payment for, Shares pursuant
to the Offer or the Merger and such order, decree, ruling or other
action shall have become final and nonappealable; or
(iii) by Liberty Media, if due to an occurrence or circumstance that
results in a failure to satisfy any condition set forth in Section 14, the
Purchaser shall have (a) failed to commence the Offer within 10 days
following the date of the Merger Agreement or (b) terminated the Offer
without having accepted any Shares for payment thereunder, unless such
failure was caused by or resulted from the failure of Liberty Media or the
Purchaser to perform in any material respect any material covenant or
agreement of either of them contained in the Merger Agreement or the
material breach by Liberty Media or the Purchaser of any material
representation or warranty of either of them contained in the Merger
Agreement; or
(iv) by Ascent, upon approval of the Ascent Board, if
(a) the Purchaser shall have (A) failed to commence the Offer
within 10 days following the date of the Merger Agreement or (B)
terminated the Offer without having accepted any Shares for payment
thereunder, unless such failure to pay for Shares shall have been caused
by or resulted from the failure of Ascent to satisfy the conditions set
forth in paragraphs (f) or (g) of Section 14;
(b) prior to the purchase of Shares pursuant to the Offer, the
Ascent Board shall have withdrawn or modified in a manner adverse to
Liberty Media or the Purchaser its approval or recommendation of the
Offer, the Merger or the Merger Agreement in order to approve any bona
fide written Alternative Proposal (as defined below) to acquire,
directly or indirectly, more than 50% of the shares of Shares then
outstanding or all or substantially all the assets of Ascent and that
the Ascent Board determines in good faith, after taking into account the
advice of a financial advisor of nationally recognized reputation, and
taking into account all the terms and conditions of the Alternative
Proposal, is more favorable to Ascent's stockholders than the Offer and
the Merger and for which financing, to the extent required, is then
fully committed or reasonably determined to be available by the Ascent
Board (a "Superior Proposal"); provided, that (x) Ascent has made
payment to Liberty Media of $18 million and (y) has deposited $2 million
with a mutually acceptable escrow agent for reimbursement of Liberty
Media's and Purchaser's expenses; or
(c) Liberty Media or the Purchaser shall have breached in any
material respect any of their respective representations, warranties,
covenants or other agreements contained in the Merger Agreement, which
failure to perform is incapable of being cured or has not been cured
within 20 days after the giving of written notice to Liberty Media or
the Purchaser, as applicable, except, in any case, such failures that
are not reasonably likely to affect adversely the ability of Liberty
Media or the Purchaser to complete the Offer or the Merger.
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No Solicitation. The Merger Agreement provides that Ascent will not,
directly or indirectly, through any subsidiary, affiliate, officer, director,
employee, agent or representative or otherwise (a) solicit or initiate proposals
or offers from, furnish any non-public information to, or negotiate with, any
person in favor of, or (b) approve, vote for, recommend or execute, or permit
Ascent or any of its subsidiaries to execute, any agreements or understandings,
with respect to any proposal (other than as contemplated by the Merger Agreement
or otherwise proposed by Liberty Media or its affiliates) for (i) a merger,
consolidation, share exchange, reorganization, other business combination,
recapitalization or similar transaction involving Ascent or any of its
subsidiaries, (ii) the acquisition, directly or indirectly, of an equity
interest representing greater than 20% of the voting securities of Ascent or any
of its subsidiaries, (iii) the acquisition of a substantial portion of any of
the assets of Ascent or any of its subsidiaries (including without limitation
Ascent's interests in OCC), (iv) any transfer or sale of all or any material
part of the assets related to the Sports Assets, or (v) any transaction the
effect of which would be reasonably likely to prohibit, restrict or delay the
consummation of the Offer or the Merger or any of the other transactions
contemplated by the Merger Agreement (an "Alternative Proposal"); provided,
however, that the foregoing provision does not prohibit Ascent or the Ascent
Board, to the extent the Ascent Board determines in its good faith judgment that
it is required by its fiduciary duties under applicable law after taking into
account the advice of Ascent's outside legal counsel, from providing information
to, participating in discussions or negotiating with any third party that
delivers a Superior Proposal that was not solicited in violation of the
foregoing. Upon execution of the Merger Agreement, Ascent agreed to immediately
cease and terminate all activities, discussions or negotiations with any persons
with respect to any Alternative Proposal. In addition, the Ascent Board agreed
not to recommend that the stockholders of Ascent tender their shares in
connection with a tender offer except to the extent the Ascent Board determines
in its good faith judgment that such a recommendation is required to comply with
the fiduciary duties of the Ascent Board to stockholders under applicable law,
after taking into account the advice of outside legal counsel. In addition,
Ascent is required under the Merger Agreement to notify Liberty Media promptly
after receipt of any Alternative Proposal or of certain requests for non-public
information relating to Ascent or any of its subsidiaries or for access to the
properties, books or records of Ascent or any subsidiary thereof by any person
who is known to be considering making, or has made, an Alternative Proposal.
Liberty Media has requested that Ascent continue to seek a qualified buyer of
the Sports Assets notwithstanding this provision.
Ascent covenants and agrees with Liberty Media that prior to the
effectiveness of the Merger, Ascent and its subsidiaries will not, and will not
agree with any person to (i) voluntarily sell, dispose of, tender or exchange
any shares of OCC Stock owned by Ascent or any subsidiary of Ascent (including
in connection with a tender offer, exchange offer or similar transaction) (the
"Company OCC Shares"), (ii) vote, or execute a written consent or proxy with
respect to Company OCC Shares, in favor of any acquisition by any person of OCC,
of any equity interest in OCC, or of a material portion of the assets of OCC (an
"OCC Alternative Transaction") or (iii) publicly recommend any OCC Alternative
Transaction or otherwise express an intention to take any of such actions;
provided that Ascent's obligations to cause its representatives on the Board of
Directors of OCC (or any committee thereof) to take any action (or to refrain
from taking any action) in compliance with this Section shall be subject in all
respects to such persons' fiduciary duties under applicable law.
Termination Fee; Fees and Expenses. The Merger Agreement provides that
Ascent will pay Liberty Media the sum of (x) Liberty Media's expenses actually
incurred in an amount not to exceed $2 million and (y) $18 million (the
"Termination Fee") upon demand if (i) Liberty Media or the Purchaser terminates
the Merger Agreement pursuant to subparagraph (iii) under "-- Termination of the
Merger Agreement" as a result of conditions set forth in paragraph (e) (ii),
(iii) or (iv) of Section 14; or (ii) prior to any termination of the Merger
Agreement (other than by Ascent pursuant to subsection (c) of subparagraph (iv)
under "-- Termination of the Merger Agreement"), an Alternative Proposal or OCC
Alternative Transaction shall have been made and within 12 months of such
termination, a transaction constituting an Alternative Proposal or OCC
Alternative Transaction is consummated or Ascent enters into or causes OCC to
enter into an agreement with respect to, approves or recommends or takes any
action to facilitate such proposal. Except as set forth above in this paragraph,
all other costs and expenses incurred in connection with the Merger Agreement
and the transactions are to be paid by the party incurring such expenses,
whether or not any transaction is consummated.
Conduct of Business. The Merger Agreement provides that from the date of
the Merger Agreement until the Purchaser's Election Date, Ascent will (and will
cause its subsidiaries to), conduct its business in the ordinary
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course of business and consistent with past practices, preserve intact its
business organization, preserve in full force and effect its licenses, keep
available the services of its present officers and key employees, and preserve
the goodwill of those having business relationships with it. Ascent is obligated
to confer on a regular basis with Liberty Media, report on operational matters
and promptly advise Liberty Media of any material adverse change. The Merger
Agreement also contains specific restrictive covenants as to certain
impermissible activities of Ascent prior to the Purchaser's Election Date
without the prior consent of Liberty Media, relating to among other things,
amendments to its organizational documents, issuances or sales of its
securities, changes in capital structure, dividends and other distributions,
repurchases or redemptions of securities, changes to material contracts,
material acquisitions or dispositions, increases in compensation or adoption of
new benefit plans, changes in accounting methods, tax elections, settlement of
litigation, incurrence of certain indebtedness, and certain other material
events or transactions.
Board of Directors. The Merger Agreement provides that promptly upon the
purchase of and payment for Shares by the Purchaser pursuant to the Offer, the
Purchaser shall be entitled to designate up to such number of directors, rounded
up to the next whole number, on the Ascent Board as will give the Purchaser
representation on the Ascent Board equal to the product of the total number of
directors on the Ascent Board (giving effect to the directors elected pursuant
to this provision) multiplied by the percentage that the aggregate number of
Shares beneficially owned by the Purchaser and its affiliates bears to the total
number of Shares then outstanding. Ascent has agreed that it will promptly take
all actions necessary to cause the Purchaser's designees to be so elected as
directors of Ascent, including increasing the size of the Ascent Board or
securing the resignations of incumbent directors or both. The Merger Agreement
provides that at such times, Ascent shall also use its best efforts to cause
persons designated by the Purchaser to constitute the same percentage as persons
designated by the Purchaser shall constitute of the Ascent Board of (i) each
committee of the Ascent Board (some of whom may be required to be independent as
required by applicable law), (ii) each board of directors of each domestic
subsidiary (including OCC, realizing that Ascent has the right to appoint only a
majority of the OCC board) and (iii) each committee of each such board, in each
case only to the extent permitted by applicable law. Notwithstanding the
foregoing, the Merger Agreement provides that until the time the Purchaser
acquires a majority of the then outstanding Shares on a fully diluted basis,
Ascent shall use its best efforts to ensure that all the members of the Ascent
Board and each committee of the Ascent Board and such boards and committees of
the domestic subsidiaries as of the date hereof who are not employees of Ascent
shall remain members of the Ascent Board and of such boards and committees.
Stock Options; Stock Appreciation Rights. At the Effective Time, each
outstanding option to purchase Shares or other similar interest (collectively,
the "Options") granted under any Ascent stock plan, whether or not then
exercisable or vested, will be cancelled and, in exchange therefor, each holder
of such Option shall receive an amount in cash in respect thereof, if any, equal
to the product of (i) the excess, if any, of $15.25 over the per share exercise
price thereof and (ii) the number of shares subject thereto. At the Effective
Time, each outstanding stock appreciation right ("SAR") granted under any Ascent
stock plan, whether or not then exercisable or vested, will be cancelled and, in
exchange therefor, each holder of such SAR shall receive an amount in cash in
respect thereof, if any, equal to the product of (i) the excess, if any, of
$15.25 over the per share exercise price thereof and (ii) the number of shares
subject thereto.
Employee Benefit Matters. The Merger Agreement provides that neither
Liberty Media nor the Surviving Entity shall be required to maintain any Ascent
plan after the Effective Time. Liberty Media agrees to cause the Surviving
Entity to assume and honor without modification the severance and cash severance
payment provisions of certain specified employment agreements and change of
control severance plan of Ascent (the "Employee Severance Agreements"), with any
cash severance payments pursuant thereto to be made in a lump sum not later than
the Effective Time. Each of Liberty Media and Ascent acknowledges that the
consummation of the Offer as provided herein will constitute a "Change of
Control" for purposes of the Employee Severance Agreements and, accordingly, as
of the Effective Time, each of the individuals party to such agreements will be
entitled to (x) a cash severance payment as provided in such agreements in the
manner described in the previous sentence, (y) provision of the other fringe
benefits provided in such agreements and (z) accelerated vesting of the stock
appreciation rights and options with respect to Ascent Common Stock held by such
individuals as provided in such agreements. Prior to the Closing, Ascent shall
take such action as is necessary in accordance with the terms of the Employee
Severance Agreements
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to terminate all individuals covered by such agreements, effective as of the
Effective Time, subject to the making of the cash severance payments and
provisions for the other benefits referred to earlier in this paragraph.
Indemnification, Exculpation and Insurance. The Merger Agreement provides
that from and after the Effective Time, Liberty Media and the Surviving Entity
will jointly and severally indemnify, defend and hold harmless the present and
former officers, directors and employees of Ascent and any of its subsidiaries,
and any person who is or was serving at the request of Ascent as an officer,
director or employee or agent of another person (each, an "Indemnified Party"
and together, the "Indemnified Parties") (and will also advance expenses as
incurred to the fullest extent permitted under the DGCL, provided that the
person to whom expenses are advanced provides an undertaking to repay such
advances if it is ultimately determined that such person is not entitled to
indemnification), against (i) all losses, costs, expenses, claims, damages,
judgments or liabilities in connection with any claim, action, suit, proceeding
or investigation based on the fact that the Indemnified Party is or was an
officer, director or employee of Ascent or any of its subsidiaries pertaining to
any matter existing or occurring before or at the Effective Time (the
"Indemnified Liabilities") and (ii) all Indemnified Liabilities pertaining to
the transactions contemplated by the Merger Agreement, in each case to the
fullest extent permitted under the DGCL; provided, however, that such
indemnification will be provided only to the extent any directors' and officers'
liability insurance policy of Ascent or its subsidiaries does not provide
coverage and actual payment thereunder with respect to the matters that would
otherwise be subject to indemnification hereunder. The Surviving Entity shall,
and Liberty Media shall cause the Surviving Entity to, maintain in effect for
not less than three years after the Effective Time the current policies of
directors' and officers' liability insurance maintained by Ascent and Ascent's
subsidiaries with respect to matters occurring prior to or at the Effective
Time; provided, however, that (i) the Surviving Entity may substitute therefor
policies of at least the same coverage containing terms and conditions which are
no less advantageous to the Indemnified Parties and (ii) the Surviving Entity
shall not be required to pay an annual premium for such insurance in excess of
three times the last annual premium paid prior to February 22, 2000, but in such
case will purchase the maximum coverage for such amount. Neither Liberty Media
nor the Surviving Entity will be liable for any settlement effected without its
prior written consent, which consent, however, will not be unreasonably withheld
or delayed.
Reasonable Efforts; Notification. The Merger Agreement provides that each
of Ascent, Liberty Media and the Purchaser agree to use reasonable efforts to
take, or cause to be taken, all actions, and to do, or cause to be done, all
things reasonably necessary, proper or advisable to consummate and make
effective the transactions contemplated by the Merger Agreement as soon as
reasonably practicable. These obligations include, among other things and
subject to certain exceptions, cooperating with and providing reasonable
assistance to each other in (i) the preparation and filing of any documents with
the Commission; (ii) using commercially reasonable efforts to obtain all
necessary consents, approvals, waivers, licenses or permits, and giving all
necessary notices to and making all necessary filings with any governmental
entity or other person required to be obtained or made by Liberty Media, the
Purchaser, Ascent or any of their subsidiaries in connection with the taking of
any action contemplated by the Merger Agreement; (iii) using commercially
reasonable efforts to lift certain types of permanent or preliminary injunctions
or restraining orders or decrees; and (iv) providing information and making all
applications and filings as may be necessary or reasonably requested in
connection with the Merger Agreement.
Competitor Transaction. The Merger Agreement contains a covenant
prohibiting Liberty Media and its controlled subsidiaries from, at any time
prior to the earlier of the termination of the Merger Agreement or the Effective
Time, effecting or entering into any agreement to effect a merger,
consolidation, asset disposition, recapitalization or another transaction
resulting in the transfer of securities or assets of LodgeNet Entertainment
Corporation.
Representations and Warranties. The Merger Agreement contains various
customary representations and warranties from each of the parties.
Amendment; Extension; Waiver. The Merger Agreement may be amended by the
Boards of Directors of all the parties, at any time before or after approval and
adoption of the Merger Agreement and the Merger by the stockholders of Ascent,
but, after any such approval by the stockholders of Ascent, no amendment may be
made that by law requires further approval by such stockholders of Ascent
without such further approval. At any time prior to the Effective Time, the
parties, by action taken or authorized by each such party's Board of Directors,
may, to the extent legally allowed, (i) extend the time specified herein for the
performance of any of the obligations of the other party, (ii) waive any
inaccuracies in the representations and warranties of the other party contained
in the Merger
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Agreement, (iii) waive compliance by the other party with any of the agreements
or covenants of such other party contained in the Merger Agreement, or (iv)
waive compliance with any condition to such waiving party's obligation to
consummate the transactions contemplated by the Merger Agreement or to any other
obligation of such party.
The foregoing summary of the Merger Agreement is qualified in its entirety
by reference to the Merger Agreement, a copy of which is filed as Exhibit (d) to
the Schedule TO. The Merger Agreement should be read in its entirety for a more
complete description of the matters summarized above.
APPRAISAL RIGHTS
The holders of Shares do not have appraisal rights as a result of the
Offer. However, if the Merger is consummated, holders of Shares at the Effective
Time will have certain rights pursuant to the provisions of Section 262 of the
DGCL ("Section 262") to dissent and demand appraisal of their Shares. Under
Section 262, dissenting stockholders who comply with the applicable statutory
procedures will be entitled to receive a judicial determination of the fair
value of their Shares (exclusive of any element of value arising from the
accomplishment or expectation of the Merger) and to receive payment of such fair
value in cash, together with a fair rate of interest, if any. Any such judicial
determination of the fair value of Shares could be based upon factors other
than, or in addition to, the price per Share to be paid in the Merger or the
market value of the Shares. The value so determined could be more or less than
the price per Share to be paid in the Merger.
The foregoing summary of Section 262 does not purport to be complete and is
qualified in its entirety by reference to Section 262. FAILURE TO FOLLOW THE
STEPS REQUIRED BY SECTION 262 OF THE DGCL FOR PERFECTING APPRAISAL RIGHTS MAY
RESULT IN THE LOSS OF SUCH RIGHTS.
GOING PRIVATE TRANSACTIONS
The Commission has adopted Rule 13e-3 under the Exchange Act, which is
applicable to certain "going private" transactions. The Purchaser does not
believe that Rule 13e-3 will be applicable to the Merger unless the Merger is
consummated more than one year after the termination of the Offer. If
applicable, Rule 13e-3 requires, among other things, that certain financial
information concerning the fairness of the Merger and the consideration offered
to minority stockholders in the Merger be filed with the Commission and
disclosed to stockholders prior to the consummation of the Merger.
Except as otherwise described in this Offer to Purchase, the Purchaser and
Liberty Media have no current plans or proposals that would relate to, or result
in, an extraordinary corporate transaction involving Ascent, such as a merger,
reorganization or liquidation involving Ascent or any of its subsidiaries, a
sale or transfer of a material amount of assets of Ascent or any of its
subsidiaries, any change in the present Board of Directors or management of
Ascent including, but not limited to, any plans or proposals to change the
number or term of directors or to fill any existing vacancies on the Board of
Directors, any material change in Ascent's present capitalization or dividend
policy, any other material change in Ascent's corporate structure or business,
causing a class of securities of Ascent to be delisted from a national
securities exchange or to cease to be authorized to be quoted in an inter-dealer
quotation system of a registered national securities association or a class of
equity securities of Ascent becoming eligible for termination of registration
pursuant to Section 12(g)(4) of the Exchange Act.
13. DIVIDENDS AND DISTRIBUTIONS
If on or after the date of the Merger Agreement Ascent (a) splits, combines
or otherwise changes the Shares or its capitalization, (b) acquires Shares or
otherwise causes a reduction in the number of Shares, (c) issues or sells
additional Shares (other than the issuance of Shares reserved for issuance as of
the date of the Merger Agreement under option and employee stock purchase plans
in accordance with their terms as publicly disclosed as of the date of the
Merger Agreement) or any shares of any other class of capital stock, other
voting securities or any securities convertible into or exchangeable for, or
rights, warrants or options, conditional or otherwise, to acquire, any of the
foregoing or (d) discloses that it has taken such action, then, without
prejudice to the Purchaser's rights under Section 14, the Purchaser, in its sole
discretion, may make such adjustments in the purchase price and other terms of
the Offer as it deems appropriate to reflect such split, combination or other
change or action, including, without limitation, the Minimum Condition or the
number or type of securities offered to be purchased.
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If on or after the date of the Merger Agreement Ascent declares or pays any
dividend on the Shares or any distribution (including, without limitation, the
issuance of additional Shares pursuant to a stock dividend or stock split, the
issuance of other securities or the issuance of rights for the purchase of any
securities) with respect to the Shares that is payable or distributable to
stockholders of record on a date prior to the transfer into the name of the
Purchaser or its nominees or transferees on Ascent's stock transfer records of
the Shares purchased pursuant to the Offer, and if Shares are purchased in the
Offer, then, without prejudice to the Purchaser's rights under Section 14, (a)
the purchase price per Share payable by the Purchaser pursuant to the Offer
shall be reduced by the amount of any such cash dividend or cash distribution
and (b) any such non-cash dividend, distribution, issuance, proceeds or rights
to be received by the tendering stockholders will (i) be received and held by
the tendering stockholders for the account of the Purchaser and will be required
to be promptly remitted and transferred by each tendering stockholder to the
Depositary for the account of the Purchaser, accompanied by appropriate
documentation of transfer or (ii) at the direction of the Purchaser, be
exercised for the benefit of the Purchaser, in which case the proceeds of such
exercise will promptly be remitted to the Purchaser. Pending such remittance and
subject to applicable law, the Purchaser will be entitled to all rights and
privileges as owner of any such non-cash dividend, distribution, issuance,
proceeds or rights and may withhold the entire purchase price or deduct from the
purchase price the amount or value thereof, as determined by the Purchaser in
its sole discretion.
14. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer, the Purchaser shall not
be required to accept for payment or, subject to any applicable rules and
regulations of the Commission, including Rule 14e-1(c) promulgated under the
Exchange Act (relating to the obligation of the Purchaser to pay for or return
tendered shares of Common Stock promptly after termination or withdrawal of the
Offer), pay for any Shares tendered pursuant to the Offer, and (subject to any
such rules or regulations and except as provided in the Agreement) may terminate
or amend the Offer and may postpone the acceptance for payment of and payment
for Shares tendered, if (i) the Minimum Condition shall not have been satisfied,
(ii) any applicable waiting period under the HSR Act shall not have expired or
been terminated prior to the expiration of the Offer or (iii) at any time on or
after the date of the Merger Agreement, and prior to the acceptance for payment
of Shares, any of the following conditions shall exist:
(a) there shall have been instituted or be pending any action or
proceeding brought by any governmental entity (i) challenging or seeking to
make illegal, materially delay or otherwise directly or indirectly restrain
or prohibit or make materially more costly the making of the Offer, the
acceptance for payment of, or payment for, any Shares by Liberty Media, the
Purchaser or any other affiliate of Liberty Media pursuant to the Offer, or
the consummation of the Merger, or seeking to obtain material damages in
connection with the Merger; (ii) seeking to prohibit or limit materially
the ownership or operation by Ascent, Liberty Media or any of their
subsidiaries of all or any material portion of the business or assets of
Ascent, or to compel Ascent, to dispose of or hold separate all or any
material portion of the business or assets of Ascent, as a result of the
Transactions; (iii) seeking to impose or confirm limitations on the ability
of Liberty Media, the Purchaser or any other affiliate of Liberty Media to
exercise effectively full rights of ownership of any Shares, including,
without limitation, the right to vote any Shares acquired by the Purchaser
pursuant to the Offer, or otherwise on all matters properly presented to
Ascent's stockholders, including, without limitation, the approval and
adoption of the Merger Agreement and the transactions contemplated thereby,
or making the holding of such Shares illegal or subject to any materially
burdensome requirement or condition; (iv) seeking to prohibit Liberty Media
or any of its subsidiaries from effectively controlling in any material
respect any material portion of the business or operations of Ascent and
its subsidiaries; (v) seeking to require divestiture by Liberty Media, the
Purchaser or any other affiliate of Liberty Media of any Shares; (vi)
prohibiting or unreasonably delaying consummation of the Offer, the Merger
or increasing in any material respect the liabilities or obligations of
Liberty Media arising out of the Merger Agreement, the Offer or the Merger;
or (vii) that otherwise is reasonably likely to materially adversely affect
Ascent and its subsidiaries taken as a whole;
(b) there shall have been issued any permanent or preliminary
injunction or restraining order or decree resulting from any action or
proceeding brought by any person other than any governmental entity that is
reasonably likely to result, directly or indirectly, in any of the
consequences referred to in clauses (i) through (v) of paragraph (a) above;
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(c) there shall have been any statute, rule, regulation, order or
injunction enacted, entered, enforced, promulgated, amended, issued or
deemed applicable to (i) Liberty Media, Ascent or any subsidiary or
affiliate of Liberty Media or Ascent or (ii) the Offer or the Merger, by
any governmental entity, in the case of both (i) and (ii) other than the
routine application of the waiting period provisions of the HSR Act to the
Offer or the Merger that is reasonably likely to result, directly or
indirectly, in any of the consequences referred to in clauses (i) through
(v) of paragraph (a) above;
(d) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on a national securities
exchange in the U.S.; (ii) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States; (iii) any
limitation (whether or not mandatory) by any government or governmental,
administrative or regulatory authority or agency, domestic or foreign, on
the extension of credit by banks or other lending institutions; (iv) a
commencement of a war or armed hostilities or other national or
international calamity directly or indirectly involving the United States;
or (v) in the case of any of the foregoing existing on the date hereof, a
material acceleration or worsening thereof;
(e) (i) it shall have been publicly disclosed or Liberty Media or the
Purchaser shall have otherwise learned that beneficial ownership
(determined for the purposes of this paragraph as set forth in Rule 13d-3
promulgated under the Exchange Act) of 20% or more of the then outstanding
Shares has been acquired by any person, other than Liberty Media or any of
its affiliates; (ii) the Board of Directors shall have withdrawn or
modified in a manner adverse to Liberty Media or the Purchaser the approval
or recommendation of the Offer, the Merger or the Merger Agreement or
approved or recommended any Alternative Proposal or OCC Alternative
Transaction, or any other takeover proposal or any other acquisition of
Shares or OCC Shares other than the Offer and the Merger; (iii) Ascent
shall have entered into any agreement with respect to a Superior Proposal;
or (iv) the Board shall have resolved to do any of the foregoing;
(f) any of the representations and warranties of Ascent set forth in
the Merger Agreement shall not have been true and correct at the date of
the Merger Agreement, and as a result thereof there shall have been, or it
is reasonable to foresee that there will be, a material adverse effect on
the business, assets, results of operations or financial condition of
Ascent and its subsidiaries taken as a whole;
(g) Ascent shall have failed to perform in any material respect any
material obligation or to comply in any material respect with any material
agreement or covenant of Ascent to be performed or complied with by it
under the Merger Agreement;
(h) the Merger Agreement shall have been terminated in accordance with
its terms; and
(i) the Purchaser and Ascent shall have agreed that the Purchaser
shall terminate the Offer or postpone the acceptance for payment of or
payment for Shares thereunder.
Pursuant to the foregoing conditions, if Liberty Media and Ascent are
unsuccessful in obtaining an STA from the FCC, as discussed in Section 15 below,
the Purchaser will not purchase Shares until Long Form Approval has been
obtained from the FCC or Liberty Media is otherwise satisfied, in its sole
discretion, that the Shares can be purchased without violating the
Communications Act. See Section 15 "CERTAIN LEGAL MATTERS -- FCC Approvals and
Regulation."
The foregoing conditions are for the sole benefit of the Purchaser and
Liberty Media and may be asserted by the Purchaser or Liberty Media regardless
of the circumstances giving rise to any such condition or may be waived by the
Purchaser or Liberty Media in whole or in part at any time and from time to time
in their sole discretion. The failure by Liberty Media or the Purchaser at any
time to exercise any of the foregoing rights shall not be deemed a waiver of any
such right; the waiver of any such right with respect to particular facts and
other circumstances shall not be deemed a waiver with respect to any other facts
and circumstances; and each such right shall be deemed an ongoing right that may
be asserted at any time and from time to time.
15. CERTAIN LEGAL MATTERS
Except as described in this Section 15, based on a review of publicly
available filings made by Ascent with the Commission and other publicly
available information concerning Ascent and discussions of representatives of
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Liberty Media with representatives of Ascent, none of the Purchaser, Liberty
Media or Ascent is aware of any license or regulatory permit that appears to be
material to the business of Ascent and its subsidiaries, taken as a whole, that
might be adversely affected by the Purchaser's acquisition of Shares (and the
indirect acquisition of the stock of Ascent's subsidiaries) as contemplated
herein or of any approval or other action by any Governmental Entity that would
be required or desirable for the acquisition or ownership of Shares by the
Purchaser as contemplated herein. Should any such approval or other action be
required or desirable, the Purchaser and Liberty Media currently contemplate
that such approval or other action will be sought, except as described below
under "-- State Takeover Laws." While (except as otherwise expressly described
in this Section 15) the Purchaser does not presently intend to delay the
acceptance for payment of or payment for Shares tendered pursuant to the Offer
pending the outcome of any such matter, there can be no assurance that any such
approval or other action, if needed, would be obtained or would be obtained
without substantial conditions or that failure to obtain any such approval or
other action might not result in consequences adverse to Ascent's business or
that certain parts of Ascent's business might not have to be disposed of if such
approvals were not obtained or such other actions were not taken or in order to
obtain any such approval or other action. If certain types of adverse action are
taken with respect to the matters discussed below, the Purchaser could decline
to accept for payment or pay for any Shares tendered. See Section 14 for a
description of certain conditions to the Offer.
State Takeover Laws. A number of states throughout the United States have
enacted takeover statutes that purport, in varying degrees, to be applicable to
attempts to acquire securities of corporations that are incorporated or have
assets, stockholders, executive offices or places of business in such states. In
Edgar v. MITE Corp., the Supreme Court of the United States held that the
Illinois Business Takeover Act, which involved state securities laws that made
the takeover of certain corporations more difficult, imposed a substantial
burden on interstate commerce and therefore was unconstitutional. In CTS Corp.
v. Dynamics Corp. of America, however, the Supreme Court of the United States
held that a state may, as a matter of corporate law and, in particular, those
laws concerning corporate governance, constitutionally disqualify a potential
acquiror from voting on the affairs of a target corporation without prior
approval of the remaining stockholders, provided that such laws were applicable
only under certain conditions. Subsequently, a number of federal courts ruled
that various state takeover statutes were unconstitutional insofar as they apply
to corporations incorporated outside the state of enactment.
Section 203 of the DGCL, in general, prohibits a Delaware corporation such
as Ascent from engaging in a "Business Combination" (defined as a variety of
transactions, including mergers) with an "Interested Stockholder" (defined
generally as a person that is the beneficial owner of 15% or more of a
corporation's outstanding voting stock) for a period of three years following
the time that such person became an Interested Stockholder unless, among other
things, prior to the time such person became an Interested Stockholder, the
board of directors of the corporation approved either the Business Combination
or the transaction that resulted in the stockholder's becoming an Interested
Stockholder. The Ascent Board, as well as the Board of Directors of OCC, of
which Ascent owns approximately 57%, has approved the Merger Agreement and the
transactions contemplated thereby. Therefore, Section 203 of the DGCL is
inapplicable to the Merger.
Based on information supplied by Ascent, the Purchaser does not believe
that any other state takeover statutes or similar laws purport to apply to the
Offer or the Merger. Neither the Purchaser nor Liberty Media has currently
complied with any other state takeover statute or regulation. The Purchaser
reserves the right to challenge the applicability or validity of any state law
purportedly applicable to the Offer or the Merger and nothing in this Offer to
Purchase or any action taken in connection with the Offer or the Merger is
intended as a waiver of such right. If it is asserted that any state takeover
statute is applicable to the Offer or the Merger and an appropriate court does
not determine that it is inapplicable or invalid as applied to the Offer or the
Merger, the Purchaser might be required to file certain information with, or to
receive approvals from, the relevant state authorities, and the Purchaser might
be unable to accept for payment or pay for Shares tendered pursuant to the
Offer, or be delayed in consummating the Offer or the Merger. In such case, the
Purchaser may not be obligated to accept for payment or pay for any Shares
tendered pursuant to the Offer. See Section 14.
Antitrust. Under the provisions of the HSR Act applicable to the Offer, the
acquisition of Shares under the Offer may be consummated after the expiration of
a 15-calendar day waiting period commenced by the filing by Liberty Media of a
Notification and Report Form with respect to the Offer, unless Liberty Media
receives a request for additional information or documentary material from the
Antitrust Division or the FTC or unless early termina-
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tion of the waiting period is granted. Liberty Media effected an appropriate
filing on February 25, 2000. If, within the initial 15-day waiting period,
either the Antitrust Division or the FTC requests additional information or
material concerning the Offer, the waiting period will be extended and would
expire at 11:59 p.m., New York City time, on the tenth calendar day after the
date of substantial compliance with such request. Only one extension of the
waiting period pursuant to a request for additional information is authorized by
the HSR Act. Thereafter, such waiting period may be extended only by court order
or with the consent of the filing parties. In practice, complying with a request
for additional information or material can take a significant amount of time. In
addition, if the Antitrust Division or the FTC raises substantive issues in
connection with a proposed transaction, the parties frequently engage in
negotiations with the relevant governmental agency concerning possible means of
addressing those issues and may agree to delay consummation of the transaction
while such negotiations continue. Expiration or termination of the applicable
waiting period under the HSR Act is a condition to the Purchaser's obligation to
accept for payment and pay for Shares tendered pursuant to the Offer.
The Merger will not require an additional filing under the HSR Act if the
Purchaser owns 50% or more of the outstanding Shares at the time of the Merger
or if the Merger occurs within one year after the HSR Act waiting period
applicable to the Offer expires or is terminated.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the Purchaser's proposed acquisition
of Ascent. At any time before or after the Purchaser's acquisition of Shares
pursuant to the Offer, the Antitrust Division or the FTC could take such action
under the antitrust laws as it deems necessary or desirable in the public
interest, including seeking to enjoin the purchase of Shares pursuant to the
Offer or the consummation of the Merger or seeking the divestiture of Shares
acquired by the Purchaser or the divestiture of substantial assets of Ascent or
its subsidiaries or Liberty Media or its subsidiaries. Private parties may also
bring legal action under the antitrust laws under certain circumstances. There
can be no assurance that a challenge to the Offer on antitrust grounds will not
be made or, if such a challenge is made, of the result thereof.
FCC Approvals and Regulation. Ascent holds a number of FCC licenses in
connection with the operation of its ANS division, and, therefore, is subject to
regulation by the FCC. Such licenses and renewals thereof are granted when and
if the FCC finds that the public interest, convenience and necessity will be
served thereby. The FCC is also empowered to modify and revoke such licenses,
and deny applications for renewals of such licenses.
The Communications Act prohibits the transfer of control of any licensee,
or the assignment of any license without prior FCC approval. Such approval is
referred to herein as "Long Form Approval." The consummation of the Offer would
result in a transfer of control of Ascent, the holder of such FCC licenses, to
the Purchaser. Thus, unless the parties obtain from the FCC a satisfactory
Special Temporary Authorization (an "STA") permitting the Purchaser to
consummate the Offer and permitting the Purchaser to operate the licensed
facilities on a temporary basis pending review of the parties' "long form"
application, Long Form Approval by the FCC would be required before the Offer
could be consummated.
Liberty Media and Ascent filed on February 25, 2000 a "long form"
application with the FCC seeking Long Form Approval. Interested parties have 30
days after the public notice of acceptance by the FCC for filing of such
application to file petitions to deny approval of the application, and the final
resolution of the application could take several months. Liberty Media and
Ascent have also submitted to the FCC a request for the grant of an STA, which
would permit the Purchaser to consummate the Offer and would allow the Purchaser
to operate the licensed facilities on a temporary basis pending Long Form
Approval by the FCC.
PURSUANT TO THE CONDITIONS SET FORTH IN SECTION 14 ABOVE, IF LIBERTY MEDIA
AND ASCENT ARE UNSUCCESSFUL IN OBTAINING AN STA FROM THE FCC, THE PURCHASER WILL
NOT PURCHASE SHARES UNTIL LONG FORM APPROVAL HAS BEEN OBTAINED FROM THE FCC OR
LIBERTY MEDIA IS OTHERWISE SATISFIED, IN ITS SOLE DISCRETION, THAT THE SHARES
CAN BE PURCHASED WITHOUT VIOLATING THE COMMUNICATIONS ACT.
If, by the initial Expiration Date, the FCC has not granted the parties'
request for an STA, Liberty Media will extend the Offer and retain all tendered
Shares until the new Expiration Date, subject to the terms of the Offer and the
Merger Agreement, and attempt to obtain Long Form Approval. There can be no
assurance that an STA will be obtained from the FCC on satisfactory terms and
conditions or that Long Form Approval will be obtained.
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16. FEES AND EXPENSES
J.P. Morgan Securities Inc. is acting as Dealer Manager in connection with
the Offer. Liberty Media has agreed to pay J.P. Morgan Securities Inc.
reasonable and customary fees for such services. Liberty Media has also agreed
to reimburse J.P. Morgan Securities Inc. for its expenses, including the fees
and reasonable expenses of its counsel in connection with its engagement, and to
indemnify J.P. Morgan Securities Inc. and certain related persons against
certain liabilities and expenses, including certain liabilities under federal
securities laws.
J.P. Morgan Securities Inc. has rendered various investment banking and
other advisory services to Liberty Media and its affiliates in the past and is
expected to continue to render such services for which it has received and will
continue to receive customary compensation from Liberty Media and its
affiliates.
The Purchaser and Liberty Media have retained D. F. King & Co., Inc. to act
as the Information Agent and The Bank of New York to serve as the Depositary in
connection with the Offer. The Information Agent and the Depositary each will
receive reasonable and customary compensation for their services, be reimbursed
for certain reasonable out-of-pocket expenses and be indemnified against certain
liabilities and expenses in connection therewith, including certain liabilities
and expenses under the U.S. federal securities laws.
Neither the Purchaser nor Liberty Media will pay any fees or commissions to
any broker or dealer or other person (other than the Dealer Manager and the
Information Agent) in connection with the solicitation of tenders of Shares
pursuant to the Offer. Brokers, dealers, banks and trust companies will be
reimbursed by the Purchaser upon request for customary mailing and handling
expenses incurred by them in forwarding material to their customers.
17. MISCELLANEOUS
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the laws of such
jurisdiction. Neither the Purchaser nor Liberty Media is aware of any
jurisdiction in which the making of the Offer or the acceptance thereof would
not be in compliance with the laws of such jurisdiction. To the extent the
Purchaser or Liberty Media becomes aware of any state law that would limit the
class of offerees in the Offer, the Purchaser will amend the Offer and,
depending on the timing of such amendment, if any, will extend the Offer to
provide adequate dissemination of such information to holders of Shares prior to
the expiration of the Offer. In any jurisdiction the securities, blue sky or
other laws of which require the Offer to be made by a licensed broker or dealer,
the Offer is being made on behalf of the Purchaser by the Dealer Manager or one
or more registered brokers or dealers licensed under the laws of such
jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER OR LIBERTY MEDIA NOT CONTAINED HEREIN
OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
The Purchaser and Liberty Media have filed with the Commission the Schedule
TO pursuant to Rule 14d-3 under the Exchange Act, together with exhibits,
furnishing certain additional information with respect to the Offer, and may
file amendments thereto. In addition, Ascent has filed the Schedule 14D-9
pursuant to Rule 14d-9 under the Exchange Act, together with exhibits, setting
forth its recommendation with respect to the Offer and the reasons for such
recommendation and furnishing certain additional related information. Such
Schedules and any amendments thereto, including exhibits, should be available
for inspection and copies should be obtainable in the manner set forth in
Section 8 (except that such material will not be available at the regional
offices of the Commission).
LIBERTY AEG ACQUISITION, INC.
February 29, 2000
33
<PAGE> 37
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF
LIBERTY MEDIA CORPORATION AND THE PURCHASER
1. DIRECTORS AND EXECUTIVE OFFICERS OF LIBERTY MEDIA CORPORATION. The
following table sets forth the name of each director and executive officer of
Liberty Media. Unless otherwise indicated below, each occupation set forth below
opposite each person refers to employment with Liberty Media. The business
address of each such person is c/o Liberty Media Corporation, 9197 South Peoria
Street, Englewood, Colorado 80112 and the business telephone number of each such
person is (720) 875-5400, and each such person is a citizen of the United States
of America.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ---- --------------------------------------------------
<S> <C>
John C. Malone....................... Chairman of the Board and a director since 1990. Dr. Malone
has also served, since December 1996, as Chairman of the
Board and a director of TCI Satellite Entertainment, Inc.
Dr. Malone served as Chairman of the Board of TCI from
November 1996 to March 1999, as Chief Executive Officer of
TCI from January 1994 to March 1999, and as President of TCI
from January 1994 to March 1997. Dr. Malone served as Chief
Executive Officer of TCI Communications, Inc., the domestic
cable subsidiary of TCI prior to the AT&T merger ("TCIC"),
from March 1992 to October 1994, and as President of TCIC
from 1973 to October 1994. Dr. Malone is also a director of
AT&T, The Bank of New York, TCI, TCI Satellite
Entertainment, Inc. and At Home Corporation.
Robert R. Bennett.................... President and Chief Executive Officer and a director since
April 1997. Mr. Bennett served as Executive Vice President
of TCI from April 1997 to March 1999. Mr. Bennett served as
Executive Vice President and Chief Financial Officer,
Secretary and Treasurer of Liberty Media Corporation from
June 1995 through March 1997, and as Senior Vice President
of Liberty Media Corporation from September 1991 to June
1995. Mr. Bennett also served as acting Chief Financial
Officer of Liberty Digital, Inc. from June 1997 to July
1997. Mr. Bennett is a director of TV Guide, Inc., Teligent,
Inc. and USA Networks, Inc. and is Chairman of the Board of
Liberty Digital, Inc.
Gary S. Howard....................... Executive Vice President, Chief Operating Officer and a
director since July 1998. Mr. Howard has also served as
Chief Executive Officer of TCI Satellite Entertainment, Inc.
since December 1996. Mr. Howard served as Executive Vice
President of TCI from December 1997 to March 1999; as Chief
Executive Officer, Chairman of the Board and a director of
TV Guide, Inc. from June 1997 to March 1999; and as
President and Chief Executive Officer of TCI Ventures Group,
LLC from December 1997 to March 1999. Mr. Howard served as
President of TV Guide, Inc. from June 1997 to September
1997; as President of TCI Satellite Entertainment, Inc. from
February 1995 through August 1997; as Senior Vice President
of TCIC from October 1994 to December 1996; and as Vice
President of TCIC from December 1991 through October 1994.
Mr. Howard is a director of TV Guide, Inc., Liberty Digital,
Inc., TCI Satellite Entertainment, Inc. and Teligent, Inc.
</TABLE>
S-1
<PAGE> 38
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ---- --------------------------------------------------
<S> <C>
David B. Koff........................ Senior Vice President since February 1998. Mr. Koff has also
served as Vice President and Assistant Secretary of Liberty
Digital, Inc. since January 1998. Mr. Koff served as Vice
President -- Corporate Development of Liberty Media
Corporation from August 1994 to February 1998, and as
special counsel to Liberty Media Corporation from March 1993
to August 1994. Mr. Koff also served as interim President
and Chief Executive Officer of Liberty Digital, Inc. from
May 1997 to January 1998. Mr. Koff is a director of Liberty
Digital, Inc.
Charles Y. Tanabe.................... Senior Vice President and General Counsel since January
1999. Prior to joining Liberty Media Corporation, Mr. Tanabe
was a member of Sherman & Howard L.L.C., a law firm based in
Denver, Colorado, for more than five years.
Carl E. Vogel........................ Senior Vice President since December 1999. Mr. Vogel served
as Executive Vice President/Chief Operating Officer of Field
Operations for AT&T Broadband & Internet Services from June
1999 until joining Liberty Media Corporation. He served as
Chairman and Chief Executive Officer of Primestar, Inc. from
June 1998 to June 1999. From October 1997 to June 1998, Mr.
Vogel was Chief Executive Officer of Star Choice
Communications. From March 1994 to March 1997, he served
first as Executive Vice President and Chief Operating
Officer and later as President of EchoStar Communications
Corporation. Mr. Vogel began his career at Arthur Andersen &
Co. and subsequently held several senior level financial and
operating positions at Jones Intercable, Inc. Mr. Vogel is a
director of Canadian Satellite Communications.
Peter N. Zolintakis.................. Senior Vice President of Tax Strategy since November 1998.
Prior to joining Liberty, Mr. Zolintakis was a partner of
PricewaterhouseCoopers, where he specialized, for more than
five years, in the tax issues relating to corporate mergers,
acquisitions, divestitures and restructurings for clients
primarily in the cable television and high technology
industries.
Vivian J. Carr....................... Vice President since June 1993 and was appointed Secretary
in August 1994. Ms. Carr served as Director of Investor
Relations from March 1991 to June 1993.
Kathryn S. Douglass.................. Vice President since September 1997 and Controller since
September 1993. Ms. Douglass served as Accounting Manager
from October 1991 to September 1993.
David J.A. Flowers................... Vice President and Treasurer since April 1997. Mr. Flowers
served as Vice President -- Portfolio Manager from June 1995
to April 1997. Prior to joining Liberty Media Corporation,
Mr. Flowers held several positions at Toronto Dominion Bank
from August 1989 to June 1995, including Managing Director
in its Media Finance Group.
Paul A. Gould........................ Director since March 1999. Mr. Gould has also served as a
Managing Director and Executive Vice President of Allen &
Company Incorporated, an investment banking services
company, for more than the last five years. Mr. Gould served
as a director of TCI from December 1996 to March 1999 and of
Liberty from November 1992 to August 1994. Mr. Gould is a
director of TCI and Sunburst Hospitality Corporation.
</TABLE>
S-2
<PAGE> 39
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ---- --------------------------------------------------
<S> <C>
Jerome H. Kern....................... Director since March 1999. Mr. Kern served as Vice Chairman
and as a consultant of TCI from June 1998 to March 1999.
Prior to joining TCI, Mr. Kern was Special Counsel with the
law firm of Baker Botts L.L.P. from July 1996 to June 1998
and a senior partner of Baker Botts L.L.P. from September
1992 to July 1996. Mr. Kern served as a director of TCIC
from December 1993 to August 1994. Mr. Kern is a director of
TCI.
John C. Petrillo..................... Director since March 1999. Mr. Petrillo has served as
Executive Vice President of Corporate Strategy and Business
Development for AT&T since May 1996. Mr. Petrillo was the
President of AT&T's Business Communications Services from
1993 to 1995 and also served as AT&T Vice President of
Strategic Planning from 1991 to 1993, AT&T Vice President of
Business Communications Services in 1990, AT&T Services Vice
President in 1987 and AT&T Director of Personnel in 1986.
Mr. Petrillo is a director of TCI and At Home Corporation.
Larry E. Romrell..................... Director since March 1999. Mr. Romrell has also served as a
consultant to Liberty Media Corporation since March 1999.
Mr. Romrell served as Executive Vice President of TCI from
January 1994 to March 1999 and since March 1999 has served
as a consultant to TCI. Mr. Romrell also served, from
December 1997 to March 1999, as Executive Vice President and
Chief Executive Officer of TCI Business Alliance and
Technology Co., a subsidiary of TCI prior to the AT&T merger
that oversaw and developed TCI's technology activities; from
December 1997 to March 1999, as Senior Vice President of TCI
Ventures Group, LLC; and, from September 1994 to October
1997, as President of TCI Technology Ventures, Inc., a
subsidiary of TCI prior to the AT&T merger that invested in
and developed companies engaged in advancing
telecommunications technology. Mr. Romrell served as Senior
Vice President of TCIC from 1991 to October 1994. Mr.
Romrell is a director of TV Guide, Inc. and General
Communication, Inc.
Daniel E. Somers..................... Director since March 1999. Mr. Somers has also served as
Acting Co-Chief Executive Officer of AT&T Broadband &
Internet Services since October 6, 1999 and as Senior
Executive Vice President and Chief Financial Officer of AT&T
since May 1997. Prior to joining AT&T, Mr. Somers served as
Chairman and Chief Executive Officer of Bell Cablemedia, plc
from 1995 to 1997, and as Executive Vice President and Chief
Financial Officer of Bell Canada International, Inc. from
1992 to 1995. Mr. Somers is a member of AT&T's Executive
Council and Operations Group. He is also a director of TCI
and Lubrizol Corporation.
John D. Zeglis....................... Director since October 11, 1999. Mr. Zeglis has also served
as President of AT&T since November 1997. Mr. Zeglis served
as Vice Chairman of AT&T from June to November 1997, General
Counsel and Senior Executive Vice President of AT&T from
1996 to 1997, and Senior Vice President and General Counsel
of AT&T from 1986 to 1996. He is also a director of AT&T,
Helmerich and Payne Corporation, Sara Lee Corporation and
Illinova Corporation.
</TABLE>
S-3
<PAGE> 40
2. DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER. The following table
sets forth the name and position with the Purchaser of each director and
executive officer of the Purchaser. All such positions have been held since the
Purchaser's incorporation in February 2000. The business address of each such
person is Liberty AEG Acquisition, Inc. c/o Liberty Media Corporation, 9197
South Peoria Street, Englewood, Colorado 80112. Further information concerning
the directors and executive officers listed below, each of whom also serves as
an executive officer of Liberty Media Corporation, is provided above.
<TABLE>
<CAPTION>
NAME POSITION WITH THE PURCHASER
- ---- ---------------------------
<S> <C>
John C. Malone....................... Chairman of the Board
Robert R. Bennett.................... President and Chief Executive Officer and a director
Gary S. Howard....................... Executive Vice President, Chief Operating Officer and a
director
</TABLE>
S-4
<PAGE> 41
SCHEDULE II
INFORMATION CONCERNING AT&T CORP. AND THE
DIRECTORS AND EXECUTIVE OFFICERS OF AT&T CORP.
1. INFORMATION CONCERNING AT&T. Liberty Media is a wholly owned subsidiary
of AT&T Corp., a New York corporation. AT&T is among the world's communications
leaders, providing voice, data and video telecommunications services to large
and small businesses, consumers and government entities. AT&T and its
subsidiaries furnish regional, domestic, international, local and Internet
communication transmission services, including cellular telephone and other
wireless services, and cable television services. The principal executive
offices of AT&T are located at 32 Avenue of the Americas, New York, New York
10013-2412.
2. DIRECTORS AND EXECUTIVE OFFICERS OF AT&T. The following table sets forth
the name and present principal occupation or employment, and material
occupations, positions, offices or employments for the past five years of each
director and executive officer of AT&T. Unless otherwise indicated below, each
occupation set forth opposite each person refers to employment with AT&T. The
business address of each such person is c/o AT&T Corp., 32 Avenue of the
Americas, New York, New York 10013-2412, and each such person is a citizen of
the United States of America.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
---- ----------------------------
<S> <C> <C>
1. Directors of AT&T C. Michael Armstrong........... Chairman and Chief Executive Officer, AT&T
Corp. since November 1997. Chairman and
Chief Executive Officer of Hughes
Electronics Corporation, a commercial
electronics, space and telecommunications
company, 1992-1997. Hughes Electronics
Corporation, 200 North Sepulveda Blvd., El
Segundo, CA 90245-0956.
Kenneth T. Derr................ Chairman of the Board, Retired, of Chevron
Corporation, an international oil company;
Chairman and Chief Executive Officer of
Chevron Corporation, 1989-1999. Chevron
Corporation, 575 Market Street, San
Francisco, CA 94105-2856.
M. Kathryn Eickhoff............ President of Eickhoff Economics
Incorporated, an economics consulting
company, since 1987. Eickhoff Economics
Incorporated, 510 LaGuardia Place, 4th
Floor, New York, NY 10012.
Walter Y. Elisha............... Retired Chairman and Chief Executive Officer
of Springs Industries Inc., a textile
manufacturing company, 1981-1997; Chairman,
1983-1998. Springs Industries, Inc., 205 N.
White St., Fort Mill, SC 29715. Phone:
803-547-1500.
George M.C. Fisher............. Chairman of the Board, Eastman Kodak
Company, Chairman and Chief Executive
Officer, 1993-1999. Eastman Kodak Company,
343 State St., Rochester, NY 14650.
Donald V. Fites................ Retired Chairman and Chief Executive
Officer, Caterpillar Inc., an equipment
manufacturer, Chairman and Chief Executive,
1990-1999. Caterpillar Inc., 100 N.E. Adams
Street, Peoria, IL 61629.
</TABLE>
S-5
<PAGE> 42
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
---- ----------------------------
<S> <C> <C>
Amos B. Hostetter, Jr. ........ Chairman of Pilot House Associates, LLC, an
investment firm, since 1997. Pilot House
Associates, the Pilot House, Lewis Wharf,
Boston, MA 02110. Chief Executive Officer of
Media One Group, 1996-1997; Chairman and
Chief Executive Officer, 1980-1996. MediaOne
Group, Inc., 188 Inverness Dr. West,
Englewood, CO 80112.
Ralph S. Larsen................ Chairman and Chief Executive Officer of
Johnson & Johnson, a pharmaceutical, medical
and consumer products company, since 1989.
Johnson & Johnson, 1 Johnson & Johnson
Plaza, New Brunswick, NJ 08933.
John C. Malone................. Chairman of Liberty Media Group, a cable
programming company, since 1990. Former
Chairman 1996-1999, Chief Executive Officer
1994-1999, and President 1994-1997 of
Tele-Communications, Inc. Liberty Media
Group, 9197 S. Peoria St., Englewood, CO
80112.
Donald F. McHenry.............. President of IRC Group, LLC, an
international relations consulting company,
since 1981. The IRC Group, LLC, 1320 19th
Street NW, Suite 410, Washington, D.C.
20036.
Michael I. Sovern.............. President Emeritus and Chancellor, Kent
Professor of Law at Columbia University.
President 1980-1993. Columbia University,
435 West 116th Street, Box B20, New York,
NY, 10027.
Sanford I. Weill............... Chairman and Chief Executive Officer of
Travelers Group, a financial services
company, and its predecessor, Commercial
Credit Company, 1986-1998. Citigroup, Inc.,
153 East 153rd Street, New York, NY, 10043.
Thomas H. Wyman................ Senior Advisor of SBC Warburg Inc.,
1996-1997, an investment banking firm,
Chairman of S.G. Warburg & Co. Inc.,
1992-1996, and Vice Chairman of S.G. Warburg
Group p1c, 1993-1995, Chairman of UB
Investments US Inc., 1989-1996. SBC Warburg,
1 High Timber St., London EC4V 3SB UK.
John D. Zeglis................. Chairman and Chief Executive Officer of AT&T
Wireless Group since December 1999,
President, AT&T Corp. since November 1997;
Vice Chairman of AT&T Corp., June-Nov. 1997,
General Counsel and Senior Executive Vice
President, 1996-1997, Senior Vice President
and General Counsel, 1986-1996.
</TABLE>
S-6
<PAGE> 43
<TABLE>
<CAPTION>
DATE
BECAME
EXECUTIVE
NAME PRESENT TITLE OFFICER
---- ------------- ---------
<S> <C> <C> <C>
2. Executive Officers of
AT&T C. Michael Armstrong........... Chairman of the Board and Chief 10-97
Executive Officer
Harold W. Burlingame........... Executive Vice President, Merger & 9-86
Joint Venture Integration
James W. Cicconi............... General Counsel and Executive Vice 12-98
President, Law & Government Affairs
Mirian Graddick................ Executive Vice President, Human 3-99
Resources
Daniel R. Hesse................ Executive Vice President, and 5-97
President & CEO, AT&T Wireless
Services
Frank Ianna.................... Executive Vice President, and 3-97
President, AT&T Network Services
Michael G. Keith............... Executive Vice President, AT&T 12-98
Wireless Group
Richard J. Martin.............. Executive Vice President, Public 11-97
Relations and Employee
Communication
David C. Nagel................. President, AT&T Labs & Chief 3-97
Technology Officer
Charles H. Noski............... Senior Executive Vice President and 12-99
Chief Financial Officer
John C. Petrillo............... Executive Vice President, Corporate 1-96
Strategy and Business Development
Richard Roscitt................ Executive Vice President and 9-97
President, AT&T Business Services
Daniel E. Somers............... President and CEO -- AT&T Broadband 5-97
John D. Zeglis**............... President, AT&T; Chief Executive 9-86
Officer, AT&T Wireless Group
</TABLE>
All of the above executive officers have held high-level managerial
positions with AT&T or its Affiliates for more than the past five years, except
Messrs. Armstrong, Cicconi, Nagel, Noski and Somers.
Prior to joining AT&T in October 1997, Mr. Armstrong was Chairman and Chief
Executive Officer of Hughes Electronics Corporation, a commercial electronics,
space and telecommunications company, located at 200 Sepulveda Blvd., El
Segundo, California, 90245-0956.
Prior to joining AT&T in September 1998, Mr. Cicconi was a Partner at the
law firm of Akin, Gump, Strauss, Hauer and Field, 1333 New Hampshire Avenue NW,
Suite 400, Washington, D.C., 20036, from 1991.
Prior to joining AT&T in April 1996, Mr. Nagel was with Apple Computer,
Inc., a computer manufacturing firm, located at 1 Infinite Loop, Cupertino,
California, 95014, where he served as Senior Vice President from 1995 and
General Manager from 1988 through 1995.
Prior to joining AT&T in December 1999, Mr. Noski served as President and
Chief Operating Officer of Hughes Electronics Corporation, a commercial
electronics, space and telecommunications company, located at 200 Sepulveda
Blvd., El Segundo, California, 90245-0956, from 1997-1999. He served as Vice
Chairman and CFO for that company from 1996 through 1997 and as Corporate Senior
Vice President and CFO from 1992.
S-7
<PAGE> 44
Prior to joining AT&T in May 1997, Mr. Somers was Chairman and CEO for Bell
Cablemedia, PLC, a cable TV and cable telephone company, Bell Cablemedia, PLC,
Bell Cablemedia House, 5 Limeharbour, London, England E14 9TY, for two years
and, from 1992 to 1995, Mr. Somers was Executive Vice President and CFO for Bell
Canada International, an international telecommunications firm with operations
in Latin America and the Asia Pacific region. Bell Canada International Inc.,
1000, Rue de La Gauchetiere Ouest, Ste. 1100, Montreal, Quebec, H3B 4Y8, Canada.
S-8
<PAGE> 45
SCHEDULE III
LIBERTY MEDIA'S INTERESTS IN SHARES;
RECENT TRANSACTIONS IN SHARES
Liberty Media owns 25,000 Shares, or about 0.1% of the outstanding Shares.
Except as disclosed below, Liberty Media has not engaged in any transaction in
the Shares during the 60 days prior to the date of this Offer to Purchase.
On February 4, 2000, Liberty Media purchased 25,000 Shares at a price per
Share of $11.9375. Such Shares were purchased in the open market through
purchases executed on the Nasdaq National Market.
S-9
<PAGE> 46
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates for Shares
and any other required documents should be sent or delivered by each stockholder
of Ascent or his broker, dealer, commercial bank, trust company or other nominee
to the Depositary as follows:
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: By Facsimile Transmission: By Hand or Overnight Delivery:
(for Eligible Institutions only)
Tender & Exchange Department (212) 815-6213 Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
</TABLE>
To Confirm Facsimile Transmissions:
(For Eligible Institutions Only)
(212) 815-6156
Questions and requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed
Delivery may be directed to the Information Agent or to the Dealer Manager at
their respective telephone numbers and locations listed below. You may also
contact your broker, dealer, bank, trust company or other nominee for assistance
concerning the Offer.
The Information Agent for the Offer is:
D. F. KING & CO., INC.
77 Water Street, 20th Floor
New York, New York 10005
Toll Free (888) 242-8153
Banks and Brokerage Firms Please Call: (212) 269-5550
THE DEALER MANAGER FOR THE OFFER IS:
J.P. MORGAN & CO.
60 WALL STREET
NEW YORK, NEW YORK 10260
TOLL FREE (877) 672-2445
February 29, 2000
<PAGE> 1
EXHIBIT (A)(1)(B)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
ASCENT ENTERTAINMENT GROUP, INC.
PURSUANT TO THE OFFER TO PURCHASE DATED FEBRUARY 29, 2000
BY
LIBERTY AEG ACQUISITION, INC.,
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
LIBERTY MEDIA CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME ON MONDAY, MARCH 27, 2000,
UNLESS THE OFFER IS EXTENDED.
TO: THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: By Facsimile Transmission: By Hand or Overnight Delivery:
(for Eligible Institutions only)
Tender & Exchange Department (212) 815-6213 Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York New York, New York 10286
10286-1248
</TABLE>
To Confirm Facsimile Transmissions:
(for Eligible Institutions only)
(212) 815-6156
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE DOES NOT
CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used if certificates for Shares (as defined
below) are to be forwarded herewith or, unless an Agent's Message (as defined in
Section 2 of the Offer to Purchase (as defined below)) is utilized, if delivery
of Shares is to be made by book-entry transfer to an account maintained by the
Depositary (as defined below) at the Book-Entry Transfer Facility (as defined in
Section 2 of the Offer to Purchase) pursuant to the procedures described in
Section 2 of the Offer to Purchase, or if the Shares are held in the Ascent
Entertainment Group, Inc. BuyDIRECT Plan ("BuyDIRECT") or are Direct
Registration Shares. See Instruction 2. Stockholders who deliver Shares by
book-entry transfer are referred to herein as "Book-Entry Stockholders."
Stockholders whose certificates for Shares are not immediately available or who
cannot deliver either the certificates for, or a Book-Entry Confirmation (as
defined in Section 2 of the Offer to Purchase) with respect to, their Shares and
all other documents required hereby to the Depositary prior to the Expiration
Date (as defined in Section 1 of the Offer to Purchase) must tender their Shares
in accordance with the guaranteed delivery procedures described in Section 2 of
the Offer to Purchase. See Instruction 2. DELIVERY OF DOCUMENTS TO THE
BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
<PAGE> 2
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- ---------------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) SHARE NUMBER OF SHARES NUMBER OF
(PLEASE FILL IN EXACTLY AS NAME(S) APPEAR(S) CERTIFICATE REPRESENTED BY SHARES
ON SHARE CERTIFICATE(S) (ATTACH LIST IF NECESSARY) NUMBER(S)(1) CERTIFICATES(S)(1) TENDERED(2)
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
Total Shares
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Need not be completed by Book-Entry Stockholders, Stockholders holding such
Shares as Direct Registration Shares or through BuyDIRECT.
(2) Unless otherwise indicated, it will be assumed that all Shares represented
by certificates delivered to the Depositary are being tendered. See
Instruction 4.
- --------------------------------------------------------------------------------
BUYDIRECT SHARES
(SEE INSTRUCTION 12)
This section is to be completed ONLY by participants in BuyDIRECT who wish to
tender shares of common stock held in BuyDIRECT.
[ ] Check here to instruct the Depositary to tender on behalf of the undersigned
ALL the shares of common stock credited to the BuyDIRECT account of the
undersigned (including any shares of common stock purchased on or after
February 22, 2000 and credited to such account, which are not reflected on
the pre-addressed label).
[ ] Check here to instruct the Depositary to tender on behalf of the undersigned
the following number of shares of common stock credited to the BuyDIRECT
account of the undersigned: ----------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 3
- --------------------------------------------------------------------------------
DIRECT REGISTRATION SHARES
(SEE INSTRUCTION 13)
[ ] Check here if you are tendering Direct Registration Shares and complete the
following:
Write your DRS number and the number of Direct Registration Shares tendered
in the space provided.
DRS Number----------------------------------------------------------------------
Number of Direct Registration Shares tendered-----------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BOOK-ENTRY TRANSFER
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY
TRANSFER FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution---------------------------------------------------
Account Number------------------------------------------------------------------
Transaction Code Number---------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PRIOR GUARANTEED DELIVERY
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Owners(s)-------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery------------------------------
Name of Institution that Guaranteed Delivery------------------------------------
If delivered by book-entry transfer:
Account Number at Book-Entry Transfer Facility----------------------------------
Transaction Code Number---------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 4
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to Liberty AEG Acquisition, Inc., a Delaware
corporation (the "Purchaser") which is an indirect wholly owned subsidiary of
Liberty Media Corporation, a Delaware corporation, the above-described shares of
common stock, par value $0.01 per share (the "Common Stock"), including the
associated preferred share purchase rights (the "Rights" and, together with the
Common Stock, the "Shares"), of Ascent Entertainment Group, Inc., a Delaware
corporation ("Ascent"), upon the terms and subject to the conditions set forth
in the Purchaser's Offer to Purchase dated February 29, 2000 (the "Offer to
Purchase"), and this Letter of Transmittal (which, together with any amendments
or supplements thereto or hereto, collectively constitute the "Offer"), receipt
of which is hereby acknowledged.
Upon the terms of the Offer, subject to, and effective upon, acceptance for
payment of, and payment for, the Shares tendered herewith in accordance with the
terms of the Offer, the undersigned hereby sells, assigns and transfers to, or
upon the order of, the Purchaser all right, title and interest in and to all the
Shares that are being tendered hereby (and any and all other Shares or other
securities or rights issued or issuable in respect thereof on or after February
22, 2000), and irrevocably constitutes and appoints The Bank of New York (the
"Depositary"), the true and lawful agent and attorney-in-fact of the
undersigned, with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest), to the full extent
of the undersigned's rights with respect to such Shares (and any such other
Shares or securities or rights), (a) to deliver certificates for such Shares
(and any such other Shares or securities or rights) or transfer ownership of
such Shares (and any such other Shares or securities or rights) on the account
books maintained by the Book-Entry Transfer Facility or as Direct Registration
Shares, together, in any such case, with all accompanying evidences of transfer
and authenticity to, or upon the order of, the Purchaser, (b) to present such
Shares (and any such other Shares or securities or rights) for transfer on
Ascent's books and (c) to receive all benefits and otherwise exercise all rights
of beneficial ownership of such Shares (and any such other Shares or securities
or rights), all in accordance with the terms of the Offer.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the tendered
Shares (and any and all other Shares or other securities or rights issued or
issuable in respect of such Shares on or after February 22, 2000 and, when the
same are accepted for payment by the Purchaser, the Purchaser will acquire good
title thereto, free and clear of all liens, restrictions, claims and
encumbrances, and the same will not be subject to any adverse claim. The
undersigned will, upon request, execute any additional documents deemed by the
Depositary or the Purchaser to be necessary or desirable to complete the sale,
assignment and transfer of the tendered Shares (and any and all such other
Shares or securities or rights).
All authority conferred or agreed to be conferred pursuant to this Letter
of Transmittal shall be binding upon the successors, assigns, heirs, executors,
administrators and legal representatives of the undersigned and shall not be
affected by, and shall survive, the death or incapacity of the undersigned.
Except as stated in the Offer to Purchase this tender is irrevocable.
The undersigned hereby irrevocably appoints Gary S. Howard, Charles Y.
Tanabe and John Orr and each of them, and any other designees of the Purchaser,
the attorneys-in-fact and proxies of the undersigned, each with full power of
substitution, to vote at any annual, special or adjourned meeting of Ascent's
stockholders or otherwise in such manner as each such attorney-in-fact and proxy
or his substitute shall in his sole discretion deem proper with respect to, to
execute any written consent concerning any matter as each such attorney-in-fact
and proxy or his substitute shall in his sole discretion deem proper with
respect to, and to otherwise act as each such attorney-in-fact and proxy or his
substitute shall in his sole discretion deem proper with respect to, the Shares
tendered hereby that have been accepted for payment by the Purchaser prior to
the time any such action is taken and with respect to which the undersigned is
entitled to vote (and any and all other Shares or other securities or rights
issued or issuable in respect of such Shares on or after February 22, 2000).
This appointment is effective when, and only to the extent that, the Purchaser
accepts for payment such Shares as provided in the Offer to Purchase. This power
of attorney and proxy are irrevocable and are granted in consideration of the
acceptance for payment of such Shares in accordance with the terms of the Offer.
Upon such acceptance for payment, all prior powers of attorney, proxies and
consents given by the undersigned with respect to such Shares (and any such
other Shares or securities or rights) will, without further action, be revoked
and no subsequent powers of attorney, proxies, consents or revocations may be
given (and, if given, will not be effective) by the undersigned.
The undersigned understands that the valid tender of Shares pursuant to any
of the procedures described in Section 2 of the Offer to Purchase and in the
Instructions hereto will constitute a binding agreement between the undersigned
and the Purchaser upon the terms and subject to the conditions of the Offer.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or return any certificates for
Shares not tendered or accepted for payment in the name(s) of the registered
holder(s) appearing under "Description of Shares Tendered." Similarly, unless
otherwise indicated under "Special Delivery Instructions," please mail the check
for the purchase price and/or return any certificates for Shares not tendered or
accepted for payment (and accompanying documents, as appropriate) to the
address(es) of the registered holder(s) appearing under "Description of Shares
Tendered." In the event that both "Special Delivery Instructions" and "Special
Payment Instructions" are completed, please issue the check for the purchase
price and/or return any certificates for Shares not tendered or accepted for
payment (and any accompanying documents, as appropriate) in the name of, and
deliver such check and/or return such certificates (and any accompanying
documents, as appropriate) to, the person or persons so indicated. Please credit
any Shares tendered herewith by book-entry transfer that are not accepted for
payment by crediting the account at the Book-Entry Transfer Facility designated
above. The undersigned recognizes that the Purchaser has no obligation pursuant
to "Special Payment Instructions" to transfer any Shares from the name of the
registered holder thereof if the Purchaser does not accept for payment any of
the Shares so tendered.
[ ] CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN HAVE
BEEN LOST OR DESTROYED AND SEE INSTRUCTION 11.
Number of Shares represented by the lost or destroyed certificates:
<PAGE> 5
- --------------------------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 5, 6 AND 7)
To be completed ONLY if certificates for Shares not tendered or not
accepted for payment and/or the check for the purchase price of Shares accepted
for payment are to be issued in the name of someone other than the undersigned.
Issue to: [ ] Check [ ] Certificate(s)
Name
- ----------------------------------------------------------
(PLEASE PRINT)
Address
- ----------------------------------------------------------
- ----------------------------------------------------------
(INCLUDE ZIP CODE)
- ----------------------------------------------------------
(TAXPAYER IDENTIFICATION OR
SOCIAL SECURITY NUMBER)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 5, 6 AND 7)
To be completed ONLY if certificates for Shares not tendered or not
accepted for payment and/or the check for the purchase price of Shares accepted
for payment are to be sent to someone other than the undersigned, or to the
undersigned at an address other than that above.
Mail to: [ ] Check [ ] Certificate(s)
Name
- ----------------------------------------------------------
(PLEASE PRINT)
Address
- ----------------------------------------------------------
- ----------------------------------------------------------
(INCLUDE ZIP CODE)
- ----------------------------------------------------------
(TAXPAYER IDENTIFICATION OR
SOCIAL SECURITY NUMBER)
- --------------------------------------------------------------------------------
SIGN HERE
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(SIGNATURE(S) OF STOCKHOLDER(S))
Dated:
- ---------------------------------
(Must be signed by registered holder(s) as name(s) appear(s) on the
Certificate(s) for the Shares or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations or others acting in a
fiduciary or representative capacity, please provide the following information
and see Instruction 5.)
If a holder holds Direct Registration Shares, the person(s) signing above hereby
directs The Bank of New York, as Ascent's transfer agent (the "Transfer Agent"),
to place a stop against the aforementioned number of Shares held as Direct
Registration Shares pending expiration of the Offer. Upon expiration of the
Offer, the Transfer Agent is further directed to follow the directions for
delivery to the Depositary.
Name(s):
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (full title):
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Daytime Area Code and Telephone No.:
- --------------------------------------------------------------------------------
Taxpayer Identification or Social Security No.:
- --------------------------------------------------------------------------------
(SEE SUBSTITUTE FORM W-9)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED -- SEE INSTRUCTIONS 1 AND 5)
- --------------------------------------------------------------------------------
AUTHORIZED SIGNATURE
- --------------------------------------------------------------------------------
NAME (PLEASE PRINT)
- --------------------------------------------------------------------------------
NAME OF FIRM
- --------------------------------------------------------------------------------
ADDRESS
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
- --------------------------------------------------------------------------------
DAYTIME AREA CODE AND TELEPHONE NO.
Dated:
- --------------------------------------------------------------------------------
<PAGE> 6
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES.
Your signature on this Letter of Transmittal must be guaranteed unless (a)
this Letter of Transmittal is signed by the registered holder(s) (which term,
for purposes of this Instruction 1, includes any participant in the Book-Entry
Transfer Facility's system whose name appears on a security position listing as
the owner of the Shares) of Shares tendered herewith and such registered
holder(s) has not completed either the box entitled "Special Payment
Instructions" or the box entitled "Special Delivery Instructions" on this Letter
of Transmittal or (b) if such Shares are tendered for the account of a financial
institution (including most commercial banks, savings and loan associations and
brokerage houses) that is a participant in the Security Transfer Agents
Medallion Program, the New York Stock Exchange Medallion Signature Guarantee
Program or the Stock Exchange Medallion Program (such participant, an "Eligible
Institution"). If a signature is required, it must be provided by an Eligible
Institution. See Instruction 5.
2. REQUIREMENTS OF TENDER.
This Letter of Transmittal is to be completed by stockholders either if
certificates are to be forwarded herewith or, unless an Agent's Message (as
defined below) is utilized, if delivery of Shares is to be made pursuant to the
procedures for book-entry transfer set forth in Section 2 of the Offer to
Purchase or if the Shares are Direct Registration Shares or are held through
BuyDIRECT. For a stockholder validly to tender Shares pursuant to the Offer,
either (a) a Letter of Transmittal (or a facsimile thereof), property completed
and duly executed, together with any required signature guarantees, or, in the
case of a book-entry transfer, an Agent's Message, and any other required
documents, must be received by the Depositary at one of its addresses set forth
herein prior to the Expiration Date and either certificates for tendered Shares
must be received by the Depositary at one of such addresses or Shares must be
delivered pursuant to the procedures for book-entry transfer described herein
(and a Book-Entry Confirmation received by the Depositary) or, in the case of
Direct Registration Shares or BuyDIRECT Shares, the applicable portion of the
Letter of Transmittal above must be properly completed, in each case prior to
the Expiration Date, or (b) the tendering stockholder must comply with the
guaranteed delivery procedures described below and in Section 2 of the Offer to
Purchase.
If your Shares are not immediately available or you cannot deliver your
certificates and all other required documents to the Depositary or complete the
procedures for book-entry transfer prior to the Expiration Date, your tender may
be effected if all the following conditions are met:
(i) your tender is made by or through an Eligible Institution;
(ii) you ensure that a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form provided by us, is received
by the Depositary, as provided below, prior to the Expiration Date; and
(iii) you ensure that the certificates for all tendered Shares, in
proper form for transfer (or a Book-Entry Confirmation with respect to all
such Shares), together with a Letter of Transmittal (or a facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, or, in the case of a book-entry transfer, an Agent's Message,
and any other required documents are received by the Depositary within
three trading days after the date of execution of such Notice of Guaranteed
Delivery. A "trading day" is any day on which the Nasdaq National Market
(the "Nasdaq National Market") operated by the National Association of
Securities Dealers, Inc. (the "NASD") is open for business.
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against the participant.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY,
IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. SHARES WILL BE DEEMED
DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE
OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering stockholders, by execution of
this Letter of Transmittal (or facsimile hereof), waive any right to receive any
notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE.
If the space provided herein is inadequate, the certificate numbers and/or
the number of Shares should be listed on a separate schedule attached hereto.
4. PARTIAL TENDERS (APPLICABLE TO CERTIFICATED STOCKHOLDERS ONLY).
If fewer than all the Shares evidenced by any certificate submitted are to
be tendered, fill in the number of Shares that are to be tendered in the box
entitled "Number of Shares Tendered." In any case, new certificate(s) for the
remainder of the Shares that were evidenced by the old certificate(s) will be
sent to the registered holder, unless otherwise provided in the appropriate box
on this Letter of Transmittal, as soon as practicable after the acceptance for
payment of, and payment for, the Shares tendered herewith. All Shares
represented by certificates delivered to the Depositary will be deemed to have
been tendered unless otherwise indicated.
<PAGE> 7
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS.
If this Letter of Transmittal is signed by the registered holder of the
Shares tendered hereby, the signature must correspond with the name as written
on the face of the certificate(s) without any change whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
If this Letter of Transmittal or any certificates or stock powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and proper evidence
satisfactory to the Purchaser of their authority so to act must be submitted.
When this Letter of Transmittal is signed by the registered owner(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment is to be made to, or
certificates for Shares not tendered or accepted for payment are to be issued
to, a person other than the registered owner(s). Signatures on such certificates
or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the certificates listed, the certificates must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name or names of the registered owner or owners appear on the
certificates. Signatures on such certificates or stock powers must be guaranteed
by an Eligible Institution.
6. STOCK TRANSFER TAXES.
The Purchaser will pay any stock transfer taxes with respect to the
transfer and sale of Shares to it or its order pursuant to the Offer. If,
however, payment of the purchase price is to be made to, or if certificates for
Shares not tendered or accepted for payment are to be registered in the name of,
any person(s) other than the person(s) signing this Letter of Transmittal, the
amount of any stock transfer taxes (whether imposed on the registered owner(s)
or such person(s)) payable on account of the transfer to such person(s) will be
deducted from the purchase price unless satisfactory evidence of the payment of
such taxes or exemption therefrom is submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATES LISTED IN THIS LETTER OF
TRANSMITTAL.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS.
If a check is to be issued in the name of, and/or certificates for Shares
not accepted for payment are to be returned to, a person other than the signer
of this Letter of Transmittal or if a check is to be sent and/or such
certificates are to be returned to a person other than the signer of this Letter
of Transmittal or to an address other than that shown above, the appropriate
boxes on this Letter of Transmittal should be completed. Stockholders tendering
Shares as Direct Registration Shares will have any Shares not accepted for
payment, returned by crediting the appropriate Direct Registration Shares
account.
8. WAIVER OF CONDITIONS.
The Purchaser reserves the right, subject to the terms and conditions
contained in the Merger Agreement and to the applicable rules and regulations of
the Commission, to waive any of the specified conditions of the Offer, in whole
or in part, in the case of any Shares tendered.
9. 31% BACKUP WITHHOLDING.
In order to avoid backup withholding of Federal income tax on payments of
cash pursuant to the Offer, when surrendering Shares in the Offer, you must
unless an exemption applies, provide the Depositary with your correct taxpayer
identification number ("TIN") on Substitute Form W-9 below in this Letter of
Transmittal and certify under penalties of perjury that such TIN is correct and
that such you are not subject to backup withholding. If you do not provide your
correct TIN or fail to provide the certifications described above, the Internal
Revenue Service (the "IRS") may impose a $50 penalty on you and payment of cash
to you pursuant to the Offer may be subject to backup withholding of 31%.
Backup withholding is not an additional income tax. Rather, the amount of
the backup withholding can be credited against the U.S. federal income tax
liability of the person subject to the backup withholding, provided that the
required information is given to the IRS. If backup withholding results in an
overpayment of tax, a refund can be obtained by the stockholder upon filing an
income tax return.
You are required to give the Depositary the TIN (i.e., social security
number or employer identification number) of the record owner of the Shares. If
the Shares are held in more than one name or are not in the name of the actual
owner, consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
number to report.
The box in Part 3 of the Substitute Form W-9 may be checked if the
tendering stockholder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future. If the box in Part 3 is checked,
the stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% on all payments made prior to the time a properly certified TIN is
provided to the Depositary. However, such amounts will be refunded to such
stockholder if a TIN is provided to the Depositary within 60 days.
Certain stockholders (including, among others, all corporations and certain
foreign individuals and entities) are not subject to backup withholding.
Noncorporate foreign stockholders should complete and sign the main signature
form and a Form W-8, Certificate of Foreign Status, a copy of which may be
obtained from the Depositary, in order to avoid backup withholding. See the
enclosed "Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9" for more instructions.
<PAGE> 8
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.
Questions and requests for assistance or additional copies of the Offer to
Purchase, this Letter of Transmittal, the Notice of Guaranteed Delivery and the
Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9 may be directed to the Information Agent at its address set forth
below.
11. LOST, DESTROYED OR STOLEN CERTIFICATES.
If any certificate representing Shares has been lost, destroyed or stolen,
the stockholder should promptly notify the Depositary by checking the box
immediately preceding the special payment/special delivery instructions and
indicating the number of Shares lost. The stockholder will then be instructed as
to the steps that must be taken in order to replace the certificate. This Letter
of Transmittal and related documents cannot be processed until the procedures
for replacing lost or destroyed certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE HEREOF), TOGETHER
WITH ANY REQUIRED SIGNATURE GUARANTEES, OR, IN THE CASE OF A BOOK-ENTRY
TRANSFER, AN AGENT'S MESSAGE, AND ANY OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED
BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE AND EITHER CERTIFICATES FOR
TENDERED SHARES MUST BE RECEIVED BY THE DEPOSITARY OR SHARES MUST BE DELIVERED
PURSUANT TO THE PROCEDURES FOR BOOK-ENTRY TRANSFER OR THE PROVISIONS OF THIS
LETTER OF TRANSMITTAL APPLICABLE TO BUYDIRECT OR DIRECT REGISTRATION SHARES MUST
BE PROPERLY COMPLETED, IN EACH CASE PRIOR TO THE EXPIRATION DATE, OR THE
TENDERING STOCKHOLDER MUST COMPLY WITH THE PROCEDURES FOR GUARANTEED DELIVERY.
12. BUYDIRECT.
If you desire to tender Shares credited to your account under BuyDIRECT,
you should complete the provisions under the caption "BuyDIRECT Shares" above. A
participant in BuyDIRECT may complete such box on only one Letter of Transmittal
submitted by such participant.
If a stockholder tenders Shares held in BuyDIRECT, all such Shares credited
to such stockholder's accounts(s) (including any Shares purchased on or after
February 22, 2000 and credited to such accounts(s), which are not reflected on
the pre-addressed label included herewith) will be tendered, unless otherwise
specified above in the box entitled "BuyDIRECT Shares." In the event that the
box captioned "BuyDIRECT Shares" is not completed, no Shares held in the
tendering stockholder's BuyDIRECT account will be tendered.
13. DIRECT REGISTRATION SHARES.
If you wish to tender Direct Registration Shares, you should complete the
provisions under the caption "Direct Registration Shares" above. A holder of
Direct Registration Shares may complete such box on only one Letter of
Transmittal submitted by such holder.
PAYOR'S NAME: THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT THE RIGHT ------------------------------
AND CERTIFY BY SIGNING AND DATING BELOW. Social Security Number(s)
or
------------------------------
Taxpayer Identification
Number(s)
SUBSTITUTE PART 2 -- CERTIFICATIONS -- Under penalties of perjury, I certify that:
FORM W-9 (1) The number shown on this form is my correct Taxpayer Identification Number (or I am
waiting for a number to be issued to me) and
DEPARTMENT OF THE TREASURY (2) I am not subject to backup withholding because (a) I am exempt from backup withholding
INTERNAL REVENUE SERVICE or (b) I have not been notified by the Internal Revenue Service ("IRS") that I am subject to
backup withholding as a result of a failure to report all interest or dividends or (c)
PAYER'S REQUEST FOR TAXPAYER the IRS has notified me that I am no longer subject to backup withholding.
IDENTIFICATION NUMBER ("TIN")
CERTIFICATION INSTRUCTIONS -- You must cross out item (2) in Part 2 above if you have been
notified by the IRS that you are subject to backup withholding because of under reporting
interest or dividends on your tax returns. However, if after being notified by the IRS that
you were subject to backup withholding you received another notification from the IRS
stating you are no longer subject to backup withholding, do not cross out such item (2). If
you are exempt from backup withholding, check the box in Part 4.
PART 3
SIGNATURE Awaiting TIN [ ]
DATE PART 4
Exempt TIN [ ]
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN
BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE
OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL INFORMATION.
<PAGE> 9
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX
IN PART 3 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (b)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number to the Depositary, all
reportable payments made to me may be subject to a 31% backup withholding tax.
Signature Date
-------------------------------- ------------------
The Information Agent for the Offer is:
D. F. KING & CO., INC.
77 Water Street, 20th Floor
New York, New York 10005
Toll Free (888) 242-8153
Banks and Brokerage Firms Please Call: (212) 269-5550
THE DEALER MANAGER FOR THE OFFER IS:
J.P. MORGAN & CO.
60 WALL STREET
NEW YORK, NEW YORK 10260
TOLL FREE (877) 672-2445
February 29, 2000
<PAGE> 1
EXHIBIT (a)(1)(C)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
ASCENT ENTERTAINMENT GROUP, INC.
As set forth in Section 2 of the Offer to Purchase (as defined below), this
form or one substantially equivalent hereto must be used to accept the Offer (as
defined below) if certificates for shares of Common Stock, par value $.01 per
share (the "Shares"), of Ascent Entertainment Group, Inc., a Delaware
corporation ("Ascent"), are not immediately available or if the procedure for
book-entry transfer cannot be completed on a timely basis or time will not
permit all required documents to reach the Depositary prior to the Expiration
Date (as defined in Section 1 of the Offer to Purchase). This form may be
delivered by hand to the Depositary or transmitted by telegram, facsimile
transmission or mail to the Depositary and must include a guarantee by an
Eligible Institution (as defined in Section 2 of the Offer to Purchase). See
Section 2 of the Offer to Purchase.
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: By Facsimile Transmission: By Hand or Overnight Delivery:
(for Eligible Institutions only)
Tender & Exchange Department (212) 815-6213 Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
</TABLE>
To Confirm Facsimile Transmissions:
(For Eligible Institutions Only)
(212) 815-6156
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS
VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A
VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an Eligible Institution
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
<PAGE> 2
LADIES AND GENTLEMEN:
The undersigned hereby tenders to Liberty AEG Acquisition, Inc., a Delaware
corporation (the "Purchaser"), which is an indirect wholly owned subsidiary of
Liberty Media Corporation, a Delaware corporation, upon the terms and subject to
the conditions set forth in the Purchaser's Offer to Purchase dated February 29,
2000 (the "Offer to Purchase"), and the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute the
"Offer"), receipt of which is hereby acknowledged, the number of Shares set
forth below, all pursuant to the guaranteed delivery procedures described in
Section 2 of the Offer to Purchase.
Number of Shares
- --------------------------------------------------------------------------------
Name(s) of Record Holder(s)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Please Print
Address(es)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Zip Code
Daytime Area Code and Tel. No.:
- -------------------------------------------------------------------------------
Certificate Nos. (if available):
- --------------------------------------------------------------------------------
Signature(s):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated:
- --------------------------------------------------------------------------------
If Shares will be tendered by book-entry transfer:
Account Number at Book-Entry Transfer Facility
- ----------------------------------------------------------------
2
<PAGE> 3
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a participant in the Security Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program or
the Stock Exchange Medallion Program, hereby guarantees to deliver to the
Depositary either the certificates representing the Shares tendered hereby, in
proper form for transfer, or a Book-Entry Confirmation (as defined in the Offer
to Purchase) with respect to such Shares, in any such case together with a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), with any required signature guarantees, or an Agent's Message (as
defined in the Offer to Purchase), and any other required documents, within
three trading days (as defined in the Offer to Purchase) after the date hereof.
Holders whose Shares are Direct Registration Shares or are held through
BuyDIRECT need not deliver certificates for such Shares or comply with the
procedures for book-entry transfer; however, such holders must complete the
appropriate box captioned either "Direct Registration Shares" or "BuyDIRECT
Shares" in the Letter of Transmittal.
The Eligible Institution that completes this form must communicate this
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares to the Depositary within the time period shown herein.
Failure to do so could result in a financial loss to such Eligible Institution.
Name of Firm:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AUTHORIZED SIGNATURE
Name:
- --------------------------------------------------------------------------------
Please Print
Title:
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
Zip Code
Area Code and Tel No.:
- --------------------------------------------------------------------------------
Dated:
- --------------------------------------------------------------------------------
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. CERTIFICATES FOR
SHARES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
3
<PAGE> 1
EXHIBIT (A)(1)(D)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
ASCENT ENTERTAINMENT GROUP, INC.
AT
$15.25 NET PER SHARE
BY
LIBERTY AEG ACQUISITION, INC.,
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
LIBERTY MEDIA CORPORATION
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON MONDAY, MARCH 27, 2000,
UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
February 29, 2000
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by Liberty AEG Acquisition, Inc., a Delaware
corporation (the "Purchaser") and an indirect wholly owned subsidiary of Liberty
Media Corporation, a Delaware corporation ("Liberty Media"), to act as Dealer
Manager in connection with the Purchaser's offer to purchase all outstanding
shares of common stock, par value $.01 per share (the "Shares"), of Ascent
Entertainment Group, Inc., a Delaware corporation ("Ascent"), at $15.25 per
Share, net to the seller in cash, upon the terms and subject to the conditions
set forth in the Purchaser's Offer to Purchase dated February 29, 2000 (the
"Offer to Purchase"), and the related Letter of Transmittal (which, together
with any supplements or amendments thereto, collectively constitute the
"Offer").
Please furnish copies of the enclosed materials to those of your clients
for whom you hold Shares registered in your name or in the name of your nominee.
Enclosed herewith are copies of the following documents:
1. Offer to Purchase dated February 29, 2000;
2. Letter of Transmittal to be used by stockholders of Ascent
accepting the Offer;
3. Letter to Stockholders of Ascent from the Chairman of the Board of
Directors of Ascent, accompanied by Ascent's Solicitation/Recommendation
Statement on Schedule 14D-9;
4. A printed form of letter that may be sent to your clients for whose
account you hold Shares in your name or in the name of a nominee, with
space provided for obtaining such client's instructions with regard to the
Offer;
5. Notice of Guaranteed Delivery;
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
7. Return envelope address to The Bank of New York, the Depositary.
<PAGE> 2
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION DATE THAT NUMBER OF
SHARES THAT, TOGETHER WITH ANY SHARES OWNED BY THE PURCHASER, LIBERTY MEDIA AND
LIBERTY MEDIA'S OTHER DIRECT OR INDIRECT SUBSIDIARIES, WOULD CONSTITUTE AT LEAST
A MAJORITY OF ALL OUTSTANDING SHARES ON A FULLY DILUTED BASIS ON THE DATE OF
PURCHASE, (2) ANY APPLICABLE WAITING PERIOD UNDER THE HART-SCOTT-RODINO
ANTITRUST IMPROVEMENTS ACT OF 1976 HAVING EXPIRED OR BEEN TERMINATED, AND (3)
LIBERTY MEDIA HAVING OBTAINED SPECIAL TEMPORARY AUTHORIZATION OR APPROVAL FROM
THE FEDERAL COMMUNICATIONS COMMISSION FOR THE TRANSFER OF CONTROL OF CERTAIN FCC
LICENSES. CERTAIN OTHER CONDITIONS TO THE OFFER ARE DESCRIBED IN SECTION 14 OF
THE OFFER TO PURCHASE.
WE URGE YOU TO CONTACT YOUR CLIENTS PROMPTLY. PLEASE NOTE THAT THE OFFER
AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON
MONDAY, MARCH 27, 2000, UNLESS EXTENDED.
The Board of Directors of Ascent has approved the Merger Agreement and the
transactions contemplated by the Merger Agreement, including the Offer and the
Merger, and determined that the terms of the Offer and the Merger and the other
transactions contemplated by the Merger Agreement are fair to, and in the best
interests of, the stockholders of Ascent and recommends that the stockholders of
Ascent accept and tender their shares pursuant to the Offer.
The Offer is being made pursuant to the Agreement and Plan of Merger dated
as of February 22, 2000 (the "Merger Agreement"), among the Purchaser, Liberty
Media and Ascent pursuant to which, following the consummation of the Offer and
the satisfaction or waiver of certain conditions, the Purchaser will be merged
with and into Ascent, with Ascent surviving the merger as an indirect wholly
owned subsidiary of Liberty Media (the "Merger"). In the Merger, each
outstanding Share (other than Shares owned by Ascent, the Purchaser, Liberty
Media or any direct or indirect wholly owned subsidiary of Liberty Media or of
Ascent or by stockholders, if any, who are entitled to and who properly exercise
appraisal rights under Delaware law) will be converted into the right to receive
$15.25 per Share, without interest, as set forth in the Merger Agreement and
described in the Offer to Purchase.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by The Bank of New York (the
"Depositary") of (a) certificates for (or a timely Book-Entry Confirmation (as
defined in the Offer to Purchase) with respect to) such Shares, (b) a Letter of
Transmittal (or a facsimile thereof), properly completed and duly executed, with
any required signature guarantees, or, in the case of a book-entry transfer
effected pursuant to the procedures described in Section 2 of the Offer to
Purchase, an Agent's Message (as defined in the Offer to Purchase), and (c) any
other documents required by the Letter of Transmittal. Accordingly, tendering
stockholders may be paid at different times depending upon when certificates for
Shares or Book-Entry Confirmations with respect to Shares are actually received
by the Depositary. THE PURCHASER SHALL NOT HAVE ANY OBLIGATION TO PAY INTEREST
ON THE PURCHASE PRICE FOR TENDERED SHARES, WHETHER OR NOT THE PURCHASER
EXERCISES ITS RIGHT TO EXTEND THE OFFER.
Neither the Purchaser nor Liberty Media will pay any fees or commissions to
any broker or dealer or other person (other than the Dealer Manager (as defined
in the Offer to Purchase) and the Information Agent as described in the Offer to
Purchase) in connection with the solicitation of tenders of Shares pursuant to
the Offer. You will be reimbursed upon request for customary mailing and
handling expenses incurred by you in forwarding the enclosed offering materials
to your customers.
2
<PAGE> 3
Questions and requests for additional copies of the enclosed material may be
directed to the Information Agent or the Dealer Manager at their respective
addresses and telephone numbers set forth on the back cover of the enclosed
Offer to Purchase.
Very truly yours,
J. P. MORGAN & CO.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU OR
ANY OTHER PERSON THE AGENT OF THE PURCHASER, LIBERTY MEDIA, THE DEALER MANAGER,
THE DEPOSITARY, THE INFORMATION AGENT OR ANY AFFILIATE THEREOF OR AUTHORIZE YOU
OR ANY OTHER PERSON TO GIVE ANY INFORMATION OR USE ANY DOCUMENT OR MAKE ANY
STATEMENTS ON BEHALF OF ANY OF THEM WITH RESPECT TO THE OFFER OTHER THAN THE
ENCLOSED DOCUMENTS AND THE STATEMENT CONTAINED THEREIN.
3
<PAGE> 1
EXHIBIT (a)(1)(E)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
ASCENT ENTERTAINMENT GROUP, INC.
AT
$15.25 NET PER SHARE
BY
LIBERTY AEG ACQUISITION, INC.,
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
LIBERTY MEDIA CORPORATION
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON MONDAY, MARCH 27, 2000,
UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
February 29, 2000
To Our Clients:
Enclosed for your consideration is an Offer to Purchase dated February 29,
2000 (the "Offer to Purchase"), and a related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute the
"Offer") relating to an offer by Liberty AEG Acquisition, Inc., a Delaware
corporation (the "Purchaser") and an indirect wholly owned subsidiary of Liberty
Media Corporation, a Delaware corporation ("Liberty Media"), to purchase shares
of common stock, par value $.01 per share (the "Shares"), of Ascent
Entertainment Group, Inc., a Delaware corporation ("Ascent"), at $15.25 per
Share, net to the seller in cash, upon the terms and subject to the conditions
set forth in the Offer. Also enclosed is the Letter to stockholders of Ascent
from the Chairman of the Board of Directors of Ascent accompanied by Ascent's
Solicitation/Recommendation Statement on Schedule 14D-9.
WE ARE THE HOLDER OF RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. A TENDER
OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO
YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR
INFORMATION ONLY AND CANNOT BE USED TO TENDER SHARES HELD BY US FOR YOUR
ACCOUNT.
We request instructions as to whether you wish to tender any of or all the
Shares held by us for your account, pursuant to the terms and conditions set
forth in the Offer.
Your attention is directed to the following:
1. The tender price is $15.25 per Share, net to the seller in cash,
upon the terms and subject to the conditions set forth in the Offer.
2. The Board of Directors of Ascent has approved the Merger Agreement
(as defined below), and the transactions contemplated by the Merger
Agreement, including the Offer and the Merger, and determined that the
Offer and the Merger and the other transactions contemplated by the Merger
Agreement are fair to, and in
<PAGE> 2
the best interests of, the stockholders of Ascent and recommends that the
stockholders of Ascent accept and tender their Shares pursuant to the
Offer.
3. The Offer is being made for all outstanding Shares.
4. The Offer is being made pursuant to the Agreement and Plan of
Merger dated as of February 22, 2000 (the "Merger Agreement"), among the
Purchaser, Liberty Media and Ascent pursuant to which, following the
consummation of the Offer and the satisfaction or waiver of certain
conditions, the Purchaser will be merged with and into Ascent, with Ascent
surviving the merger as an indirect wholly owned subsidiary of Liberty
Media (the "Merger"). In the Merger, each outstanding Share (other than
Shares owned by Ascent, the Purchaser, Liberty Media or any direct or
indirect wholly owned subsidiary of Liberty Media or of Ascent or by
stockholders, if any, who are entitled to and who properly exercise
appraisal rights under Delaware law) will be converted into the right to
receive $15.25 per Share, without interest, as set forth in the Merger
Agreement and described in the Offer to Purchase.
5. The Offer is conditioned upon, among other things, (1) there being
validly tendered and not properly withdrawn prior to the expiration of the
Offer that number of Shares that, together with any Shares owned by the
Purchaser, Liberty Media and Liberty Media's other direct or indirect
subsidiaries, would represent at least a majority of all outstanding Shares
on a fully diluted basis on the date of purchase, (2) any applicable
waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of
1976 having expired or been terminated, and (3) Liberty Media having
obtained special temporary authorization or approval from the Federal
Communications Commission for the transfer of control of certain FCC
licenses. Certain other conditions to the Offer are described in Section 14
of the Offer to Purchase.
6. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on Monday, March 27, 2000, unless the Offer is extended by
the Purchaser.
7. The Purchaser will pay any stock transfer taxes with respect to the
transfer and sale of Shares to it or its order pursuant to the Offer,
except as otherwise provided in Instruction 6 of the Letter of Transmittal.
If you wish to have us tender any of or all your Shares, please so instruct
us by completing, executing, detaching and returning to us the instruction form
set forth below. An envelope to return your instructions to us is enclosed. If
you authorize tender of your Shares, all such Shares will be tendered unless
otherwise specified below. Your instructions to us should be forwarded promptly
to permit us to submit a tender on your behalf prior to the expiration of the
Offer.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by The Bank of New York (the
"Depositary"), of (a) certificates for (or a timely Book-Entry Confirmation (as
defined in the Offer to Purchase) with respect to) such Shares, (b) a Letter of
Transmittal (or a facsimile thereof), properly completed and duly executed, with
any required signature guarantees, or, in the case of a book-entry transfer
effected pursuant to the procedures described in Section 2 of the Offer to
Purchase, an Agent's Message (as defined in the Offer to Purchase), and (c) any
other documents required by the Letter of Transmittal. Accordingly, tendering
stockholders may be paid at different times depending upon when certificates for
Shares or Book-Entry Confirmations with respect to Shares are actually received
by the Depositary. THE PURCHASER SHALL NOT HAVE ANY OBLIGATION TO PAY INTEREST
ON THE PURCHASE PRICE FOR TENDERED SHARES, WHETHER OR NOT THE PURCHASER
EXERCISES ITS RIGHT TO EXTEND THE OFFER.
2
<PAGE> 3
The Offer is not being made to, nor will tenders be accepted from or on
behalf of, holders of Shares in any jurisdiction in which the making or
acceptance of the Offer would not be in compliance with the laws of such
jurisdiction.
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
ASCENT ENTERTAINMENT GROUP, INC.
BY
LIBERTY AEG ACQUISITION, INC.,
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
LIBERTY MEDIA CORPORATION
The undersigned acknowledges receipt of your letter enclosing the Offer to
Purchase, dated February 29, 2000, of Liberty AEG Acquisition, Inc., a Delaware
corporation and an indirect wholly owned subsidiary of Liberty Media
Corporation, a Delaware corporation, and the related Letter of Transmittal,
relating to shares of common stock, par value $.01 per share of Ascent
Entertainment Group, Inc., a Delaware corporation (the "Shares").
This will instruct you to tender the number of Shares indicated below held
by you for the account of the undersigned on the terms and conditions set forth
in such Offer to Purchase and the related Letter of Transmittal.
<TABLE>
<S> <C>
Dated: --------------------------------------------
- -----------------------------------------, 2000 --------------------------------------------
Number of Shares to be Tendered* Signature(s)
- ------------------------------------- Shares --------------------------------------------
--------------------------------------------
Please Print names(s)
Address
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
(Include Zip Code)
Area Code and Telephone No.
--------------------------------------------
Taxpayer Identification or Social
Security No.
----------------------------------------
</TABLE>
- ---------------
* Unless otherwise indicated, it will be assumed that all your Shares are to be
tendered.
3
<PAGE> 1
EXHIBIT (A)(1)(F)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER FOR THE PAYEE
(YOU) TO GIVE THE PAYER -- Social Security Numbers have nine digits separated by
two hyphens: i.e., 000-00-0000. Employer identification numbers have nine digits
separated by only one hyphen: i.e., 00-0000000. The table below will help
determine the number to give the payer. All "Section" references are to the
Internal Revenue Code of 1986, as amended. "IRS" is the Internal Revenue
Service.
- -------------------------------------------------------------
<TABLE>
<CAPTION>
GIVE THE
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- ------------------------------------------------------------
GIVE THE EMPLOYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- ------------------------------------------------------------
<C> <S> <C>
1. Individual The individual
2. Two or more individuals (joint The actual owner of the
account) account or, if combined
funds, the first
individual on the
account (1)
3. Custodian account of a minor The minor (2)
(Uniform Gift to Minors Act)
4. a. The usual revocable savings The grantor-trustee (1)
trust account (grantor is also
trustee)
b. So-called trust account The actual owner (1)
that is not a legal or valid
trust under state law
5. Sole proprietorship The owner (3)
6. Sole proprietorship The owner (3)
7. A valid trust, estate, or The legal entity (4)
pension trust
8. Corporate The corporation
9. Association, club, religious, The organization
charitable, educational, or
other tax-exempt organization
10. Partnership The partnership
11. A broker or registered nominee The broker or nominee
12. Account with the Department of The public entity
Agriculture in the name of a
public entity (such as a state
or local government, school
district, or prison) that
receives agricultural program
payments
</TABLE>
- -------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish. If
only one person on a joint account has a social security number, that
person's number must be furnished.
(2) Circle the minor's name and furnish the minor's social security number.
(3) You must show your individual name, but you may also enter your business or
"doing business as" name. You may use either your social security number or
your employer identification number (if you have one).
(4) List first and circle the name of the legal trust, estate, or pension
trust. (Do not furnish the taxpayer identification number of the personal
representative or trustee unless the legal entity itself is not designated
in the account title.)
NOTE:If no name is circled when there is more than one name listed, the number
will be considered to be that of the first name listed.
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
OBTAINING A NUMBER
If you don't have a taxpayer identification number, obtain Form SS-5,
Application for a Social Security Card at the local Social Security
Administration office, or Form SS-4, Application for Employer Identification
Number, by calling 1 (800) TAX-FORM, and apply for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from withholding include:
-- An organization exempt from tax under Section 501(a), an individual
retirement account (IRA), or a custodial account under Section 403(b)(7),
if the account satisfies the requirements of Section 401(f)(2).
-- The United States or a state thereof, the District of Columbia, a
possession of the United States, or a political subdivision or wholly-owned
agency or instrumentality of any one or more of the foregoing.
-- An international organization or any agency or instrumentality thereof.
-- A foreign government and any political subdivision, agency or
instrumentality thereof.
Payees that may be exempt from backup withholding include:
-- A corporation.
-- A financial institution.
-- A dealer in securities or commodities required to register in the United
States, the District of Columbia, or a possession of the United States.
-- A real estate investment trust.
-- A common trust fund operated by a bank under Section 584(a).
-- An entity registered at all times during the tax year under the Investment
Company Act of 1940.
-- A middleman known in the investment community as a nominee or who is listed
in the most recent publication of the American Society of Corporate
Secretaries, Inc., Nominee List.
-- A futures commission merchant registered with the Commodity Futures Trading
Commission.
-- A foreign central bank of issue.
Payments of dividends and patronage dividends generally exempt from backup
withholding include:
-- Payments to nonresident aliens subject to withholding under Section 1441.
-- Payments to partnerships not engaged in a trade or business in the United
States and that have at least one nonresident alien partner.
-- Payments of patronage dividends not paid in money.
-- Payments made by certain foreign organizations.
-- Section 404(k) payments made by an ESOP.
Payments of interest generally exempt from backup withholding include:
-- Payments of tax-exempt interest (including exempt-interest dividends under
Section 852).
-- Payments described in Section 6049(b)(5) to nonresident aliens.
-- Payments on tax-free covenant bonds under Section 1451.
-- Payments made by certain foreign organizations.
Certain payments, other than payments of interest, dividends, and patronage
dividends, that are exempt from information reporting are also exempt from
backup withholding. For details, see Sections 6041, 6041A, 6042, 6044, 6045,
6049, 6050A and 6050N and the regulations thereunder.
EXEMPT PAYEES SHOULD COMPLETE A SUBSTITUTE FORM W-9 TO AVOID POSSIBLE
ERRONEOUS BACKUP WITHHOLDING. Furnish your taxpayer identification number, write
"EXEMPT" on the form, sign and date the form and return it to the payer.
PRIVACY ACT NOTICE. -- Section 6109 requires you to provide your correct
taxpayer identification number to payers who must report the payments to the
IRS. The IRS uses the numbers for identification purposes and to help verify the
accuracy of your return and may also provide this information to various
government agencies for tax enforcement or litigation purposes. Payers must be
given the numbers whether or not recipients are required to file tax returns.
Payers must generally withhold 31% of taxable interest, dividend, and certain
other payments to a payee who does not furnish a taxpayer identification number
to a payer. Certain penalties may also apply.
PENALTIES
(1) FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. -- If you fail to
furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. -- If you
make a false statement with no reasonable basis that results in no backup
withholding, you are subject to a $500 penalty.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. -- Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION
CONTACT YOUR TAX CONSULTANT OR
THE INTERNAL REVENUE SERVICE.
2
<PAGE> 1
LIBERTY MEDIA SIGNS MERGER AGREEMENT
WITH ASCENT ENTERTAINMENT GROUP
DENVER, COLORADO, February 22, 2000 -- Liberty Media Corporation (NYSE: LMG.A,
LMG.B) and Ascent Entertainment Group, Inc. (Nasdaq: GOAL) announced today that
they have entered into a definitive merger agreement under which Liberty Media
will acquire Ascent Entertainment. Under the merger agreement, Ascent
stockholders will receive $15.25 in cash per share of Ascent Entertainment
Common Stock. The stock closed at $10.13 last Friday, February 18, 2000.
The total cost of the acquisition of Ascent's shares will be approximately $460
million, with a total transaction value, including assumed or refinanced debt,
of approximately $755 million. Following the acquisition, Liberty will continue
the process of finding a suitable buyer for the Pepsi Center, as well as the
professional sports teams included in the assets currently owned by Ascent.
"We are delighted to have agreed on terms for the purchase of Ascent
Entertainment," said Gary S. Howard, Liberty's Executive Vice President and
Chief Operating Officer. "From a corporate perspective, Liberty has had a
long-term interest in the consumer access offered through On Command
Corporation's (Nasdaq: ONCO) service. When completed, the purchase of Ascent
will provide us with a majority ownership position in that company. Given our
extensive relationships in video programming, interactive television and high
speed data services, the acquisition of On Command will position us perfectly to
offer even better and more comprehensive services for business and recreational
travelers.
"Like Ascent, we are a company with headquarters in Colorado. And, like Ascent,
we are committed to finding an ownership group for the Pepsi Center, the
Avalanche and the Nuggets that is committed to giving our sports community teams
that play at a championship level. We will continue that process until the right
group is identified and a deal can be consummated. Until that time, we will
continue to run our sports operations under the very able stewardship of Don
Elliman, Pierre Lacroix and Dan Issel."
In accordance with the merger agreement, Liberty expects to commence on or prior
to February 28, 2000, a tender offer for all shares of stock of Ascent at a net
cash price of $15.25 per share of Ascent Common Stock. The tender offer will be
conditioned on the tender of at least a majority of the Ascent shares, as well
as other customary conditions. J.P. Morgan will act as dealer manager for the
tender offer.
If a majority of the Ascent shares are purchased in the tender offer, it is
expected that a corporation controlled by Liberty will merge with Ascent, with
any remaining shares of Ascent converted into cash at the same price as offered
in the tender offer. The merger is expected to close in the second quarter of
2000.
-2-
<PAGE> 2
Ascent's Board of Directors has received an opinion letter from Donaldson,
Lufkin & Jenrette Securities Corporation that the consideration to be received
by Ascent's shareholders pursuant to the transaction is fair to such
shareholders from a financial point of view.
Liberty Media holds interests in a broad range of video programming,
communications, technology and internet businesses in the United States, Europe,
South America and Asia.
Ascent Entertainment's principal business is providing pay-per-view
entertainment and information services through its majority-owned On Command
Corporation. In addition, Ascent provides satellite service and maintenance to
the NBC television network in connection with its distribution of its national
television feed to its local affiliates. The company also is the owner of the
National Basketball Association's Denver Nuggets, the National Hockey League's
Colorado Avalanche, and the Pepsi Center, the new, state of the art
entertainment facility which is home to both the Nuggets and Avalanche.
**********
Investors and security holders are advised to read both the tender
offer statement and the solicitation/recommendation statement regarding the
tender offer referred to in this press release, when they become available,
because they will contain important information. The tender offer statement will
be filed by Liberty Media Corporation with the Securities and Exchange
Commission, and the solicitation/recommendation statement will be filed with the
Commission by Ascent Entertainment Group, Inc. Investors and security holders
may obtain a free copy of these statements (when available) and other documents
filed by Liberty Media Corporation and Ascent Entertainment Group, Inc. with the
Commission at the Commission's web site at www.sec.gov. The tender offer
statement and related offering materials may be obtained for free from Liberty
Media Corporation by directing such request to: Liberty Media Corporation, 9197
S. Peoria Street, Englewood, Colorado 80112, Attention: Vivian J. Carr,
telephone: (720) 875-5406, e-mail: [email protected]. The
solicitation/recommendation statement and such other documents may also be
obtained for free from Ascent Entertainment Group, Inc. by directing such
request to: Ascent Entertainment Group, Inc., 1225 Seventeenth Street, Suite
1800, Denver, Colorado 80202, Attention: Arthur M. Aaron, telephone: (303)
308-7040, e-mail: [email protected].
**********
CONTACT: LIBERTY MEDIA ASCENT ENTERTAINMENT
Vivian Carr MEDIA CONTACT: Arthur M. Aaron
720-875-5406 303-308-7040
INVESTOR CONTACT: David A. Holden
303-308-7033
-3-
<PAGE> 1
EXHIBIT (a)(1)(h)
LIBERTY MEDIA AND ASCENT ENTERTAINMENT GROUP
ANNOUNCE NEW DATE FOR COMMENCEMENT OF TENDER OFFER
FOR STOCK OF ASCENT ENTERTAINMENT GROUP
DENVER, COLORADO, February 28, 2000 -- Liberty Media Corporation (NYSE: LMG.A,
LMG.B) and Ascent Entertainment Group, Inc. (Nasdaq: GOAL) announced today that
Liberty Media's tender offer for all shares of Ascent Entertainment is expected
to commence on Tuesday, February 29, 2000. The parties had previously announced
that the tender offer was expected to commence on Monday, February 28, 2000.
Pursuant to the tender offer, Liberty Media will offer to purchase all shares of
stock of Ascent Entertainment at a net cash price of $15.25 per share.
**********
Investors and security holders are advised to read both the tender
offer statement and the solicitation/recommendation statement regarding the
tender offer referred to in this press release, when they become available,
because they will contain important information. The tender offer statement will
be filed by Liberty Media Corporation with the Securities and Exchange
Commission, and the solicitation/recommendation statement will be filed with the
Commission by Ascent Entertainment Group, Inc. Investors and security holders
may obtain a free copy of these statements (when available) and other documents
filed by Liberty Media Corporation and Ascent Entertainment Group, Inc. with the
Commission at the Commission's web site at www.sec.gov. The tender offer
statement and related offering materials may be obtained for free from Liberty
Media Corporation by directing such request to: Liberty Media Corporation, 9197
S. Peoria Street, Englewood, Colorado 80112, Attention: Vivian J. Carr,
telephone: (720) 875-5406, e-mail: [email protected]. The
solicitation/recommendation statement and such other documents may also be
obtained for free from Ascent Entertainment Group, Inc. by directing such
request to: Ascent Entertainment Group, Inc., 1225 Seventeenth Street, Suite
1800, Denver, Colorado 80202, Attention: Arthur M. Aaron, telephone: (303)
308-7040, e-mail: [email protected].
**********
CONTACT: LIBERTY MEDIA ASCENT ENTERTAINMENT
Vivian Carr MEDIA CONTACT: Arthur M. Aaron
720-875-540 303-308-7040
INVESTOR CONTACT: David A. Holden
303-308-7033
<PAGE> 1
EXHIBIT (a)(1)(I)
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell Shares. The Offer is made solely by the Offer to Purchase dated
February 29, 2000, and the related Letter of Transmittal and is not being made
to (nor will tenders be accepted from or on behalf of) holders of Shares in any
jurisdiction in which the making of the Offer or the acceptance thereof would
not be in compliance with the laws of such jurisdiction. In any jurisdictions
where securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer shall be deemed to be made on behalf of the
Purchaser by J.P. Morgan Securities Inc. or one or more registered brokers or
dealers licensed under the laws of such jurisdictions.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
ASCENT ENTERTAINMENT GROUP, INC.
AT
$15.25 NET PER SHARE
BY
LIBERTY AEG ACQUISITION, INC.,
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
LIBERTY MEDIA CORPORATION
Liberty AEG Acquisition, Inc., a Delaware corporation (the "Purchaser"),
which is an indirect wholly owned subsidiary of Liberty Media Corporation, a
Delaware corporation ("Liberty Media"), is offering to purchase all outstanding
shares of Common Stock, par value $0.01 per share (the "Shares"), of Ascent
Entertainment Group, Inc., a Delaware corporation (the "Company"), together with
the associated preferred share purchase rights (the "Rights") issued pursuant to
the Company's Rights Agreement dated June 27, 1997, as amended, between the
Company and The Bank of New York, as Rights Agent (the "Rights Agreement"), at a
price of $15.25 per Share, net to the seller in cash, without interest thereon,
upon the terms and subject to the conditions set forth in the Offer to Purchase
dated February 29, 2000, and in the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute the
"Offer"). Unless the context otherwise requires, all references to Shares
include the associated Rights, and all references to the Rights include the
benefits that may enure to holders of the Rights pursuant to the Rights
Agreement.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON MONDAY, MARCH 27, 2000, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF
SHARES THAT, TOGETHER WITH ANY SHARES OWNED BY THE PURCHASER, LIBERTY MEDIA AND
LIBERTY MEDIA'S OTHER DIRECT OR INDIRECT SUBSIDIARIES, WOULD CONSTITUTE AT LEAST
A MAJORITY OF ALL OUTSTANDING SHARES ON A FULLY DILUTED BASIS ON THE DATE OF
PURCHASE, (2) ANY APPLICABLE WAITING PERIOD UNDER THE HART-SCOTT-RODINO
ANTITRUST IMPROVEMENTS ACT OF 1976 HAVING EXPIRED OR BEEN TERMINATED, AND (3)
LIBERTY MEDIA HAVING OBTAINED SPECIAL TEMPORARY AUTHORIZATION OR APPROVAL FROM
THE FEDERAL COMMUNICATIONS COMMISSION FOR THE TRANSFER OF CONTROL OF CERTAIN FCC
LICENSES. CERTAIN OTHER CONDITIONS TO THE OFFER ARE DESCRIBED IN SECTION 14 OF
THE OFFER TO PURCHASE.
The Offer is being made pursuant to an Agreement and Plan of Merger dated
as of February 22, 2000 (the "Merger Agreement"), among Liberty Media, the
Purchaser and the Company pursuant to which, following the consummation of the
Offer and the satisfaction or waiver of certain conditions, the Purchaser will
be merged with and into the Company (the "Merger"). In the Merger, each issued
and outstanding Share (other than Shares owned by Liberty Media, the Purchaser
or the Company or any of their direct or indirect wholly owned subsidiaries, or
by stockholders, if any, who are entitled to and properly exercise appraisal
rights under Delaware law) will be converted into $15.25 in cash, without
interest. The Board of Directors has adopted a resolution and the Company has
amended the Rights Agreement to make the Rights Agreement inapplicable to the
Offer, the Merger and the Merger Agreement.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE MERGER AGREEMENT AND
THE TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT, INCLUD-
<PAGE> 2
ING THE OFFER AND THE MERGER, AND DETERMINED THAT THE TERMS OF THE OFFER AND THE
MERGER AND THE OTHER TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT ARE FAIR
TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF THE COMPANY AND RECOMMENDS
THAT THE STOCKHOLDERS OF THE COMPANY ACCEPT AND TENDER THEIR SHARES PURSUANT TO
THE OFFER.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares properly tendered to the Purchaser
and not withdrawn as, if and when the Purchaser gives oral or written notice to
the Depositary set forth below of the Purchaser's acceptance for payment of such
Shares. Upon the terms and subject to the conditions of the Offer, payment for
Shares accepted for payment pursuant to the Offer will be made by deposit of the
purchase price therefor with the Depositary, which will act as an agent for
tendering stockholders for the purpose of receiving payment from the Purchaser
and transmitting payment to tendering stockholders. In all cases, payment for
Shares accepted for payment pursuant to the Offer will be made only after timely
receipt by the Depositary of (a) certificates for such Shares or timely
confirmation of book-entry transfer of such Shares into the Depositary's account
at the Book-Entry Transfer Facility (as defined in the Offer to Purchase), or,
in the case of Shares held as Direct Registration Shares or through BuyDIRECT,
completion of the appropriate portion of the Letter of Transmittal, pursuant to
the procedures described in Section 2 of the Offer to Purchase, (b) a Letter of
Transmittal (or a facsimile thereof), properly completed and duly executed, with
any required signature guarantees, or, in the case of a book-entry transfer, an
Agent's Message (as defined in the Offer to Purchase) and (c) any other
documents required by the Letter of Transmittal. Under no circumstances will
interest be paid on the purchase price of the Shares to be paid by the
Purchaser, regardless of any extension of the Offer or any delay in making such
payment.
The term "Expiration Date" means 12:00 midnight, New York City time, on
Monday, March 27, 2000, unless and until the Purchaser, in its sole discretion
(but subject to the terms of the Merger Agreement), shall have extended the
period of time during which the Offer is open, in which event the term
"Expiration Date" shall mean the latest time and date on which the Offer, as so
extended by the Purchaser, shall expire. Subject to the terms of the Merger
Agreement (which prohibit certain amendments to the Offer) and the applicable
rules and regulations of the Securities and Exchange Commission, the Purchaser
reserves the right (but shall not be obligated), at any time and from time to
time, and regardless of whether or not any of the events or facts set forth in
Section 14 of the Offer to Purchase shall have occurred, (i) to extend the
period of time during which the Offer is open, and thereby delay acceptance for
payment of and the payment for any Shares, by giving oral or written notice of
such extension to the Depositary and (ii) to amend the Offer in any other
respect by giving oral or written notice of such amendment to the Depositary.
Under no circumstances will interest be paid on the purchase price for tendered
Shares, whether or not the Purchaser exercises its right to extend the Offer.
Any such extension will be followed by a public announcement thereof no later
than 9:00 A.M., New York City time, on the next business day after the
previously scheduled Expiration Date. During any such extension, all Shares
previously tendered and not withdrawn will remain subject to the Offer, subject
to the right of a tendering stockholder to withdraw such stockholder's Shares.
Except as otherwise provided below, tenders of Shares are irrevocable.
Shares tendered pursuant to the Offer may be withdrawn pursuant to the
procedures set forth below at any time prior to the Expiration Date and, unless
theretofore accepted for payment and paid for by the Purchaser pursuant to the
Offer, may also be withdrawn at any time after April 29, 2000, except as
provided with respect to any subsequent offering period. For a withdrawal to be
effective, a written notice of withdrawal must be timely received by the
Depositary at one of its addresses set forth on the back cover of the Offer to
Purchase and must specify the name of the person having tendered the Shares to
be withdrawn, the number of Shares to be withdrawn and the name of the
registered holder of the Shares to be withdrawn, if different from the name of
the person who tendered the Shares. If certificates for Shares have been
delivered or otherwise identified to the Depositary, then, prior to the physical
release of such certificates, the serial numbers shown on such certificates must
be submitted to the Depositary and, unless such Shares have been tendered by an
Eligible Institution (as defined in Section 2 of the Offer to Purchase), the
signatures on the notice of withdrawal must be guaranteed by an Eligible
Institution. If Shares have been delivered pursuant to the procedures for
book-entry transfer described in Section 2 of the Offer to Purchase, any notice
of withdrawal must also specify the name and number of the account at the
Book-Entry Transfer Facility to be credited with the withdrawn Shares and
otherwise comply with the Book-Entry Transfer Facility's procedures. Withdrawals
of tenders of Shares may not be rescinded, and any Shares properly withdrawn
will thereafter be deemed not validly tendered for purposes of the Offer.
However, withdrawn Shares may be retendered by again following one of the
procedures described in Section 2 of the Offer to Purchase at any time prior to
the Expiration Date. All questions as to the form and validity (including time
of receipt) of notices of withdrawal will be determined by the Purchaser in its
sole discretion, which determination will be final and binding.
2
<PAGE> 3
Under the Merger Agreement and pursuant to Rule 14d-11 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), the Purchaser may, subject to certain conditions, include a
subsequent offering period following the Expiration Date. The Purchaser does not
currently intend to include a subsequent offering period in the Offer, although
it reserves the right to do so in its sole discretion. Under the Exchange Act,
no withdrawal rights apply to Shares tendered during a subsequent offering
period and no withdrawal rights apply during the subsequent offering period with
respect to Shares tendered in the Offer and accepted for payment. See Section 1
of the Offer to Purchase.
The Company has provided the Purchaser with the Company's stockholder lists
and security position listing for the purpose of disseminating the Offer to
holders of Shares. The Offer to Purchase, the related Letter of Transmittal and
other relevant materials will be mailed to record holders of Shares and will be
furnished to brokers, dealers, banks, trust companies and similar persons whose
names, or the names of whose nominees, appear on the stockholder lists or, if
applicable, who are listed as participants in a clearing agency's security
position listing for subsequent transmittal to beneficial owners of Shares.
The information required to be disclosed by Rule 14d-6(d)(1) of the
Exchange Act is contained in the Offer to Purchase and is incorporated herein by
reference.
THE OFFER TO PURCHASE AND LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH RESPECT TO THE
OFFER.
Requests for copies of the Offer to Purchase, the Letter of Transmittal and
other tender offer materials may be directed to the Information Agent or the
Dealer Manager as set forth below, and copies will be furnished promptly at the
Purchaser's expense. No fees or commissions will be payable to brokers, dealers
or other persons other than the Dealer Manager and the Information Agent for
soliciting tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
D. F. KING & CO., INC.
77 Water Street, 20th Floor
New York, New York 10005
Toll Free 888.242.8153
Banks and Brokerage Firms Please Call:
212.269.5550
The Dealer Manager for the Offer is:
J.P. MORGAN & CO.
60 Wall Street
New York, New York 102060
Toll Free 877.672.2445
February 29, 2000
3
<PAGE> 1
EXHIBIT (d)
================================================================================
AGREEMENT AND PLAN OF MERGER
AMONG
LIBERTY AEG ACQUISITION, INC.,
LIBERTY MEDIA CORPORATION
AND
ASCENT ENTERTAINMENT GROUP, INC.
DATED AS OF FEBRUARY 22, 2000
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I DEFINITIONS AND CONSTRUCTION.................................................................2
1.1 Certain Definitions..................................................................2
1.2 Terms Generally......................................................................6
ARTICLE II THE OFFER AND RELATED MATTERS................................................................7
2.1 The Offer............................................................................7
2.2 Company Action.......................................................................9
ARTICLE III THE MERGER AND RELATED MATTERS..............................................................11
3.1 The Merger..........................................................................11
3.2 Closing.............................................................................12
3.3 Conversion of Securities............................................................12
3.4 Options; SARs.......................................................................13
3.5 Dissenting Shares...................................................................13
3.6 Surrender of Shares; Stock Transfer Books...........................................14
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY...............................................15
4.1 Organization and Qualification......................................................15
4.2 Authorization and Validity of Agreement.............................................16
4.3 Capitalization......................................................................16
4.4 Reports and Financial Statements....................................................17
4.5 No Approvals or Notices Required; No Conflict with Instruments......................18
4.6 Absence of Certain Changes or Events................................................20
4.7 Information Supplied................................................................20
4.8 Legal Proceedings...................................................................21
4.9 Licenses; Compliance with Regulatory Requirements...................................21
4.10 Brokers or Finders..................................................................22
4.11 Tax Matters.........................................................................23
4.12 Employee Matters....................................................................24
4.13 Fairness Opinion....................................................................26
4.14 Recommendation of the Company Board.................................................26
4.15 Vote Required.......................................................................27
4.16 Intangible Property; Copyrights.....................................................27
4.17 Investment Securities...............................................................27
4.18 Transactions with Affiliates and Certain Agreements.................................27
4.19 No Investment Company...............................................................28
4.20 State Takeover Statutes.............................................................28
4.21 Rights Agreement....................................................................28
4.22 Sale of Entertainment Assets........................................................28
</TABLE>
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<PAGE> 3
<TABLE>
<S> <C>
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT
AND MERGER SUB..............................................................................29
5.1 Organization and Qualification......................................................29
5.2 Authorization and Validity of Agreement.............................................29
5.3 No Prior Activities of Merger Sub...................................................29
5.4 Information Supplied................................................................29
5.5 Brokers.............................................................................30
5.6 Financing...........................................................................30
ARTICLE VI COVENANTS AND AGREEMENTS....................................................................30
6.1 Stockholders Meetings...............................................................30
6.2 Access to Information Concerning Properties and Records.............................32
6.3 Confidentiality.....................................................................32
6.4 Public Announcements................................................................33
6.5 Conduct of the Company's Business Pending Merger Sub's
Election Date.......................................................................33
6.6 No Solicitation.....................................................................36
6.7 Reasonable Efforts..................................................................38
6.8 Rights Agreement....................................................................39
6.9 Certain Litigation..................................................................39
6.10 Indemnification of Directors and Officers...........................................40
6.11 Directors...........................................................................42
6.12 Stock Options; SARs.................................................................42
6.13 Employee Matters....................................................................43
6.14 Severance Obligations...............................................................43
6.15 Competitor Transaction..............................................................43
ARTICLE VII CONDITIONS TO THE MERGER....................................................................44
7.1 Conditions to the Merger............................................................44
ARTICLE VIII TERMINATION.................................................................................44
8.1 Termination and Abandonment.........................................................44
8.2 Termination Fee; Effects of Termination.............................................45
ARTICLE IX MISCELLANEOUS...............................................................................46
9.1 No Waiver or Survival of Representations, Warranties,
Covenants and Agreements............................................................46
9.2 Notices.............................................................................47
9.3 Entire Agreement....................................................................48
9.4 Assignment; Binding Effect; Benefit.................................................48
9.5 Amendment...........................................................................48
9.6 Extension; Waiver...................................................................48
9.7 Headings............................................................................49
9.8 Counterparts........................................................................49
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<S> <C>
9.9 Applicable Law......................................................................49
9.10 No Remedy in Certain Circumstances..................................................49
9.11 Severability........................................................................49
9.12 Disclosure Schedule.................................................................50
9.13 Enforcement.........................................................................50
</TABLE>
EXHIBITS
Exhibit 3.1(a) Form of Certificate of Merger
SCHEDULES
Company Disclosure Schedules
-iii-
<PAGE> 5
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made as of this
22nd day of February, 2000, by and among Liberty AEG Acquisition, Inc., a
Delaware corporation ("Merger Sub"), Liberty Media Corporation, a Delaware
corporation ("Parent"), and Ascent Entertainment Group, Inc., a Delaware
corporation (the "Company").
WHEREAS, the Boards of Directors of Parent, Merger Sub and the Company have
each determined that it is in the best interests of their respective
stockholders for Parent, through Merger Sub, to acquire the Company upon the
terms and subject to the conditions set forth herein; and
WHEREAS, in furtherance of such acquisition, it is proposed that Merger Sub
shall make a cash tender offer (the "Offer") to acquire all the issued and
outstanding shares of Common Stock, par value $.01 per share, of the Company and
the associated Rights ("Company Common Stock"; shares of Company Common Stock
being hereinafter collectively referred to as the "Shares"), at a purchase price
of $15.25 per Share (such amount, or any greater amount per Share paid pursuant
to the Offer, being hereinafter referred to as the "Per Share Amount") net to
the seller in cash, without interest thereon, upon the terms and subject to the
conditions of this Agreement and the Offer; and
WHEREAS, the Board of Directors of Parent and Merger Sub have approved the
making of the Offer and the transactions related thereto; and
WHEREAS, the Board of Directors of the Company (the "Board") has approved
the making of the Offer and resolved and agreed, subject to the terms and
conditions contained herein, to recommend that holders of Shares tender their
Shares pursuant to the Offer; and
WHEREAS, in furtherance of such acquisition, the Boards of Directors of
Parent, Merger Sub and the Company have each approved the merger (the "Merger")
of Merger Sub with and into the Company in accordance with the General
Corporation Law of the State of Delaware following the consummation of the Offer
and upon the terms and subject to the conditions set forth herein; and
WHEREAS, pursuant to the Merger, all Shares that remain outstanding after
the expiration of the Offer will be converted into and exchangeable for $15.25
in cash per Share.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby,
Parent, Merger Sub and the Company hereby agree as follows:
<PAGE> 6
ARTICLE I
DEFINITIONS AND CONSTRUCTION
1.1 CERTAIN DEFINITIONS. As used in this Agreement, the following terms
shall have the following meanings unless the context otherwise requires:
An "Affiliate" of any Person shall mean any other Person which,
directly or indirectly, controls or is controlled by or is under common control
with such Person. A Person shall be deemed to "control," be "controlled by" or
be "under common control with" any other Person if such other Person possesses,
directly or indirectly, power to direct or cause the direction of the management
or policies of such Person whether through the ownership of voting securities or
partnership interests, by contract or otherwise. Notwithstanding the foregoing,
for purposes of this Agreement, neither AT&T Corp. nor any of its Affiliates
shall be deemed an Affiliate of Parent or any of its Affiliates.
"Agreement" shall mean this Agreement and Plan of Merger, including all
Exhibits and Schedules hereto.
"Alternative Proposal" shall mean any proposal, other than as
contemplated by this Agreement or otherwise proposed by Parent or its
Affiliates, for (A) a merger, consolidation, share exchange, reorganization,
other business combination, recapitalization or similar transaction involving
the Company or any of its Subsidiaries, (B) the acquisition, directly or
indirectly, of an equity interest representing greater than 20% of the voting
securities of the Company or any of its Subsidiaries, (C) the acquisition of a
substantial portion of any of the assets of the Company or any of its
Subsidiaries (including without limitation the Company's interests in OCC), (D)
any transfer or sale of all or any material part of the Entertainment Assets or
any interest therein; or (E) any transaction the effect of which would be
reasonably likely to prohibit, restrict or delay the consummation of the Offer
or the Merger or any of the other transactions contemplated by this Agreement.
"Closing" shall mean the consummation of the Merger.
"Closing Date" shall mean the date on which the Closing occurs pursuant
to Section 3.2.
"Commission" shall mean the Securities and Exchange Commission and the
staff of the Securities and Exchange Commission.
"Company Common Stock" shall have the meaning specified in the preamble
hereto.
"Company Disclosure Schedule" shall mean the disclosure schedule, dated
as of the date of this Agreement, delivered by the Company to Parent.
2
<PAGE> 7
"Company Stock Plans" shall mean the following: (i) the Ascent
Entertainment Group, Inc. 1995 Non-Employee Directors Stock Plan; (ii) the
Ascent Entertainment Group, Inc. 1995 Key Employee Stock Plan; and (iii) the
Ascent Entertainment Group, Inc. 1997 Non-Employee Directors Stock Appreciation
Rights Plan.
"Control" (including the terms "controlling," "controlled by" and
"under common control with") shall have the meaning given to such term in Rule
405 under the Securities Act.
"DGCL" shall mean the General Corporation Law of the State of Delaware.
"Effective Time" shall mean the time when the Merger of Merger Sub with
and into the Company becomes effective under applicable law as provided in
Section 3.1(a).
"Entertainment Assets" shall mean the assets of, or the interests of
the Company in, the following entities: (i) The Denver Nuggets Limited
Partnership; (ii) Colorado Avalanche, LLC; (iii) Ascent Sports, Inc.; (iv)
Ascent Arena and Development Corporation; (v) Ascent Sports Holdings, Inc.; (vi)
Ascent Arena Company, LLC; (vii) Ascent Arena Operating Company, LLC; (viii) The
Denver Arena Trust; (ix) NBG Arena LLC; and (x) NBG Sports LLC.
"Exchange Act" shall mean the Securities Exchange Act of 1934, and the
rules and regulations thereunder.
"GAAP" shall mean generally accepted accounting principles as accepted
by the accounting profession in the United States as in effect from time to
time.
"Hart-Scott Act" shall mean the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, and the rules and regulations thereunder.
"Indebtedness" shall mean, with respect to any Person, without
duplication (whether or not the recourse of the lender is to the whole of the
assets of such Person or only to a portion thereof), (i) every liability of such
Person (excluding intercompany accounts between the Company and any wholly owned
Subsidiary of the Company or between wholly owned Subsidiaries of the Company)
(A) for borrowed money, (B) evidenced by notes, bonds, debentures or other
similar instruments (whether or not negotiable), (C) for reimbursement of
amounts drawn under letters of credit, bankers' acceptances or similar
facilities issued for the account of such Person, (D) issued or assumed as the
deferred purchase price of property or services (excluding contingent payment
obligations and accounts payable) and (E) relating to a capitalized lease
obligation and all debt attributable to sale/leaseback transactions of such
Person; and (ii) every liability of others of the kind described in the
preceding clause (i) which such Person has guaranteed or which is otherwise its
legal liability, in either case to the extent required pursuant to GAAP to be
set forth as a liability on a balance sheet of such Person.
3
<PAGE> 8
"Indenture" shall mean the Indenture, dated as of December 22, 1997,
between the Company and The Bank of New York, as trustee, pursuant to which the
Company issued its 11-7/8% Senior Secured Discount Notes Due 2004.
"Injunction" shall mean any permanent or preliminary injunction or
restraining order or decree or other similar order or decree issued or entered
by any court or Governmental Entity.
"Lien" shall mean any security interest, mortgage, pledge,
hypothecation, charge, claim, option, right to acquire, adverse interest,
assignment, deposit arrangement, encumbrance, restriction, lien (statutory or
other), or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any conditional sale or
other title retention agreement, any financing lease involving substantially the
same economic effect as any of the foregoing, and the filing of any financing
statement under the Uniform Commercial Code or comparable law of any
jurisdiction).
"Material Adverse Effect" on any Person shall mean a material adverse
effect on such Person's business, assets, result of operations or financial
condition, provided that any effects of changes, either individually or in the
aggregate, that are generally applicable to (A) such Person's primary industry,
(B) the United States economy or (C) the United States securities markets, shall
not be considered a Material Adverse Effect.
"Merger" shall have the meaning specified in the preamble hereto.
"OCC" shall mean On Command Corporation, a Delaware corporation.
"OCC Stock" shall mean the Common Stock, par value $0.01 per share, of
OCC.
"OCC Stock Plans" shall mean the following (i) the On Command
Corporation 1996 Key Employee Stock Plan; (ii) the On Command Corporation 1997
Employee Stock Purchase Plan; and (iii) the On Command Corporation 1997
Non-Employee Directors Stock Plan.
"OCC Warrants" shall mean the SpectraVision Warrants, the Series A
Warrants and the Series C Warrants, collectively, as such terms are defined in
the Warrant Agreement, dated as of October 8, 1996, between OCC and The Bank of
New York, as warrant agent.
"Permitted Encumbrances" shall mean the following Liens with respect to
the properties and assets of the Company: (a) Liens for taxes, assessments or
other governmental charges or levies not at the time delinquent or thereafter
payable without penalty or being contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on the Company's books; (b) Liens of carriers, warehousemen,
mechanics, materialmen and landlords incurred in the ordinary course of business
for sums not overdue or being contested in good faith by appropriate proceedings
and for which adequate reserves in accordance with GAAP shall have been set
aside on the Company's books; (c) Liens incurred in the ordinary course of
business in connection with workmen's compensation, unemployment insurance or
other forms of governmental insurance or benefits, or to secure performance of
tenders, statutory
4
<PAGE> 9
obligations, leases and contracts (other than for borrowed money) entered into
in the ordinary course of business or to secure obligations on surety or appeal
bonds; (d) purchase money security interests or Liens on property acquired or
held by the Company in the ordinary course of business to secure the purchase
price of such property or to secure Indebtedness incurred solely for the purpose
of financing the acquisition of such property; (e) easements, restrictions and
other defects of title which are not, in the aggregate, material and which do
not, individually or in the aggregate, materially and adversely affect the
Company's use or occupancy of the property affected thereby; (f) Liens incurred
under the Company's $50 million Amended and Restated Credit Facility, dated as
of December 22, 1997, among the Company, the Lenders named therein and
NationsBank, N.A., as Administrative Agent, as amended through January 15, 1999;
(g) Liens incurred under OCC's $200 million First Amended and Restated Credit
Facility, dated as of November 24, 1997, among OCC, the Lenders named therein
and NationsBank, N.A., as Administrative Agent; (h) Liens incurred under the
$139,835,000 Denver Arena Trust 6.94% Arena Revenue Backed Notes, dated as of
July 29, 1998, among Ascent Arena Company, LLC, the Denver Arena Trust,
Wilmington Trust Company, as Owner Trustee, and The Bank of New York, as
Indenture Trustee; and (i) Liens related to the Company's holdings of OCC Stock
incurred in connection with the Indenture.
"Person" shall mean an individual, partnership, corporation, limited
liability company, trust, unincorporated organization, association, or joint
venture or a government, agency, political subdivision, or instrumentality
thereof.
"Proxy Statement" shall mean the proxy statement, as amended and
supplemented, to be sent to the stockholders of the Company in connection with
the Stockholders Meeting (as defined in Section 6.1).
"Restriction", with respect to any capital stock or other security,
shall mean any voting or other trust or agreement, option, warrant, escrow
arrangement, proxy, buy-sell agreement, power of attorney or other Contract, or
any law, rule, regulation, order, judgment or decree which, conditionally or
unconditionally: (i) grants to any Person the right to purchase or otherwise
acquire, or obligates any Person to purchase or sell or otherwise acquire,
dispose of or issue, or otherwise results in or, whether upon the occurrence of
any event or with notice or lapse of time or both or otherwise, may result in,
any Person acquiring, (A) any of such capital stock or other security; (B) any
of the proceeds of, or any distributions paid or which are or may become payable
with respect to, any of such capital stock or other security; or (C) any
interest in such capital stock or other security or any such proceeds or
distributions; (ii) restricts or, whether upon the occurrence of any event or
with notice or lapse of time or both or otherwise, may restrict the transfer or
voting of, or the exercise of any rights or the enjoyment of any benefits
arising by reason of ownership of, any such capital stock or other security or
any such proceeds or distributions; or (iii) creates or, whether upon the
occurrence of any event or with notice or lapse of time or both or otherwise,
may create a Lien or purported Lien affecting such capital stock or other
security, proceeds or distributions.
"Rights" shall mean the rights issued under the Rights Agreement.
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"Rights Agent" shall mean The Bank of New York or its successor, in its
capacity as Rights Agents under the Rights Agreement.
"Rights Agreement" shall mean the Rights Agreement, dated June 27,
1997, between the Company and The Bank of New York, as amended through the date
hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations thereunder.
"Subsidiary," when used with respect to any Person, shall mean any
corporation or other organization, whether incorporated or unincorporated, of
which such Person or any other Subsidiary of such Person is a general partner or
at least 50% of the securities or other interests having by their terms ordinary
voting power to elect at least 50% of the Board of Directors or others
performing similar functions with respect to such corporation or other
organization is directly or indirectly owned or controlled by such Person, by
any one or more of its Subsidiaries, or by such Person and one or more of its
Subsidiaries. Notwithstanding the foregoing, for purposes of this Agreement, the
Company's Subsidiaries shall be deemed to include OCC, whether or not it
otherwise would be a Subsidiary of the Company under the foregoing definition.
"Superior Proposal" shall mean any bona fide written Alternative
Proposal to acquire, directly or indirectly, more than 50% of the shares of
Company Common Stock then outstanding or all or substantially all the assets of
the Company and that the Company Board determines in good faith, after taking
into account the advice of a financial advisor of nationally recognized
reputation, and taking into account all the terms and conditions of the
Alternative Proposal, is more favorable to the Company's stockholders than the
Offer and the Merger and for which financing, to the extent required, is then
fully committed or reasonably determined to be available by the Company Board.
"Surviving Entity" shall mean the Company as the surviving entity in
the Merger as provided in Section 3.1(a).
"Tender Offer Acceptance Date" shall mean the date on which Merger Sub
shall have accepted for payment all Shares validly tendered and not withdrawn
pursuant to the expiration date with respect to the Offer.
1.2 TERMS GENERALLY. The definitions set forth or referenced in this
Agreement shall apply equally to both the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words "include",
"includes" and "including" shall be deemed to be followed by the phrase "without
limitation". The words "herein", "hereof" and "hereunder" and words of similar
import refer to this Agreement (including the Exhibits and Schedules) in its
entirety and not to any part hereof unless the context shall otherwise require.
As used herein, the term "to the Company's knowledge" or any similar term
relating to the knowledge of the Company means the actual knowledge of any of
the officers (determined in accordance with Rule 16a-1(f) under the Exchange Act
as in effect on the
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date hereof) or directors of the Company. All references herein to Articles,
Sections, Exhibits and Schedules shall be deemed references to Articles and
Sections of, and Exhibits and Schedules to, this Agreement unless the context
shall otherwise require. Unless the context shall otherwise require, any
references to any agreement or other instrument or statute or regulation are to
it as amended and supplemented from time to time (and, in the case of a statute
or regulation, to any successor provisions). Any reference in this Agreement to
a "day" or number of "days" (without the explicit qualification of "business")
shall be interpreted as a reference to a calendar day or number of calendar
days. If any action or notice is to be taken or given on or by a particular
calendar day, and such calendar day is not a business day, then such action or
notice shall be deferred until, or may be taken or given on, the next business
day. References to the term "business day" shall mean any day which is not a
Saturday, Sunday or day on which banks in New York, New York are authorized or
required by law to close. As applied to Parent, the phrases "as soon as
reasonably practicable," "as promptly as practicable" and similar phrases shall
mean "reasonably promptly under the circumstances, in light of the other burdens
on the time and attention of the directors, officers, employees and agents of
Parent and the relative benefits to Parent of this Agreement and such other
burdens."
ARTICLE II
THE OFFER AND RELATED MATTERS
2.1 THE OFFER.
(a) Provided that this Agreement shall not have been terminated in
accordance with Article VIII and none of the events set forth in Annex A shall
have occurred or be existing (unless such event shall have been waived by Merger
Sub), Parent shall cause Merger Sub to commence, and Merger Sub shall commence,
the Offer at the Per Share Amount as promptly as reasonably practicable after
the date hereof, but in no event later than five business days after the public
announcement of Merger Sub's intention to commence the Offer. The Offer will be
made pursuant to an Offer to Purchase and related Letter of Transmittal
containing the terms and conditions set forth in this Agreement. The initial
expiration date of the Offer shall be the twentieth business day from and after
the date the Offer is commenced (the "Initial Expiration Date"). The obligation
of Merger Sub to accept for payment and pay for Shares tendered pursuant to the
Offer shall be subject only to (i) the condition (the "Minimum Condition") that
at least the number of Shares that, when combined with the Shares already owned
by Parent and its direct or indirect Subsidiaries, constitute a majority of the
then outstanding Shares on a fully diluted basis, including, without limitation,
all Shares issuable upon the conversion of any convertible securities or upon
the exercise of any options, warrants or rights (other than the Rights (as
defined in the Rights Agreement)) shall have been validly tendered and not
withdrawn prior to the expiration of the Offer and (ii) the satisfaction or
waiver of the other conditions set forth in Annex A hereto. Merger Sub expressly
reserves the right to waive any such condition (other than the Minimum
Condition), to increase the price per Share payable in the Offer, and to make
any other changes in the terms and
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conditions of the Offer; provided, however, that (notwithstanding Section 9.5)
no change may be made which (A) decreases the price per Share payable in the
Offer, (B) reduces the maximum number of Shares to be purchased in the Offer,
(C) imposes conditions to the Offer in addition to those set forth in Annex A,
(D) amends or changes the terms and conditions of the Offer in any manner
adverse to the holders of Shares (other than Parent and its Subsidiaries), (E)
changes or waives the Minimum Condition, (F) changes the form of consideration
payable in the Offer or (G) except as provided below or required by any rule,
regulation, interpretation or position of the Commission applicable to the
Offer, changes the expiration date of the Offer. Notwithstanding the foregoing,
Merger Sub may, without the consent of the Company, (A) extend the Offer, if at
the scheduled expiration date of the Offer any of the conditions set forth in
Annex A (the "Offer Conditions") shall not be satisfied or waived, until such
time as such conditions are satisfied or waived, (B) extend the Offer for any
period required by any rule, regulation, interpretation or position of the
Commission applicable to the Offer and (C) extend the Offer to provide for a
subsequent offering period pursuant to Rule 14d-11 under the Exchange Act for an
aggregate period of not more than 20 business days (for all such extensions)
beyond the latest expiration date that would otherwise be permitted under clause
(A) or (B) of this sentence. In addition, Parent and Merger Sub agree that
Merger Sub shall from time to time extend the Offer, if requested by the
Company, (i) if at the Initial Expiration Date (or any extended expiration date
of the Offer, if applicable), any of the conditions to the Offer other than the
Minimum Condition shall not have been waived or satisfied, and the Minimum
Condition shall have been satisfied, until (taking into account all such
extensions) the earlier of August 31, 2000 or such earlier date upon which any
such condition shall not be reasonably capable of being satisfied prior to
August 31, 2000; or (ii) if at the Initial Expiration Date (or any extended
expiration date of the Offer, if applicable), all of the conditions to the Offer
other than the Minimum Condition shall have been waived or satisfied and the
Minimum Condition shall not have been satisfied, until the earlier of ten (10)
business days after such expiration date or August 31, 2000. Upon the prior
satisfaction or waiver of all the conditions to the Offer, and subject to the
terms and conditions of this Agreement, Merger Sub will, and Parent will cause
Merger Sub to, accept for payment, purchase and pay for, in accordance with the
terms of the Offer, all shares of Company Common Stock validly tendered and not
withdrawn pursuant to the Offer as soon as reasonably practicable after the
expiration of the Offer. The Per Share Amount shall, subject to applicable
withholding of taxes, be net to the seller in cash, without interest thereon,
upon the terms and subject to the conditions of the Offer. Subject to the terms
and conditions of the Offer (including, without limitation, the Minimum
Condition), Merger Sub shall accept for payment and pay, as promptly as
practicable after expiration of the Offer, for all Shares validly tendered and
not withdrawn.
(b) As soon as reasonably practicable on the date of commencement of
the Offer, Merger Sub shall file with the Commission and disseminate to holders
of Shares to the extent required by law a Tender Offer Statement on Schedule TO
(together with all amendments and supplements thereto, the "Schedule TO") with
respect to the Offer and the other Transactions (as hereinafter defined). The
Schedule TO shall contain or shall incorporate by reference an offer to purchase
(the "Offer to Purchase") and forms of the related letter of transmittal and any
related summary advertisement (the Schedule TO, the Offer to Purchase and such
other documents, together
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with all supplements and amendments thereto, being referred to herein
collectively as the "Offer Documents"). Parent, Merger Sub and the Company agree
to correct promptly any information provided by any of them for use in the Offer
Documents which shall have become false or misleading, and Parent and Merger Sub
further agree to take all steps necessary to cause the Schedule TO as so
corrected to be filed with the Commission and the other Offer Documents as so
corrected to be disseminated to holders of Shares, in each case as and to the
extent required by applicable federal securities laws. The Company and its
counsel shall be given an opportunity to review and comment on the Offer
Documents and any amendments thereto prior to the filing thereof with the
Commission. Parent and Merger Sub will provide the Company and its counsel with
a copy of any written comments or telephonic notification of any verbal comments
Parent or Merger Sub may receive from the Commission with respect to the Offer
Documents promptly after the receipt thereof and will provide the Company and
its counsel with a copy of any written responses and telephonic notification of
any verbal response of Parent, Merger Sub or their counsel. In the event that
the Offer is terminated or withdrawn by Merger Sub, Parent and Merger Sub shall
cause all tendered Shares to be returned to the registered holders of the Shares
represented by the certificate or certificates surrendered to the Paying Agent.
2.2 COMPANY ACTION.
(a) The Company hereby approves of and consents to the Offer and
represents that (i) the Board, at a meeting duly called and held on February 21,
2000 (the "February 21 Meeting"), has unanimously (with one director having
recused himself) (A) determined that this Agreement and the transactions
contemplated hereby, including, without limitation, each of the Offer and the
Merger (the "Transactions"), are fair to and in the best interests of the
holders of Shares, (B) approved and adopted this Agreement and the Transactions,
(C) resolved to recommend, subject to the conditions set forth herein, that the
stockholders of the Company accept the Offer and approve and adopt this
Agreement and the Transactions and (D) took all action necessary to render the
limitations on business combinations contained in Section 203 of the DGCL
inapplicable to this Agreement and the transactions contemplated hereby; (ii)
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ") has delivered to the
Board a written opinion that the consideration to be received by the holders of
Shares pursuant to each of the Offer and the Merger is fair to such holders from
a financial point of view; and (iii) the Board, at the February 21 Meeting,
determined upon receipt of the opinion referred to in clause (ii) of this
sentence that the terms of the Offer (including the Per Share Amount) are fair
to, and in the best interests of, the Company and the holders of Shares. The
Company has been authorized by DLJ, subject to prior review by such financial
advisor, to include such fairness opinion (or references thereto) in the Offer
Documents and in the Schedule 14D-9 (as defined in paragraph (b) of this Section
2.2), the Proxy Statement and the Section 14(c) Information Statement (as
defined in Section 4.7). Subject to the fiduciary duties of the Board under
applicable law after taking into account the advice of the Company's outside
legal counsel, the Company hereby consents to the inclusion in the Offer
Documents of the recommendation of the Board described above. The Company has
been advised by each of its directors and executive officers that they intend
either to tender all Shares beneficially owned by them to Merger Sub pursuant to
the Offer or to vote such Shares in favor of the approval and adoption by the
stockholders of the
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Company of this Agreement and the Transactions; provided, however, that such
directors and executive officers shall have no obligation under this Agreement
to so tender or vote their Shares if this Agreement is terminated.
(b) As soon as reasonably practicable on the date of commencement of
the Offer, the Company shall file with the Commission a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with all
amendments and supplements thereto, the "Schedule 14D-9") containing, subject
only to the fiduciary duties of the Board under applicable law after taking into
account the advice of the Company's outside legal counsel, the recommendation of
the Board described in Section 2.2(a) and shall disseminate the Schedule 14D-9
to the extent required by Rule 14d-9 promulgated under the Exchange Act and any
other applicable federal securities laws. The Company, Parent and Merger Sub
agree to correct promptly any information provided by any of them for use in the
Schedule 14D-9 which shall have become false or misleading, and the Company
further agrees to take all steps necessary to cause the Schedule 14D-9 as so
corrected to be filed with the Commission and disseminated to holders of Shares,
in each case as and to the extent required by applicable federal securities
laws. Parent, Merger Sub and their counsel shall be given an opportunity to
review and comment on the Schedule 14D-9 and any amendments thereto prior to the
filing thereof with the Commission. The Company will provide Parent and Merger
Sub and their counsel with a copy of any written comments or telephonic
notification of any verbal comments the Company may receive from the Commission
with respect to the Offer Documents promptly after the receipt thereof and will
provide Parent and Merger Sub and their counsel with a copy of any written
responses and telephonic notification of any verbal response of the Company or
its counsel.
(c) The Company shall promptly furnish Merger Sub with mailing labels
containing the names and addresses of all record holders of Shares and with
security position listings of Shares held in stock depositories, each as of the
most recent date reasonably practicable, together with all other available
listings and computer files containing names, addresses and security position
listings of record holders and non-objecting beneficial owners of Shares as of
the most recent date reasonably practicable. The Company shall furnish Merger
Sub with such additional information, including, without limitation, updated
listings and computer files of stockholders, mailing labels and security
position listings, and such other assistance as Parent, Merger Sub or their
agents may reasonably request. Subject to the requirements of applicable law,
and except for such steps as are necessary to disseminate the Offer Documents
and any other documents necessary to consummate the Offer or the Merger, Parent
and Merger Sub shall hold in confidence the information contained in such
labels, listings and files, shall use such information only in connection with
the Offer and the Merger, and, if this Agreement shall be terminated in
accordance with Article VIII, shall deliver promptly to the Company all copies
of such information then in their possession and shall certify in writing to the
Company its compliance with this Section 2.2(c).
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ARTICLE III
THE MERGER AND RELATED MATTERS
3.1 THE MERGER.
(a) Merger; Effective Time. At the Effective Time and subject to and
upon the terms and conditions of this Agreement, Merger Sub shall, and Parent
shall cause Merger Sub to, merge with and into the Company in accordance with
the provisions of the DGCL, the separate corporate existence of Merger Sub shall
cease and the Company shall continue as the Surviving Entity. The Effective Time
shall occur upon the filing with the Secretary of State of the State of Delaware
a Certificate of Merger (the "Certificate of Merger") substantially in the form
of Exhibit 3.1(a) and executed in accordance with the applicable provisions of
the DGCL, or at such later time as may be agreed to by Parent and the Company
and specified in the Certificate of Merger. Provided that this Agreement has not
been terminated pursuant to Article VIII, the parties will cause the Certificate
of Merger to be filed as soon as practicable after the Closing. At the election
of Parent, any direct or indirect wholly owned subsidiary of Parent may be
substituted for Merger Sub as a constituent corporation in the Merger, provided
that no such substitution shall be made if it would delay or impede the
transactions contemplated hereby. In such event, the parties agree to execute an
appropriate amendment to this Agreement in order to reflect the foregoing.
(b) Effects of the Merger. The Merger shall have the effect set forth
in the DGCL. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time, all the properties, rights, privileges, powers
and franchises of the Company and Merger Sub shall vest in the Surviving Entity,
and all debts, liabilities and duties of the Company and Merger Sub shall become
the debts, liabilities and duties of the Surviving Entity. If, at any time after
the Effective Time, the Surviving Entity considers or is advised that any deeds,
bills of sale, assignments, assurances or any other actions or things are
necessary or desirable to vest, perfect or confirm of record or otherwise in the
Surviving Entity its right, title or interest in, to or under any of the rights,
properties, or assets of either the Company or Merger Sub, or otherwise to carry
out the intent and purposes of this Agreement, the officers and directors of the
Surviving Entity will be authorized to execute and deliver, in the name and on
behalf of each of the Company and Merger Sub, all such deeds, bills of sale,
assignments and assurances and to take and do, in the name and on behalf of each
of the Company and Merger Sub, all such other actions and things as the Board of
Directors of the Surviving Entity may determine to be necessary or desirable to
vest, perfect or confirm any and all right, title and interest in, to and under
such rights, properties or assets in the Surviving Entity or otherwise to carry
out the intent and purposes of this Agreement.
(c) Certificate of Incorporation and Bylaws of Surviving Entity. At the
Effective Time, the Company's Amended and Restated Certificate of Incorporation
("Company Charter") shall be amended pursuant to the Certificate of Merger to be
identical to the Certificate of Incorporation of Merger Sub in effect
immediately prior to the Effective Time, except that Article I thereof shall
read as follows: "The name of the corporation is: Ascent Entertainment Group,
Inc." Such Company
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Charter as so amended shall be the Certificate of Incorporation of the Surviving
Entity until thereafter duly amended in accordance with the terms thereof and
the DGCL. At the Effective Time, the Company's Amended and Restated Bylaws
("Company Bylaws") shall be amended to be identical to the bylaws of Merger Sub
in effect immediately prior to the Effective Time and, in such amended form,
shall be the bylaws of the Surviving Entity until thereafter duly amended in
accordance with the terms thereof, the terms of the Certificate of Incorporation
of the Surviving Entity and the DGCL.
(d) Directors and Officers of Surviving Entity. At the Effective Time,
the directors of Merger Sub immediately prior to the Effective Time shall be the
directors of the Surviving Entity, and all such directors will hold office from
the Effective Time until their respective successors are duly elected or
appointed and qualify in the manner provided in the Certificate of Incorporation
and Bylaws of the Surviving Entity, or as otherwise provided by applicable law.
At the Effective Time, the officers of Merger Sub immediately prior to the
Effective Time shall be the officers of the Surviving Entity, and all such
officers will hold office until their respective successors are duly appointed
and qualify in the manner provided in the Bylaws of the Surviving Entity, or as
otherwise provided by applicable law.
3.2 CLOSING. The Closing shall take place (i) at 10:00 a.m. (New York time)
at the offices of Baker Botts L.L.P., 599 Lexington Avenue, New York, New York
10022, on the first business day following the date on which the last of the
conditions set forth in Article VII (other than the filing of the Certificate of
Merger and other than any such conditions which by their terms are not capable
of being satisfied until the Closing Date) is satisfied or, if permissible,
waived, or (ii) on such other date and at such other time or place as is
mutually agreed by Parent and the Company.
3.3 CONVERSION OF SECURITIES. At the Effective Time, by virtue of the
Merger and without any action on the part of Merger Sub, the Company or the
holders of any of the Shares:
(a) Each Share issued and outstanding immediately prior to the
Effective Time (other than any Shares to be cancelled pursuant to Section 3.3(b)
and any Dissenting Shares (as hereinafter defined)) shall be cancelled and shall
be converted automatically into the right to receive an amount equal to the Per
Share Amount in cash (the "Merger Consideration") payable, without interest, to
the holder of such Share, upon surrender, in the manner provided in Section 3.6,
of the certificate that formerly evidenced such Share;
(b) Each Share held in the treasury of the Company and each Share owned
by Merger Sub, Parent or any direct or indirect wholly owned subsidiary of
Parent or of the Company immediately prior to the Effective Time shall be
cancelled without any conversion thereof and no payment or distribution shall be
made with respect thereto; and
(c) Each share of common stock, par value $.01 per share, of Merger Sub
issued and outstanding immediately prior to the Effective Time shall be
converted into and exchanged for
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one validly issued, fully paid and nonassessable share of common stock, par
value $.01 per share, of the Surviving Entity.
3.4 OPTIONS; SARS.
(a) Company Stock Options. Prior to the Initial Expiration Date, the
Company shall take all actions necessary and appropriate to provide that, upon
the Effective Time, each outstanding option to purchase Shares or other similar
interest (collectively, the "Options") granted under any Company Stock Plan,
whether or not then exercisable or vested, shall be cancelled and, in exchange
therefor, each holder of such Option shall receive an amount in cash in respect
thereof, if any, equal to the product of (i) the excess, if any, of the Merger
Consideration over the per share exercise price thereof and (ii) the number of
shares subject thereto.
(b) Stock Appreciation Rights. Prior to the Initial Expiration Date,
the Company shall take all actions necessary and appropriate to provide that,
upon the Effective Time, each outstanding stock appreciation right ("SAR")
granted under any Company Stock Plan, whether or not then exercisable or vested,
shall be cancelled and, in exchange therefor, each holder of such SAR shall
receive an amount in cash in respect thereof, if any, equal to the product of
(i) the excess, if any, of the Merger Consideration over the per share exercise
price thereof and (ii) the number of shares subject thereto.
3.5 DISSENTING SHARES.
(a) Notwithstanding any provision of this Agreement to the contrary,
Shares that are outstanding immediately prior to the Effective Time and which
are held by stockholders who shall have not voted in favor of the Merger or
consented thereto in writing and who shall have demanded properly in writing
appraisal for such Shares in accordance with Section 262 of the DGCL (insofar as
such Section is applicable to the Merger and provides for appraisal rights with
respect to it) (collectively, the "Dissenting Shares") shall not be converted
into or represent the right to receive the Merger Consideration. Such
stockholders shall be entitled to receive payment of the appraised value of such
Shares held by them in accordance with the provisions of Section 262 of the DGCL
(insofar as such Section is applicable to the Merger and provides for appraisal
rights with respect to it), except that all Dissenting Shares held by
stockholders who shall have failed to perfect or who effectively shall have
withdrawn or lost their rights to appraisal of such Shares under the DGCL shall
thereupon be deemed to have been converted into and to have become exchangeable
for, as of the Effective Time, the right to receive the Merger Consideration,
without any interest thereon, upon surrender, in the manner provided in Section
3.6, of the certificate or certificates that formerly evidenced such Shares.
(b) The Company shall give Parent (i) prompt notice of any demands for
appraisal received by the Company, withdrawals of such demands, and any other
instruments served pursuant to Section 262 of the DGCL in respect of Dissenting
Shares and received by the Company and (ii) the opportunity to direct all
negotiations and proceedings with respect to demands for appraisal
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under the DGCL. The Company shall not, except with the prior written consent of
Parent, make any payment with respect to any demands for appraisal or offer to
settle or settle any such demands.
(c) The right of any stockholder to receive the Merger Consideration
shall be subject to and reduced by the amount of any required tax withholding
obligation.
3.6 SURRENDER OF SHARES; STOCK TRANSFER BOOKS.
(a) Prior to the Effective Time, Merger Sub shall designate a bank or
trust company reasonably satisfactory to the Company to act as agent (the
"Paying Agent") for the holders of Shares in connection with the Merger to
receive the funds to which holders of Shares shall become entitled pursuant to
Section 3.3(a). Immediately prior to the Effective Time, Parent shall cause
Surviving Entity to have sufficient funds to deposit, and shall cause Surviving
Entity to deposit in trust with the Paying Agent, cash in the aggregate amount
equal to the product of (i) the number of shares outstanding immediately prior
to the Effective Time (other than Shares owned by Parent or Merger Sub and
Shares as to which dissenters' rights have been exercised as of the Effective
Time) and (ii) the Per Share Amount.
(b) Promptly after the Effective Time, Parent shall cause the Surviving
Entity to mail to each Person who was, at the Effective Time, a holder of record
of Shares entitled to receive the Merger Consideration pursuant to Section
3.6(a) a form of letter of transmittal (which shall specify that delivery shall
be effected, and risk of loss and title to the certificates evidencing such
Shares (the "Certificates") shall pass, only upon proper delivery of the
Certificates to the Paying Agent) and instructions for use in effecting the
surrender of the Certificates pursuant to such letter of transmittal. Upon
surrender to the Paying Agent of a Certificate, together with such letter of
transmittal, duly completed and validly executed in accordance with the
instructions thereto, and such other documents as may be required pursuant to
such instructions, the holder of such Certificate shall be entitled to receive
in exchange therefor the Merger Consideration for each Share formerly evidenced
by such Certificate, and such Certificate shall then be cancelled. No interest
shall accrue or be paid on the Merger Consideration payable upon the surrender
of any Certificate for the benefit of the holder of such Certificate. If payment
of the Merger Consideration is to be made to a Person other than the Person in
whose name the surrendered Certificate is registered on the stock transfer books
of the Company, it shall be a condition of payment that the Certificate so
surrendered shall be endorsed properly or otherwise be in proper form for
transfer and that the Person requesting such payment shall have paid all
transfer and other taxes required by reason of the payment of the Merger
Consideration to a Person other than the registered holder of the Certificate
surrendered or shall have established to the satisfaction of the Surviving
Entity that such taxes either have been paid or are not applicable. The
Surviving Entity shall pay all charges and expenses, including those of the
Paying Agent, in connection with the distribution of the Merger Consideration.
Until surrendered as contemplated by this Section 3.6, each Certificate shall be
deemed at any time after the Effective Time to represent only the right to
receive upon such surrender the amount of cash, without interest, into which the
Shares theretofore represented by such Certificate shall have been converted
pursuant to Section 3.3.
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(c) At any time following the twelfth month after the Effective Time,
the Surviving Entity shall be entitled to require the Paying Agent to deliver to
it any funds which had been made available to the Paying Agent and not disbursed
to holders of Shares (including, without limitation, all interest and other
income received by the Paying Agent in respect of all funds made available to
it) and, thereafter, such holders shall be entitled to look to the Surviving
Entity (subject to abandoned property, escheat and other similar laws) only as
general creditors thereof with respect to any Merger Consideration that may be
payable upon due surrender of the Certificates held by them. Notwithstanding the
foregoing, neither the Surviving Entity nor the Paying Agent shall be liable to
any holder of a Share for any Merger Consideration delivered in respect of such
Share to a public official pursuant to any abandoned property, escheat or other
similar law.
(d) At the close of business on the day of the Effective Time, the
stock transfer books of the Company shall be closed and, thereafter, there shall
be no further registration of transfers of Shares on the records of the Company.
From and after the Effective Time, the holders of Shares outstanding immediately
prior to the Effective Time shall cease to have any rights with respect to such
Shares except as otherwise provided herein or by applicable law.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and
Merger Sub as follows:
4.1 ORGANIZATION AND QUALIFICATION. Each of the Company and each of its
Subsidiaries (i) is a corporation, partnership or limited liability company duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization, (ii) has all requisite
corporate, partnership or limited liability company power and authority to own,
lease and operate its properties and to carry on its business as it is now being
conducted and (iii) is duly qualified or licensed to do business and is in good
standing in each jurisdiction in which the properties owned, leased or operated
by it or the nature of its activities makes such qualification necessary, except
in such jurisdictions where the failure to be so duly qualified or licensed and
in good standing has not had and is not reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on the Company and its
Subsidiaries taken as a whole. Section 4.1 of the Company Disclosure Schedule
sets forth a complete and accurate list of each of the Company's Subsidiaries
and reflects the percentage and nature of the Company's ownership of each such
Subsidiary.
The Company owns 17,159,085 shares of OCC Stock and OCC Warrants
exercisable for 1,123,823 shares of OCC Stock. The shares of OCC Stock owned by
the Company have been validly issued, fully paid and non-assessable and are not
and, from the date hereof through and including the Effective Time, will not be
subject to any Liens or Restrictions, except as created by this Agreement or as
set forth on Section 4.1 of the Company Disclosure Schedule. The foregoing
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representations regarding the Company's ownership of shares of OCC Stock are
made subject to any changes that may affect the holders of OCC Stock generally.
The Company has delivered to Parent true and complete copies of the
Company Charter and Company Bylaws in effect on the date hereof. The Company's
minute books, true and complete copies of which have been made available to
Parent, contain the minutes (or draft copies of the minutes) of all meetings of
directors and stockholders of the Company since January 1, 1996.
4.2 AUTHORIZATION AND VALIDITY OF AGREEMENT. The Company has all requisite
corporate power and authority to enter into this Agreement and, subject to
obtaining the approval of its stockholders specified in Section 4.15, to perform
its obligations hereunder and consummate the Merger. The execution, delivery and
performance by the Company of this Agreement and the consummation by the Company
of the Merger have been duly and validly authorized by the Company Board and by
all other necessary corporate action on the part of the Company, subject to the
approval of the Company's stockholders specified in the previous sentence. This
Agreement has been duly executed and delivered by the Company and is a legal,
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms (except insofar as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally, or by principles governing the
availability of equitable remedies).
4.3 CAPITALIZATION. The authorized capital stock of the Company consists of
60,000,000 shares of Company Common Stock and 5,000,000 shares of preferred
stock, par value $0.01 per share (the "Company Preferred Stock"). As of the date
hereof, (i) 29,755,600 shares of Company Common Stock were issued and
outstanding and no shares were issued and held by the Company in its treasury or
by Subsidiaries of the Company and (ii) no shares of Company Preferred Stock
were issued and outstanding or were issued and held by the Company in its
treasury or by Subsidiaries of the Company. All issued and outstanding shares of
Company Common Stock have been validly issued and are fully paid and
non-assessable, and have not been issued in violation of any preemptive rights
or of any federal or state securities laws. There are no issued or outstanding
bonds, debentures, notes or other Indebtedness of the Company or any of its
Subsidiaries which have the right to vote (or which are convertible into other
securities having the right to vote) on any matters on which stockholders may
vote ("Voting Debt"). Section 4.3 of the Company Disclosure Schedule describes
all outstanding or authorized subscriptions, options, warrants, calls, rights,
commitments or any other agreements of any character to or by which the Company
or any of its Subsidiaries is a party or is bound which, directly or indirectly,
obligate the Company or any of its Subsidiaries to issue, deliver or sell or
cause to be issued, delivered or sold any additional shares of Company Common
Stock or any other capital stock, equity interest or Voting Debt of the Company
or any Subsidiary of the Company, any securities convertible into, or
exercisable or exchangeable for, or evidencing the right to subscribe for any
such shares, interests or Voting Debt, or any phantom shares, phantom equity
interests or stock or equity appreciation rights, or obligating the Company or
any of its Subsidiaries to grant, extend or enter into any such subscription,
option, warrant, call or right (collectively, "Convertible Securities"). Neither
the Company nor any
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Subsidiary thereof is subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any shares of its capital stock.
Neither the Company nor any of its Subsidiaries has adopted, authorized or
assumed any plans, arrangements or practices for the benefit of its officers,
employees or directors which require or permit the issuance, sale, purchase or
grant of any capital stock, other equity interests or Voting Debt of the Company
or any Subsidiary of the Company, any other securities convertible into, or
exercisable or exchangeable for, any such stock, interests or Voting Debt, or
any phantom shares, phantom equity interests or stock or equity appreciation
rights, other than the Company Stock Plans and the OCC Stock Plans. Other than
Permitted Encumbrances, all shares of capital stock of and all partnership or
other equity interests in each Subsidiary of the Company are owned free and
clear of any Lien or Restriction and the shares of capital stock of each
corporate Subsidiary of the Company are validly issued, fully paid and
non-assessable. Except as set forth on Section 4.3 of the Company Disclosure
Schedule, there are not, and immediately after the Effective Time, there will
not be, any outstanding or authorized subscriptions, options, warrants, calls,
rights, commitments or other agreements of any character to or by which the
Company or any of its Subsidiaries is a party or is bound that, directly or
indirectly, (x) call for or relate to the sale, pledge, transfer or other
disposition by the Company or any Subsidiary of the Company of any shares of
capital stock, any partnership or other equity interests or any Voting Debt of
any Subsidiary of the Company or (y) relate to the voting or control of such
capital stock, partnership or other equity interests or Voting Debt.
4.4 REPORTS AND FINANCIAL STATEMENTS. (a) The Company has filed all forms,
reports and documents, including all Reports on Form 10-K, Form 10-Q and Form
8-K, registration statements and proxy statements required to be filed with the
Commission since January 1, 1997 (collectively, the "Company SEC Reports"). None
of the Company SEC Reports, as of their respective dates, contained any untrue
statement of material fact or omitted to state 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. Each of the
consolidated balance sheets (including the related notes) included in the
Company SEC Reports presents fairly, in all material respects, the consolidated
financial position of the Company and its Subsidiaries as of the respective
dates thereof, and the other related financial statements (including the related
notes) included in the Company SEC Reports present fairly, in all material
respects, the results of operations and the changes in financial position of the
Company and its Subsidiaries for the respective periods or as of the respective
dates set forth therein, all in conformity with GAAP consistently applied during
the periods involved, except as otherwise noted therein and subject, in the case
of the unaudited interim financial statements, to normal year-end adjustments.
All of the Company SEC Reports, as of their respective dates, complied as to
form in all material respects with the requirements of the Exchange Act, the
Securities Act and the applicable rules and regulations thereunder.
(b) OCC has filed all forms, reports and documents, including all
Reports on Form 10-K, Form 10-Q and Form 8-K, registration statements and proxy
statements required to be filed with the Commission since January 1, 1997
(collectively, the "OCC SEC Reports"). None of the OCC SEC Reports, as of their
respective dates, contained any untrue statement of material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements
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therein, in light of the circumstances under which they were made, not
misleading. Each of the consolidated balance sheets (including the related
notes) included in the OCC SEC Reports presents fairly, in all material
respects, the consolidated financial position of OCC and its Subsidiaries as of
the respective dates thereof, and the other related statements (including the
related notes) included in the OCC SEC Reports present fairly, in all material
respects, the results of operations and the changes in financial position of OCC
and its Subsidiaries for the respective periods or as of the respective dates
set forth therein, all in conformity with GAAP consistently applied during the
periods involved, except as otherwise noted therein and subject, in the case of
the unaudited interim financial statements, to normal year-end adjustments. All
of the OCC SEC Reports, as of their respective dates, complied as to form in all
material respects with requirements of the Exchange Act, the Securities Act and
the applicable rules and regulations thereunder.
(c) Except as set forth on Section 4.4 of the Company Disclosure
Schedule, the Company and its Subsidiaries have not made any misstatements of
fact, or omitted to disclose any fact, to any Governmental Entity, or taken or
failed to take any action, which misstatements or omissions, actions or failures
to act, individually or in the aggregate, subject or would subject any Licenses
held by the Company or any of its Subsidiaries to revocation or failure to
renew, except where such revocation or failure to renew, individually or in the
aggregate, does not and would not be reasonably likely to have a Material
Adverse Effect on the Company and its Subsidiaries taken as a whole.
(d) Except as set forth on Section 4.4 of the Company Disclosure
Schedule, neither the Company nor any of its Subsidiaries has guaranteed or
otherwise agreed to become responsible for any Indebtedness of any other Person.
(e) Except as set forth on Section 4.4 of the Company Disclosure
Schedule, neither the Company nor any Subsidiary of the Company has any
obligation to contribute any additional capital to, or acquire any additional
interest in, any of its Affiliates.
(f) Except as and to the extent set forth in the Company SEC Reports or
in any Section of the Company Disclosure Schedules, neither the Company nor any
of its Subsidiaries has any liabilities or obligations of any nature, whether or
not accrued, contingent or otherwise, that would be required by generally
accepted accounting principles to be reflected on a consolidated balance sheet
of the Company and its Subsidiaries (including the notes thereto), except for
liabilities or obligations incurred in the ordinary course of business since
September 30, 1999, that would not, individually or in the aggregate, have a
Material Adverse Effect on the Company and its Subsidiaries taken as a whole.
4.5 NO APPROVALS OR NOTICES REQUIRED; NO CONFLICT WITH INSTRUMENTS. The
execution and delivery by the Company of this Agreement do not, and the
performance by the Company of its obligations hereunder and the consummation by
the Company of the Offer and Merger will not:
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(i) assuming approval by the Company's stockholders as contemplated by
Section 4.15, conflict with or violate the Company Charter or Company Bylaws or
the charter or bylaws of any corporate Subsidiary of the Company or the
partnership agreement of any partnership Subsidiary of the Company;
(ii) require any consent, approval, order or authorization of or other
action by any Governmental Entity (a "Governmental Consent") or any
registration, qualification, declaration or filing with or notice to any
Governmental Entity (a "Governmental Filing"), in each case on the part of the
Company or any Subsidiary of the Company, except for (A) the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware and
appropriate documents with the relevant authorities of other states in which the
Company is qualified to do business, (B) the Governmental Consents and
Governmental Filings with foreign, state and local governmental authorities set
forth on Section 4.5 of the Company Disclosure Schedule (the "Local Approvals"),
(C) the Governmental Filings required to be made pursuant to the pre-merger
notification requirements of the Hart-Scott Act, (D) the filing with the
Commission of (1) the Schedule 14D-9 and the Proxy Statement and (2) such
reports under Section 13(a), 13(d), 14(c), 15(d) or 16(a) of the Exchange Act as
may be required in connection with this Agreement or the transactions
contemplated hereby and (E) such other Governmental Consents and Government
Filings the absence or omission of which will not, either individually or in the
aggregate, have a material adverse effect on the Transactions or a Material
Adverse Effect on the Company and its Subsidiaries taken as a whole or the
Surviving Entity and its Subsidiaries taken as a whole;
(iii) except as set forth on Section 4.5 of the Company Disclosure
Schedule, require, on the part of the Company or any Subsidiary of the Company,
any consent by or approval or authorization of (a "Contract Consent") or notice
to (a "Contract Notice") any other Person (other than a Governmental Entity),
under any License or other Contract, except for such Contract Consents and
Contract Notices the absence or omission of which will not, either individually
or in the aggregate, have a material adverse effect on the Transactions or a
Material Adverse Effect on the Company and its Subsidiaries taken as a whole or
the Surviving Entity and its Subsidiaries taken as a whole;
(iv) assuming that the Contract Consents and Contract Notices
described on Section 4.5 of the Company Disclosure Schedule are obtained and
given, conflict with or result in any violation or breach of or default (with or
without notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation, suspension, modification or acceleration of any
obligation or any increase in any payment required by, or the impairment, loss
or forfeiture of any material benefit, rights or privileges under, or the
creation of a Lien or other encumbrance on any assets pursuant to (any such
conflict, violation, breach, default, right of termination, cancellation or
acceleration, loss or creation, a "Violation"), any "Contract" (which term shall
mean and include any note, bond, indenture, mortgage, deed of trust, lease,
franchise, permit, authorization, license, contract, instrument, employee
benefit plan or practice, or other agreement, obligation, commitment or
concession of any nature to which the Company or any Subsidiary of the Company
is a party, by which the Company, any Subsidiary of the Company or any of their
respective assets or properties
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is bound or affected or pursuant to which the Company or any Subsidiary of the
Company is entitled to any rights or benefits (including the Licenses)), except
for such Violations which would not, individually or in the aggregate, be
reasonably likely to have a material adverse effect on the transactions
contemplated hereby or a Material Adverse Effect on the Company and its
Subsidiaries taken as a whole or the Surviving Entity and its Subsidiaries taken
as a whole; or
(v) assuming that the Governmental Consents and Governmental Filings
specified in clause (ii) of this Section 4.5 are obtained, made and given,
result in a Violation of, under or pursuant to any law, rule, regulation, order,
judgment or decree applicable to the Company or any Subsidiary of the Company or
by which any of their respective properties or assets are bound, except for such
Violations which would not, individually or in the aggregate, be reasonably
likely to have a material adverse effect on the transactions contemplated hereby
or a Material Adverse Effect on the Company and its Subsidiaries taken as a
whole or the Surviving Entity and its Subsidiaries taken as a whole. As used
herein, the term "Governmental Entity" means and includes any court,
arbitrators, administrative, regulatory or other governmental department,
agency, commission, authority or instrumentality, domestic or foreign.
4.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. (a) Except as otherwise disclosed
in the Company SEC Reports or the OCC SEC Reports filed with the Commission
prior to the date hereof or as set forth on Section 4.6 of the Company
Disclosure Schedule, since September 30, 1999 through the date of this
Agreement, (i) there has not been any adverse change in, and no event has
occurred and no condition exists which, individually or together with all other
such changes, events and conditions, has had or, insofar as the Company can
reasonably foresee, is reasonably likely to have, a Material Adverse Effect on
the Company and its Subsidiaries taken as a whole; and (ii) through the date
hereof, other than actions that in the ordinary course of the Company's business
consistent with prior practice would not have required, and would have been
taken without, the approval of the Company Board, no action has been taken by
the Company or any Subsidiary of the Company which, if Section 6.5 had then been
in effect, would have been prohibited by such Section without the consent or
approval of Parent, and no agreements, understandings, obligations or
commitments, whether in writing or otherwise, to take any such action were
entered into during such period.
(b) Prior to the date hereof, the Company delivered to Parent a
schedule setting forth a detailed estimate of the amount of cash which the
Company expects to have retained after giving effect to, among other things, the
payment of the severance obligations contemplated by Section 6.14 hereof and the
other transactions contemplated hereby, and the Company has no reason to believe
that such estimate is materially inaccurate.
4.7 INFORMATION SUPPLIED. None of the information supplied or to be
supplied by the Company for inclusion or incorporation by reference in any
documents filed or to be filed with the Commission or any other Governmental
Entity in connection with the transactions contemplated hereby, including (i)
the Offer Documents, (ii) the Schedule 14D-9, (iii) the information to be filed
by the Company in connection with the Offer pursuant to Rule 14f-1 promulgated
under the
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Exchange Act (the "Information Statement"), (iv) the Proxy Statement and (v) the
information to be filed by the Company in connection with the Merger pursuant to
Section 14(c) of the Exchange Act (the "Section 14(c) Information Statement"),
will, at the respective times such documents are filed, and also in the case of
the Offer Documents, the Schedule 14D-9, the Information Statement and the
Section 14(c) Information Statement, at the respective times the Offer
Documents, the Schedule 14D-9, the Information Statement and the Section 14(c)
Information Statement are first published, sent or given to the Company's
stockholders, and also, in the case of the Proxy Statement, at the time the
Proxy Statement is first mailed to the Company's stockholders, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading (or
necessary to correct any statement in any earlier communication), except that no
representation or warranty is made by the Company with respect to statements
made or incorporated by reference therein based on information supplied by
Parent or Merger Sub in writing specifically for inclusion or incorporation by
reference therein. The Schedule 14D-9, the Information Statement, the Proxy
Statement and the Section 14(c) Information Statement will comply as to form in
all material respects with the requirements of the Exchange Act and the rules
and regulations thereunder and will comply in all respects with the applicable
requirements of the DGCL.
4.8 LEGAL PROCEEDINGS. As of the date hereof, there is no (i) suit, action
or proceeding pending of which the Company has received notice or, to the
knowledge of the Company, any investigation pending or any suit, action,
proceeding or investigation threatened, against, involving or affecting the
Company, any Subsidiary of the Company or any of its or their properties or
rights (including without limitation the Company's interests in OCC), which, if
adversely determined, is, insofar as the Company can reasonably foresee,
reasonably likely to have, either individually or in the aggregate, a Material
Adverse Effect on the Company and its Subsidiaries taken as a whole; (ii)
judgment, order, decree, Injunction or order of any Governmental Entity entered
against and binding on the Company or any Subsidiary of the Company of which the
Company has received notice, which, insofar as the Company can reasonably
foresee, is reasonably likely to have, either individually or in the aggregate,
a Material Adverse Effect on the Company and its Subsidiaries taken as a whole;
(iii) suit, action or proceeding pending of which the Company has received
notice or, to the knowledge of the Company, any investigation pending or any
suit, action, proceeding or investigation threatened, against the Company or any
Subsidiary of the Company which seeks to restrain, enjoin or delay the
consummation of the Merger, the Offer or any of the other transactions
contemplated hereby or which seeks damages in connection therewith; and (iv)
Injunction of any type referred to in Section 7.1(c) of which the Company has
received notice which has been entered or issued and is in effect.
4.9 LICENSES; COMPLIANCE WITH REGULATORY REQUIREMENTS. The Company and its
Subsidiaries hold all licenses, franchises, ordinances, authorizations, permits,
certificates, variances, exemptions, concessions, leases, rights of way,
easements, instruments, orders and approvals, domestic or foreign required for
the ownership of the assets and operation of the businesses of the Company or
any of its Subsidiaries, except for the failure to hold any of the foregoing as
would not be reasonably likely to have, either individually or in the aggregate,
a Material Adverse Effect on
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the Company and its Subsidiaries taken as a whole (collectively, the
"Licenses"). Each of the Company and its Subsidiaries is in compliance with, and
has conducted its business so as to comply with, the terms of their respective
Licenses and with all applicable laws, rules, regulations, ordinances and codes,
except where the failure so to comply has not had and, insofar as reasonably can
be foreseen by the Company, in the future is not reasonably likely to have,
either individually or in the aggregate, a Material Adverse Effect on the
Company and its Subsidiaries taken as a whole. Without limiting the generality
of the foregoing, the Company and its Subsidiaries, (i) have all Licenses of
foreign, state and local governmental authorities required for the operation of
the facilities being operated on the date hereof by the Company or any of its
Subsidiaries (the "Permits"), (ii) have duly and currently filed all reports and
other information required to be filed by any other Governmental Entity in
connection with such Permits and (iii) are not in violation of any of such
Permits, other than the lack of Permits, delays in filing reports or possible
violations which have not had and, insofar as can reasonably be foreseen by the
Company, in the future are not reasonably likely to have, a Material Adverse
Effect on the Company and its Subsidiaries taken as a whole. Without limiting
the generality of the foregoing, to the knowledge of the Company, the Company
and its Subsidiaries have duly complied with, and the operation of their
respective businesses, equipment and other assets and the facilities owned or
leased by them are in compliance with the provisions of all applicable federal,
state and local environmental, health and safety laws, statutes, ordinances,
rules and regulations of any governmental or a quasi governmental authority
relating to (i) errors or omissions, (ii) discharges to surface water or ground
water, (iii) solid or liquid waste disposal, (iv) the use, storage, generation,
handling, transport, discharge, release or disposal of toxic or hazardous
substances or waste, (v) the emission of non-ionizing electromagnetic radiation
or (vi) other environmental, health or safety matters, including without
limitation all matters set forth in the Comprehensive Environmental Response
Compensation and Liability Act of 1980 as amended by the Superfund Amendments
and Authorization Act of 1986, the Occupational Safety and Health Act, the
Resource Conservation Recovery Act of 1976, the Federal Water Pollution Control
Act of 1970, the Safe Drinking Water Act of 1974, the Toxic Substances Control
Act of 1976, the Emergency Planning Community Right to Know Act of 1986, as
amended, and the Clean Air Act, as amended (collectively "Environmental and
Health Laws"); except, with respect to any of the foregoing, where the failure
to be or have been in such compliance would not be reasonably likely to have,
either individually or in the aggregate, a Material Adverse Effect on the
Company and its Subsidiaries taken as a whole. To the knowledge of the Company,
there are no investigations, administrative proceedings, judicial actions,
orders, claims or notices that are pending or threatened against the Company or
any of its Subsidiaries relating to violations of the Environmental and Health
Laws, except for such matters as would not be reasonably likely to have, either
individually or in the aggregate, a Material Adverse Effect on the Company and
its Subsidiaries taken as a whole.
4.10 BROKERS OR FINDERS. No agent, broker, investment banker, financial
advisor or other Person is or will be entitled, by reason of any agreement, act
or statement by the Company or any of its Subsidiaries, directors, officers,
employees or Affiliates, to any financial advisory, broker's, finder's or
similar fee or commission, to reimbursement of expenses or to indemnification or
contribution in connection with any of the transactions contemplated by this
Agreement, except DLJ, Allen & Company Incorporated and Wasserstein Perella &
Co., Inc., whose fees and expenses will
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be paid by the Company in accordance with the Company's agreement with such
firms (a schedule which has been delivered by the Company to Parent prior to the
date of this Agreement), and the Company agrees to indemnify and hold Parent and
Merger Sub harmless from and against any and all claims, liabilities or
obligations with respect to any other such fees, commissions, expenses or claims
for indemnification or contribution asserted by any Person on the basis of any
act or statement made or alleged to have been made by the Company or any of its
Subsidiaries, directors, officers, employees or Affiliates.
4.11 TAX MATTERS. (a) Except as set forth on Section 4.11, paragraph 1
of the Company Disclosure Schedule, (i) there has been duly filed by or on
behalf of the Company and each of its Subsidiaries (and each of their respective
predecessors, if any), or filing extensions from the appropriate federal, state,
foreign and local Governmental Entities have been obtained with respect to, all
material federal, state, foreign and local tax returns and reports required to
be filed on or prior to the date hereof; (ii) payment in full or adequate
provision for the payment of all material taxes required to be paid in respect
of the periods covered by such tax returns and reports has been made; (iii) a
reserve which the Company reasonably believes to be adequate has been set up for
the payment of all such material taxes anticipated to be payable in respect of
periods through the most recent fiscal quarter end; (iv) none of the income tax
returns required to be filed by or on behalf of the Company and each of its
Subsidiaries consolidated in such returns (the "Company Consolidated Returns")
or by or on behalf of OCC and each of its Subsidiaries consolidated in such
returns (the "OCC Consolidated Returns") have been examined by or settled with
the Internal Revenue Service ("IRS") or other Governmental Entity; (v) there are
no material "deferred intercompany transactions" or "intercompany transactions"
the gain or loss in which has not yet been taken into account under the Company
Consolidated Returns or the OCC Consolidated Returns; (vi) there are no Liens
for material taxes on the assets of the Company and each of its Subsidiaries,
except for statutory liens for current taxes not yet due and payable; and (vii)
there have been no claims or assessments against the Company or any of its
Subsidiaries asserted in writing by any Governmental Entity with respect to any
alleged deficiency in any tax, other than those claims or assessments that would
not have a Material Adverse Effect on the Company or its Subsidiaries taken as a
whole. For the purpose of this Agreement, the term "tax" (including, with
correlative meaning, the terms "taxes" and "taxable") shall include all federal,
state, local and foreign income, profits, franchise, gross receipts, payroll,
sales, employment, use, property, withholding, value added, alternative or added
minimum, ad valorem, transfer, excise and other taxes, duties or assessments of
any nature whatsoever, together with all interest, penalties and additions
imposed with respect to such amounts. The term "tax return" means a report,
return or other information required to be supplied to or filed with a
Governmental Entity with respect to any tax including an information return,
claim for refund, amended tax return or declaration of estimated tax.
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(b) Except as set forth on Section 4.11, paragraph 2 of the Company
Disclosure Schedule, the Company Plans and other Company employee compensation
arrangements in effect as of the date of this Agreement have been designed so
that the disallowance of a material deduction under Section 162(m) of the Code
for employee remuneration will not apply to any amounts paid or payable by the
Company or any of its Subsidiaries under any such plan or arrangement and, to
the best knowledge of the Company, no fact or circumstance exists that could
reasonably be expected to cause such disallowance to apply to any such amounts.
(c) Except as set forth on Section 4.11, paragraph 3 of the Company
Disclosure Schedule, neither the Company nor any of its Subsidiaries (i) is a
party to any tax allocation or tax sharing agreement, (ii) has been a member of
an affiliated group filing a consolidated federal income tax return other than a
group the common parent of which was the Company or (iii) has any liability for
taxes of any Person (other than the Company and its Subsidiaries) under Reg.
ss.1.1502-6 (or any similar provision of state, local or foreign law), as
transferee or successor, by contract or otherwise.
4.12 EMPLOYEE MATTERS.
(a) Section 4.12(a) of the Company Disclosure Schedule contains a true
and complete list of each bonus, deferred compensation, incentive compensation,
stock purchase, stock option, severance or termination pay, hospitalization,
medical, life or other insurance, supplemental unemployment benefits,
profit-sharing, pension or retirement plan, program, agreement or arrangement,
and each other employee benefit plan, program, agreement or arrangement,
sponsored, maintained or contributed to or required to be contributed to at any
time since January 1, 1997 by the Company or by any trade or business, whether
or not incorporated ("ERISA Affiliate"), that together with the Company would be
deemed a "controlled group" within the meaning of Section 4001 of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), for the benefit of
any employee or former employee of the Company, including any such type of plan
established, maintained or contributed to under the laws of any foreign country
(the "Company Plans"). Section 4.12(a) of the Company Disclosure Schedule
identifies each Company Plan that is an "employee benefit plan," as defined in
Section 3(3) of ERISA. Except as set forth on Section 4.12(a) of the Company
Disclosure Schedule, the Company has heretofore delivered to Parent true and
complete copies of each Company Plan and, if the Company Plan is funded through
a trust or any third party funding vehicle, a copy of the trust or other funding
document, the most recent determination letter issued by the IRS with respect to
each Company Plan for which such a letter has been obtained, annual reports on
Form 5500 required to be filed with any Governmental Entity for each Company
Plan which is an employee pension benefit plan for the three most recent plan
years and all required actuarial reports for the last two plan years of each
Company Plan.
(b) No Company Plan is subject to Title IV of ERISA or Section 412 of
the Code and neither the Company nor any ERISA Affiliate made, or was required
to make, contributions to any employee benefit plan subject to Title IV of ERISA
during the five year period ending on the Effective Time.
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(c) Except as set forth on Section 4.12(c) of the Company Disclosure
Schedule, each Company Plan that utilizes a funding vehicle described in Section
501(c)(9) of the Code or is subject to the provisions of Section 505 of the Code
has been the subject of a notification by the IRS that such funding vehicle
qualifies for tax-exempt status under Section 501(c)(9) of the Code and/or such
Company Plan complies with Section 505 of the Code, unless the IRS does not as a
matter of policy issue such notification with respect to that particular type of
plan. To the Company's knowledge, each such Company Plan satisfies, where
appropriate, the requirements of Sections 501(c)(9) and 505 of the Code.
(d) There has been no event or circumstance which has resulted in any
liability being asserted by any Company Plan, the Pension Benefit Guaranty
Corporation ("PBGC") or any other Person or entity under Title IV of ERISA
against the Company or any ERISA Affiliate nor, except as would not have a
material adverse effect on the business, assets, results of operations,
financial condition or prospects of the Company and its Subsidiaries taken as a
whole, is there or has there been any event or circumstance which could
reasonably be expected to result in such liability.
(e) Except for the NBA Collective Bargaining Agreement dated September
1995 and the NHL Collective Bargaining Agreement dated September 16, 1993, as
delivered to Parent, neither the Company nor any Subsidiary of the Company is a
party to or bound by the terms of any collective bargaining agreement. The
Company and each of its Subsidiaries is in compliance in all material respects
with all applicable laws respecting the employment and employment practices,
terms and conditions of employment and wage and hours of its employees and is
not engaged in any unfair labor practice. There is no labor strike or labor
disturbance pending or, to the knowledge of the Company, threatened against the
Company or any Subsidiary of the Company, and during the past five years neither
the Company nor any Subsidiary of the Company has experienced a work stoppage.
(f) Each Company Plan has been operated and administered in all
material respects in accordance with its terms and applicable law, including,
but not limited to, Section 406 of ERISA and Section 4975 of the Code.
(g) To the Company's knowledge, each Company Plan which is intended to
be "qualified" within the meaning of Section 401(a) of the Code is so qualified
and the trusts maintained thereunder are exempt from taxation under Section
501(a) of the Code.
(h) No Company Plan provides welfare benefits, including without
limitation death or medical benefits, with respect to current or former
employees or consultants of the Company or any Subsidiary of the Company beyond
their retirement or other termination of service (other than coverage mandated
by applicable law).
(i) There are no material pending, threatened or anticipated claims by
or on behalf of any Company Plan, by any employee or beneficiary covered under
any such Company Plan
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with respect to such Company Plan, or otherwise involving any such Company Plan
(other than routine claims for benefits).
(j) Section 4.12(j) of the Company Disclosure Schedule sets forth a
true and complete list as of the date hereof of each of the following
agreements, arrangements and commitments to which the Company or any of its
Subsidiaries is a party or by which any of them may be bound (true and complete
copies of which have been made available to Parent): (i) each employment,
consulting, agency or commission agreement not terminable without liability to
the Company or any of its Subsidiaries upon 60 days' or less prior notice to the
employee, consultant or agent and involving compensation or remuneration of more
than $200,000 per annum; (ii) each agreement with any executive officer or other
key employee of the Company or any Subsidiary of the Company the benefits of
which are contingent, or the terms of which are materially altered, upon the
consummation of the transactions contemplated by this Agreement; (iii) each
agreement with respect to any officer or other key employee of the Company or
any Subsidiary of the Company providing any term of employment or compensation
guarantee extending for a period longer than one year; and (iv) each other
material agreement or Company Plan any of the benefits of which will be
increased, or the vesting of the benefits of which will be accelerated, by the
occurrence of any of the transactions contemplated by this Agreement or the
value of any of the benefits of which will be calculated on the basis of any of
the transactions contemplated by this Agreement.
(k) No employee of the Company or any of its Subsidiaries will be
entitled to any additional benefits or any acceleration of the time of payment
or vesting of any benefits under any Company Plan as a result of the
consummation of the transactions contemplated by this Agreement or otherwise.
Except as set forth in Section 4.12(k) of the Company Disclosure Schedule, no
amount payable, or economic benefit provided, by the Company or any of its
Subsidiaries (including any acceleration of the time of payment or vesting of
any benefit) could be considered an "excess parachute payment" under Section
280G of the Code as a result of the consummation of the transactions
contemplated by this Agreement. No Person is entitled to receive any additional
payment from the Company or any of its Subsidiaries or any other Person (a
"Parachute Gross-Up Payment") in the event that the excise tax of Section 4999
of the Code is imposed on such Person. Other than as disclosed in a schedule to
this Agreement, neither the Company nor any of its Subsidiaries has granted to
any Person any right to receive any Parachute Gross-Up Payment.
4.13 FAIRNESS OPINION. The Company Board has received the oral opinion of
DLJ to the effect that, as of the date hereof, the consideration to be received
in the Offer and the Merger by the Company's stockholders is fair, from a
financial point of view, to the stockholders of the Company (the "Fairness
Opinion"). The Company has provided Parent with a true and complete copy of the
executed Fairness Opinion. In addition, the Company will include an executed
copy of the Fairness Opinion in or as an annex to the Offer Documents, the
Schedule 14D-9, the Proxy Statement and the Section 14(c) Information Statement.
4.14 RECOMMENDATION OF THE COMPANY BOARD. The Company Board, by vote at a
meeting duly called and held, has approved the Offer, the Merger and this
Agreement, and has
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determined that the consideration to be paid to the Company's stockholders is
fair to and in the best interests of the Company's stockholders and has adopted
resolutions recommending approval and adoption of this Agreement and the
transactions contemplated hereby to the stockholders of the Company.
4.15 VOTE REQUIRED. The only vote of stockholders of the Company required
under the DGCL, NASDAQ Stock Market requirements and the Company Charter and
Company Bylaws in order to approve the Merger is the affirmative vote of a
majority of the total number of votes entitled to be cast by the holders of the
issued and outstanding shares of Company Common Stock voting as a single class,
and no other vote or approval of or other action by the holders of any capital
stock of the Company is required for such approval and adoption.
4.16 INTANGIBLE PROPERTY; COPYRIGHTS. The Company and its Subsidiaries own
or have adequate rights to use all patents, trademarks, trade names, service
marks, brands, logos, copyrights, trade secrets, customer lists and other
proprietary intellectual property rights required for, used in or incident to
the businesses of the Company and its Subsidiaries as now conducted, except
where the failure to so own or have such rights to use, individually or in the
aggregate, would not be reasonably likely to have a Material Adverse Effect on
the Company and its Subsidiaries taken as a whole. Except as set forth on
Section 4.16 of the Company Disclosure Schedule, the Company does not have
knowledge, and the Company has not received any notice alleging, that it or any
of its Subsidiaries is infringing upon or otherwise violating, or has in the
past infringed upon or otherwise violated, the rights of any third party with
respect to any patent, trademark, trade name, service mark or copyright.
4.17 INVESTMENT SECURITIES. Section 4.17 of the Company Disclosure Schedule
sets forth a complete and accurate list of each capital, participating, equity
or other interest owned of record or beneficially by the Company in any
corporation, partnership, joint venture or other Person, other than the
Subsidiaries of the Company listed on Section 4.1 of the Company Disclosure
Schedule (each, an "Investment Security" and collectively, the "Investment
Securities"). Section 4.17 of the Company Disclosure Schedule includes, with
respect to each Investment Security, the name of the corporation, partnership,
joint venture or other Person in respect of which such Investment Security
relates, the amount and nature of such interest, and a description of the
material terms of any Liens and Restrictions with respect to such Investment
Securities. The Company's representations in this Section 4.17 with respect to
any such Investment Securities are made subject to any events, Liens and
Restrictions that affect the holders of the applicable class(es) or series of
such Investment Securities generally.
4.18 TRANSACTIONS WITH AFFILIATES AND CERTAIN AGREEMENTS. Section 4.18 of
the Company Disclosure Schedule sets forth an accurate and complete listing, (a)
as of the date hereof, of all contracts, leases, agreements or understandings,
whether written or oral, to which the Company or any of its Subsidiaries is a
party, or by which the Company, any of its Subsidiaries or any of their
respective assets is bound, which contain any material restrictions or
limitation on the ability of the Company or any of its Subsidiaries or
Affiliates to engage in any business anywhere in the world,
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and (b) of all contracts, leases, agreements or understandings, whether written
or oral, giving any Person the right to require the Company to register under
the Securities Act any securities of the Company or to participate in any
registration of such securities. Each of the Company SEC Reports and the OCC SEC
Reports complies as to form in all material respects with Item 404 of Regulation
S-K promulgated under the Securities Act and is true and correct in all material
respects with regard to its disclosure of any relationships or transactions
involving the Company or any Subsidiary or Affiliate of the Company of a type
required to be disclosed in the Company SEC Reports or the OCC SEC Reports, as
applicable, pursuant to such item.
4.19 NO INVESTMENT COMPANY. The Company is not an "investment company"
subject to the registration requirements of, and regulation as an investment
company under, the Investment Company Act of 1940, as amended.
4.20 STATE TAKEOVER STATUTES. The Boards of Directors of the Company and
OCC have approved the Offer, the Merger and this Agreement and the Transactions,
and such approvals are sufficient to render inapplicable to the Offer, the
Merger and this Agreement and the Transactions the provisions of Section 203 of
the DGCL. To the best of the Company's knowledge, no other state takeover
statute or similar statute or regulation applies or purports to apply to the
Offer, the Merger, this Agreement or any of the Transactions.
4.21 RIGHTS AGREEMENT. The Company has heretofore provided Parent with a
complete and correct copy of the Rights Agreement, including all amendments and
exhibits thereto. The amendment to the Rights Agreement attached hereto as
Section 4.21 to the Company Disclosure Schedule has been duly authorized by the
Board of Directors of the Company and has been duly executed by the Company,
and, accordingly, the execution of this Agreement, the announcement or making of
the Offer, the acquisition of Shares pursuant to the Offer and the Merger and
the other transactions contemplated in this Agreement will not cause the Rights
to become exercisable or result in either Parent or Merger Sub or any of their
Affiliates being considered to be an "Acquiring Person" (as defined in the
Rights Agreement) or the occurrence of a "Distribution Date" (as such term is
defined in the Rights Agreement) or an event described in Sections 11(a)(ii) or
13 of the Rights Agreement.
4.22 SALE OF ENTERTAINMENT ASSETS. Except as heretofore disclosed to Parent
in the Company Disclosure Schedules, (i) the Company is not a party to any
agreement which provides for the sale of the Entertainment Assets and (ii) no
broker, investment banker, financial advisor or other Person is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with the sale of the Entertainment Assets.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub hereby represent and warrant to the Company as
follows:
5.1 ORGANIZATION AND QUALIFICATION. Each of Parent and Merger Sub (i) is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation, (ii) has all requisite corporate power
and authority to own, lease and operate its properties and to carry on its
business as now being conducted and (iii) is duly qualified or licensed and is
in good standing to do business in each jurisdiction in which the properties
owned, leased or operated by it or the nature of its activities makes such
qualification necessary, except in such jurisdictions where the failure to be so
duly qualified or licensed and in good standing has not had and is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Parent and its Subsidiaries taken as a whole.
5.2 AUTHORIZATION AND VALIDITY OF AGREEMENT. This Agreement has been duly
executed and delivered by Parent and Merger Sub. Each of Parent and Merger Sub
has all requisite corporate power and authority to enter into this Agreement and
each of Parent and Merger Sub has all requisite corporate power and authority to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution, delivery and performance by Parent and
Merger Sub of this Agreement and the consummation by each of Parent and Merger
Sub of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action on the part of Parent and Merger
Sub (including in the case of Merger Sub, approval and adoption of this
Agreement and the Merger by Parent, as the sole stockholder of Merger Sub). This
Agreement is a legal, valid and binding obligation of Parent and Merger Sub,
enforceable in accordance with its terms (except insofar as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally, or by principles governing
the availability of equitable remedies).
5.3 NO PRIOR ACTIVITIES OF MERGER SUB. Merger Sub was formed by Parent
solely for the purpose of engaging in the transactions contemplated hereby, and
has engaged in no other business activities and has conducted its operations
only as contemplated hereby.
5.4 INFORMATION SUPPLIED. None of the information supplied or to be
supplied by Parent or Sub for inclusion or incorporation by reference in any
documents filed or to be filed with the Commission or any other Governmental
Entity in connection with the transactions contemplated hereby, including (i)
Offer Documents, (ii) the Schedule 14D-9, (iii) the Information Statement, (iv)
the Proxy Statement and (v) the Section 14(c) Information Statement, will, at
the respective times such documents are filed, and also, in the case of the
Offer Documents, the Schedule 14D-9, the Information Statement and the Section
14(c) Information Statement, at the respective times the Offer Documents, the
Schedule 14D-9, the Information Statement and the Section 14(c) Information
Statement are first published, sent or given to the Company's stockholders, and
also, in the case of
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the Proxy Statement, at the date the Proxy Statement is first mailed to the
Company's stockholders or at the time of the meeting of the Company's
stockholders held to vote upon the approval and adoption of this Agreement,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not misleading
(or necessary to correct any statement in any earlier communication), except
that no representation is made by Parent or Merger Sub with respect to
information supplied by the Company in writing specifically for inclusion or
incorporation by reference therein. The Offer Documents comply as to form in all
material respects with the Exchange Act and the rules and regulations
promulgated thereunder.
5.5 BROKERS. No broker, investment banker, financial advisor or other
Person is entitled to any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of Parent or Merger
Sub.
5.6 FINANCING. Parent has, or will have available to it at the time Merger
Sub is required to pay for Shares under the terms of the Offer, and will make
available to Merger Sub, sufficient funds to permit Merger Sub to acquire all
the outstanding Shares in the Offer and the Merger. Parent has obtained
commitments for such funds.
5.7 SALE OF ENTERTAINMENT ASSETS. Parent is not a party to any agreement
which provides for the sale of the Entertainment Assets.
ARTICLE VI
COVENANTS AND AGREEMENTS
6.1 STOCKHOLDERS MEETINGS. (a) If the Company Stockholder Approval (as
hereinafter defined) is required by law, the Company will, at Parent's request,
subject to the fiduciary duties of the Board of Directors of the Company under
applicable law, as soon as practicable following the expiration of the Offer,
duly call, give notice of, convene and hold a meeting of its stockholders (the
"Stockholders Meeting") for the purpose of approving and adopting this Agreement
and the Transactions (the "Company Stockholder Approval"). The Company will,
through its Board of Directors, recommend to its stockholders that the Company
Stockholder Approval be given. Notwithstanding the foregoing, (1) if Merger Sub
or any other Subsidiary of Parent shall acquire at least a majority of the
outstanding Shares, the parties shall, at the request of Parent, take all
necessary and appropriate action to cause the Merger to be approved by a written
consent of stockholders pursuant to Section 228 of the DGCL, the Company Charter
and the Company Bylaws (the "Written Consent") and for the Merger to become
effective as soon as practicable as permitted by applicable law after purchase
of such Shares in the Offer without a Stockholders Meeting in accordance with
Sections 228 and 251 of the DGCL, and (2) if Merger Sub or any other subsidiary
of Parent shall acquire at least 90% of the outstanding Shares, the parties
shall, at the request of
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Parent, take all necessary and appropriate action to cause the Merger to become
effective as soon as practicable after the expiration of the Offer without a
Stockholders Meeting in accordance with Section 253 of the DGCL. Without
limiting the generality of the foregoing, the Company agrees that its
obligations pursuant to the first sentence of this Section 6.1(a) shall not be
affected by (i) the commencement, public proposal, public disclosure or
communication to the Company of any Acquisition Proposal or (ii) the withdrawal
or modification by the Board of Directors of the Company of its approval or
recommendation of the Offer, this Agreement or the Merger.
(b) If the Company Stockholder Approval is required by law, the Company
will, at Parent's request, as soon as practicable following the expiration of
the Offer, prepare and file a preliminary Proxy Statement with the Commission
and will use its best efforts to respond to any comments of the Commission and
to cause the Proxy Statement to be mailed to the Company's stockholders as
promptly as practicable after responding to all such comments to the
satisfaction of the Commission. The Company will notify Parent promptly of the
receipt of any comments from the Commission and of any request by the Commission
for amendments or supplements to the Proxy Statement or for additional
information and will supply Parent with copies of all correspondence between the
Company or any of its representatives, on the one hand, and the Commission, on
the other hand, with respect to the Proxy Statement or the Merger. If at any
time prior to the Stockholders Meeting there shall occur any event that should
be set forth in an amendment or supplement to the Proxy Statement, the Company
will promptly prepare and mail to its stockholders such an amendment or
supplement. The Company will not mail any Proxy Statement, or any amendment or
supplement thereto, to which Parent reasonably objects after being afforded the
opportunity to review the same.
(c) Parent agrees to cause all Shares purchased pursuant to the Offer
and all other Shares owned by Parent or any Subsidiary of Parent to be voted in
favor of the Company Stockholder Approval.
(d) If Merger Sub or any other Subsidiary of Parent shall acquire at
least a majority of the outstanding Shares, the Company will, at Parent's
request, as soon as practicable following purchase of such Shares in the Offer,
prepare and file a preliminary Section 14(c) Information Statement with the
Commission and will use its best efforts to respond to any comments of the
Commission and to cause the Section 14(c) Information Statement to be mailed to
the Company's stockholders as promptly as practicable after responding to all
such comments to the satisfaction of the Commission. The Company will notify
Parent promptly of the receipt of any comments from the Commission and of any
request by the Commission for amendments or supplements to the Section 14(c)
Information Statement or for additional information and will supply Parent with
copies of all correspondence between the Company or any of its representatives,
on the one hand, and the Commission, on the other hand, with respect to the
Section 14(c) Information Statement or the Merger. If at any time prior to the
effective date of the Written Consent there shall occur any event that should be
set forth in an amendment or supplement to the Section 14(c) Information
Statement, the Company will promptly prepare and mail to its stockholders such
an amendment or supplement. The Company will not mail any Section 14(c)
Information Statement,
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or any amendment or supplement thereto, to which Parent reasonably objects after
being afforded the opportunity to review the same.
6.2 ACCESS TO INFORMATION CONCERNING PROPERTIES AND RECORDS. During the
period from the date of this Agreement and continuing until the earlier of the
termination of this Agreement or the Effective Time, upon reasonable notice, the
Company will (and will use reasonable efforts to cause each of its Subsidiaries
to) afford to the officers, employees, counsel, accountants and other authorized
representatives of Parent reasonable access during normal business hours to all
its properties, personnel, books and records and furnish promptly to such
Persons such financial and operating data and other information concerning its
business, properties, personnel and affairs as such Persons will from time to
time reasonably request and instruct the officers, directors, employees, counsel
and financial advisors of the Company to discuss the business operations,
affairs and assets of the Company and otherwise fully cooperate with the other
party in its investigation of the business of the Company. Parent agrees that it
will not, and will cause its officers, employees, counsel, accountants and other
authorized representatives not to, use any information obtained pursuant to this
Section 6.2 for any purpose unrelated to the consummation of the transactions
contemplated by this Agreement. No investigation pursuant to this Section 6.2
will affect any representation or warranty given by the Company to Parent
hereunder.
6.3 CONFIDENTIALITY. Except as otherwise agreed to in writing by the party
disclosing (or whose Representatives disclosed) the same (a "disclosing party"),
and unless and until Parent and Merger Sub shall have purchased a majority of
the outstanding Shares pursuant to this Offer, and notwithstanding the
termination of this Agreement, each party (a "receiving party") will, and will
cause its Affiliates, directors, officers, employees, agents and controlling
Persons (such Affiliates and other Persons with respect to any party being
collectively referred to as such party's "Representatives") to, (i) keep all
Confidential Information of the disclosing party confidential and not disclose
or reveal any such Confidential Information to any Person other than those
Representatives of the receiving party who are participating in effecting the
transactions contemplated hereby or who otherwise need to know such Confidential
Information, (ii) use such Confidential Information only in connection with
consummating the transactions contemplated hereby and enforcing the receiving
party's rights hereunder, and (iii) not use Confidential Information in any
manner detrimental to the disclosing party. In the event that a receiving party
is requested pursuant to, or required by, applicable law or regulation or by
legal process to disclose any Confidential Information of the disclosing party,
the receiving party will provide the disclosing party with prompt notice of such
request(s) to enable the disclosing party to seek an appropriate protective
order. A party's obligations hereunder with respect to Confidential Information
that (i) is disclosed to a third party with the disclosing party's written
approval, (ii) is required to be produced under order of a court of competent
jurisdiction or other similar requirements of a governmental agency, or (iii) is
required to be disclosed by applicable law or regulation, will, subject in the
case of clauses (ii) and (iii) above to the receiving party's compliance with
the preceding sentence, cease to the extent of the disclosure so consented to or
required, except to the extent otherwise provided by the terms of such consent
or covered by a protective order. If a receiving party uses a degree of care to
prevent disclosure of the Confidential Information that is at least as great as
the care it
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normally takes to preserve its own information of a similar nature, it will not
be liable for any disclosure that occurs despite the exercise of that degree of
care, and in no event will a receiving party be liable for any indirect,
punitive, special or consequential damages unless such disclosure resulted from
its willful misconduct or gross negligence in which event it will be liable in
damages for the disclosing party's lost profits resulting directly and solely
from such disclosure; provided, however, that notwithstanding the foregoing,
Parent will not be liable under any circumstances for damages other than direct
damages (and not lost profits or indirect, special, punitive or consequential
damages) resulting directly and solely from such wrongful disclosure by Parent.
In the event this Agreement is terminated, each party will, if so requested by
the other party, promptly return or destroy all of the Confidential Information
of such other party, including all copies, reproductions, summaries, analyses or
extracts thereof or based thereon in the possession of the receiving party or
its Representatives; provided, however, that the receiving party will not be
required to return or cause to be returned summaries, analyses or extracts
prepared by it or its Representatives, but will destroy (or cause to be
destroyed) the same upon request of the disclosing party.
For purposes of this Section 6.3, "Confidential Information" of a party
means all confidential or proprietary information about such party that is
furnished by it or its Representatives to the other party or the other party's
Representatives, regardless of the manner in which it is furnished.
"Confidential Information" does not include, however, information which (a) has
been or in the future is published or is now or in the future is otherwise in
the public domain through no fault of the receiving party or its
Representatives, (b) was available to the receiving party or its Representatives
on a non-confidential basis prior to its disclosure by the disclosing party, (c)
becomes available to the receiving party or its Representatives on a
non-confidential basis from a Person other than the disclosing party or its
Representatives who is not otherwise bound by a confidentiality agreement with
the disclosing party or its Representatives, or is not otherwise prohibited from
transmitting the information to the receiving party or its Representatives, or
(d) is independently developed by the receiving party or its Representatives
through Persons who have not had, either directly or indirectly, access to or
knowledge of such information.
6.4 PUBLIC ANNOUNCEMENTS. The Company and Parent shall use commercially
reasonable efforts to develop a joint communications plan and each party hereto
shall use reasonable efforts to ensure that all press releases and other public
statements with respect to the transactions contemplated hereby shall be
consistent with such joint communications plan. Unless otherwise required by
applicable law or by obligations pursuant to any listing agreement with or rules
of any securities exchange, the National Association of Securities Dealers, Inc.
or the NASDAQ Stock Market, each party shall use commercially reasonable efforts
to consult with, and use commercially reasonable efforts to accommodate the
comments of the other parties before issuing any press release or otherwise
making any public statement with respect to this Agreement or the transactions
contemplated hereby.
6.5 CONDUCT OF THE COMPANY'S BUSINESS PENDING MERGER SUB'S ELECTION DATE.
Except as set forth on Section 6.5 of the Company Disclosure Schedule, the
Company will, and will use its commercially reasonable efforts to cause each of
its Subsidiaries to, except as permitted, required
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or specifically contemplated by this Agreement, including without limitation
Section 6.6 hereof, or consented to or approved in writing by Parent, during the
period commencing on the date hereof and ending at the election or appointment
or Merger Sub's designees to the Board pursuant to Section 6.11 upon the
purchase by Merger Sub of any shares pursuant to the Offer (the "Merger Sub's
Election Date"):
(a) conduct its business only in, and not take any action except
in, the ordinary and usual course of its business and consistent with past
practices;
(b) use reasonable efforts to preserve intact its business
organization, to preserve its Licenses in full force and effect, to keep
available the services of its present officers and key employees, and to
preserve the goodwill of those having business relationships with it;
(c) not (i) make any change or amendments in its charter, bylaws
or partnership agreement (as the case may be); (ii) issue, grant, sell or
deliver any shares of its capital stock or any of its other equity interests or
securities (other than shares of Company Common Stock issued upon the exercise
of any Company Stock Options or shares of OCC Stock issued upon the valid
exercise of any OCC Warrant or any options to purchase shares of OCC Stock
issued pursuant to any OCC Stock Plan or otherwise ("OCC Stock Options")), or
any Convertible Securities (other than OCC Stock Options to purchase up to an
aggregate of 300,000 shares of OCC Stock; provided, however, that OCC shall not
grant to any one Person OCC Stock Options to purchase in excess of 100,000
shares of OCC Stock without the prior written consent of Parent) or any phantom
shares, phantom equity interests or stock or equity appreciation rights; (iii)
split, combine or reclassify the outstanding shares of its capital stock or any
of its other outstanding equity interests or securities or issue any capital
stock or other equity interests or securities in exchange for any such shares or
interests; (iv) redeem, purchase or otherwise acquire, directly or indirectly,
any shares of capital stock or any other securities of the Company or any
Subsidiary of the Company; (v) amend or modify any outstanding options,
warrants, or rights to acquire, or securities convertible into shares of its
capital stock or other equity interests or securities, or any phantom shares,
phantom equity interests or stock or equity appreciation rights, or adopt or
authorize any other stock or equity appreciation rights, restricted stock or
equity, stock or equity purchase, stock or equity bonus or similar plan,
arrangement or agreement; (vi) make any changes in its equity capital structure;
(vii) declare, set aside, pay or make any dividend or other distribution or
payment (whether in cash, property or securities) with respect to its capital
stock or other securities, except for dividends by a Subsidiary of the Company
other than OCC paid ratably to its stockholders or the partners thereof, as the
case may be (provided in the case of any non-wholly owned Subsidiary of the
Company that the other stockholders of or partners in such Subsidiary are not
officers, directors, employees or Affiliates of the Company or any of its
Subsidiaries); (viii) sell, transfer or otherwise dispose of, or pledge any
stock, equity or partnership interest owned by it in any Subsidiary of the
Company, except for dispositions permitted by Section 6.5(f) hereof; (ix) sell,
transfer or otherwise dispose of any securities of OCC owned beneficially or of
record by the Company or any Subsidiary of the Company or create or permit to
exist any Lien or Restriction thereon not listed on Section 4.17 of the Company
Disclosure Schedule (other than any sale, Lien or Restriction arising from any
change
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or transaction affecting the holders of such securities generally); or (x) enter
into or assume any contract, agreement, obligation, commitment or arrangement
with respect to any of the foregoing;
(d) not (i) modify or change in any material respect any material
License or other material Contract, other than in the ordinary course of
business; (ii) enter into any new employment, consulting, agency or commission
agreement, make any amendment or modification to any existing such agreement or
grant any increases in compensation, (A) in each case other than in the ordinary
course of business and consistent with past practice and with or granted to
Persons who are not officers or directors of the Company or any Subsidiary of
the Company and which do not, in the aggregate, materially increase the
compensation or benefit expense of the Company or any Subsidiary of the Company,
and (B) other than the regular annual salary increase granted in the ordinary
course of business and consistent with past practice to employees of the Company
or its Subsidiaries who are not directors or executive officers of the Company;
and (iii) establish, amend or modify any employee benefit plan of any kind
referred to in Section 4.12(a), except to the extent required by any applicable
law, the existing terms of any such plan or the provisions of this Agreement;
(iv) secure any of its outstanding unsecured Indebtedness, provide additional
security for any of its outstanding secured Indebtedness or grant, create or
suffer to exist any Lien on or with respect to any property, assets or rights of
the Company or any Subsidiary of the Company, except in any such case for
Permitted Encumbrances; (v) pay, discharge or satisfy claims, liabilities or
obligations (absolute, accrued, contingent or otherwise), other than any
payment, discharge or satisfaction in the ordinary course of business consistent
with past practice; (vi) cancel any Indebtedness or waive any claims or rights,
except in the ordinary course of business and consistent with past practice;
(vii) make any material capital expenditures (other than in accordance with the
capital expenditure budget for the year 2000 (the "2000 Budget") approved by the
OCC Board and in effect on the date hereof, a copy of which has been delivered
to Parent); (viii) accelerate the payment of, or otherwise prepay, any existing
outstanding Indebtedness except in the ordinary course of business consistent
with past practice; (ix) other than as contemplated or otherwise permitted by
this Agreement and other than the normal cash management practices of the
Company and its Subsidiaries conducted in the ordinary and usual course of their
business and consistent with past practice, make any advance or loan to or
engage in any material transaction with any director, officer, partner or
Affiliate not required by the terms of an existing Contract described in Section
4.18 of the Company Disclosure Schedule; (x) guarantee or otherwise become
responsible for any Indebtedness of any other Person; or (xi) enter into or
assume any contract, agreement, obligation, commitment or arrangement with
respect to any of the foregoing;
(e) not acquire or agree to acquire by merging or consolidating with,
or by purchasing a substantial equity interest in or a substantial portion of
the assets of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division thereof or
otherwise acquire or agree to otherwise acquire any assets which are material,
individually or in the aggregate, to the Company and its Subsidiaries taken as a
whole or OCC and its Subsidiaries taken as a whole;
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(f) except (i) as described on Section 6.5 of the Company Disclosure
Schedule and (ii) for dispositions in the ordinary course of business consistent
with prior practice, not sell, lease or encumber or otherwise voluntarily
dispose of, or agree to sell, lease, encumber or otherwise dispose of, any of
its assets which are material, individually or in the aggregate, to the Company
and its Subsidiaries taken as a whole or OCC and its Subsidiaries taken as
whole;
(g) not incur any Indebtedness;
(h) not take any action that would cause its representations and
warranties contained in Section 4.1 to be untrue in any respect or, except as
otherwise contemplated by this Agreement, make any changes to the corporate
structure of the Company and its Subsidiaries (including the structure of the
ownership by the Company of the direct and indirect interests in its
Subsidiaries and of the ownership by the Company and its Subsidiaries of their
respective businesses, properties and assets);
(i) not enter into any agreement that would (after the Effective Time)
purport to bind Parent or any of its Subsidiaries (other than the Company or any
of its Subsidiaries);
(j) not amend or modify in any respect the Corporate Agreement, dated
as of October 8, 1996, between the Company and OCC;
(k) not make any tax election or settle or compromise any material
federal, state, local or foreign income tax liability;
(l) not settle or comprise any pending or threatened suit, action or
claim which is material or which relates to any of the Transactions; and
(m) confer on a regular and frequent basis with Parent, report on
operational matters and promptly advise Parent orally and in writing of any
material adverse change; and promptly provide to Parent (or its counsel) copies
of all filings made by the Company with any federal, state, foreign or
supranational Governmental Entity in connection with this Agreement and the
transactions contemplated hereby.
Notwithstanding this Section 6.5, but subject to the provisions of
Section 6.6 (to the extent applicable), the foregoing provisions of this Section
6.5 shall not prohibit or restrict in any way the Company from entering into an
agreement with respect to a Superior Proposal.
6.6 NO SOLICITATION. (a) After the date hereof and prior to the Effective
Time, the Company will not, directly or indirectly, through any Subsidiary,
Affiliate, officer, director, employee, agent or representative or otherwise (i)
solicit or initiate the submission of proposals or offers from any Person
relating to any Alternative Proposal, (ii) cooperate with, or furnish or cause
to be furnished any non-public information concerning the business, properties,
or assets of the Company or any of its Subsidiaries, to any Person in connection
with any Alternative Proposal,
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(iii) negotiate with any Person with respect to any Alternative Proposal, (iv)
approve, recommend or permit the Company or any Subsidiary to enter into an
agreement or understanding with any Person relating to any Alternative Proposal,
or (v) vote for, execute a written consent (or equivalent instrument) in favor
of, or otherwise approve or enter into any agreements or understandings with
respect to any of the foregoing; provided, however, that this Section 6.6(a)
shall not prohibit the Company or the Company Board, to the extent the Company
Board determines in its good faith judgment that it is required by its fiduciary
duties under applicable law after taking into account the advice of the
Company's outside legal counsel, from providing information to, participating in
discussions or negotiating with any third party that delivers a Superior
Proposal that was not solicited in violation of this Section 6.6(a). Nothing
contained in this Agreement shall prevent the Company Board from complying with
Rule 14e-2 and Rule 14d-9 under the Exchange Act with regard to an Alternative
Proposal, provided that the Company Board shall not recommend that the
stockholders of the Company tender their shares in connection with a tender
offer except to the extent the Company Board determines in its good faith
judgment that such a recommendation is required to comply with the fiduciary
duties of the Company Board to stockholders under applicable law, after taking
into account the advice of outside legal counsel (it being understood that
disclosure by the Company of its receipt of an Alternative Proposal and the
terms thereof shall not alone constitute a withdrawal or modification of such
position or an approval or recommendation of such Alternative Proposal).
(b) The Company will notify Parent promptly (but in no event later than
24 hours) after receipt by the Company (or any of its advisors) of any
Alternative Proposal or of any request (other than in the ordinary course of
business and not related to an Alternative Proposal) for non-public information
relating to the Company or any of its Subsidiaries or for access to the
properties, books or records of the Company or any Subsidiary thereof by any
Person who is known to be considering making, or has made, an Alternative
Proposal. The Company shall provide such notice orally and in writing and shall
identify the Person making, and the terms and conditions of, any such
Alternative Proposal, indication or request. The Company shall keep Parent fully
informed, on a prompt basis (but in any event no later than 24 hours), of the
status and details of any such Alternative Proposal, indication or request. The
Company shall, and shall cause its Subsidiaries and the directors, employees and
other agents of the Company and its Subsidiaries to, cease immediately and cause
to be terminated all activities, discussions or negotiations, if any, with any
Persons conducted prior to the date hereof with respect to any Alternative
Proposal.
(c) Except as set forth above in this Section 6.6, the Company
covenants and agrees with Parent that prior to the Effective Time the Company
will not, and will not cause or permit any Subsidiary of the Company to, (i)
voluntarily sell, dispose of, tender or exchange or agree to sell, dispose of,
tender or exchange any shares of OCC Stock owned by the Company or any
Subsidiary of the Company on the date hereof or hereafter acquired (including
without limitation any such sale or disposition in connection with a tender
offer, exchange offer or similar transaction) (the "Company OCC Shares"), (ii)
vote, or execute a written consent or proxy with respect to the Company OCC
Shares, which the Company or any such Subsidiary is entitled to vote, in favor
of any acquisition by any Person of OCC, of any equity interest in OCC, or of a
material portion of the
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assets of OCC (an "OCC Alternative Transaction") or agree with any other Person
to vote, or execute a written consent or proxy, with respect to any such Company
OCC Shares or (iii) publicly recommend any OCC Alternative Transaction or
otherwise express an intention to take any of the actions otherwise prohibited
by this Section 6.6(c) (it being understood that disclosure by the Company or
any of its Subsidiaries of the receipt of a proposal for an OCC Alternative
Transaction shall not alone constitute a recommendation of such OCC Alternative
Transaction or an expression of intent prohibited by this Section 6.6(c));
provided that the Company's obligations to cause its representatives on the
Board of Directors of OCC (or any committee thereof) to take any action (or to
refrain from taking any action) in compliance with this Section 6.6(c) shall be
subject in all respects to such Persons' fiduciary duties under applicable law.
6.7 REASONABLE EFFORTS. (a) Each of the Company, Parent and Merger Sub
agree to use reasonable efforts to take, or cause to be taken, all actions, and
to do, or cause to be done, all things reasonably necessary, proper or advisable
to consummate and make effective the transactions contemplated by this Agreement
as soon as reasonably practicable, including such actions or things as any party
hereto may reasonably request in order to cause any of the conditions to any
other party's obligation to consummate such transactions specified in Article
VII and Annex A to be fully satisfied, and to promptly cooperate with and
furnish information to each other in connection with any requirements imposed
upon any of them with respect thereto. Without limiting the generality of the
foregoing, the parties shall (and shall cause their respective directors,
officers and Subsidiaries, and use their reasonable efforts to cause their
respective Affiliates, employees, agents, attorneys, accountants and
representatives, to) consult and fully cooperate with and provide reasonable
assistance to each other in (i) the preparation and filing of any documents with
the Commission contemplated hereby (including any necessary amendments or
supplements); (ii) using commercially reasonable efforts to obtain all necessary
consents, approvals, waivers, licenses, permits, authorizations, registrations,
qualifications, or other permission or action by, and giving all necessary
notices to and making all necessary filings with and applications and
submissions to, any Governmental Entity or other Person required to be obtained
or made by Parent, Merger Sub, the Company or any of their Subsidiaries in
connection with the Offer, the Merger or the taking of any action contemplated
thereby or by this Agreement; (iii) filing all pre-merger notification and
report forms required under the Hart-Scott Act and responding to any requests
for additional information made by any Governmental Entity pursuant to the
Hart-Scott Act; (iv) using commercially reasonable efforts to lift any
Injunction of any type referred to in Section 7.1(c); (v) providing all such
information about such party, its Subsidiaries and its officers, directors,
partners and Affiliates and making all applications and filings as may be
necessary or reasonably requested in connection with any of the foregoing; and
(vi) in general, using commercially reasonable efforts to consummate and make
effective the transactions contemplated thereby; provided, however, that in
making any such filing and in order to obtain any consent, approval, waiver,
license, permit, authorization, registration, qualification, or other permission
or action or the lifting of any Injunction referred to in this sentence, (A) no
party shall be required to pay any consideration, to divest itself of any of, or
otherwise rearrange the composition of, any of its assets or to agree to any of
the foregoing or any other condition or requirement that is materially adverse
or burdensome; (B) Parent shall not be required to take any action pursuant to
the foregoing if the taking of such action is reasonably likely
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to result in the imposition of a condition or restriction of the type referred
to in paragraphs (a), (b) or (c) of Annex A; and (C) without Parent's prior
consent, the Company shall not, and shall not permit any of its Subsidiaries to,
amend any material License or material Contract, pay any consideration or make
any agreement or reach any understanding or arrangement other than in the
ordinary course of business consistent with prior practice. Prior to making any
application to or filing with any Governmental Entity or other Person in
connection with this Agreement, each party shall provide the other party with
drafts thereof and afford the other party a reasonable opportunity to comment on
such drafts. In case at any time after the Effective Time any further action is
necessary or desirable to carry out the purposes of this Agreement, the proper
officers and directors of each party to this Agreement then in office shall use
their reasonable best efforts to take all such action.
(b) In its capacity as the sole stockholder of Merger Sub, Parent will
cause Merger Sub to approve and adopt this Agreement and the Transactions and to
take all corporate action necessary on its part to consummate the Transactions
and its obligations under this Agreement. Except as contemplated by this
Agreement, Merger Sub will not conduct any other business, and will have no
other assets or liabilities.
(c) The Company shall not, and shall not permit any of its Subsidiaries
to, take any action that would result in (i) any of the representations and
warranties of the Company set forth in this Agreement that are qualified as to
materiality becoming untrue, (ii) any of such representations and warranties
that are not so qualified becoming untrue in any material respect or (iii) any
of the Offer Conditions not being satisfied (subject to the Company's right to
take actions specifically permitted by Section 6.6).
(d) The Company shall give prompt notice to Parent, and Parent shall
give prompt notice to the Company, of (i) the occurrence, or non-occurrence, of
any event the occurrence, or non- occurrence, of which would be likely to cause
any representation or warranty contained in this Agreement to be untrue or
inaccurate and (ii) any failure of the Company, Parent or Merger Sub, as the
case may be, to comply with or satisfy any covenant, condition or agreement to
be complied with or satisfied by it hereunder; provided, however, that the
delivery of any notice pursuant to this Section shall not limit or otherwise
affect the remedies available hereunder to the party receiving such notice.
6.8 RIGHTS AGREEMENT. Except as otherwise provided in Section 4.21, the
Company shall not redeem the Rights or amend (other than to delay the
Distribution Date (as defined therein) or to render the Rights inapplicable to
the Offer and the Merger) or terminate the Rights Agreement prior to the
Effective Time unless required to do so by order of a court of competent
jurisdiction.
6.9 CERTAIN LITIGATION. (a) Each of the Company and Parent agrees to
vigorously defend against all actions, suits or proceedings in which such party
is named as a defendant which seek to enjoin, restrain or prohibit the
transactions contemplated hereby or seek damages with respect to such
transactions. The Company will not settle any such action, suit or proceeding or
fail to perfect
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on a timely basis any right to appeal any judgment rendered or order entered
against the Company therein without the consent of Parent (which consent will
not be withheld or delayed unreasonably). Each of Parent and the Company further
agrees to use its reasonable efforts to cause each of its Affiliates, directors
and officers to vigorously defend any action, suit or proceeding in which such
Affiliate, director or officer is named as a defendant and which seeks any such
relief to comply with this Section 6.9 to the same extent as if such Person were
a party hereto.
(b) The Company will not voluntarily cooperate with any third party
which has sought or may hereafter seek to restrain or prohibit or otherwise
oppose the Offer or the Merger and will cooperate with Parent and Merger Sub to
resist any such effort to restrain or prohibit or otherwise oppose the Offer or
the Merger, unless the Board of Directors of the Company determines in good
faith, after consultation with counsel, that failing so to cooperate with such
third party or cooperating with Parent or Merger Sub, as the case may be, would
constitute a breach of the Board's fiduciary duties under applicable law.
6.10 INDEMNIFICATION OF DIRECTORS AND OFFICERS. (a) From and after the
Effective Time, Parent and the Surviving Entity will jointly and severally
indemnify, defend and hold harmless the present and former officers, directors
and employees of the Company and any of its Subsidiaries, and any Person who is
or was serving at the request of the Company as an officer, director or employee
or agent of another Person (each, an "Indemnified Party" and together, the
"Indemnified Parties") (and will also, subject to Section 6.10(b), advance
expenses as incurred to the fullest extent permitted under the DGCL, provided
that the Person to whom expenses are advanced provides an undertaking to repay
such advances if it is ultimately determined that such Person is not entitled to
indemnification), against (i) all losses, costs, expenses, claims, damages,
judgments or liabilities arising out of, or in connection with, any claim,
action, suit, proceeding or investigation based in whole or in part on the fact
that the Indemnified Party is or was an officer, director or employee of the
Company or any of its Subsidiaries, or is or was serving at the request of the
Company as an officer, director or employee or agent of another Person,
pertaining to any matter existing or occurring before or at the Effective Time
and whether asserted or claimed before, at or after, the Effective Time (the
"Indemnified Liabilities") and (ii) all Indemnified Liabilities based in whole
or in part on, or arising in whole or in part out of, or pertaining to this
Agreement, the Offer, the Merger or any other transactions contemplated hereby
or thereby, in each case to the fullest extent permitted under the DGCL
(notwithstanding the charter, bylaws or similar organizational documents of the
Company, the Surviving Entity or Parent); provided, however, that such
indemnification will be provided only to the extent any directors' and officers'
liability insurance policy of the Company or its Subsidiaries does not provide
coverage and actual payment thereunder with respect to the matters that would
otherwise be subject to indemnification hereunder (it being understood that
Parent or the Surviving Entity shall, subject to Section 6.10(b), advance
expenses on a current basis as provided in this paragraph (a) notwithstanding
such insurance coverage to the extent that payments thereunder have not yet been
made, in which case Parent or the Surviving Entity, as the case may be, shall be
entitled to repayment of such advances from the proceeds of such insurance
coverage). Parent and Merger Sub agree that all rights to indemnification,
including provisions relating to advances of expenses incurred in defense of any
action, suit or proceeding, whether civil, criminal, administrative
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or investigative (each, a "Claim"), existing in favor of the Indemnified Parties
as provided in the Company Charter or Company Bylaws or pursuant to other
agreements, or certificates of incorporation or bylaws or similar documents of
any Subsidiaries of the Company, as in effect as of the date hereof, with
respect to matters occurring through the Effective Time, will survive the Merger
and will continue in full force and effect. The Surviving Entity shall, and
Parent shall cause the Surviving Entity to, maintain in effect for not less than
three years after the Effective Time the current policies of directors' and
officers' liability insurance maintained by the Company and the Company's
Subsidiaries with respect to matters occurring prior to or at the Effective
Time; provided, however, that (i) the Surviving Entity may substitute therefor
policies of at least the same coverage containing terms and conditions which are
no less advantageous to the Indemnified Parties with an insurance company or
companies, the claims paying ability of which is substantially equivalent to the
claims paying ability of the insurance company or companies providing currently
such insurance coverage for directors and officers of the Company, and (ii) the
Surviving Entity shall not be required to pay an annual premium for such
insurance in excess of three times the last annual premium paid prior to the
date hereof, but in such case shall purchase as much coverage as possible for
such amount.
(b) If any Claim relating hereto or to the transactions contemplated by
this Agreement is commenced before the Effective Time, the Company, Parent and
the Surviving Entity agree to cooperate and use their respective reasonable
efforts to vigorously defend against and respond thereto. Any Indemnified Party
wishing to claim indemnification under paragraph (a) of this Section 6.10, upon
learning of any such claim, action, suit, proceeding or investigation (whether
arising before, at or after the Effective Time), will promptly notify Parent
thereof (but the failure so to notify will not relieve the Company, Parent or
the Surviving Entity from any liability which it may have under this Section
6.10 except to the extent such failure materially prejudices such party),
whereupon Parent or the Surviving Entity will have the right, from and after the
Effective Time, to assume from such Indemnified Party and control the defense
thereof on behalf of such Indemnified Party, and upon such assumption, the
Surviving Entity will not be liable to such Indemnified Parties for any legal
expenses of other counsel or any other expenses subsequently incurred by such
Indemnified Parties in connection with the defense thereof. Notwithstanding the
foregoing, if counsel for the Indemnified Parties advises that there are issues
which raise conflicts of interest between Parent or the Surviving Entity and the
Indemnified Parties, the Indemnified Parties may retain separate counsel and
Parent will pay or cause to be paid all reasonable fees and expenses of such
counsel; provided that Parent will not be obligated pursuant to this Section
6.10(b) to pay or cause to be paid for more than one firm or counsel to
represent all Indemnified Parties in any jurisdiction unless there is, under
applicable standards of professional conduct, a conflict on any significant
issue between the positions of any two or more Indemnified Parties. Neither
Parent nor the Surviving Entity will be liable for any settlement effected
without its prior written consent, which consent, however, will not be
unreasonably withheld or delayed.
(c) This Section 6.10 is intended to benefit the Indemnified Parties
and will be enforceable by each Indemnified Party, his or her heirs and
representatives and will be binding on all successors and assigns of Parent,
Merger Sub and the Surviving Entity.
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6.11 DIRECTORS. (a) Promptly upon the purchase by Merger Sub of Shares
pursuant to the Offer, and from time to time thereafter, Merger Sub shall be
entitled to designate up to such number of directors, rounded up to the next
whole number, on the Board as shall give Merger Sub representation on the Board
equal to the product of the total number of directors on the Board (giving
effect to the directors elected pursuant to this sentence) multiplied by the
percentage that the aggregate number of Shares beneficially owned by Merger Sub
or any Affiliate of Merger Sub at such time bears to the total number of Shares
then outstanding, and the Company shall, at such time, promptly take all actions
necessary to cause Merger Sub's designees to be elected as directors of the
Company, including increasing the size of the Board or securing the resignations
of incumbent directors or both. At such times, the Company shall use its best
efforts to cause Persons designated by Merger Sub to constitute the same
percentage as Persons designated by Merger Sub shall constitute of the Board of
(i) each committee of the Board (some of whom may be required to be independent
as required by applicable law), (ii) each board of directors of each domestic
Subsidiary (including OCC, realizing that the Company has the right to appoint
only a majority of the OCC board) and (iii) each committee of each such board,
in each case only to the extent permitted by applicable law. Notwithstanding the
foregoing, until the time Merger Sub acquires a majority of the then outstanding
Shares on a fully diluted basis, the Company shall use its best efforts to
ensure that all the members of the Board and each committee of the Board and
such boards and committees of the domestic Subsidiaries as of the date hereof
who are not employees of the Company shall remain members of the Board and of
such boards and committees.
(b) The Company shall promptly take all actions required pursuant to
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder in order
to fulfill its obligations under this Section 6.11 and shall include in the
Schedule 14D-9 such information with respect to the Company and its officers and
directors as is required under Section 14(f) and Rule 14f-1 to fulfill such
obligations. Parent or Merger Sub shall supply to the Company and be solely
responsible for any information with respect to either of them and their
nominees, officers, directors and affiliates required by such Section 14(f) and
Rule 14f-1.
(c) Following the election or appointment of designees of Merger Sub
pursuant to this Section 6.11, prior to the Effective Time, any amendment of
this Agreement or the Company Charter or Company Bylaws, any termination of this
Agreement by the Company, any extension by the Company of the time for the
performance of any of the obligations or other acts of Parent or Merger Sub or
waiver of any of the Company's rights hereunder shall require the concurrence of
a majority of the directors of the Company then in office who neither were
designated by Merger Sub nor are employees of the Company or if no such
directors are then in office, no such amendment, termination, extension or
waiver shall be effected which is materially adverse to the holders of Shares
(other than Parent and its Subsidiaries).
6.12 STOCK OPTIONS; SARS. Prior to the Effective Time, the parties to this
Agreement shall take all such actions as shall be necessary to effectuate the
provisions of Sections 3.4(a) and 3.4(b).
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6.13 EMPLOYEE MATTERS. Neither Parent nor the Surviving Entity shall be
required to maintain any Company Plan after the Effective Time. Each employee of
the Surviving Entity who was an employee of the Company immediately prior to the
Effective Time (i) shall be entitled to participate in the "employee benefit
plans", as defined in Section 3(3) of ERISA, maintained by Parent (the "Parent
Plans") to the same extent, if any, as similarly situated employees of Parent,
(ii) shall receive credit for such employee's past service with the Company as
of the Effective Time for purposes of eligibility and vesting under the Parent
Plans, including for purposes of eligibility and participation under Parent's
severance policies and plans, to the extent such service was credited under the
Company Plans on the Closing Date, and (iii) shall not be subject to any waiting
periods or limitations on benefits for pre-existing conditions under the Parent
Plans, including any group health and disability plans, except to the extent
such employees were subject to such limitations under the Company Plans;
provided, however, that clauses (ii) and (iii) shall not apply to employees who
become eligible to participate in Parent Plans as a result of transfer of
employment to Parent or one of its Subsidiaries other than the Surviving Entity.
6.14 SEVERANCE OBLIGATIONS. (a) Parent agrees to cause the Surviving Entity
to assume and honor without modification the severance and cash severance
payment provisions of the employment agreements and change of control severance
plan listed in Section 6.14 of the Company Disclosure Schedule (the "Employee
Severance Agreements"), with any cash severance payments pursuant thereto to be
made in a lump sum not later than the Effective Time. Each of Parent and the
Company acknowledges that the consummation of the Offer as provided herein will
constitute a "Change of Control" for purposes of the Employee Severance
Agreements and, accordingly, as of the Effective Time, each of the individuals
party to such agreements will be entitled to (x) a cash severance payment as
provided in such agreements in the manner described in the previous sentence,
(y) provision of the other fringe benefits provided in such agreements and (z)
accelerated vesting of the stock appreciation rights and options with respect to
the Company Common Stock held by such individuals as provided in such
agreements.
(b) Prior to the Closing, the Company shall take such action as is
necessary in accordance with the terms of the Employee Severance Agreements to
terminate all individuals covered by such agreements, effective as of the
Effective Time, subject to the making of the cash severance payments and
provisions for the other benefits referred to in Section 6.14(a).
6.15 COMPETITOR TRANSACTION. During the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
or the Effective Time, neither Parent nor any of its controlled Subsidiaries
will effect or enter into an agreement with any Person to effect, directly or
indirectly, a merger, consolidation, asset disposition, recapitalization or
another transaction resulting in the transfer of securities or assets of
LodgeNet Entertainment Corporation.
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ARTICLE VII
CONDITIONS TO THE MERGER
7.1 CONDITIONS TO THE MERGER. The respective obligations of each party to
effect the Merger shall be subject to the satisfaction at or prior to the
Effective Time of the following conditions and only the following conditions:
(a) Stockholder Approval. This Agreement and the Merger shall have been
approved and adopted by the affirmative vote of the stockholders of the Company
to the extent required by Delaware Law (including Section 203 thereof) and the
Company Charter;
(b) HSR Act. Any waiting period (and any extension thereof) applicable
to the consummation of the Merger under the Hart-Scott Act shall have expired or
been terminated;
(c) No Order. No permanent or preliminary Injunction or restraining
order by any court or other Government Entity of competent jurisdiction, or
other legal restraint or prohibition, shall be in effect preventing consummation
of the transactions contemplated hereby as provided herein, or permitting such
consummation only subject to any condition or restriction that has had or would
have (x) a material adverse effect on the transactions contemplated hereby or
(y) a Material Adverse Effect on Parent and its Subsidiaries taken as a whole or
the Surviving Entity and its Subsidiaries taken as a whole; and
(d) Offer. Merger Sub or its permitted assignee shall have purchased
all Shares validly tendered and not withdrawn pursuant to the Offer; provided,
however, that neither Parent nor Merger Sub shall be entitled to assert the
failure of this condition if, in breach of this Agreement or the terms of the
Offer, Merger Sub fails to purchase any Shares validly tendered and not
withdrawn pursuant to the Offer.
ARTICLE VIII
TERMINATION
8.1 TERMINATION AND ABANDONMENT. This Agreement may be terminated and the
Merger and the other Transactions may be abandoned at any time prior to the
Effective Time, notwithstanding any requisite approval and adoption of this
Agreement and the transactions contemplated hereby by the stockholders of the
Company:
(a) By mutual written consent duly authorized by the Boards of
Directors of Parent, Merger Sub and the Company prior to Merger Sub's Election
Date; or
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(b) By Parent or the Company if (i) the Minimum Condition has not been
satisfied during a ten (10) business day extension of the Offer following the
Initial Expiration Date, but all other conditions have been satisfied or (ii)
any court of competent jurisdiction in the United States or other governmental
authority shall have issued an order, decree, ruling or taken any other action
restraining, enjoining or otherwise prohibiting the acceptance for payment of,
or payment for, shares of Company Common Stock pursuant to the Offer or the
Merger and such order, decree, ruling or other action shall have become final
and nonappealable; or
(c) By Parent, if due to an occurrence or circumstance that results in
a failure to satisfy any condition set forth in Annex A, Merger Sub shall have
(A) failed to commence the Offer within 10 days following the date of this
Agreement or (B) terminated the Offer without having accepted any Shares for
payment thereunder, unless any such failure listed above shall have been caused
by or resulted from the failure of Parent or Merger Sub to perform in any
material respect any material covenant or agreement of either of them contained
in this Agreement or the material breach by Parent or Merger Sub of any material
representation or warranty of either of them contained in this Agreement; or
(d) By the Company, upon approval of the Board, if (i) Merger Sub shall
have (A) failed to commence the Offer within 10 days following the date of this
Agreement or (B) terminated the Offer without having accepted any Shares for
payment thereunder, unless such failure to pay for Shares shall have been caused
by or resulted from the failure of the Company to satisfy the conditions set
forth in paragraphs (f) or (g) of Annex A, (ii) prior to the purchase of Shares
pursuant to the Offer, the Board shall have withdrawn or modified in a manner
adverse to Merger Sub or Parent its approval or recommendation of the Offer,
this Agreement or the Merger in order to approve a Superior Proposal; provided,
however, that such termination under this clause (ii) shall not be effective
until the Company has made payment to Parent of the Termination Fee (as
hereinafter defined) required to be paid pursuant to Section 8.2(a) and has
deposited with a mutually acceptable escrow agent $2 million for reimbursement
to Parent and Merger Sub of Expenses (as hereinafter defined) or (iii) Parent or
Merger Sub shall have breached in any material respect any of their respective
representations, warranties, covenants or other agreements contained in this
Agreement, which failure to perform is incapable of being cured or has not been
cured within 20 days after the giving of written notice to Parent or Merger Sub,
as applicable, except, in any case, such failures which are not reasonably
likely to affect adversely Parent's or Merger Sub's ability to complete the
Offer or the Merger.
The party desiring to terminate this Agreement pursuant to this Section 8.1
(other than pursuant to Section 8.1(a)) shall give notice of such termination to
the other party.
8.2 TERMINATION FEE; EFFECTS OF TERMINATION.
(a) The Company shall pay, or cause to be paid, in same day funds to
Parent the sum of (x) Parent's Expenses (as hereinafter defined) actually
incurred in an amount not to exceed $2 million and (y) $18 million (the
"Termination Fee") upon demand if (i) Parent or Merger Sub
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<PAGE> 50
terminates this Agreement pursuant to Section 8.1(c), as a result of conditions
set forth in paragraph (e) (ii), (iii) or (iv) of Annex A; or (ii) prior to any
termination of this Agreement (other than by the Company pursuant to Section
8.1(d)(iii)), an Alternative Proposal or OCC Alternative Transaction shall have
been made and within 12 months of such termination, a transaction constituting
an Alternative Proposal or OCC Alternative Transaction is consummated or the
Company enters into or causes OCC to enter into an agreement with respect to,
approves or recommends or takes any action to facilitate such proposal.
(b) "Expenses" means all out-of-pocket expenses and fees (including,
without limitation, fees and expenses payable to all banks, investment banking
firms, other financial institutions and other Persons and their respective
agents and counsel for arranging, committing to provide or providing any
financing for the Transactions or structuring the Transactions and all fees of
counsel, accountants, experts and consultants to Parent and Merger Sub, and all
printing and advertising expenses) actually incurred or accrued by either of
them or on their behalf in connection with the Transactions, including, without
limitation, the financing thereof, and actually incurred or accrued by banks,
investment banking firms, other financial institutions and other Persons and
assumed by Parent and Merger Sub in connection with the negotiation,
preparation, execution and performance of this Agreement, the structuring and
financing of the Transactions and any financing commitments or agreements
relating thereto.
(c) Except as set forth in this Section 8.2, all costs and expenses
incurred in connection with this Agreement and the Transactions shall be paid by
the party incurring such expenses, whether or not any Transaction is
consummated.
(d) In the event that the Company shall fail to pay the Termination Fee
or any Expenses when due, the Company shall pay the costs and expenses
(including legal fees and expenses) incurred in connection with any action,
including the prosecution of any lawsuit or other legal action, taken to collect
payment.
(e) In the event of the termination of this Agreement pursuant to
Section 8.1, this Agreement shall forthwith become void, and there shall be no
liability on the part of any party hereto, except as set forth in (1) Sections
4.10, 5.5 and 8.2, (2) the penultimate sentence of Section 6.2, and (3) Article
IX, and nothing herein shall relieve any party from liability for any breach
hereof.
ARTICLE IX
MISCELLANEOUS
9.1 NO WAIVER OR SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND
AGREEMENTS. The respective representations and warranties of Parent, Merger Sub,
and the Company contained herein or in any certificate or other instrument
delivered pursuant hereto prior to or at the Closing
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<PAGE> 51
shall not be deemed waived or otherwise affected by any investigation made by
any party hereto. All representations and warranties made by each of the parties
herein shall expire at the Effective Time or termination of the Agreement, as
the case may be, and shall thereafter be of no further force or effect; provided
that the representations of the Company in Article IV and Parent and Merger Sub
in Article V shall expire upon acceptance for payment of, and payment for, the
Shares by Merger Sub pursuant to the Offer. The respective covenants and
agreements of the parties contained herein or in any other documents delivered
prior to or at the Closing shall survive execution and delivery of this
Agreement and shall only terminate in accordance their respective terms.
9.2 NOTICES. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if delivered personally
(by courier service or otherwise) or mailed, certified or registered mail with
postage prepaid, or sent by confirmed telecopier, as follows:
(b) If to Parent or Merger Sub:
Liberty Media Corporation
9197 South Peoria Street
Englewood, Colorado 80112
Attention: Charles Y. Tanabe, Esq.
Facsimile: (720) 875-5382
with a copy to:
Baker Botts L.L.P.
910 Louisiana
Houston, Texas 77002
Attention: Joseph A. Cialone, II Esq.
Facsimile: (713) 229-1261
(c) If to the Company:
Ascent Entertainment Group, Inc.
1225 Seventeenth Street, Suite 1800
Denver, Colorado 80202
Attention: Arthur M. Aaron
Facsimile: (303) 308-0489
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<PAGE> 52
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
Attention: Jeffrey W. Tindell, Esq.
Facsimile: (212) 735-2000
or to such other Person or address as any party shall specify by notice in
writing to the other party. All such notices, requests, demands, waivers and
communications shall be deemed to have been received on the date of delivery if
delivered on a business day, on the business day following delivery if not
delivered on a business day, or on the third business day after the mailing
thereof, except that any notice of a change of address shall be effective only
upon actual receipt thereof.
9.3 ENTIRE AGREEMENT. This Agreement (including the Schedules, Annexes,
Exhibits and other documents referred to herein) constitutes the entire
agreement between the parties and supersedes all prior agreements and
understandings, oral and written, between the parties with respect to the
subject matter hereof.
9.4 ASSIGNMENT; BINDING EFFECT; BENEFIT. Neither this Agreement nor any of
the rights, benefits or obligations hereunder may be assigned by any party
(whether by operation of law or otherwise) without the prior written consent of
the other party. Subject to the preceding sentence, this Agreement will be
binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and assigns. Except for the provisions of Section
6.10 (which may be enforced by the Indemnified Parties), nothing in this
Agreement, expressed or implied, is intended to confer on any Person other than
the parties or their respective successors and assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
9.5 AMENDMENT. This Agreement may be amended by action of all the parties,
by action taken or authorized by their respective Boards of Directors, at any
time before or after approval and adoption of this Agreement and the Merger by
the stockholders of the Company, but, after any such approval by the
stockholders of the Company, no amendment shall be made which by law requires
further approval by such stockholders of the Company without such further
approval. This Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties.
9.6 EXTENSION; WAIVER. At any time prior to the Effective Time, the
parties, by action taken or authorized by each such party's Board of Directors,
may, to the extent legally allowed, (i) extend the time specified herein for the
performance of any of the obligations of the other party, (ii) waive any
inaccuracies in the representations and warranties of the other party contained
herein or in any document delivered pursuant hereto, (iii) waive compliance by
the other party with any of the agreements or covenants of such other party
contained herein or (iv) waive any condition to such waiving party's obligation
to consummate the transactions contemplated hereby or to any of such
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<PAGE> 53
waiving party's other obligations hereunder. Any agreement on the part of a
party hereto to any such extension or waiver shall be valid only if set forth in
a written instrument signed by such party. Any such extension or waiver by any
party shall be binding on such party but not on the other party entitled to the
benefits of the provision of this Agreement affected unless such other party
also has agreed to such extension or waiver. No such waiver shall constitute a
waiver of, or estoppel with respect to, any subsequent or other breach or
failure to strictly comply with the provisions of this Agreement. The failure of
any party to insist on strict compliance with this Agreement or to assert any of
its rights or remedies hereunder or with respect hereto shall not constitute a
waiver of such rights or remedies. Whenever this Agreement requires or permits
consent or approval by any party, such consent or approval shall be effective if
given in writing in a manner consistent with the requirements for a waiver of
compliance as set forth in this Section 9.6.
9.7 HEADINGS. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. The phrase "made available" in this
Agreement shall mean that the information referred to has been made available if
requested by the party to whom such information is to be made available.
9.8 COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original, and all of which together shall be
deemed to be one and the same instrument.
9.9 APPLICABLE LAW. This Agreement and the legal relations between the
parties hereunder shall be governed by and construed in accordance with the laws
of the State of Delaware, without regard to the conflict of laws rules thereof.
9.10 NO REMEDY IN CERTAIN CIRCUMSTANCES. Each party agrees that, should any
court or other competent governmental authority hold any provision of this
Agreement or part hereof to be null, void or unenforceable, or order any party
to take any action inconsistent herewith or not to take any action required
herein, the other party shall not be entitled to specific performance of such
provision or part hereof or to any other remedy, including but not limited to
money damages, for breach thereof or of any other provision of this Agreement or
part hereof as a result of such holding or order.
9.11 SEVERABILITY. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof. If any
provisions of this Agreement, or the application thereof to any Person or entity
or any circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other Persons, entities or circumstances shall not be affected by
such
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invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.
9.12 DISCLOSURE SCHEDULE. The parties acknowledge that the Company
Disclosure Schedule to this Agreement (i) relates to certain matters concerning
the disclosures required and transactions contemplated by this Agreement, (ii)
is qualified in its entirety by reference to specific provisions of this
Agreement and (iii) is not intended to constitute and shall not be construed as
indicating that such matter is required to be disclosed, nor shall such
disclosure be construed as an admission that such information is material with
respect to the Company or any of its Subsidiaries or will have or is likely to
have a Material Adverse Effect on the Company and its Subsidiaries taken as a
whole, OCC and its Subsidiaries taken as a whole, or Parent and its Subsidiaries
taken as a whole. Disclosure of the information contained in one section or part
of the Company Disclosure Schedule shall be deemed as proper disclosure for
other sections or parts of the Company Disclosure Schedule only if appropriately
cross-referenced or if the relevance thereof is reasonably apparent from the
context in which it appears.
9.13 ENFORCEMENT. The parties agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to seek an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States or
in Delaware state court, this being in addition to any other remedy to which
they are entitled at law or in equity. In addition, each of the parties hereto
(a) consents to submit itself to the non-exclusive jurisdiction of any Federal
court located in the State of Delaware or any Delaware state court in the event
any dispute arises out of this Agreement or any of the transactions contemplated
by this Agreement, and (b) agrees that it will not attempt to deny or defeat
such personal jurisdiction by motion or other request for leave from any such
court.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement and
Plan of Merger as of the date first above written.
LIBERTY AEG ACQUISITION, INC.
By: /s/ GARY S. HOWARD
------------------------------------
Name: Gary S. Howard
Title: Vice President
LIBERTY MEDIA CORPORATION
By: /s/ GARY S. HOWARD
------------------------------------
Name: Gary S. Howard
Title: Executive Vice President &
Chief Operating Officer
ASCENT ENTERTAINMENT GROUP, INC.
By: /s/ ARTHUR M. AARON
------------------------------------
Name: Arthur M. Aaron
Title: Executive Vice President -
Business Affairs
<PAGE> 56
ANNEX A
CONDITIONS TO THE OFFER
Notwithstanding any other provision of the Offer, Merger Sub shall not be
required to accept for payment or, subject to any applicable rules and
regulations of the Commission, including Rule 14e-1(c) promulgated under the
Exchange Act (relating to the obligation of Merger Sub to pay for or return
tendered shares of Company Common Stock promptly after termination or withdrawal
of the Offer), pay for any Shares tendered pursuant to the Offer, and (subject
to any such rules or regulations and except as provided in the Agreement) may
terminate or amend the Offer and may postpone the acceptance for payment of and
payment for Shares tendered, if (i) the Minimum Condition shall not have been
satisfied, (ii) any applicable waiting period under the HSR Act shall not have
expired or been terminated prior to the expiration of the Offer or (iii) at any
time on or after the date of this Agreement, and prior to the acceptance for
payment of Shares, any of the following conditions shall exist:
(a) there shall have been instituted or be pending any action or
proceeding brought by any Governmental Entity (i) challenging or seeking to
make illegal, materially delay or otherwise directly or indirectly restrain
or prohibit or make materially more costly the making of the Offer, the
acceptance for payment of, or payment for, any Shares by Parent, Merger Sub
or any other Affiliate of Parent pursuant to the Offer, or the consummation
of the Merger, or seeking to obtain material damages in connection with the
Merger; (ii) seeking to prohibit or limit materially the ownership or
operation by the Company, Parent or any of their Subsidiaries of all or any
material portion of the business or assets of the Company, or to compel the
Company, to dispose of or hold separate all or any material portion of the
business or assets of the Company, as a result of the Transactions; (iii)
seeking to impose or confirm limitations on the ability of Parent, Merger
Sub or any other Affiliate of Parent to exercise effectively full rights of
ownership of any Shares, including, without limitation, the right to vote
any Shares acquired by Merger Sub pursuant to the Offer, or otherwise on
all matters properly presented to the Company's stockholders, including,
without limitation, the approval and adoption of this Agreement and the
Transactions, or making the holding of such Shares illegal or subject to
any materially burdensome requirement or condition; (iv) seeking to
prohibit Parent or any of its Subsidiaries from effectively controlling in
any material respect any material portion of the business or operations of
the Company and its Subsidiaries; (v) seeking to require divestiture by
Parent, Merger Sub or any other Affiliate of Parent of any Shares; (vi)
prohibiting or unreasonably delaying consummation of the Offer, the Merger
or increasing in any material respect the liabilities or obligations of
Parent arising out of this Agreement, the Offer or the Merger; or (vii)
otherwise is reasonably likely to materially adversely affect the Company
and its Subsidiaries taken as a whole;
(b) there shall have been issued any Injunction resulting from any
action or proceeding brought by any Person other than any Governmental
Entity that is reasonably
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likely to result, directly or indirectly, in any of the consequences
referred to in clauses (i) through (v) of paragraph (a) above;
(c) there shall have been any statute, rule, regulation, order or
injunction enacted, entered, enforced, promulgated, amended, issued or
deemed applicable to (i) Parent, the Company or any Subsidiary or Affiliate
of Parent or the Company or (ii) the Offer or the Merger, by any
Governmental Entity, in the case of both (i) and (ii) other than (A) the
routine application of the waiting period provisions of the HSR Act to the
Offer or the Merger that is reasonably likely to result, directly or
indirectly, in any of the consequences referred to in clauses (i) through
(v) of paragraph (a) above;
(d) there shall have occurred (i) any general suspension of trading in,
or limitation on prices for, securities on a national securities exchange
in the U.S. (ii) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States, (iii) any limitation
(whether or not mandatory) by any government or governmental,
administrative or regulatory authority or agency, domestic or foreign, on
the extension of credit by banks or other lending institutions, (iv) a
commencement of a war or armed hostilities or other national or
international calamity directly or indirectly involving the United States
or (v) in the case of any of the foregoing existing on the date hereof, a
material acceleration or worsening thereof;
(e) (i) it shall have been publicly disclosed or Parent or Merger Sub
shall have otherwise learned that beneficial ownership (determined for the
purposes of this paragraph as set forth in Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of the then outstanding Shares has been
acquired by any Person, other than Parent or any of its Affiliates; (ii)
the Board shall have withdrawn or modified in a manner adverse to Parent or
Merger Sub the approval or recommendation of the Offer, the Merger or this
Agreement or approved or recommended any Alternative Proposal or OCC
Alternative Transaction, or any other takeover proposal or any other
acquisition of Shares or OCC Shares other than the Offer and the Merger;
(iii) the Company shall have entered into any agreement with respect to a
Superior Proposal; or (iv) the Board shall have resolved to do any of the
foregoing;
(f) any of the representations and warranties of the Company set forth
in this Agreement shall not have been true and correct at the date of this
Agreement, and as a result thereof there shall have been, or it is
reasonable to foresee that there will be, a Material Adverse Effect on the
Company and its Subsidiaries taken as a whole;
(g) the Company shall have failed to perform in any material respect
any material obligation or to comply in any material respect with any
material agreement or covenant of the Company to be performed or complied
with by it under this Agreement;
(h) this Agreement shall have been terminated in accordance with its
terms; and
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(i) Merger Sub and the Company shall have agreed that Merger Sub shall
terminate the Offer or postpone the acceptance for payment of or payment
for Shares thereunder.
The foregoing conditions are for the sole benefit of Merger Sub and
Parent and may be asserted by Merger Sub or Parent regardless of the
circumstances giving rise to any such condition or may be waived by Merger Sub
or Parent in whole or in part at any time and from time to time in their sole
discretion. The failure by Parent or Merger Sub at any time to exercise any of
the foregoing rights shall not be deemed a waiver of any such right; the waiver
of any such right with respect to particular facts and other circumstances shall
not be deemed a waiver with respect to any other facts and circumstances; and
each such right shall be deemed an ongoing right that may be asserted at any
time and from time to time.
A-3
