SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
(Rule 13d-101)
Amendment No. 1*
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(c)
AT HOME CORPORATION
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(Name of Issuer)
SERIES A COMMON STOCK
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(Title of Class of Securities)
045919101
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(CUSIP Number)
Robert S. Lemle
Executive Vice President, General Counsel and Secretary
Cablevision Systems Corporation
One Media Crossways
Woodbury, New York 11797
516-364-8450
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
March 4, 1998
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[ ].
NOTE: Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. See Rule 13d-7(b) for
other parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 15 pages)
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*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
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CUSIP NO. 045919101 PAGE 2 OF 15 PAGES
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1. NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
CABLEVISION SYSTEMS CORPORATION 11-2776686
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [XX]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS*
WC
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d)OR 2(e)
[ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
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7. SOLE VOTING POWER
NUMBER OF 10,946,936; see items 4-6.
SHARES --------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 0
EACH --------------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 10,946,936; see items 4-6.
WITH --------------------------------------------------------------
10. SHARED DISPOSITIVE POWER
0
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
10,946,936; see items 4-6.
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
11.0%; see items 4-6.
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14. TYPE OF REPORTING PERSON*
HC, CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
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This Statement on Schedule 13D relates to the Series A Common Stock, par
value $.01 per share (the "Series A Common Stock"), of At Home Corporation, a
Delaware corporation (the "Issuer" or the "Company"). Cablevision Systems
Corporation ("Cablevision"), together with certain other holders of shares of
Series A Common Stock referred to herein which are (or will be) parties to the
Amended and Restated Stockholders' Agreement, dated as of July 16, 1997 (the
"Stockholders' Agreement"), may be deemed a "group" for purposes of Rule 13d-5
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), with
respect to their respective beneficial ownership of the shares of Series A
Common Stock. See items 4-6.
The summary descriptions contained in this Statement of certain agreements
and documents are qualified in their entirety by reference to the complete texts
of such agreements and documents filed as Exhibits hereto and incorporated
herein by reference.
ITEM 1. SECURITY AND ISSUER.
This Statement relates to the Series A Common Stock. The principal
executive offices of the Issuer are at 425 Broadway, Redwood City, California
94063.
Holders of Series A Common Stock and the Issuer's Series K Common Stock
("Series K Common Stock") are entitled to one vote for each share held, and
holders of the Issuer's Series B Common Stock ("Series B Common Stock") are
entitled to ten votes for each share held, on all matters presented to
stockholders, except as otherwise provided in the Issuer's Certificate of
Incorporation (the "Company Charter"). Each share of Series B Common Stock and
Series K Common Stock is convertible, at the option of the holder, into one
share of Series A Common Stock. Shares of Series A Common Stock are not
convertible into shares of Series B or Series K Common Stock. All other rights
and privileges of the Series A, Series B and Series K Common Stock are
identical, except that: (i) so long as there are at least 5,000,000 shares of
Series B Common Stock outstanding, the holders of Series B Common Stock (all of
which are owned by a subsidiary of Tele-Communications, Inc. ("TCI")), voting
separately as a single series, have the right to elect five directors (the
"Series B Directors") to the Issuer's Board of Directors (the "Board"); (ii) so
long as there are at least 5,000,000 shares of Series K Common Stock outstanding
(the substantial majority of which are owned by certain affiliates (the "KPCB
Affiliates") of Kleiner, Perkins, Caufield & Byers ("KPCB") and certain of its
affiliates), the holders of Series K Common Stock, voting separately as a single
series, have the right to elect one director (the "Series K Director") to the
Board; and (iii) so long as the holders of Series B Common Stock or Series K
Common Stock are entitled to elect any Series B Directors or a Series K
Director, the holders of Series A Common Stock, voting separately as a single
series, have the right to elect two directors (the "Series A Directors"), each
of whom is not an officer (other than any Vice Chairman)
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or employee of the Issuer and is not an affiliate or associate of TCI, Comcast
Corporation ("Comcast") or Cox Enterprises, Inc. ("Cox").
ITEM 2. IDENTITY AND BACKGROUND.
Name: Cablevision Systems Corporation
("Cablevision"), which holds
warrants to purchase Series A
Common Stock through an indirect
wholly owned subsidiary, CSC
At Home Holding Corporation
State of Incorporation: Delaware
Principal Business: Cable Television Service
Address of Principal Business: One Media Crossways Drive
Woodbury, New York 11797
Address of Principal Executive Offices: One Media Crossways Drive
Woodbury, New York 11797
Information concerning the executive officers and directors of Cablevision
and the persons controlling Cablevision is set forth in Exhibit 99.1 to this
Statement. Some of such executive officers, directors and controlling persons
hold Series A Common Stock. See Item 5. Unless otherwise set forth in Exhibit
99.1, each of such executive officers and directors is a citizen of the United
States. Neither Cablevision nor, to the best of its knowledge, any person named
in Exhibit 99.1 to this Statement, during the last five years (i) has been
convicted in a criminal proceeding (excluding traffic violations and similar
misdemeanors); or (ii) has been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OF OTHER CONSIDERATION.
The aggregate purchase price of the warrants, $2.00, was paid out of the
working capital of Cablevision Systems Corporation. The aggregate exercise price
for the warrants described herein may be paid out of working capital, bank
borrowings or other sources. Except as set forth in Exhibit 99.1, the aggregate
purchase price of the Series A Common Stock held by executive officers,
directors and controlling persons was paid from personal funds.
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ITEM 4. PURPOSE OF TRANSACTION.
Effective October 2, 1997, Cablevision entered into a Letter Agreement and
Term Sheet with the Issuer, Comcast, Cox, KPCB and TCI, which Letter Agreement
was amended on October 10, 1997 (as amended, the "Letter Agreement"). The Letter
Agreement provides that Cablevision will enter into a Master Distribution
Agreement for the distribution of the Issuer's At Home service on substantially
the same terms and conditions as TCI, Comcast and Cox. The Master Distribution
Agreement between Cablevision and the Issuer has not yet been entered into. The
Letter Agreement provides for the issuance to Cablevision of a warrant to
purchase up to 7,875,784 shares of Series A Common Stock at an exercise price of
$0.50 per share (the "Warrant"). The Warrant is immediately exercisable, subject
to the receipt of all necessary governmental consents or approvals. The Letter
Agreement also provides for the issuance of a warrant to purchase up to
3,071,152 shares of Series A Common Stock at an exercise price of $0.50 per
share under certain conditions (the "Contingent Warrant"). The Contingent
Warrant will become exercisable as and to the extent certain cable television
systems are transferred from TCI and its controlled affiliates to Cablevision or
its controlled affiliates. The occasion for this amendment to the Statement is
that the Contingent Warrant has become exercisable for 2,355,514 of the
3,071,152 shares represented by the Contingent Warrant, with the right to
purchase the remaining 715,638 shares remaining contingent.
In the Letter Agreement, Cablevision also agreed to enter into the
Stockholders' Agreement with a subsidiary of Comcast ("Comcast Sub"), Cox
Teleport Providence, Inc., a wholly owned subsidiary of Cox ("Cox Sub"), KPCB
Affiliates, TCI Internet Holdings, Inc., a wholly owned subsidiary of TCI ("TCI
Sub") (each of the foregoing, the "Initial Stockholders"), certain of their
respective affiliates (including Comcast, Cox, TCI and KPCB) and the Issuer. The
Stockholders' Agreement provides for, among other things, certain voting
agreements, restrictions on transfer of securities of the Issuer, rights of
first offer, tag-along and drag-along rights and preemptive rights.
Because the Stockholders' Agreement provides for certain arrangements among
the Initial Stockholders in connection with the voting and transfer of stock of
the Issuer, the Initial Stockholders may be deemed to be a "group" as referred
to in Rule 13d-5 under the Exchange Act. Further, because the Letter Agreement
provides for the amendment of the Stockholders' Agreement to reflect the
addition of Cablevision as a "Stockholder" thereunder and to subject Cablevision
to such voting and transfer arrangements, the Initial Stockholders together with
Cablevision may be deemed to be a "group", and as a result Cablevision may be
deemed to have acquired beneficial ownership of Series A Common Stock of the
Initial Stockholders. Absent the amendment of the Stockholders' Agreement,
Cablevision would have been eligible to file on Schedule 13G to disclose its
beneficial ownership of Series A Common Stock.
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Neither the filing of this Statement nor any of its contents shall be
deemed to constitute an admission that Cablevision is a member of a "group" for
purposes of Rule 13d-5 with any of the above-mentioned persons, or that such
"group" exists, and Cablevision expressly disclaims the existence, or membership
in, any such "group" and beneficial ownership of stock of the Issuer held by any
of the above-mentioned persons.
Except as otherwise disclosed in this Statement, Cablevision has not made
any decision concerning its course of action with respect to the Issuer.
Cablevision could decide, depending on market and other factors, to dispose of
shares of the Issuer's Common Stock beneficially owned by it, to acquire
additional Common Stock or other equity securities of the Issuer, to seek a
strategic or other partner to share its interest in the Issuer or to take any
other available course of action (which could involve one or more of the types
of transactions, or have one or more of the results described in subparagraphs
(a) through (j) of Item 4 of Schedule 13D). In this regard, Cablevision intends
continuously to review its investment in the Issuer. In reaching any conclusion
as to its future course of action, Cablevision will take into consideration
various factors, including without limitation the Issuer's business and
financial condition and prospects, other developments concerning the Issuer and
Cablevision, the effect of legal and regulatory requirements applicable to the
Issuer and Cablevision, other business opportunities available to Cablevision,
developments with respect to the business of Cablevision, developments in the
cable television and telecommunications industries generally, general economic
conditions and stock market conditions.
Except as otherwise disclosed in Exhibit 99.1, no executive officer,
director or controlling person of Cablevision that holds Series A Common Stock
(each, an "Individual Holder") has made any decision concerning its course of
action with respect to the Issuer. Each such Individual Holder could decide,
depending on market and other factors, to dispose of shares of Series A Common
Stock beneficially owned by it, to acquire additional Series A Common Stock or
other equity securities of the Issuer, to seek a strategic or other partner to
share its interest in the Issuer or to take any other available course of action
(which could involve one or more of the types of transactions, or have one or
more of the results described in subparagraphs (a) through (j) of Item 4 of
Schedule 13D). In this regard, each such Individual Holder intends to
continuously review its investment in the Issuer. In reaching any conclusion as
to its future course of action, each such Individual Holder will take into
consideration various factors, including without limitation the Issuer's
business and financial condition and prospects, other developments concerning
the Issuer and such Individual Holder, the effect of legal and regulatory
requirements applicable to the Issuer and such Individual Holder, other business
opportunities available to such Individual Holder, developments with respect to
the business of such Individual Holder, developments in the cable television and
telecommunications industries generally, general economic conditions and stock
market conditions.
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Except as set forth in this Statement or in Exhibit 99.1, to the best
knowledge of Cablevision, neither Cablevision nor any Individual Holder has any
current plan or proposals which relate to or would result in any of the
transactions described in subparagraphs (a) through (j) of Item 4 of Schedule
13D.
ITEM 5. INTEREST IN SECURITIES OF ISSUER.
(a)-(b) The Issuer's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997 reports that as of October 31, 1997 there were outstanding
88,240,810 shares of Series A Common Stock, 15,400,000 shares of Series B Common
Stock and 14,877,660 shares of Series K Common Stock. The following table
indicates, with respect to Cablevision and, to the best of Cablevision's
knowledge, the other Stockholders, (i) the number of shares of Series A Common
Stock currently owned, (ii) the number of shares of Series A Common Stock that
may be acquired within 60 days as a result of the conversion on a one for one
basis of shares of Series B or Series K Common Stock currently owned or the
exercise of the Warrants or Contingent Warrants, (iii) the total number of
shares of Series A Common Stock owned, treating the Series B and Series K Common
Stock currently owned as if it had been converted into Series A Common Stock,
and (iv) the percentage of Series A Common Stock represented by the total number
of shares of Series A Common Stock owned. The percentage ownership of each
Stockholder is based on the shares of Series A Common Stock deemed outstanding
under Rule 13d-3(d)(i) of the Exchange Act and assumes conversion of stock or
exercise of warrants by such Stockholder only. These amounts exclude shares of
Series A Common Stock held by executive officers and directors of Cablevision.
<TABLE>
<CAPTION>
Series A Common Series A Common Total Series A Common Percentage of Series A
Stock Currently Owned Stock that may be Stock owned Common Stock
acquired within 60 days
<S> <C> <C> <C> <C>
TCI 31,060,000 15,400,000 (Series B) 46,460,000 44.8%
Comcast 14,557.300 14,557,300 16.5%
Cox 14,557,300 14,557,300 16.5%
KPCB Affiliates 14,877,660 (Series K) 14,877,660 13.6%
Cablevision 10,946,936* 10,946,936* 11.0%
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<FN>
* Assumes current exercisability of all Warrants and Contingent Warrants for
Series A Common Stock.
</FN>
</TABLE>
Cablevision may be deemed to share voting power and dispositive power with
TCI, Cox, the KPCB Affiliates and Comcast over the shares owned by such other
Stockholders due to the existence of voting arrangements and restrictions on
transfer contained in the Stockholders' Agreement and the Letter Agreement. See
item 6 below. To the extent that TCI, Comcast, Cox, the KPCB Affiliates and
Cablevision are considered to be a "group" for purposes of this Statement, and
assuming the conversion
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into Series A Common Stock of all shares of Series B Common Stock owned by TCI
and all shares of Series K Common Stock owned by the KPCB Affiliates and the
exercise by Cablevision of all the Warrants and Contingent Warrants for Series A
Common Stock, such "group" would beneficially own an aggregate of 100,399,196
shares of Series A Common Stock, or 78.2% of all shares of Series A Common Stock
deemed outstanding. Neither the filing of this Statement nor any of its contents
shall be deemed to constitute an admission that Cablevision or any of its
affiliates are the beneficial owners of the Issuer's stock (including the Series
A, Series B and Series K Common Stock) held by any of the other Persons referred
to in this statement for purposes of Section 13(d) of the Exchange Act or for
any other purpose, and such beneficial ownership is expressly disclaimed.
To the best knowledge of Cablevision, the holdings of Series A Common Stock
of each Individual Holder is set forth below. Cablevision disclaims beneficial
ownership of all of these shares.
Mr. Barry J. O'Leary, Senior Vice President, Finance, and Treasurer of
Cablevision, holds with sole power to vote 1,000 shares of Series A Common
Stock. In addition, John C. Malone and Leo J. Hindery, Jr., directors of
Cablevision, are directors and officers of TCI, which as discussed above may be
deemed to be part of a "group" of which Cablevision is also a part.
(c) Cablevision has not engaged in any transaction in the Series A Common
Stock during the sixty days immediately preceding the date of this Statement.
Mr. Barry J. O'Leary, Senior Vice President, Finance, and Treasurer of
Cablevision, purchased using personal funds 1,000 shares of Series A Common
Stock on February 24, 1998 at a per share price of $35.50 in an open-market
transaction through a broker.
(d) None.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
The information set forth in items 3 and 4 of this Schedule 13D is hereby
incorporated by reference herein.
The Stockholders' Agreement provides for certain rights and obligations
with respect to the ownership, voting and disposition of Common Stock owned by
the parties thereto. The Letter Agreement provides that Cablevision Systems
Corporation and CSC At Home Holding Corporation, the wholly owned subsidiary of
Cablevision which holds
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the Warrants ("CSC Sub") become parties to the Stockholders' Agreement and
generally be entitled to all of the rights and benefits and be subject to all of
the obligations thereunder on the same basis as the Comcast Stockholder Group,
the Cox Stockholder Group and the TCI Stockholder Group (a "Stockholder Group"
with respect to any person referring to such Stockholder and certain of its
affiliates). Furthermore, the Warrants, any exercisable Contingent Warrants and
any stock of the Issuer for which such warrants are exercised, are deemed
"Company Securities" (as further defined below) and are subject to such
agreements and arrangements with respect thereto, all with certain
qualifications relating to the exercise or exercisability of the Contingent
Warrants. Although such amendment to the Stockholders' Agreement has not yet
occurred, the Letter Agreement provides that the relevant provisions of the
Letter Agreement will become the definitive agreement if the Stockholders'
Agreement is not amended within 60 days of the date of the Letter Agreement
(which time period has since elapsed). The following description of the
Stockholders' Agreement reflects such agreement as amended or supplemented by
the Letter Agreement.
The Stockholders' Agreement provides that the Stockholders will vote their
shares of voting stock of the Issuer in favor of any action required by the
Stockholders' Agreement, including the election to the Board of the Chief
Executive Officer of the Issuer, and that any holder of Series B Common Stock
(all of which is currently owned by TCI) will vote all such shares in favor of
the election of certain designees of TCI, Comcast and Cox to the Board as Series
B Directors (as defined below) as follows: Comcast will be entitled to designate
one director so long as it owns at least 5,000,000 shares of Common Stock; Cox
will be entitled to designate one director so long as it owns at least 5,000,000
shares of Common Stock; and TCI will be entitled to designate three directors so
long as it owns at least 7,700,000 shares of Series B Common Stock, two
directors so long as it owns at least 6,350,000 shares of Series B Common Stock
and one director so long as it owns at least 5,000,000 shares of Series B Common
Stock. In addition, under the Letter Agreement the parties have agreed to vote
all of their shares in favor of the election of one designee of Cablevision to
the Board as a Common Stock Director upon Cablevision's request to have such a
representative on the Board. Cablevision's right to designate a director will
terminate at such time as Cablevision ceases to own at least 5,000,000 shares of
Common Stock, on a fully diluted basis assuming all outstanding Warrants have
been exercised.
The Stockholders' Agreement prohibits, unless expressly permitted by the
terms thereof, the transfer of Company Securities (which includes, in addition
to such securities described in the second preceding paragraph, the Series B
Common Stock issued upon conversion of the Series T Preferred Stock, the Series
A Common Stock issued or issuable upon conversion of shares of Series B or
Series K Common Stock or Series AM, AT or AX Preferred Stock and Series K Common
Stock issued on conversion of the Series K Preferred Stock, stock of the Issuer
acquired by a Stockholder pursuant to
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preemptive rights and Company Securities acquired from another Stockholder
Group) until the earliest to occur of certain dates. Such transfer restrictions
cease to apply to the KPCB Affiliates following an interim or liquidating
distribution of the Company Securities owned by such KPCB Affiliate to the
partners of such KPCB Affiliate.
Generally such permitted transfers include (i) transfers by a Stockholder
to another member of the Stockholder Group, (ii) third party transfers, subject
to a right of first offer to the other Stockholders (the "Right of First
Offer"), and (iii) sales to third parties resulting in such third party
acquiring beneficial ownership of a majority of the voting power in the Issuer
(a "Control Block Sale"), subject to certain "tag-along rights" and "drag-along
rights". To the extent transfers of Series B and Series K Common Stock are
permitted, the holders of such shares generally must convert them to Series A
Common Stock prior to consummating such transfers. Prior to any conversion of
Series B Common Stock to Series A Common Stock, such shares must be offered for
exchange with the Series A Common Stock held by the other Cable Stockholder
Groups (i.e., TCI, Comcast, Cox or Cablevision Stockholder Groups). Under the
Right of First Offer, after the earlier occurrence of certain dates (including
the first anniversary of the Offering), a Stockholder Group may transfer all of
its Company Securities to third parties provided that it complies with certain
procedures offering the other Stockholder Groups the prior right to acquire such
shares, or following the first anniversary of the Offering to transfer some or
all of its Series A Common Stock pursuant to the exercise of registration rights
or to an exemption from registration provided that it complies with certain
procedures offering the other Stockholder Groups the prior right to acquire such
shares.
Under the "tag-along right", the Stockholders proposing to make a Control
Block Sale must offer any Exclusive Stockholder or Eligible Stockholder the
right to participate in such sale by selling a pro rata portion of their Company
Securities to the third party. Under the "drag-along right", if any group of
Stockholders composed of TCI Sub and any three other Eligible Stockholders
proposes to make a Control Block Sale, such group may require each remaining
Stockholder to sell a pro rata portion of its Company Securities to the third
party. An Eligible Stockholder means a Stockholder continuing to own at least
25% of the Company Securities it purchased on or before August 1, 1996 (or, in
the case of CSC, 25% of the shares issuable upon exercise of the Warrants, as
adjusted by the vesting of Contingent Warrants). An Exclusive Stockholder means
generally a Stockholder whose affiliates have complied with exclusivity
provisions in the Master Distribution Agreement prohibiting them from engaging
in certain Internet services.
The Stockholders' Agreement provides that, if the number of homes passed
(i.e., homes that can be connected to a cable distribution system) by a Cable
Stockholder's cable systems that remain subject to the exclusivity provisions of
the Master Distribution Agreement applicable to each Cable Stockholder (together
with any systems that have been released from such provisions due to the
Issuer's failure to meet the rollout schedule)
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falls below 80% of the Cable Stockholder's base homes passed as of June 4, 1996
(or, in the case of Cablevision, as specified to the Issuer in connection with
the issuance of the Warrants to it), then such Cable Stockholder must offer to
sell a proportionate amount of its Company Securities to the other Stockholders
at a price equal to the average closing price of the Series A Common Stock over
the most recent 20 trading days preceding the event.
The Stockholders' Agreement gives each Eligible Stockholder the preemptive
right to purchase a pro rata portion of any new securities offered by the
Issuer, other than securities issued pursuant to a public offering, securities
issued pursuant to any incentive plan or agreement for the benefit of the
Issuer's employees, directors or consultants, securities issued by the Issuer in
connection with an acquisition, and securities issued in exchange for interests
in a joint venture or other business combination.
The Stockholders' Agreement will terminate on the earliest of (i) June 4,
2021, (ii) when there are no Eligible Stockholders and no Cable Stockholders
subject to exclusivity obligations under the Master Distribution Agreement,
(iii) a merger in which the Issuer is not the surviving entity or (iv) when
there are no shares of Common Stock of the Issuer outstanding.
Pursuant to the Third Amended and Restated Registration Rights Agreement
dated as of April 11, 1997 (the "Registration Rights Agreement"), the
Stockholder Groups (including the Cablevision Stockholder Group, as provided
under the Letter Agreement) each have a certain number of demand registration
rights (two for each such group but four for TCI) exercisable one year after the
Offering. The Stockholders are also granted incidental or "piggy-back"
registration rights.
The Company Charter provides that the Board shall consist of not less than
three and not more than 17 directors, with the exact number to be specified by
the Series B Committee (as defined below) or the Board. The Board currently
consists of 11 directors and would be increased to 12 directors upon
Cablevision's request to have its designee join the Board. Under the Company
Charter, the holders of the Series B Common Stock, all of which is owned by a
subsidiary of TCI, have the right to elect five members of the Board (the
"Series B Directors"). The holders of the Series K Common Stock, the substantial
majority of which is controlled by KPCB, have the right to elect one director
(the "Series K Director"). So long as the holders of Series B Common Stock or
Series K Common Stock are entitled to elect any Series B Director or any Series
K Director, the holders of Series A Common Stock have the right to elect two
directors (the "Series A Directors") who are not officers or employees of the
Issuer and are not affiliates or associates of TCI, Comcast or Cox ("Outside
Directors"). Because of TCI's ownership of Series A Common Stock (and without
converting any shares of Series B Common Stock to Series A Common Stock), TCI
together with either Comcast and/or Cox has the ability
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to elect both of the Series A Directors subject to the requirement that they
qualify as Outside Directors. The remaining directors are elected by the holders
of the Series A, Series B and Series K Common Stock, voting together as a single
class. Since TCI holds more than 50% of the outstanding voting power of the
Issuer's capital stock, it has the power to elect all of these directors.
However, TCI, Cablevision, Comcast, Cox and KPCB have agreed to vote for the
election of the Chief Executive Officer of the Issuer to the Board. In addition,
the Company Charter provides that, so long as TCI owns at least 7,700,000 shares
of Series B Common Stock and securities representing a majority of the
outstanding voting power of the Issuer, there will be a committee of the Board
consisting of those Series B Directors who are officers, directors or employees
of TCI or any subsidiary of TCI, which shall have the sole power, exercisable at
any time, to increase the size of the Board to up to 17 directors (the maximum
number of directors specified in the Company Charter) and to fill any vacancies
created by such an increase. Since four of the eleven current directors are
officers of TCI or a subsidiary of TCI and TCI has the power, without a meeting
of the stockholders, to increase the size of the Board to up to 17 directors and
appoint additional members of the Board, TCI has the power to appoint a majority
of the Board at any time.
Under the Company Charter, all actions of the Board must be approved by (i)
a majority of the members of the Board present at a meeting at which a quorum is
present or the unanimous written consent of all members of the Board and (ii) so
long as TCI owns at least 7,700,000 shares of Series B Common Stock and
securities representing a majority of the outstanding voting power of the
Issuer, a majority of the Series B Directors. Accordingly, because TCI has the
right to elect three of the five Series B Directors, TCI has the power to
prevent the Board from taking any action that is not approved by its designated
Series B Directors. In addition, to the extent that TCI exercises its power to
elect a majority of the entire Board, TCI will be able to control all Board
decisions, subject to the supermajority and unanimous vote requirements and
other limitations contained in the Company Charter.
In addition, certain actions of the Board require the approval of at least
75% (currently five of six) of the total number of Series B and Series K
Directors, and certain other actions of the Board require the unanimous approval
of all of the Series B and Series K Directors. Accordingly, with the current
composition of the Board, actions that require supermajority approval cannot be
taken without the approval of the Series B Directors designated by TCI and at
least two of the three directors designated by Comcast, Cox and KPCB, and
actions that require unanimous approval cannot be taken without the approval of
all three of such directors and the Series B Directors designated by TCI.
The Company actions that require supermajority approval by the Series B and
Series K Directors are: (i) a merger, consolidation or other business
combination; (ii) the
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<PAGE>
acquisition of assets having a value greater than 20% of the value of the
Issuer's assets; (iii) the disposition of assets having an aggregate value
greater than 50% of the value of the Issuer's assets; (iv) the acquisition by
the Issuer of assets in exchange for capital stock that would constitute more
than 16-2/3% of its fully diluted shares (other than a sale of stock solely for
cash); (v) the appointment or removal of the Chief Executive Officer; (vi)
voluntary dissolution or liquidation or the initiation of voluntary bankruptcy
proceedings; (vii) any amendment of the Company Charter or the bylaws of the
Issuer, other than the filing of a Certificate of Designation establishing a
series of preferred stock that does not have certain specified special voting
rights; (viii) the creation or issuance of any additional class or series of
capital stock having more than one vote per share or entitled to vote as a
separate class or series on any matter, subject to certain exceptions; (ix) any
increase in the number of shares reserved for issuance to management of the
Issuer in excess of 16,000,000 shares plus an amount equal to the greater of (a)
7.5% of the number of shares issued by the Issuer after August 1, 1996 and (b)
the number of shares the issuance of which would represent a dilution of the
fully diluted equity of the Issuer of 4% per year from August 1, 1996 to the
date of such proposed increase; (x) the declaration of dividends on or certain
repurchases of equity securities of a controlled affiliate of the Issuer; (xi)
the adoption of any budget for the Issuer that does not provide for a
substantially pro rata rollout of the Issuer's services to each of the Cable
Stockholders in proportion to the number of qualifying homes passed made
available by them to the Issuer; and (xii) the appointment of any directors to
the .Com Committee (as defined in the Company Charter) other than the current
members of the .Com Committee.
The Company actions that require unanimous approval by the Series B and
Series K Directors are: (i) any amendments to or modifications of the actions
requiring supermajority or unanimous approval of the Series B and Series K
Directors; (ii) any increase in the number of Series B or Series K Directors;
(iii) any modifications of the rights of the holders of Series B or Series K
Common Stock to designate and elect directors; (iv) the appointment of any
directors to the .Com Committee other than the Chief Executive Officer, the
other directors who are currently members of the .Com Committee and any
additional directors elected to the .Com Committee by supermajority vote; and
(v) any amendment to the specifications and standards for the Issuer's service
that would require the operator facilities of any affiliate of a Cable
Stockholder to be capable of distributing or providing streaming video
transmissions that include video segments longer than ten minutes in duration.
In addition, the Company Charter specifies certain requirements for the
approval of certain transactions between the Issuer and any holder of more than
5% of the voting power of the Issuer or any affiliate of such holder.
The summary descriptions of the Stockholders' Agreement, the Letter
Agreement, the Registration Rights Agreement, the Company Charter, the Warrant
Purchase
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<PAGE>
Agreement, the Warrant and the Contingent Warrant contained in this Statement do
not purport to be complete and are qualified in their entireties by the
documents themselves, which documents are filed as Exhibits hereto and
incorporated by reference herein.
Except for the agreements as described above, to the best knowledge of
Cablevision, there are no contracts, arrangements, understandings or
relationships (legal or otherwise) between the persons enumerated in item 2 and
any other person with respect to any securities of the Issuer, including but not
limited to transfer or voting of any of the securities, finder's fees, joint
ventures, loan or option arrangements, puts or calls, guarantees of profits,
division of profits or loss or the giving or withholding of proxies.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
10.1 Letter Agreement and Term Sheet, dated October 2, 1997, among
the Issuer, Cablevision, Comcast, Cox, KPCB and TCI, as
amended October 10, 1997 (incorporated by reference to Exhibit
10.01 of the Current Report on Form 8-K filed by the Issuer
(File No. 000-22697) on October 22, 1997 (the "8-K")).
10.2 The Warrant (incorporated by reference to Exhibit 10.03 of the 8-K).
10.3 The Contingent Warrant (incorporated by reference to Exhibit 10.04 of
the 8-K).
10.4 Warrant Purchase Agreement, dated October 10, 1997 between the
Issuer and Cablevision (incorporated by reference herein to
Exhibit 10.02 of the 8-K).
10.5 Amended and Restated Stockholders Agreement, dated July 16, 1997
(incorporated by reference to Exhibit 4.04 of the Amendment No. 4 to
the Form S-1 Registration Statement filed by the Issuer
(Reg. No. 333-27323) on July 11, 1997 (the "S-1")).
10.6 Fourth Amended and Restated Certificate of Incorporation of
the Issuer (incorporated by reference to Exhibit 3.06 of the
S-1).
10.7 Third Amended and Restated Registration Rights Agreement,
dated April 11, 1997 (incorporated by reference to Exhibit
4.01 of the S-1).
99.1 Directors, Executive Officers and Controlling Persons of Cablevision.
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<PAGE>
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, correct and
complete.
CABLEVISION SYSTEMS CORPORATION
By: /s/ William J. Bell
---------------------------------
Name: William J. Bell
Title: Vice Chairman
Date: March 16, 1998
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<PAGE>
INDEX TO EXHIBITS
*10.1 Letter Agreement and Term Sheet, dated October 2, 1997,
among the Issuer, Cablevision, Comcast, Cox, KPCB and TCI,
as amended October 10, 1997 (incorporated by reference to
Exhibit 10.01 of the Current Report on Form 8-K filed by the
Issuer (File No. 000-22697) on October 22, 1997 (the
"8-K")).
*10.2 The Warrant (incorporated by reference to Exhibit 10.03 of
the 8-K).
*10.3 The Contingent Warrant (incorporated by reference to Exhibit
10.04 of the 8-K).
*10.4 Warrant Purchase Agreement, dated October 10, 1997 between
the Issuer and Cablevision (incorporated by reference herein
to Exhibit 10.02 of the 8-K).
10.5 Amended and Restated Stockholders Agreement, dated July 16,
1997 (incorporated by reference to Exhibit 4.04 of the
Amendment No. 4 to the Form S-1 Registration Statement filed
by the Issuer (Reg. No. 333-27323) on July 11, 1997 (the
"S-1")).
10.6 Fourth Amended and Restated Certificate of Incorporation of
the Issuer (incorporated by reference to Exhibit 3.06 of the
S-1).
10.7 Third Amended and Restated Registration Rights Agreement,
dated April 11, 1997 (incorporated by reference to Exhibit
4.01 of the S-1).
99.1 Directors, Executive Officers and Controlling Persons of
Cablevision.
- ------------------------
* Previously filed.
EXHIBIT 99.1
DIRECTORS, EXECUTIVE OFFICERS AND CONTROLLING PERSONS OF CABLEVISION
<TABLE>
<CAPTION>
NAME POSITION WITH CABLEVISION PRINCIPAL OCCUPATION AND BUSINESS PRINCIPAL BUSINESS IN
ADDRESS WHICH SUCH
EMPLOYMENT IS
CONDUCTED
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Charles F. Dolan Director Cable Cable
Chairman One Media Crossways
Woodbury, NY 11797
- ------------------------------------------------------------------------------------------------------------------------------------
James L. Dolan Director Cable Cable
Chief Executive Officer One Media Crossways
Woodbury, NY 11797
- ------------------------------------------------------------------------------------------------------------------------------------
William J. Bell Director Cable Cable
Vice Chairman One Media Crossways
Woodbury, NY 11797
- ------------------------------------------------------------------------------------------------------------------------------------
Marc A. Lustgarten Director Cable Cable
Vice Chairman One Media Crossways
Woodbury, NY 11797
- ------------------------------------------------------------------------------------------------------------------------------------
Robert S. Lemle Director Cable Cable
Executive Vice President, One Media Crossways
General Counsel and Woodbury, NY 11797
Secretary
- ------------------------------------------------------------------------------------------------------------------------------------
Patrick F. Dolan Director Cable Cable
One Media Crossways
Woodbury, NY 11797
- ------------------------------------------------------------------------------------------------------------------------------------
Charles D. Ferris Director Attorney Law
Mintz, Levin, Cohn, Ferris
Glovsky & Popeo, P.C.
701 Pennsylvania Ave., NW
Washington, DC 20004
- ------------------------------------------------------------------------------------------------------------------------------------
Leo J. Hindery, Jr. Director Cable Cable
Tele-Communications, Inc.
5619 DTC Parkway
Englewood, CO 80111
- ------------------------------------------------------------------------------------------------------------------------------------
Richard H. Hochman Director Managing Partner Investments
Regent Capital Partners, L.P.
505 Park Avenue
New York, NY 10022
- ------------------------------------------------------------------------------------------------------------------------------------
John C. Malone Director Cable Cable
Tele-Communications, Inc.
5619 DTC Parkway
Englewood, CO 80111
- ------------------------------------------------------------------------------------------------------------------------------------
<PAGE>
NAME POSITION WITH CABLEVISION PRINCIPAL OCCUPATION AND BUSINESS PRINCIPAL BUSINESS IN
ADDRESS WHICH SUCH
EMPLOYMENT IS
CONDUCTED
- ------------------------------------------------------------------------------------------------------------------------------------
Victor Oristano Director Cable Cable
People's Choice TV
21 Corporate Drive #249
Shelton, CT 06484
- ------------------------------------------------------------------------------------------------------------------------------------
John Tatta Director Cable Cable
One Media Crossways
Woodbury, NY 11797
- ------------------------------------------------------------------------------------------------------------------------------------
Vincent Tese Director Director Investments
Bear,Stearns & Co., Inc.
245 Park Avenue, 3rd Fl.
New York, NY 10167
- ------------------------------------------------------------------------------------------------------------------------------------
Andrew Rosengard Executive Vice President, Cable Cable
Financial Planning and One Media Crossways
Controller Woodbury, NY 11797
- ------------------------------------------------------------------------------------------------------------------------------------
Margaret Albergo Senior Vice President, Cable Cable
Planning and Performance One Media Crossways
Woodbury, NY 11797
- ------------------------------------------------------------------------------------------------------------------------------------
Joseph Cece Senior Vice President, Cable Cable
Strategic Planning One Media Crossways
Woodbury, NY 11797
- ------------------------------------------------------------------------------------------------------------------------------------
Thomas C. Dolan Director Cable Cable
Senior Vice President and One Media Crossways
Chief Information Officer Woodbury, NY 11797
- ------------------------------------------------------------------------------------------------------------------------------------
Sheila A. Mahony Director Cable Cable
Senior Vice President One Media Crossways
Woodbury, NY 11797
- ------------------------------------------------------------------------------------------------------------------------------------
Barry J. O'Leary Senior Vice President, Cable Cable
Finance and Treasurer One Media Crossways
Woodbury, NY 11797
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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