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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported):
September 30, 1998 (September 25, 1998)
COMMONWEALTH TELEPHONE ENTERPRISES, INC.
(Exact Name of Registrant as Specified in Its Charter)
Pennsylvania 0-11053 23-2093008
(State of incorporation (Commission File Number) (I.R.S. Employer
or organization) Identification No.)
100 CTE Drive
Dallas, PA 18612-9774
(Address, including zip code of Registrant's principal executive offices)
Registrant's telephone number, including area code: (717) 674-2700
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Item 5: Other Events
The Registrant issued a press release on September 25, 1998. The text of
such release was as follows:
"Contact: David G. Weselcouch
(717) 674-2805
CTE OFFERS NEW SHARES TO ALL SHAREHOLDERS
Company to Raise Approximately $77 Million in Accordance with its
Recapitalization Plan
Dallas, PA - September 25, 1998 - Commonwealth Telephone Enterprises, Inc.
(the "Company") (NASDAQ: CTCO, CTCOB) announced today that it is commencing a
rights offering of 3.69 million shares of its Common Stock. The Company is
distributing to holders of shares of its Common Stock and of its Class B Common
Stock transferable subscription rights to purchase shares of its Common Stock
at a subscription price of $21.25 per share. Shareholders of record at the
close of business on September 25, 1998, will receive 1 right for every 5
shares of Common Stock or Class B Common Stock held. Rights holders may
purchase one share of Common Stock for each right held. Each right also carries
the right to "oversubscribe" at the subscription price for offered shares of
Common Stock that are not purchased pursuant to the initial exercise of rights.
The rights will be evidenced by transferable certificates and will expire at
5:00 p.m., New York City time, on October 23, 1998, unless extended. The rights
are expected to be listed on the NASDAQ National Market under the symbol
"CTCOR." The Common Stock and the Class B Common Stock will begin trading
ex-rights on the NASDAQ National Market on September 28, 1998. On September 24,
1998, the reported last sale price of the Common Stock on the NASDAQ National
Market was $21.188 per share.
Level 3 Telecom Holdings, Inc. ("LTTH"), which owns approximately 48%
percent of the outstanding Common Stock and approximately 49% of the
outstanding Class B Common Stock, has agreed with the Company to exercise all
of the rights it receives with respect to the shares it holds. Messrs. Walter
Scott, Jr., James Q. Crowe and David C. McCourt have agreed to exercise the
rights they receive and to oversubscribe for all other shares being offered for
sale in the rights offering. The commitments by LTTH and Messrs. Scott, Crowe
and McCourt ensure that the offering will be completed consistent with the
Company's recapitalization plan as previously approved by the Internal Revenue
Service.
The Opportunity to Exercise the Right to Oversubscribe is Available to All
Holders of Rights on the Same Terms
LTTH and Messrs. Scott, Crowe and McCourt will pay the same subscription
price for shares they purchase in the rights offering as the price that any
other holder exercising rights will pay. The obligations of LTTH and Messrs.
Scott, Crowe and McCourt to exercise rights and to oversubscribe for shares are
subject to customary conditions, including Hart-Scott-Rodino approval. Messrs.
Scott, Crowe and McCourt are directors of the Company and LTTH, and Mr. McCourt
is Chairman and Chief Executive Officer of the Company. The rights offering and
the transactions with LTTH and Messrs. Scott, Crowe and McCourt were approved
by a special committee of the Board of Directors composed solely of independent
directors.
The Company expects to use the net proceeds from the rights offering,
which will be approximately $77 million, to repay outstanding indebtedness.
The rights offering is the last step for the Company in the recapitalization
plan that resulted in the Company spinning off its former subsidiaries RCN
Corporation (NASDAQ: RCNC) and Cable Michigan, Inc. (NASDAQ: CABL).
The offering is being made solely by means of a prospectus, which will be
mailed, to shareholders. This release of information shall not constitute an
offer to sell or the solicitation of an offer to buy, nor shall there be any
sale of these securities in any state or jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of such state or jurisdiction.
For further information regarding the rights offering, or for a copy of
the prospectus, please contact the Information Agent, MacKenzie Partners, Inc.,
156 Fifth Avenue, New York, New York 10010, or call toll-free (800) 322-2885.
About CTE
Headquartered in Dallas, PA, Commonwealth Telephone Enterprises, Inc., is
a diversified telecommunications company providing advanced solutions to
deliver communications, information and entertainment services to business and
residential users in select United States markets.
CTE is organized into two principal operating segments: Commonwealth
Telephone Company ("CT"), the nation's 11th largest independent incumbent local
exchange carrier ("ILEC") which has been operating in various rural
Pennsylvania markets since 1897, and CTSI, Inc. ("CTSI"), a competitive local
exchange carrier ("CLEC") which formally commenced operations in 1997.
Additionally, CTE operates three support businesses that provide expertise to
its two principal operating segments. These businesses consist of Commonwealth
Communications, a telecommunications engineering and consulting business,
epix-Internet Services (www.epix.net) and Commonwealth Long Distance Company.
A web site featuring current information regarding CTE can be reached at
www.ct-enterprises.com."
Item 7: Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
10.01 Rights Exercise Agreement dated September 25, 1998, among the
Registrant, Level 3 Telecom Holdings, Inc., Walter Scott, Jr.,
James Q. Crowe and David C. McCourt.
10.02 Subscription Agency Agreement dated September 25, 1998, between
the Registrant and First Union National Bank.
10.03 Information Agent Agreement dated September 25, 1998, between
the Registrant and MacKenzie Partners, Inc.
99.01 Letter dated September 25, 1998, from David C. McCourt to
holders of shares (the "Shareholders") of Common Stock and Class
B Common Stock of the Registrant.
99.02 Notice dated September 25, 1998, from the Registrant to the
Shareholders.
99.03 Form of Subscription Certificate (incorporated herein by
reference to Exhibit 99.01 to the Registrant's Registration
Statement on Form S-3, Registration No. 333-59747).
99.04 Instructions as to use of Subscription Certificates.
99.05 Important Tax Information.
99.06 Notice from the Registrant to Securities Dealers, Commercial
Banks, Trust Companies and Other Nominees.
99.07 Notice of Guaranteed Delivery for Subscription Certificates.
99.08 Nominee Holder Oversubscription Form.
99.09 Certification and Request for Additional Rights.
99.10 Nominee Holder Certification.
99.11 Notice to Beneficial Owners of Registrant's Common Stock and
Class B Common Stock.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this registration statement to be signed on its
behalf by the undersigned hereunto duly authorized.
COMMONWEALTH TELEPHONE ENTERPRISES, INC.
By: /s/Bruce C. Godfrey
---------------------------------------
Name: Bruce C. Godfrey
Title: Executive Vice President and
Chief Financial Officer
Date: September 30, 1998
EXHIBIT 10.01
RIGHTS EXERCISE AGREEMENT
THIS RIGHTS EXERCISE AGREEMENT (this "Agreement") is made and
entered into as of September 25, 1998, by and among Commonwealth Telephone
Enterprises, Inc., a Pennsylvania corporation (the "Company"), Walter Scott,
Jr. ("Mr. Scott"), James Q. Crowe ("Mr. Crowe"), David C. McCourt ("Mr.
McCourt") and Level 3 Telecom Holdings, Inc., a Delaware corporation ("LTTH").
RECITALS:
A. The Company anticipates distributing and issuing to the
holders of record of its issued and outstanding shares of Common Stock, par
value $1.00 per share ("Common Stock"), and to holders of record its
outstanding shares of Class B Common Stock, par value $1.00 per share ("Class
B Stock", and together with the Common Stock, the "Company Stock"), at no
charge to such holders, transferable subscription rights (the "Rights") to
subscribe for and purchase an aggregate of 3,678,612 shares of Common Stock
for a price of $21.25 per share (the "Subscription Price") (such transaction
being herein referred to as the "Rights Offering").
B. The Company is conducting the Rights Offering in order to
raise approximately $77 million of net proceeds which will be used to repay
debt.
C. LTTH will receive 1,776,065 Rights (the "LTTH Rights") in
respect of the shares of Company Stock currently owned by it.
D. Mr. Scott will receive 137 Rights (the "Scott Rights") in
respect of shares of Company Stock currently owned by him.
E. Mr. Crowe will receive 137 Rights (the "Crowe Rights") in
respect of shares of Company Stock currently owned by him.
F. Mr. McCourt will receive 7,339 Rights (the "McCourt Rights")
in respect of shares of Company Stock currently owned by him.
G. The Company has requested LTTH, and Messrs. Scott, Crowe and
McCourt to exercise their Rights and to exercise the Oversubscription
Privilege (as defined below) on the terms and subject to the conditions set
forth below.
In consideration of the mutual promises contained herein, the
parties agree as follows:
1. Rights Offering; Registration of the Common Stock
The Company represents and warrants to each of the other
parties to this Agreement as follows:
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3
(registration no. 333-59747) (as amended to the date of this agreement, the
"Registration Statement"), including a related prospectus, relating to the
registration of, among other securities, the Rights. The prospectus included
therein, is hereinafter referred to as the "Base Prospectus." The Base
Prospectus, as supplemented by the prospectus supplement dated September 25,
1998 (the "Prospectus Supplement") relating to the Rights, is hereinafter
referred to as the "Prospectus". The Registration Statement has been
declared effective by the Commission. All expenses relating to the
Registration Statement and the Prospectus have been borne by the Company. The
shares of Common Stock to be issued and sold pursuant to the Rights Offering
(the "Underlying Shares") have been registered pursuant to the Registration
Statement and have been duly authorized and when issued upon valid exercise of
the Rights will be validly issued, fully paid and non-assessable. A copy of
the Prospectus has been furnished to LTTH and Messrs Scott, Crowe and McCourt.
Each part of the Registration Statement, when such part became effective, did
not contain and each such part, as amended or supplemented, if applicable,
will not, on or prior to the expiration of the Rights Offering, contain any
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading, the Registration Statement and the Prospectus comply and, as
amended or supplemented, if applicable, will, on and prior to the expiration
of the Rights Offering, comply in all material respects with the Securities
Act of 1933, as amended (the "Act"), and the applicable rules and regulations
of the Commission thereunder and the Prospectus does not contain and, as
amended or supplemented, if applicable, will not, on or prior to the Rights
Offering, contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The Company will
timely file with the Commission the Prospectus Supplement pursuant to Rule
424(b) under the Act. Capitalized terms used herein without definition shall
have the meanings ascribed to them in the Prospectus.
2. Exercise of Rights
(a) Subject to the terms and conditions herein set forth,
LTTH hereby agrees to properly exercise the Basic Subscription Privilege in
respect of all of the LTTH Rights on or before the Expiration Date.
(b) Subject to the terms and conditions set forth herein,
Mr. Scott agrees (i) to properly exercise the Basic Subscription Privilege
in respect of all of the Scott Rights on or before the Expiration Date and
(ii) to properly exercise the Oversubscription Privilege for 947,468
additional Underlying Shares on or before the Expiration Date. If Mr.
Scott purchases or otherwise acquires additional Rights (A) such Rights
will be treated as Scott Rights for purposes of clause (i) of the preceding
sentence and (B) the number of Underlying Shares in respect of which Mr.
Scott will exercise the Oversubscription Privilege pursuant to clause (ii)
of the preceding sentence will be reduced by an amount equal to such number
of additional Rights.
(c) Subject to the terms and conditions set forth herein,
Mr. Crowe agrees (i) to properly exercise the Basic Subscription Privilege
in respect of all of the Crowe Rights on or before the Expiration Date and
(ii) to properly exercise the Oversubscription Privilege for 473,733
additional Underlying Shares on or before the Expiration Date. If Mr.
Crowe purchases or otherwise acquires additional Rights (A) such Rights
will be treated as Crowe Rights for purposes of clause (i) of the preceding
sentence and (B) the number of Underlying Shares in respect of which Mr.
Crowe will exercise the Oversubscription Privilege pursuant to clause (ii)
of the preceding sentence will be reduced by an amount equal to such number
of additional Rights.
(d) Subject to the terms and conditions set forth herein,
Mr. McCourt agrees (i) to properly exercise the Basic Subscription
Privilege in respect of all of the McCourt Rights on or before the
Expiration Date and (ii) to properly exercise the Oversubscription
Privilege for 473,733 additional Underlying Shares on or before the
Expiration Date. If Mr. McCourt purchases or otherwise acquires
additional Rights (A) such Rights will be treated as McCourt Rights for
purposes of clause (i) of the preceding sentence and (B) the number of
Underlying Shares in respect of which Mr. McCourt will exercise the
Oversubscription Privilege pursuant to clause (ii) of the preceding
sentence will be reduced by an amount equal to such number of additional
Rights.
(e) The Underlying Shares for which Messrs Scott, Crowe and
McCourt have agreed to exercise the Oversubscription Privilege under
Sections 2(b), 2(c) and 2(d) are referred to herein as the
"Oversubscription Shares". The Company agrees that Messrs Scott, Crowe and
McCourt will be entitled to reallocate among themselves the
Oversubscription Shares in such manner as they may agree so long as (i) the
total number of Underlying Shares for which they exercise the
Oversubscription Privilege is equal to the number of Oversubscription
Shares and (ii) no such reallocation results in any additional filing or
approval requirements that could adversely affect or delay the Rights
Offering.
3. Payment for Underlying Shares
The Company hereby agrees to permit each of Messrs Scott,
Crowe and McCourt to enter into escrow arrangements for the payment for all
Underlying Shares subscribed for by him pursuant to the Oversubscription
Privilege in excess of 5,000 after the Expiration Date and after all
prorations and adjustments contemplated by the Rights Offering have been
effected. Such escrow arrangements shall be reasonably satisfactory to the
Company.
4. Exercise Conditions
The several obligations of LTTH and Messrs Scott, Crowe and
McCourt to take the actions set forth under Section 2 shall in each case be
subject to the satisfaction of the following conditions on the Expiration
Date:
(a) No stop order suspending the effectiveness of the
Registration Statement or any amendment or supplement thereto shall have
been issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission;
(b) (i) There shall not be pending any action or
proceeding instituted by any governmental authority before any court or
governmental, administrative or regulatory authority challenging or seeking
to make illegal, materially delay or make materially more costly the Rights
Offering or the transactions contemplated hereby; (ii) since the date of
this Agreement, there shall not have occurred any change, condition, event
or development that has had a material adverse affect on the business,
operations, properties, condition (financial or otherwise), assets or
liabilities of the Company and its subsidiaries taken as a whole; and (iii)
since the date of this Agreement, there shall not have occurred any
material adverse change in the financial markets in the United States; and
(c) The representations and warranties of the Company set
forth in Section 1 shall be true and correct as of the Expiration Date.
(d) Each of the other shareholders who are party to this
Agreement shall have exercised the Rights which such shareholders are
required to exercise pursuant to Section 2.
In addition, (i) the obligation of Mr. Scott to take the actions set forth in
Section 2(b) is subject to the expiration or early termination of the waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the
"HSR Act") to the extent applicable to the transactions by Mr. Scott
hereunder and (ii) the several obligations of Messrs Scott, Crowe and
McCourt to take the actions set forth in Sections 2(b), 2(c) and 2(d),
respectively, are subject to the delivery to such individuals by the
Company of the registration rights agreement referred to in Section 6 duly
executed by the Company.
5. HSR Filings
Promptly after the execution of this Agreement, the Company
and Mr. Scott will make an appropriate filing of a Notification and Report
Form pursuant to the HSR Act. The Company will pay all filing fees in
connection with such filings.
6. Registration Rights
On the Expiration Date, the Company and Messrs Scott, Crowe
and McCourt shall enter into a customary registration rights agreement in
respect of the shares of the Common Stock purchased by Messrs Scott, Crowe
and McCourt pursuant to the Rights Offering. Such agreement will provide
at the Company's expense Messrs Scott, Crowe and McCourt two demand
registration (to be exercised by them jointly) and unlimited "piggyback"
registration rights. Such agreement will contain other customary terms and
conditions and will be mutually satisfactory to the parties thereto.
7. Indemnity
The Company agrees to indemnify and hold harmless each other
party to this Agreement and their affiliates from and against any loss,
damage, liability, claim or expense (including reasonable attorney's fees)
arising from any third party claim (including any derivative claim brought
in the name or on behalf of the Company) arising out of or relating to this
Agreement, except to the extent such claim is for a breach by any such
party of its obligations under this Agreement. Any party seeking
indemnification under this Section 7 (the "Indemnified Party") agrees to
give prompt notice to the Company of the assertion of any claim, or the
commencement of any suit, action or proceeding in respect of which indemnity
may be sought under such Section; provided, however, that the failure to so
notify the Company shall not relieve the Company from liability under this
Section except to the extent the Company is prejudiced thereby. The Company
may participate in and control the defense of any such suit, action or
proceeding at its own expense so long as the Company shall acknowledge its
obligation to indemnify the Indemnified Party. The Company shall not be
liable under this Section 7 for any settlement effected without its consent
(which consent shall not be unreasonably withheld) of any claim, litigation
or proceeding in respect of which indemnity may be sought hereunder.
8. Termination
Any of the parties hereto may terminate this Agreement if the
transactions contemplated hereby are not consummated by December 1, 1998.
9. Choice of Law
This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York governing contracts made
and to be performed in such State without regard to any conflict of laws or
principles.
10. Execution in Counterparts
This Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be deemed to be an
original, but all such respective counterparts shall together constitute
but one and the same instrument.
11. Entire Agreement
Except for the Subscription Certificates which LTTH, Mr.
Scott, Mr. Crowe and Mr. McCourt shall execute and deliver to the
Subscription Agent pursuant to this Agreement, this Agreement constitutes
the entire agreement of the parties hereto with respect to the subject
matter hereof. Any amendment hereto must be in writing, signed by each
party.
COMMONWEALTH TELEPHONE
ENTERPRISES, INC.
By: /s/Bruce Godfrey
-----------------------------------
Name: Bruce Godfrey
Title: Executive Vice President
and Chief Financial Officer
WALTER SCOTT, JR.
/s/Walter Scott, Jr.
--------------------------------------
Walter Scott, Jr.
JAMES Q. CROWE
/s/James. Q. Crowe
--------------------------------------
James. Q. Crowe
DAVID C. MCCOURT
/s/David C. McCourt
--------------------------------------
David C. McCourt
LEVEL 3 TELECOM HOLDINGS, INC.
By: /s/LEVEL 3 TELECOM HOLDINGS, INC.
-----------------------------------
Name:
Title:
EXHIBIT 10.02
CONFORMED COPY
SUBSCRIPTION AGENCY AGREEMENT
This Subscription Agency Agreement (the "Agreement") is made as of
September 25, 1998 between Commonwealth Telephone Enterprises, Inc. ("CTE" or
the "Company") and First Union National Bank, as subscription agent (the
"Agent"). CTE has filed with the Securities and Exchange Commission a
registration statement on Form S-3 (registration no. 333-59747) (as amended to
the date of this agreement, the "Registration Statement"), including a related
prospectus, relating to the registration of, among other securities, Rights (as
defined herein). The prospectus included therein, is hereinafter referred to as
the "Base Prospectus." The Base Prospectus dated September 23, 1998, as
supplemented by the prospectus supplement dated September 25, 1998 (the
"Prospectus Supplement") relating to the Rights, is hereinafter referred to as
the "Prospectus". All terms not defined herein shall have the meaning given in
the Prospectus.
WHEREAS, the Company proposes to make a subscription offer by issuing
certificates or other evidences of transferable subscription rights, in the form
designated by the Company (the "Subscription Certificates") to holders of record
of shares (each a "Shareholder") of its Common Stock, par value $1.00 per share
(the "Common Stock"), and its Class B Common Stock, par value $1.00 per share
(the "Class B Stock", and collectively with the Common Stock, the "Company
Stock"), as of a record date specified by the Company (the "Record Date"),
pursuant to which each shareholder will receive transferable subscription rights
(the "Rights") to subscribe for shares of Common Stock, as described in and upon
such terms as are set forth in the Prospectus; a final copy of the Prospectus
has been or, upon availability will promptly be, delivered to the Agent; and
WHEREAS, the Company wishes the Agent to perform certain acts on behalf
of the Company, and the Agent is willing to so act, in connection with the
distribution of the Subscription Certificates and the issuance and exercise of
the Rights to subscribe for Common Stock as therein set forth, all upon the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
agreements set forth herein, the parties agree as follows:
1. Appointment. The Company hereby appoints the Agent to act as
subscription agent for the Company in connection with the distribution of
Subscription Certificates and the issuance and exercise of the Rights in
accordance with the terms set forth in this Agreement and the Prospectus and the
Agent hereby accepts such appointment.
2. Form and Execution of Subscription Certificates. (a) Each
Subscription Certificate shall be irrevocable except as otherwise provided in
the Prospectus. The Agent shall, in its capacity as Transfer Agent of the
Company, maintain a register of Subscription Certificates and the holders of
record thereof (each of whom shall be deemed a "Shareholder" hereunder for
purposes of determining the rights of holders of Subscription Certificates).
Each Subscription Certificate shall, subject to the provisions thereof, entitle
the Shareholder in whose name it is recorded, or any transferee designated
therein, to the following:
(1) The right to purchase from the Company until the Expiration Date,
at the Subscription Price, a number of shares of Common Stock equal to one share
of Common Stock for each Right evidenced thereby (the "Basic Subscription
Privilege"); and
(2) The right to subscribe for additional shares of Common Stock,
subject to the availability of such shares and to the allotment of such shares
as may be available among Shareholders who exercise the Oversubscription
Privilege on the basis specified in the Prospectus; provided, however, that such
Shareholder has exercised the Basic Subscription Privilege in respect of all
Rights which he or she holds (the "Oversubscription Privilege").
The shares of Common Stock being offered for sale pursuant to the Rights are
referred to collectively as the "Underlying Shares".
3. Rights and Issuance of Subscription Certificates. (a) Each
Subscription Certificate shall evidence the Rights of the Shareholder therein
named to purchase shares of Common Stock upon the terms and conditions therein
and herein set forth.
(b) Upon the written authorization of the Company, signed by any of
its duly authorized officers, as to the Record Date, the Agent shall, from a
list of the Shareholders of Company Stock as of the Record Date to be prepared
by the Agent in its capacity as Transfer Agent of the Company, prepare and
record Subscription Certificates in the names of the Shareholders, setting forth
the number of Rights to subscribe for shares of the Common Stock calculated on
the basis of one Right for each five shares of Company Stock recorded on the
books in the name of each such Shareholder as of the close of business on the
Record Date. The number of Rights distributed to each Shareholder shall be
rounded up to the nearest whole number. No Subscription Certificate may be
divided in such a way as to permit the holder of such certificate to receive a
greater number of Rights than the number to which such Subscription Certificate
entitles its holder, except that a depository, bank, trust company, or
securities broker or dealer holding shares of Company Stock, on the Record Date
for more than one beneficial owner may, upon execution and delivery to the Agent
of a Certification and Request for Additional Rights, substantially in the form
attached hereto as Exhibit A, exchange its Subscription Certificate to obtain a
Subscription Certificate for the number of Rights to which all such beneficial
owners in the aggregate would have been entitled had each been a Shareholder on
the Record Date.
(c) Each Subscription Certificate shall be dated as of the Record
Date and shall be executed manually or by facsimile signature of a duly
authorized officer of the Agent. Upon the written advice, signed as aforesaid,
as to the effective date of the Registration Statement, the Agent shall promptly
countersign and deliver the Subscription Certificates, together with a copy of
the Prospectus, instructions as to the use of the Subscription Certificates and
any other document as the Company deems necessary or appropriate, to all
Shareholders with record addresses in the United States (including its
territories and possessions and the District of Columbia). No Subscription
Certificate shall be valid for any purpose unless so executed. Delivery to
Shareholders with record address inside the United States shall be by first
class mail (without registration or insurance). For those Shareholders having a
record address outside the United States or who have an APO or FPO address
("Foreign Shareholders") (who will not receive Subscription Certificates and
will receive only copies of the Prospectus, instructions as to the use of the
Subscription Certificates and other documents as the Company deems necessary or
appropriate, if any), delivery shall be by air mail (without registration or
insurance) and by first class mail (without registration or insurance) to those
Shareholders having APO or FPO addresses.
(d) The Rights evidenced by Subscription Certificates issued to
Foreign Shareholders will be held by the Agent for such Foreign Shareholders'
accounts until instructions are received to exercise, sell or transfer the
Rights. To exercise such rights, such a Foreign Shareholder must notify the
Agent on or prior to 11:00 a.m., New York City time, on October 16, 1998, and
must establish to the satisfaction of the Agent that such exercise is permitted
under applicable law. If such a holder does not follow the procedures set forth
in the preceding sentence prior to the Expiration Date, such Rights represented
thereby will be sold by First Union National Bank, as Agent, if feasible, and
the net proceeds, if any, remitted to such Foreign Shareholders. If the Rights
can be sold, sales of such Rights will be deemed to have been effected at the
weighted average price received by the Agent on the day such Rights are sold,
less any applicable brokerage commissions, taxes and other expenses.
4. Exercise. (a) Shareholders may acquire shares of Common Stock
pursuant to the Basic Subscription Privilege, and, if available, pursuant to
the Oversubscription Privilege by delivery to the Agent as specified in the
Prospectus of (i) the Subscription Certificate with respect thereto, duly
executed by such Shareholder in accordance with and as provided by the terms
and conditions of the Subscription Certificate, together with (ii) the purchase
price of $21.25 for each share of Common Stock subscribed for by exercise of
such Rights (the "Subscription Price"), in U.S. dollars by wire transfer or by
money order or check drawn on a bank in the United States, in each case payable
to the order of the Agent. In the case of holders of Rights that are held of
record through a Depository (as defined below), exercises of the Basic
Subscription Privilege (but not the Oversubscription Privilege) may be effected
by instructing the Depository to transfer Rights (such Rights, "Depository
Rights") from the Depository's account of such holder to the Depository account
of the Agent, together with payment of the Subscription Price for each
Underlying Share subscribed for pursuant to the Basic Subscription Privilege.
The Oversubscription Privilege in respect of Depository Rights may not be
exercised through the Depository. The holder of a Depository Right may exercise
the Oversubscription Privilege in respect of such Depository Right by properly
executing and delivering to the Agent at or prior to 5:00 p.m., New York City
time, on the Expiration Date, a Nominee Holder Oversubscription Exercise Form,
substantially in the form attached hereto as Exhibit B or a Notice of
Guaranteed Delivery, together with payment of the appropriate Subscription
Price for the number of Underlying Shares for which the Oversubscription
Privilege is to be exercised. Any Rights holder subscribing for an aggregate of
more than 5,000 shares pursuant to the Oversubscription Privilege prior to the
Expiration Date shall not be required to deliver payment for such number of
Underlying Shares in excess of 5,000 until the Expiration Date. Payments will
be deemed to have been received by the Agent only upon (i) clearance on any
uncertified check (for purposes hereof, an uncertified check will be deemed to
clear when the Agent has received good funds therefrom), (ii) receipt by the
Agent of any certified check or money order or (iii) receipt of good funds by
wire transfer to the Agent's account. The Company, in its sole discretion, may
determine to permit a holder to establish an escrow arrangement for the payment
for such excess number of shares until after the Expiration Date and after all
prorations and adjustments contemplated by the terms of the Rights Offering
have been effected. (The Company has agreed pursuant to a Rights Exercise
Agreement to permit Messrs. Walter Scott, Jr., David C. McCourt and James A.
Crowe to establish such escrow arrangements.) Nominees (as defined below) who,
on behalf of beneficial owners, exercise the Basic Subscription Privilege and
who wish to exercise the Oversubscription Privilege, must properly execute and
deliver to the Agent at or prior to 5:00 p.m., New York City time, on the
Expiration Date a Nominee Holder Oversubscription Exercise Form and a Nominee
Holder Certification, substantially
in the form attached hereto as Exhibit C.
(b) Rights may be exercised at any time after the date of issuance of
the Subscription Certificates with respect thereto but no later than 5:00 P.M.
New York time on the Expiration Date. For the purpose of determining the time of
the exercise of any Rights, delivery of any material to the Agent shall be
deemed to occur when such materials are received at the Shareholder Services
Division of the Agent. Once a Shareholder has exercised the Basic Subscription
Privilege or the Oversubscription Privilege, such exercise may not be revoked
except as provided in the Prospectus.
(c) Notwithstanding the provisions of Section 4(a) and 4(b) regarding
delivery of an executed Subscription Certificate to the Agent prior to 5:00 P.M.
New York time on the Expiration Date, if prior to such time the Agent receives a
Notice of Guaranteed Delivery by facsimile (telecopy) or otherwise from a member
firm of a registered national securities exchange or a member of the National
Association of Securities Dealers, Inc., or from a commercial bank or trust
company having an office or correspondent in the United States (each, an
"Eligible Institution") guaranteeing delivery of a properly completed and
executed Subscription Certificate, then such exercise of the Basic Subscription
Privilege and Oversubscription Privilege shall be regarded as timely, subject,
however, to receipt of (i) the duly executed Subscription Certificate by the
Agent within three NASDAQ trading days after the Expiration Date (the "Protect
Period") and (ii) payment in full of the subscription price prior to 5:00 p.m.
on the Expiration Date.
(d) As soon as practicable after the valid exercise of Rights (for
purposes hereof an exercise will not be treated as valid until such time as the
Agent receives good funds) the Agent shall send to each exercising Shareholder
(an "Exercising Shareholder") (or, in the case of shares of any Company Stock
held through The Depository Trust Company, Midwest Securities Trust Company,
Philadelphia Depository Trust Company (each a "Depository") or any other
depository or nominee (together with the Depositories, "Nominees"), to such
Nominee) the share certificates representing the shares of Common Stock acquired
pursuant to the Basic Subscription Privilege. As soon as practicable after the
Expiration Date and after all pro rations and adjustments contemplated by the
terms of the Rights Offering have been effected (and, in any event, within four
business days after the Expiration Date), the Agent shall send to each
Exercising Shareholder or Nominee who exercises an Oversubscription Privilege
certificates representing the shares of Common Stock acquired pursuant to the
Oversubscription Privilege, along with a letter explaining the allocation of
shares of Common Stock pursuant to the Oversubscription Privilege. (Any excess
payment to be refunded by the Company to an Exercising Shareholder who is not
allocated the full amount of shares of Common Stock subscribed for pursuant to
the Oversubscription Privilege, shall be mailed by the Agent to him or her
without interest or deduction as soon as practicable after the Expiration Date
(and, in any Event, within four business days after the Expiration Date) and
after all prorations and adjustments contemplated by the terms of the Rights
Offering have been effected.)
(e) If an exercising Rights holder has not indicated the number of
Rights being exercised, or if the Subscription Price payment forwarded by such
holder to the Agent is not sufficient (subject to the fifth sentence of Section
4(a) above) to purchase the number of shares subscribed for, the Rights holder
will be deemed to have exercised the Basic Subscription Privilege with respect
to the maximum number of whole Rights which may be exercised for the
Subscription Price delivered to the Agent and, to the extent that the
Subscription Price payment delivered by such holder exceeds the Subscription
Price multiplied by the number of Rights exercised (such excess being the
"Subscription Excess"), the holder will be deemed to have exercised its
Oversubscription Privilege to purchase, to the extent available, a number of
whole Underlying Shares equal to the quotient obtained by dividing the
Subscription Excess by the Subscription Price.
(f) From the proceeds of the Offering, the Agent will pay amounts due
to Soliciting Dealers in accordance with the terms of the Soliciting Dealer
Agreement dated as of September 25, 1998 among the Company and the Soliciting
Dealers.
5. Transfer of Rights. Any Shareholder may transfer (i) all of the
Rights evidenced by a Subscription Certificate by properly endorsing the
Subscription Certificate or (ii) some of the Rights evidenced by a Subscription
Certificate (but not fractional Rights) by delivering to the Agent such
Subscription Certificate properly endorsed for transfer, with instructions to
register the Rights to be transferred in the name of the transferee (and to
issue a new Subscription Certificate to the transferee evidencing such
transferred Rights). In such event, the Agent shall issue a new Subscription
Certificate evidencing the balance of the Rights to the Shareholder or, if so
instructed, to an additional transferee. For purposes of this Agreement the term
"properly endorsed for transfer" shall mean that each and every signature of a
registered Shareholder or Shareholders or assigns shall be made and guaranteed
by an Eligible Institution. All transfer taxes and other governmental charges
arising from a transfer shall be paid by the transferring Shareholder.
6. Validity of Subscriptions. Irregular subscriptions not otherwise
covered by specific instructions herein shall be submitted to an appropriate
officer of the Company and handled in accordance with his or her instructions.
Such instructions will be documented by the Agent indicating the instructing
officer and the date thereof.
7. Oversubscription. If, after allocation of shares of Common Stock
to Exercising Shareholders, there remain Underlying Shares not subscribed for
through the Basic Subscription Privilege (the "Excess Shares"), then the Agent
shall allocate such Excess Shares to Shareholders who have exercised the Basic
Subscription Privilege in respect of all the Rights initially issued to them and
who have exercised the Oversubscription Privilege to acquire more than the
number of shares for which the Rights issued to them are exercisable pursuant to
the Basic Subscription Privilege. If the number of shares for which the
Oversubscription Privilege has been exercised is greater than the Excess Shares,
the Agent shall allocate pro rata the Excess Shares among the Shareholders
exercising the Oversubscription Privilege based on the number of shares each
Shareholder exercising the Oversubscription Privilege has requested pursuant to
the Oversubscription Privilege. The maximum number of Underlying Shares for
which any beneficial owner may exercise the Oversubscription Privilege is
1,905,808. The percentage of Excess Shares each oversubscribing Shareholder may
acquire will be rounded up or down to result in delivery of whole shares of
Common Stock. The Agent shall advise the Company immediately upon the completion
of the allocation set forth above as to the total number of shares subscribed
and distributable.
8. Delivery of Certificates. The Agent will deliver (i) certificates
representing those shares of Common Stock purchased pursuant to exercise of the
Basic Subscription Privilege as soon as practicable after the corresponding
Rights have been validly exercised and full payment for such shares has been
received and cleared and (ii) certificates representing those shares purchased
pursuant to the exercise of the Oversubscription Privilege as soon as
practicable after the Expiration Date and after all prorations and adjustments
contemplated by the Rights Offering have been effected, but in no event shall
share certificates be delivered after the time period set forth in Section 4(d)
hereof. The Agent will include a copy of the Prospectus with each certificate
delivered, unless a Prospectus was previously delivered to such Shareholder.
9. Holding Proceeds of Rights Offering in Escrow. (a) All proceeds
received by the Agent from Shareholders in respect of the exercise of Rights
shall be held by the Agent, on behalf of the Company, in a segregated,
interest-bearing escrow account (the "Escrow Account"). As soon as practicable
after the receipt of any proceeds in respect of the exercise of the Basic
Subscription Privilege, the Agent shall deliver all such proceeds to the
Company, together with any interest thereon.
(b) The Agent shall deliver all proceeds received in respect of the
exercise of the Oversubscription Privilege (including interest earned thereon)
to the Company as promptly as practicable, but in no event later than five
business days after all prorations and adjustments contemplated by the terms of
the Rights Offering have been effected. Pending delivery to the Company as
provided herein or disbursement in the manner described in Section 4(d) above,
funds held in the Escrow Account shall be invested by the Agent at the
direction of the Company.
10. Reports. Daily, during the period commencing with the mailing of
the Subscription Certificates and ending on the Expiration Date (and in the case
of guaranteed deliveries pursuant to Section 4(c), the period ending three
NASDAQ trading days after the Expiration Date) the Agent will report by
telephone or telecopier (by 12:00 Noon, New York time), confirmed by letter, to
an officer of the Company, data regarding (i) Rights exercised, the total number
of shares of Common Stock subscribed for, and payments received therefor,
bringing forward the figures from the previous day's report in each case so as
to show the cumulative totals and (ii) any other information as may be
reasonably requested by the Company.
11. Loss or Mutilation; Cancellation. (a) If any Subscription
Certificate is lost, stolen, mutilated or destroyed, the Agent may, on such
terms which will indemnify and protect the Company and the Agent as the Agent
and the Company shall agree (which shall, in the case of a mutilated
Subscription Certificate include the surrender and cancellation thereof), issue
a new Subscription Certificate of like denomination in substitution for the
Subscription Certificate so lost, stolen, mutilated or destroyed.
(b) All Subscription Certificates surrendered for the purpose of
exercise, exchange, substitution or transfer shall be canceled by the Agent, and
no Subscription Certificates shall be issued in lieu thereof except as expressly
permitted by provisions of this Agreement. The Company shall deliver to the
Agent for cancellation and retirement, and the Agent shall so cancel and return,
any other Subscription Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Agent shall deliver all canceled
Subscription Certificates to the Company, or shall, at the written request of
the Company, destroy such canceled Subscription Certificates, and in such case
shall deliver a certificate of destruction thereof to the Company.
12. Compensation for Services. The Company agrees to pay to the Agent
certain fees, as set forth in the schedule hereto, for services performed
hereunder, which services include any other services not described herein but
customarily performed by the Subscription/Escrow Agent in a rights offering. The
Company further agrees that it will reimburse the Agent for its reasonable
out-of-pocket expenses incurred in the performance of its duties as such.
13. Instructions and Indemnification. The Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and
conditions:
(a) The Agent shall be entitled to rely upon any instructions or
directions furnished to it by an officer of the Company, whether in conformity
with the provisions of this Agreement or constituting a modification hereof or a
supplement hereto. Without limiting the generality of the foregoing or any other
provision of this Agreement, the Agent, in connection with its duties hereunder,
shall not be under any duty or obligation to inquire into the validity or
invalidity or authority or lack thereof of any instruction or direction from an
officer of the Company which conforms to the applicable requirements of this
Agreement, as modified or supplemented, and which the Agent reasonably believes
to be genuine and shall not be liable for any delays, errors or loss of data
occurring by reason of circumstances beyond the Agent's control, including,
without limitation, acts of civil or military authority, national emergencies,
labor difficulties, fire, flood, catastrophe, acts of God, insurrection, war,
riots or failure of the mails, transportation, communication or power supply.
(b) The Company will indemnify the Agent for, and hold it harmless
against, any liability and expense which may arise out of or in connection with
the services described in this Agreement or the instructions or directions
furnished to the Agent relating to this Agreement by an officer of the Company;
provided, however, that such agreement does not extend to, and the Agent shall
not be indemnified or held harmless with respect to any liability or expense
which shall arise out of, or be incurred or suffered as a result of, the Agent's
gross negligence, bad faith, willful misconduct or breach of this Agreement. The
Company shall not indemnify the Agent with respect to any claim or action
settled without its consent, which consent shall not be unreasonably withheld.
(c) The Agent will promptly notify the Company of any claim with
respect to which it may seek indemnity hereunder but the failure to so notify
shall relieve the Company from its obligation to indemnify the Agent only to the
extent the Company demonstrates that its defense of such claim is materially
prejudiced thereby. The Company shall be entitled to participate at its own
expense in the defense of any suit brought to enforce any such claim, and if the
Company so elects, the Company shall assume the defense of any such suit. In the
event that the Company assumes such defense, the Company shall not thereafter be
liable for the fees and expenses of any additional counsel that the Agent
retains, so long as the Company shall retain counsel reasonably satisfactory to
the Agent, to defend such suit and the Agent shall not have reasonably concluded
that joint representation would be inappropriate due to actual or potential
conflicting interests of the Company and the Agent.
14. Changes in Subscription Certificate. The Agent may, without the
consent or concurrence of the Shareholders in whose names Subscription
Certificates are registered, by supplemental agreement or otherwise, concur
with the Company in making any changes or corrections in a Subscription
Certificate that it shall have been advised by counsel (who may be counsel for
the Company) is appropriate to cure any ambiguity or to correct any defective
or inconsistent provision or clerical omission or mistake or manifest error
therein or herein contained, and which shall not be inconsistent with the
provision of the Subscription Certificate except insofar as any such change may
confer additional rights upon the Shareholders.
15. Assignment, Delegation. (a) Neither this Agreement nor any rights
or obligations hereunder may be assigned or delegated by either party without
the written consent of the other party.
(b) This Agreement shall inure to the benefit of and be binding upon
the parties and their respective permitted successors and assigns. Nothing in
this Agreement is intended or shall be construed to confer upon any other person
any right, remedy or claim or to impose upon any other person any duty,
liability or obligation.
16. Governing Law. The validity, interpretation and performance of
this Agreement shall be governed by the law of the State of New York.
17. Severability. The parties hereto agree that if any of the
provisions contained in this Agreement shall be determined invalid, unlawful or
unenforceable to any extent, such provisions shall be deemed modified to the
extent necessary to render such provisions enforceable. The parties hereto
further agree that this Agreement shall be deemed severable, and the invalidity,
unlawfulness or enforceability of any term or provision thereof shall not affect
the validity, legality or enforceability of this Agreement or of any other term
or provision hereof.
18. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
19. Captions. The captions and descriptive headings herein are for
the convenience of the parties only. They do not in any way modify, amplify,
alter or give full notice of the provisions hereof.
20. Facsimile Signatures. Any facsimile signature of any party hereto
shall constitute a legal, valid and binding execution hereof by such party.
21. Further Actions. Each party agrees to perform such further acts
and execute such further documents as are necessary to effect the purposes of
this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
FIRST UNION NATIONAL BANK
By: /s/ Victor W. La Tessa
-----------------------
Title: Vice President
COMMONWEALTH TELEPHONE
ENTERPRISES, INC.
By: /s/ Bruce C. Godfrey
---------------------
Title: Executive Vice President and
Chief Financial Officer
SCHEDULE OF FEES
FOR SUBSCRIPTION/ESCROW AGENT SERVICES
between
COMMONWEALTH TELEPHONE ENTERPRISES, INC.
and
FIRST UNION NATIONAL BANK
A. TERM
The term of this Agreement shall be for a period of six (6) months,
commencing from the effective date of this Agreement, September 25,
1998.
B. FEE FOR SERVICES
$7,500.00 - Administrative fee
O Subscription Certificates issued and mailed - $2.50 each
O Subscription Certificates Received and Processed - $10.00 each
O Defective Subscription Certificates Received and Processed
(Telephone Calls if Necessary) - $7.50 each
O Notices of Guaranteed Delivery Received - N/C
O Withdrawal of Subscription Certificate, if Applicable - N/C
O Sales of Rights - N/C
O Tax Reporting (1099-INT) - N/A
O Over Subscription, Proration, (if applicable) - $5.00 each item
O Receipt of and Payments under Dealer Solicitation Forms - N/C
O Refund Checks - $2.50 each
O Other services customary for a transaction of this type -
at cost
O All out of pocket expenses, including postage insurance,
telephone, courier expenses, check stock, stationary, brokerage
fees, fees and reasonable expenses of counsel will be billed in
addition to fees listed herein.
EXHIBIT A
CERTIFICATION AND REQUEST FOR ADDITIONAL RIGHTS
To the Subscription Agent:
The undersigned hereby certifies that it is a broker-dealer registered
with the Securities and Exchange Commission, commercial bank or trust company,
securities depository or participant therein, or nominee therefor, holding of
record ___________ shares of Common Stock, par value $1.00 per share (the
"Common Shares"), and _________ shares of Class B Common Stock, par value $1.00
per share (the "Class B Stock", and collectively with the Common Stock, the
"Company Stock"), of Commonwealth Telephone Enterprises, Inc. (the "Company") on
behalf of __________ beneficial owners as of the close of business on September
25, 1998, the Record Date for the offering by the Company of 3,678,612 shares of
Common Stock pursuant to transferable subscription rights (the "Rights") being
distributed to record holders of shares of Company Stock, all as described in a
Prospectus dated September 23, 1998, as supplemented by a Prospectus Supplement
dated the Record Date (as supplemented, the "Prospectus"), a copy of which the
undersigned has received. One Right is being distributed for each 5 shares of
Company Stock held of record as of the close of business on the Record Date, and
any fractional Right will be rounded up to the nearest whole number. The
undersigned further certifies that _________ beneficial owners on whose behalf
it held, as of the close of business on the Record Date, _________ shares of
Company Stock registered in the name of the undersigned are each entitled to an
additional Right in accordance with the principle that any fractional Right to
which a beneficial owner would otherwise be entitled should be rounded up to the
nearest whole number. Accordingly, the undersigned requests that, upon surrender
of its Subscription Certificate evidencing _________ Rights, a Subscription
Certificate evidencing _________ Rights (including _________ additional Rights)
be issued. The undersigned further certifies that each such beneficial owner is
a bona fide beneficial owner of shares of Company Stock, that such beneficial
ownership is reflected on the undersigned's records and that all shares of
Company Stock which, to the undersigned's knowledge, are beneficially owned by
any such beneficial owner through the undersigned have been aggregated in
calculating the foregoing. The undersigned agrees to provide the Company or its
designee with such additional information as the Company deems necessary to
verify the foregoing.
-----------------------------------
Name of Record Holder
By:
--------------------------------
Name:
Title:
Address:
Telephone Number:
Date: ,1998
----------------------------
EXHIBIT B
NOMINEE HOLDER OVERSUBSCRIPTION EXERCISE FORM
PLEASE COMPLETE ALL APPLICABLE INFORMATION
By Mail: By Express Mail or Overnight:
First Union National Bank First Union National Bank
Corporate Trust Client Operations Corporate Trust Client Operations
1525 West W.T. Harris Boulevard-3C3 1525 West W.T. Harris Boulevard-3C3
Charlotte, North Carolina 28288-1153 Charlotte, North Carolina 28262-1153
By Hand:
First Union National Bank
Corporate Trust Client Operations
1525 West W.T. Harris Boulevard-3C3
Charlotte, North Carolina 28288-1153
THIS FORM IS TO BE USED ONLY BY NOMINEE HOLDERS TO EXERCISE THE
OVERSUBSCRIPTION PRIVILEGE IN RESPECT OF RIGHTS WITH RESPECT TO WHICH THE BASIC
SUBSCRIPTION PRIVILEGE WAS EXERCISED TO THE FULLEST EXTENT POSSIBLE AND
DELIVERED THROUGH THE FACILITIES OF A COMMON DEPOSITORY. ALL OTHER EXERCISES OF
OVERSUBSCRIPTION PRIVILEGES MUST BE EFFECTED BY THE DELIVERY OF SUBSCRIPTION
CERTIFICATES.
THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING ARE SET FORTH IN THE
COMPANY'S PROSPECTUS DATED SEPTEMBER 23, 1998, AS SUPPLEMENTED BY THE PROSPECTUS
SUPPLEMENT DATED SEPTEMBER 25, 1998, (AS SUPPLEMENTED, THE "PROSPECTUS") AND ARE
INCORPORATED HEREIN BY REFERENCE. COPIES OF THE PROSPECTUS ARE AVAILABLE UPON
REQUEST FROM THE INFORMATION AGENT, MACKENZIE PARTNERS, INC. AT (800) 322-2885.
THIS FORM OR A NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE
SUBSCRIPTION AGENT WITH PAYMENT IN FULL BY 5:00 P.M., NEW YORK CITY TIME, ON
OCTOBER 23, 1998, UNLESS EXTENDED (AS IT MAY BE EXTENDED, THE "EXPIRATION
DATE").
1. The undersigned hereby certifies to the Company and the
Subscription Agent that it is a participant in _________________________[Name of
Depository] (the "Depository") and that it has either (1) exercised the Basic
Subscription Privilege in respect of Rights and delivered such exercised Rights
to the Subscription Agent by means of transfer to the Depository Account of the
Company or (ii) delivered to the Subscription Agent a Notice of Guaranteed
Delivery in respect of the exercise of the Basic Subscription Privilege and will
deliver the Rights called for in such Notice of Guaranteed Delivery to the
Subscription Agent by means of transfer to such Depository Account of the
Company.
2. The undersigned hereby exercises the Oversubscription Privilege
to purchase, to the extent available, _______ shares of Common Stock and
certifies to the Company and the Subscription Agent by execution of a Nominee
Holder Certification that such Oversubscription Privilege is being exercised for
the account or accounts of persons (which may include the undersigned) on whose
behalf the Basic Subscription Privilege has been exercised to the fullest extent
possible.
3. The undersigned understands that payment of the Subscription
Price of $21.25 per share for each share of Common Stock subscribed for pursuant
to the Oversubscription Privilege must be received by the Subscription Agent at
or before 5:00 p.m., New York City time, on the Expiration Date and represents
that such payment, in the aggregate amount of $____________, either (check
appropriate box):
o has been or is being delivered to the Subscription Agent pursuant to the
Notice of Guaranteed Delivery referred to above
or
o is being delivered to the Subscription Agent herewith
or
o has been delivered separately to the Subscription Agent; and, in the case
of funds not delivered pursuant to a Notice of Guaranteed Delivery, is or
was delivered in the manner set forth below (check appropriate box and
complete information relating thereto):
o wire transfer of funds
-- name of transferor institution _______________________________________
-- date of transfer______________________________________________________
-- confirmation number (if available)____________________________________
o uncertified check
o certified check
o bank draft (cashier's check)
_________________________________________________________________________
Basic Subscription Confirmation Number
_________________________________________________________________________
Depository Participant Number
________________________________________________________________________
Name of Depository Participant
By ________________________________________________
Name:
Title:
Dated: _______________, 1998
PARTICIPANTS EXERCISING THE OVERSUBSCRIPTION PRIVILEGE PURSUANT HERETO MUST
SEPARATELY SUBMIT A NOMINEE HOLDER CERTIFICATION TO THE SUBSCRIPTION AGENT. SUCH
NOMINEE HOLDER CERTIFICATIONS ARE AVAILABLE FROM THE SUBSCRIPTION AGENT.
EXHIBIT C
NOMINEE HOLDER CERTIFICATION
The undersigned, a bank, broker or other nominee holder of Rights (the
"Rights") to purchase shares of Common Stock, par value $1.00 per share (the
"Common Stock"), of Commonwealth Telephone Enterprises, Inc. (the "Company")
pursuant to the rights offering (the "Rights Offering") described and provided
for in the Company's prospectus supplement dated September 25, 1998 which
supplements the Company's prospectus dated September 23, 1998 (such prospectus,
as supplemented is hereinafter referred to as the "Prospectus"), hereby
certifies to the Company and to First Union National Bank, as Subscription Agent
for such Rights Offering, that (1) the undersigned has exercised the Basic
Subscription Privilege (as defined in the Prospectus), on behalf of certain
beneficial owners of Rights (which may include the undersigned) who have also
subscribed for the purchase of additional shares of Common Stock pursuant to the
Oversubscription Privilege (as defined in the Prospectus); (2) the undersigned
has listed below for each such beneficial owner the number of Rights exercised
pursuant to the Basic Subscription Privilege and the corresponding number of
shares subscribed for pursuant to the Oversubscription Privilege (without
identifying any such beneficial owner) and (3) each such beneficial owner's
Basic Subscription Privilege has been exercised to the fullest extent possible:
<TABLE>
<CAPTION>
Number of Shares
Subscribed for
Pursuant
to Oversubscription
Number of Rights Privilege
Exercised Pursuant (maximum of Estimate of
to Basic Subscription 1,894,934 per Rights Certificate Soliciting Dealer
Privilege beneficial owner) Number Fee Due*
--------------------- ----------------- ------------------ ------------------
<S> <C> <C> <C> <C>
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
</TABLE>
(Attach additional beneficial owner list if necessary)
- --------------------------------------------
Name of Nominee Holder
- --------------------------------------------
Depository Participant Number (if applicable)
- --------------------------------------------
Address
- --------------------------------------------
Basic Subscription Confirmation Number(s)
By:
-------------------------------------
Name: (Date)
Title:
Telephone Number:
- --------
* The Company will pay Soliciting Dealers that have entered into a
Soliciting Dealer Agreement with the Company fees for their soliciting
efforts (the "Soliciting Fees") equal to $0.25 per share of Common Stock
for each share of Common Stock issued pursuant to the exercise of Rights;
such Soliciting Fee with respect to exercised rights shall be paid to the
broker-dealer, if any, designated on the applicable portion of the
subscription certificate, provided that such Soliciting Fee shall not
exceed $250 in the case of any person beneficially purchasing more than an
aggregate of 1,000 Common Shares pursuant to the exercise of Rights. In the
event that the Oversubscription Privilege is not allocated in full, the
Estimated Soliciting Dealer Fee will be reduced accordingly.
1
EXHIBIT 10.03
CONFORMED COPY
[Mackenzie Partners Letterhead]
September 25, 1998
Commonwealth Telephone Enterprises, Inc.
100 CTE Drive
Dallas, Pennsylvania 18612
Ladies and Gentlemen:
This is to confirm our agreement that effective as of the date hereof
MacKenzie Partners, Inc. ("MacKenzie") has been engaged by Commonwealth
Telephone Enterprises, Inc. (the "Company") as Information Agent for the
proposed rights offering (the "Offering") by the Company. As Information Agent,
MacKenzie will perform customary services for the Company, including:
distribution of the Offering materials to securityholders, contacting broker
dealers regarding the Offering, following up with such broker dealers while the
Offering remains open, providing information to securityholders from the
Offering materials, itemizing and paying from funds provided by the Company the
charges of brokers and banks for forwarding Offering materials to beneficial
owners and providing such other advisory services as may be requested from time
to time by the Company.
The Services shall continue until the expiration, termination or
cancellation of the Offering. In consideration of the Services you agree to pay
MacKenzie the following:
1. A fee of $4,500 plus reasonable out-of-pocket expenses. In the
event you request us to provide additional services not
contemplated by this agreement, you agree to pay us an
additional amount, if any, to be mutually agreed upon, prior
to such services being rendered to you, based on the services
provided as Information Agent, payable upon expiration,
termination or cancellation of the Offer.
2. MacKenzie's reasonable out-of-pocket expenses shall be
reimbursed at cost and shall include but not be limited to:
telephone and telecopier charges; copying costs; messenger
services; data processing; and mailing, postage and courier
costs and other services as required and authorized by the
Company.
You agree that information and data which you furnish to us (as amended
or supplemented if amendments or supplements are provided), whether written,
oral or pictorial, will be true, accurate and complete to the best of the
Company's knowledge in all material respects and we are authorized to rely upon
it, as well as any information or data received from third parties with your
specific written permission and on your behalf, as true, accurate and complete
in all material respects. You agree to review carefully any materials which we
prepare for you pursuant to this Agreement and to promptly advise if in your
reasonable opinion these materials are materially false, inaccurate or
incomplete. We agree not to make any representation not included in, and not to
distribute any information other than, the materials provided or approved by you
specifically for distribution (as amended or supplemented if amendments or
supplements are provided).
You agree to indemnify and hold us and our employees harmless against
any losses, claims, damages, liabilities or expenses (including, without
limitation, reasonable legal and other related fees and expenses) (collectively,
"Losses") to which we may become subject arising from or in connection with the
Services or matters which are the subject of this Agreement; provided, however,
that you shall not be liable under this sentence in respect of any loss, claim,
damage, liability or expense which was the result of our breach of this
Agreement, gross negligence, willful misfeasance or bad faith. The Company will
not be liable under this indemnity unless we give you prompt written notice of
any related claim or action brought against us. At your election, you may assume
the defense of any such claim or action. We agree to indemnify and hold you and
your employees harmless against any Losses to which you may become subject
arising from or in connection with any breach of this Agreement, gross
negligence, wilful misfeasance or bad faith on our part. The provisions of this
paragraph shall indefinitely survive the period of this Agreement.
We will hold in confidence and will not use nor disclose to third
parties information we receive from you or your agents or information developed
by MacKenzie based upon such information we receive, except for information
which was public at the time of disclosure or becomes part of the public domain
without disclosure by us or information which we learn from a third party which
does not have an obligation of confidentiality to you.
This Agreement shall be interpreted according to and governed by the
laws of the State of New York and each of us consents to the exclusive
jurisdiction of the courts of such State.
Please confirm that the foregoing is in accordance with your
understanding by signing and returning to us the enclosed duplicate of this
letter.
Sincerely yours,
MACKENZIE PARTNERS, INC.
By: Mark H. Harnett
-------------------
Name: Mark H. Harnett
Title: Executive Vice President
Agreed to as of the date first written above.
COMMONWEALTH TELEPHONE ENTERPRISES, INC.
By: Bruce C. Godfrey
--------------------
Name: Bruce C. Godfrey
Title: Executive Vice President and Chief Financial Officer
EXHIBIT 99.01
COMMONWEALTH TELEPHONE ENTERPRISES, INC.
100 CTE Drive
Dallas, PA 18612
David C. McCourt September 25, 1998
Chairman & CEO
Dear Shareholder:
Enclosed are documents for a "rights" offering of Common Stock
by Commonwealth Telephone Enterprises. I am writing this letter to you to
explain this transaction to you.
The Company is offering approximately 3.68 million shares and
expects to raise approximately $77 million. That money will be used to
strengthen the Company's financial position by reducing debt. This offering
completes the recapitalization plan that began last year and included the
Company spinning off its former subsidiaries RCN Corporation and Cable
Michigan, Inc. The Company explored a variety of different ways of raising
this capital and concluded that a rights offering is both the least costly
alternative for the Company and the fairest to all shareholders -- all of whom
have the opportunity to participate in the transaction on exactly the same
basis.
In a rights offering, each shareholder receives rights to
purchase additional shares. In this case, you will receive one right for
every five shares of Common Stock or Class B Common Stock you own as of
September 25, 1998. Each right entitles the holder to purchase one share of
Common Stock for $21.25. This is $.0625 higher than the closing price of the
Common Stock on September 24, 1998, the day before the rights exercise price
was set.
To the extent any rights are not exercised, other holders who
have exercised their rights can "oversubscribe" for the unpurchased shares at
the same $21.25 price. Oversubscriptions will be allocated equally among all
oversubscribing holders based on the number of shares for which they
oversubscribed.
I hope that all shareholders will want to exercise their
rights. In case they do not, and in order to ensure that all of offered
shares are sold, Level 3 Telecom Holdings, Inc., Walter Scott, Jr., James Q.
Crowe and I have committed to exercise the rights we receive and to
oversubscribe for all of the other shares being offered. Let me emphasize --
Level 3 Telecom, Mr. Scott, Mr. Crowe and I will pay the same price and
oversubscribe on the same basis as all other shareholders exercising rights.
Our commitments ensure that the offering will be completed consistent with the
Company's recapitalization plan as previously approved by the Internal Revenue
Service.
The rights are transferable and are expected to be listed on
the NASDAQ National Market. They are set to expire on October 23, 1998. You
should either exercise or sell your rights before they expire.
The terms of the rights offering are set forth in the enclosed
Prospectus and Prospectus Supplement. I urge you to carefully read those
documents before deciding whether to exercise or sell you rights. The
offering is being made solely by means of those documents.
If you have any questions concerning the rights offering,
please call the Information Agent at 800-322-2885.
I appreciate your support and your consideration of this
transaction.
Very truly yours,
David C. McCourt
Chairman and Chief
Executive Officer
EXHIBIT 99.02
COMMONWEALTH TELEPHONE ENTERPRISES, INC.
3,678,612 Shares of Common Stock
Initially Offered Pursuant to Rights
Distributed to Shareholders
of Commonwealth Telephone Enterprises, Inc.
September 25, 1998
This notice is being distributed by Commonwealth Telephone
Enterprises, Inc. (the "Company") to all holders of record of shares of its
Common Stock, par value $1.00 per share (the "Common Stock"), and to all
holders of record of shares of its Class B Common Stock, par value $1.00 per
share (the "Class B Stock," and collectively with the Common Stock, the
"Company Stock"), as of the close of business on September 25, 1998 (the
"Record Date"), in connection with a distribution of transferable subscription
rights (the "Rights") to acquire shares of Common Stock at a subscription
price of $21.25 per share for each share of Common Stock. Each Right also
carries the right to "oversubscribe" at the subscription price for shares of
Common Stock that are not otherwise purchased pursuant to the exercise of
rights.
Each beneficial owner of Company Stock is entitled to 1 Right
for each 5 shares of Company Stock owned.
Enclosed are copies of the following documents:
1. The Base Prospectus, as supplemented by the Prospectus
Supplement;
2. Subscription Certificate;
3. The "Instructions as to Use of Commonwealth Telephone
Enterprises, Inc. Subscription Certificates" (including
Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9);
4. Important Tax Information;
5. A Notice of Guaranteed Delivery for Subscription
Certificates issued by Commonwealth Telephone Enterprises,
Inc.; and
6. A return envelope addressed to First Union National Bank,
the Subscription Agent.
Your prompt action is requested. The Rights will expire at
5:00 P.M., New York City time, on October 23, 1998, unless extended (as it may
be extended, the "Expiration Date").
To exercise Rights, properly completed and executed
Subscription Certificates (unless the guaranteed delivery procedures are
complied with) and payment in full for all Rights exercised must be delivered
to the Subscription Agent as indicated in the Prospectus prior to 5:00 P.M.,
New York City time, on the Expiration Date.
Additional copies of the enclosed materials may be obtained
from MacKenzie Partners, Inc., the Information Agent. The Information Agent's
toll-free telephone number is (800) 322-2885.
Very truly yours,
COMMONWEALTH TELEPHONE ENTERPRISES, INC.
EXHIBIT 99.04
INSTRUCTIONS AS TO USE OF
COMMONWEALTH TELEPHONE ENTERPRISES, INC.
SUBSCRIPTION CERTIFICATES
____________________
CONSULT THE INFORMATION AGENT, YOUR BANK
OR BROKER AS TO ANY QUESTIONS
The following instructions relate to a rights offering (the
"Rights Offering") by Commonwealth Telephone Enterprises, Inc., a Pennsylvania
corporation (the "Company"), to the holders of record of its Common Stock, par
value $1.00 per share (the "Common Stock"), and to holders of record of its
Class B Common Stock, par value $1.00 per share (the "Class B Stock", and
collectively with the Common Stock, the "Company Stock"), as described in the
Company's Base Prospectus dated September 23, 1998, as supplemented by the
Company's Prospectus Supplement dated September 25, 1998 (the Base Prospectus
as supplemented, the "Prospectus"). Holders of record of Company Stock at the
close of business on September 25, 1998 (the "Record Date") are receiving one
transferable subscription right (collectively, the "Rights") for every five
shares of Company Stock held by them on the Record Date. An aggregate of
approximately 3,678,612 Rights exercisable to purchase an aggregate of
approximately 3,678,612 shares of Common Stock (the "Underlying Shares") are
being distributed in connection with the Rights Offering. Each Right is
exercisable, upon payment of $21.25 in cash (the "Subscription Price"), to
purchase one share of Common Stock (the "Basic Subscription Privilege"). In
addition, subject to the allocation described below, each Right also carries
the right to subscribe at the Subscription Price for additional shares of
Common Stock available as a result of unexercised Rights, if any (the
"Oversubscription Privilege"). Any Rights holder subscribing for an aggregate
of more than 5,000 Underlying Shares pursuant to the Oversubscription Privilege
prior to 5:00 p.m., New York City time on October 23, 1998, unless extended
(as it may be extended, the "Expiration Date", provided that the Expiration
Date shall in no event be later than December 1, 1998) shall not be required
to deliver payment for such number of Underlying Shares in excess of 5,000
until the Expiration Date. The Company, in its sole discretion, may determine
to permit a holder to establish an escrow arrangement for the payment for such
excess number of Underlying Shares after the Expiration Date and after all
prorations and adjustments contemplated by the terms of the Right Offering
have been effected. Underlying Shares will be available for purchase pursuant
to the Oversubscription Privilege only to the extent that all the Underlying
Shares are not subscribed for through the exercise of the Basic Subscription
Privilege by the Expiration Date. If the Underlying Shares so available (the
"Excess Shares") are not sufficient to satisfy all subscriptions pursuant to
the Oversubscription Privilege, the available Excess Shares will be allocated
pro rata (subject to the elimination of fractional shares) among the holders
of Rights who exercise the Oversubscription Privilege in proportion to the
number of shares requested pursuant to the Oversubscription Privilege. The
maximum number of Underlying Shares for which any beneficial owner may
exercise the Oversubscription Privilege is 1,894,934. See "The Rights
Offering-Subscription Privileges - Oversubscription Privilege" in the
Prospectus.
No fractional Rights or cash in lieu thereof will be issued or
paid. The number of Rights distributed by the Company has been rounded up to
the nearest whole number in order to avoid issuing fractional Rights.
The Rights will expire at 5:00 p.m., New York City time, on the
Expiration Date. The Rights are expected to be quoted on The NASDAQ National
Market ("NASDAQ").
The number of Rights to which you are entitled is printed on
the face of your subscription certificate. You should indicate your wishes
with regard to the exercise or transfer of your Rights by completing the
appropriate form or forms on your subscription certificate and returning the
certificate to the Subscription Agent in the envelope provided.
YOUR SUBSCRIPTION CERTIFICATES MUST BE RECEIVED BY THE
SUBSCRIPTION AGENT, OR GUARANTEED DELIVERY REQUIREMENTS WITH RESPECT TO YOUR
SUBSCRIPTION CERTIFICATES MUST BE COMPLIED WITH, AND PAYMENT OF THE
SUBSCRIPTION PRICE, INCLUDING FINAL CLEARANCE OF ANY CHECKS, MUST BE RECEIVED
BY THE SUBSCRIPTION AGENT, ON OR BEFORE 5:00 P.M., NEW YORK CITY TIME, ON THE
EXPIRATION DATE. ONCE A HOLDER OF RIGHTS HAS EXERCISED THE BASIC SUBSCRIPTION
PRIVILEGE AND/OR THE OVERSUBSCRIPTION PRIVILEGE, SUCH EXERCISE MAY NOT BE
REVOKED EXCEPT UNDER CERTAIN LIMITED CIRCUMSTANCES AS DESCRIBED IN THE
PROSPECTUS.
1. Subscription Privilege.
To exercise Rights, complete Form 1 and send your properly
completed and executed subscription certificate, together with payment in full
of the Subscription Price for each Underlying Share subscribed for pursuant to
the Basic Subscription Privilege and the Oversubscription Privilege, to the
Subscription Agent. Any Rights holder subscribing for an aggregate of more
than 5,000 Underlying Shares pursuant to the Oversubscription Privilege prior
to the Expiration Date shall not be required to deliver payment for such
number of Underlying Shares in excess of 5,000 until the Expiration Date. The
Company, in its sole discretion, may determine to permit a holder to establish
an escrow arrangement for the payment for such excess number of Underlying
Shares after the Expiration Date and after all prorations and adjustments
contemplated by the terms of the Rights Offering have been effected. All
payments must be made in U.S. dollars (a) by check or bank draft drawn upon a
U.S. bank or postal or express money order payable to First Union National
Bank, as Subscription Agent, or (b) if by wire transfer please contact First
Union National Bank. Payments will be deemed to have been received by the
Subscription Agent only upon (i) the clearance of any uncertified check, (ii)
the receipt by the Subscription Agent of any certified check or bank draft
drawn upon a U.S. bank or any postal express money order or (iii) the receipt
of good funds in the Subscription Agent's account designated above. If paying
by uncertified personal check, please note that the funds paid thereby may
take at least five business days to clear. Accordingly, holders of Rights who
wish to pay the Subscription Price by means of uncertified personal check are
urged to make payment sufficiently in advance of the Expiration Date to ensure
that such payment is received and clears by such date and are urged to
consider payment by means of certified or cashier's check, money order or wire
transfer of funds. You may also transfer your subscription certificate to
your bank or broker in accordance with the procedures specified in Section
3(a) below, make arrangements for the delivery of funds on your behalf and
request such bank or broker to exercise the subscription certificate on your
behalf. Alternatively, you may cause a written guarantee substantially in the
form available from the Subscription Agent (the "Notice of Guaranteed
Delivery") from a member firm of a registered national securities exchange or
a member of the National Association of Securities Dealers, Inc., or from a
commercial bank or trust company having an office or correspondent in the
United States or from a bank, stockbroker, savings and loan association or
credit union with membership in an approved signature guarantee medallion
program, pursuant to Rule 17Ad-15 promulgated under the Securities Exchange
Act of 1934 (each of the foregoing being an "Eligible Institution"), to be
received by the Subscription Agent at or prior to the Expiration Date together
with payment in full of the applicable Subscription Price. Such Notice of
Guaranteed Delivery must state your name, the number of Rights represented by
your subscription certificate, the number of Rights being exercised pursuant
to the Basic Subscription Privilege and the number of Underlying Shares, if
any, being subscribed for pursuant to the Oversubscription Privilege, and will
guarantee the delivery to the Subscription Agent of your properly completed and
executed subscription certificate within three NASDAQ trading days following
the date of the Notice of Guaranteed Delivery. If this procedure is followed,
your subscription certificate must be received by the Subscription Agent
within three NASDAQ trading days of the Notice of Guaranteed Delivery.
Additional copies of the Notice of Guaranteed Delivery may be obtained upon
request from the Subscription Agent at the address, or by calling the
telephone number, indicated below.
Banks, brokers and other nominee holders of Rights who exercise
the Basic Subscription Privilege and the Oversubscription Privilege on behalf
of beneficial owners of Rights will be required to certify to the Subscription
Agent and the Company (by delivery to the Subscription Agent of a Nominee
Holder Certification substantially in the form available from the Subscription
Agent), the aggregate number of Rights that have been exercised, and the
number of Underlying Shares that are being subscribed for pursuant to the
Oversubscription Privilege by each beneficial owner of Rights (including such
nominee itself) on whose behalf such nominee holder is acting. In the event a
Nominee Holder Certification is not delivered in respect of a Subscription
Certificate, the Subscription Agent shall for all purposes (including for
purposes of any allocation in connection with the Oversubscription Privilege
and for purposes of calculating any applicable soliciting dealer fee) be
entitled to assume that such certificate is exercised on behalf of a single
beneficial owner. If more Excess Shares are subscribed for pursuant to the
Oversubscription Privilege than are available for sale, Excess Shares will be
allocated, as described above, among beneficial owners exercising the
Oversubscription Privilege in proportion to the number of shares requested
pursuant to the Oversubscription Privilege by such beneficial owner.
The address and telecopier numbers of the Subscription Agent
are as follows:
If by Mail or by Hand:
First Union National Bank
Corporate Trust Client Operations
1525 West W.T. Harris Boulevard -3C3
Charlotte, NC 28233-1153
If by Overnight Courier:
First Union National Bank
Corporate Trust Operations
1525 West W.T. Harris Boulevard - 3C3
Charlotte, NC 28262-1153
Telecopier: (704) 590-7628
If you exercise less than all of the Rights evidenced by your
subscription certificate by so indicating in Form 1 of your subscription
certificate, the Subscription Agent either (i) will issue to you a new
subscription certificate evidencing the unexercised Rights or (ii) if you so
indicate in Form 2 of your subscription certificate, will transfer the
unexercised Rights in accordance with your instructions. However, if you
choose to have a new subscription certificate sent to you or to a transferee,
you or such transferee may not receive any such new subscription certificate
in sufficient time to permit sale or exercise of the Rights evidenced thereby.
If you have not indicated the number of Rights being exercised, or if the
amount you have forwarded is not sufficient (subject to the second sentence
of Section 1 above) to purchase the number of shares subscribed for, you will
be deemed to have exercised the Basic Subscription Privilege with respect to
the maximum number of whole Rights which may be exercised for the Subscription
Price payment delivered by you, and to the extent that the Subscription Price
payment delivered by you exceeds the product of the Subscription Price
multiplied by the number of Rights evidenced by the subscription certificates
delivered by you (such excess being the "Subscription Excess"), you will be
deemed to have exercised your Oversubscription Privilege to purchase, to the
extent available, that number of whole shares of Common Stock equal to the
quotient obtained by dividing the Subscription Excess by the Subscription
Price.
2. Delivery of Stock Certificates, Etc.
The following deliveries and payments will be made to the
address shown on the face of your subscription certificate unless you provide
instructions to the contrary in Form 3.
(a) Basic Subscription Privilege. As soon as practicable after
the valid exercise of Rights, the Subscription Agent will mail to each
exercising Rights holder certificates representing shares of Common Stock
purchased pursuant to the Basic Subscription Privilege.
(b) Oversubscription Privilege. As soon as practicable after
the Expiration Date and after all prorations and adjustments contemplated by
the terms of the Rights Offering have been effected, the Subscription Agent
will mail to each Rights holder who validly exercises the Oversubscription
Privilege the number of shares allocated to such Rights holder pursuant to the
Oversubscription Privilege. See "The Rights Offering-Subscription
Privileges-Oversubscription Privilege" in the Prospectus.
(c) Cash Payments. As soon as practicable after the Expiration
Date and after all prorations and adjustments contemplated by the terms of the
Rights Offering have been effected, the Subscription Agent will mail to each
Rights holder who exercises the Oversubscription Privilege any excess funds
received in payment of the Exercise Price for Excess Shares that are
subscribed for by such Rights holder but not allocated to such Rights holder
pursuant to the Oversubscription Privilege.
3. To Transfer Rights.
(a) To transfer all of your Rights to a transferee other than a
bank or broker, you must complete Form 2 in its entirety, execute the
subscription certificate and have your signature guaranteed by an Eligible
Institution. A subscription certificate that has been properly transferred in
its entirety may be exercised by a new holder without having a new
subscription certificate issued. In order to exercise, or otherwise take
action with respect to, such a transferred subscription certificate, the new
holder should deliver the subscription certificate, together with payment of
the applicable Subscription Price (with respect to the exercise of both the
Basic Subscription Privilege and the Oversubscription Privilege) and complete
separate instructions signed by the new holder, to the Subscription Agent in
ample time to permit the Subscription Agent to take the desired action.
Because only the Subscription Agent can issue subscription certificates, if
you wish to transfer less than all of the Rights evidenced by your
subscription certificate to a designated transferee, you must instruct the
Subscription Agent as to the action to be taken with respect to the Rights not
sold or transferred, or you must divide your subscription certificate into
subscription certificates of appropriate smaller denominations by following
the instructions in Section 4 below. The subscription certificate evidencing
the number of Rights you intend to transfer can then be transferred by
following the instructions in this Section 3(b).
(b) Transfer Taxes. You will be responsible for any transfer
taxes payable in connection with any transfer or assignment of your Rights or
any special payment or delivery in accordance with the instructions on Form 3.
The Subscription Agent will not be obligated to effect any transfer or
assignment or to follow any special payment or delivery instructions unless
and until it is satisfied that all applicable transfer taxes have been paid.
4. To Have a Subscription Certificate Divided into Smaller
Denominations.
To have a subscription certificate divided into smaller
denominations, send your subscription certificate, together with complete
separate instructions (including specification of the denominations into which
you wish your Rights to be divided) signed by you, to the Subscription Agent,
allowing a sufficient amount of time for new subscription certificates to be
issued and returned so that they can be used prior to the Expiration Date.
Alternatively, you may ask a bank or broker to effect such actions on your
behalf. Your signature must be guaranteed by an Eligible Institution if any
of the new subscription certificates are to be issued in a name other than that
in which the old subscription certificate was issued. Subscription
certificates may not be divided into fractional Rights, and any instruction to
do so will be rejected. As a result of delays in the mail, the time of the
transmittal, the necessary processing time and other factors, you or your
transferee may not receive such new subscription certificates in time to
enable the Rights holder to complete a sale or exercise by the Expiration
Date. Neither the Company nor the Subscription Agent will be liable to either
a transferor or transferee for any such delays.
5. Execution.
(a) Execution by Registered Holder. The signature on the
subscription certificate must correspond with the name of the registered
holder exactly as it appears on the face of the subscription certificate
without any alteration or change whatsoever. Persons who sign the
subscription certificate in a representative or other fiduciary capacity must
indicate their capacity when signing and, unless waived by the Subscription
Agent in its sole and absolute discretion, must present to the Subscription
Agent satisfactory evidence of their authority to so act.
(b) Execution by Person Other than Registered Holder. If the
subscription certificate is executed by a person other than the holder named
on the face of the subscription certificate, proper evidence of authority of
the person executing the subscription certificate must accompany the same
unless, for good cause, the Subscription Agent dispenses with proof of
authority.
(c) Signature Guarantees. Your signature must be guaranteed by
an Eligible Institution if you wish to transfer your Rights, as specified in
Section 3(b) above, to a transferee other than a bank or broker, if you wish a
new subscription certificate or certificates to be issued in a name other than
that in which the old subscription certificate was issued, as specified in
Section 3 above, or if you specify special payment or delivery instructions
pursuant to Form 3.
6. Method of Delivery.
The method of delivery of subscription certificates and payment
of the Exercise Price to the Subscription Agent will be at the election and
risk of the Rights holder, but, if sent by mail, it is recommended that they
be sent by registered mail, properly insured, with return receipt requested,
and that a sufficient number of days be allowed to ensure delivery to the
Subscription Agent and the clearance of any checks sent in payment of the
Exercise Price prior to 5:00 p.m., New York City time, on the Expiration Date.
7. Special Provisions Relating to the Delivery of Rights
Through Depository Facility Participants.
In the case of holders of Rights that are held of record
through The Depository Trust Company, Midwest Securities Trust Company and
Philadelphia Depository Trust Company or any other depository (each a
"Depository"), exercises of the Basic Subscription Privilege (but not the
Oversubscription Privilege) may be effected by instructing the Depository to
transfer Rights (such Rights "Depository Rights") from the Depository's
account of such holder to the Depository account of the Subscription Agent,
together with payment of the Subscription Price for each Underlying Share
subscribed for pursuant to the Basic Subscription Privilege. The
Oversubscription Privilege in respect of Depository Rights may not be exercised
through the Depository. The holder of a Depository Right may exercise the
Oversubscription Privilege in respect of such Depository Right by properly
executing and delivering to the Subscription Agent at or prior to 5:00 p.m.,
New York City time, on the Expiration Date, a Nominee Holder Oversubscription
Exercise Form, in the form available from the Subscription Agent, or a Notice
of Guaranteed Delivery, together with payment of the appropriate Subscription
Price for the number of Underlying Shares for which the Oversubscription
Privilege is to be exercised. Any Rights holder subscribing for an aggregate
of more than 5,000 Underlying Shares pursuant to the Oversubscription
Privilege prior to the Expiration Date shall not be required to deliver
payment for such number of Underlying Shares in excess of 5,000 until the
Expiration Date. The Company, in its sole discretion, may determine to permit
a holder to establish an escrow arrangement for the payment for such excess
number of Underlying Shares after the Expiration Date and after all prorations
and adjustments contemplated by the terms of the Rights Offering have been
effected.
If a Notice of Guaranteed Delivery relates to Rights with
respect to which exercise of the Basic Subscription Privilege will be made
through a Depository and such Notice of Guaranteed Delivery also relates to
the exercise of the Oversubscription Privilege, a Nominee Holder
Oversubscription Exercise Form must also be received by the Subscription Agent
in respect of such exercise of the Oversubscription Privilege within three
NASDAQ trading days of the Notice of Guaranteed Delivery.
8. Substitute Form W-9.
Each Rights holder who elects either to exercise Rights should
provide the Subscription Agent with a correct Taxpayer Identification Number
("TIN") on Substitute Form W-9, substantially in the form provided with these
instructions. A copy of Substitute Form W-9 may be obtained upon request from
the Subscription Agent at the address indicated above. Failure to provide the
information on the form may subject such holder to a $50.00 penalty and to 31%
backup withholding with respect to dividends that may be paid by the Company
on shares of Common Stock purchased upon the exercise of Rights (for those
holders exercising Rights).
EXHIBIT 99.05
IMPORTANT TAX INFORMATION
Under the federal income tax law, (i) dividend payments that
may be made by the Company on shares of Common Stock issued upon the exercise
of Rights, and (ii) payments that may be remitted by the Subscription Agent to
Rights holders in respect of Rights sold on such holders' behalf by the
Subscription Agent, may be subject to backup withholding. Generally, such
payments will be subject to backup withholding unless (i) the holder is exempt
from backup withholding or (ii) the holder, in the case of backup withholding
of payments remitted in respect to rights sold, furnishes the payer with his
correct tax identification number and certifies that the number provided is
correct and, in the case of backup withholding on dividend payments, the
holder further certifies that such holder is not subject to backup withholding
due to prior underreporting of interest or dividend income. Each Rights
holder who either exercises Rights or requests the Subscription Agent to sell
Rights and wishes to avoid backup withholding should provide the Subscription
Agent (as the Company's agent, in respect of exercised Rights, and as payer
with respect to Rights sold by the Subscription Agent) with such Rights
holder's correct taxpayer identification number (or with a certification that
such Rights holder is awaiting a taxpayer identification number) and with a
certification that such Rights holder is not subject to backup withholding by
completing Substitute Form W-9 below.
Exempt Rights holders (including, among others, all
corporations and certain foreign individuals) are not subject to these backup
withholding and reporting requirements. In general, in order for a foreign
individual to qualify as an exempt recipient, the Rights holder must submit a
statement, signed under the penalties of perjury, attesting to that
individual's exempt status. Such statements can be obtained from the
Subscription Agent. Exempt Rights holders, while not required to file, should
file Substitute Form W-9 to avoid possible erroneous backup withholding. See
the enclosed Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 for additional instructions.
If backup withholding applies, the Company or the Subscription
Agent, as the case may be, will be required to withhold 31 percent of any such
payments made to the Rights holder. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will
be reduced by the amount of tax withheld. If withholding results in an
overpayment of taxes, a refund may be obtained.
Purpose of Substitute Form W-9
To prevent backup withholding on payments remitted by the
Subscription Agent with respect to Rights sold, the Rights holder is required
to notify the Subscription Agent of his correct taxpayer identification number
by completing the form below certifying that the taxpayer identification
number provided on Substitute Form W-9 is correct (or that such Rights holder
is awaiting a taxpayer identification number). To prevent backup withholding
on dividend payments, the Rights holder must, in addition, certify on
Substitute Form W-9 that he is not subject to backup withholding due to prior
underreporting of interest or dividend income.
What Number to Give the Subscription Agent
The Rights holder is required to give the Subscription Agent
the taxpayer identification number of the record owner of the Rights. If such
record owner is an individual, the taxpayer identification number is his
social security number. If the Rights are 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 guidelines on which number to report. If the Subscription Agent is
not provided with the correct taxpayer identification number in connection
with such payments, the Rights holder may be subject to a $50 penalty imposed
by the Internal Revenue Service.
PAYER'S NAME: First Union National Bank
SUBSTITUTE Part I - Taxpayer Part II - For Payees
Identification No. Exempt From
Backup
Withholding
(see enclosed
Guidelines)
Form W-9
Department of the Enter your taxpayer identifica-
Treasury Internal tion number in the appropriate ______________________
Revenue Service box. For most individuals, Social Security Number
this is your social security
number. If you do not have a
number, see How to Obtain a OR
"TIN" in the enclosed
Guidelines.
Payer's Request _______________________
for Taxpayer Note: If the account is in Employer Identification
Identification more than one name, see the Number
Number (TIN) chart in enclosed Guidelines
to determine what number to give.
Certification -- Under penalties of perjury, I certify that:
(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
(2) I am not subject to backup withholding either because 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 the IRS has notified me that I am no longer subject to backup
withholding.
Certification Guidelines -- You must cross out item (2) above if you have been
notified by the IRS that you are subject to backup withholding because of
underreporting interest or dividends on your tax return. However, if after being
notified by the IRS that you were subject to backup withholding you received
written certification from the IRS that you are no longer subject to backup
withholding because of underreporting interest or dividends on your tax return,
do not cross out item (2). The IRS does not require your consent to any
provision of this document other than the certifications required to avoid
backup withholding.
SIGNATURE_________________________________ DATE__________________, 1998
NOTE: FAILURE TO COMPLETE THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF
31% OF ANY PAYMENTS MADE TO YOU. PLEASE REVIEW ENCLOSED GUIDELINES FOR
CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR
ADDITIONAL DETAILS.
GUIDELINES FOR CERTIFICATE OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification Number 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.
<TABLE>
<S> <C>
For this type of account: Give the name and SOCIAL SECURITY number of:
------------------------- --------------------------------------------
1. Individual The individual
2. Two or more individuals (joint account) The actual owner of the account or,
if combined funds, the first individual on
the account(1)
3. Custodian account of a minor (Uniform Gift The minor(2)
to Minors Act)
4. a. The usual revocable savings trust The grantor-trustee(1)
(grantor is also trustee)
b. The so-called trust account that is not The actual owner(1)
a legal or valid trust under State law
5. Sole proprietorship The owner(4)
For this type of account: Give the name and EMPLOYER IDENTIFICATION number of:
------------------------- ----------------------------------------------------
6. A valid trust, estate or pension trust Legal entity (do not furnish the identification number of the personal
representative or trustee unless the legal entity itself is not designated in
the account title)(3)
7. Corporation The corporation
8. Association, club, religious, charitable, The organization
educational or other tax-exempt organization
9. Partnership The partnership
10. A broker or registered nominee The broker or nominee
11. Account with the Department of Agriculture The public entity
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.
(2) Circle the minor's name and furnish the minor's social security number.
(3) List first and circle the name of the legal trust, estate or pension trust.
(4) Show the name of the owner.
Note: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
Obtaining a Number
If you don't have a taxpayer identification number or you don't
know your number, obtain Form SS-5, Application for a Social Security Number
Card, or Form SS-4, Application for Employer Identification Number and apply
for a number. Certain individuals who are resident aliens may not be eligible
to obtain a Social Security Number, and should obtain a Form W-7 to apply for
an Individual Taxpayer Identification Number. Each of these forms may be
obtained at the local office of the Social Security Administration or the
Internal Revenue Service.
Payees Exempt from Backup Withholding
Payees specifically exempted from backup withholding on ALL
payments include the following:
o A corporation.
o A financial institution.
o An organization exempt from tax under section 501(a), or an
individual retirement plan, or a custodial account under
section 403(b)(7) if the account satisfies the
requirements of Section 401(f)(2).
o The United States or any agency or instrumentality thereof.
o A State, the District of Columbia, a possession of the United
States, or any subdivision or instrumentality thereof.
o A foreign government, a political subdivision of a foreign
government, or any agency or instrumentality thereof.
o An international organization or any agency or
instrumentality thereof.
o A dealer in securities or commodities registered in the
United States or a possession of the United States.
o A real estate investment trust.
o A common trust fund operated by a bank under section 584(a).
o An exempt charitable remainder trust, or a non-exempt trust
described in section 4947(a)(1).
o An entity registered at all times under the Investment
Company Act of 1940.
o A foreign central bank of issue.
Payment of dividends and patronage dividends not generally
subject to backup withholding include the following:
o Payments to nonresident aliens subject to withholding under
section 1441.
o Payments to partnerships not engaged in a trade or business
in the United States and which have at least one nonresident
partner.
o Payments of patronage dividends where the amount received is
not paid in money.
o Payments made by certain foreign organizations.
o Payments made by an employee stock membership plan pursuant
to Section 404(k).
Exempt payees described above should file Form W-9 to avoid
possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH
YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM,
SIGN AND DATE THE FORM AND RETURN IT TO THE PAYER.
Payments that are not subject to information reporting are also
not subject to backup withholding. For details, see the regulations under
sections 6041, 6041A, 6042, 6044, 6045, 6049, 6050A and 6050N.
Privacy Act Notice
Section 6109 requires most recipients of dividends, interest,
or other payments to give their correct taxpayer identification numbers to
payers who must report the payments to IRS. The IRS uses the numbers for
identification purposes and to help verify the accuracy of your tax return.
Payers must be given the numbers whether or not recipients are required to
file tax returns. The IRS may also provide this information to the Department
of Justice for civil and criminal litigation and to the cities, states and the
District of Columbia to carry out their tax laws. Payers must generally
withhold 31% of taxable interest, dividends, 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) Penalty for 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 which
results in no imposition of backup withholding, you are subject to a penalty
of $5000.
(3) Criminal Penalty for Falsifying Information. 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.
EXHIBIT 99.06
COMMONWEALTH TELEPHONE ENTERPRISES, INC.
3,678,612 Shares of Common Stock
Initially Offered Pursuant to Rights
Distributed to Shareholders
of Commonwealth Telephone Enterprises, Inc.
To Securities Dealers, Commercial Banks,
Trust Companies and Other Nominees:
This letter is being distributed to securities dealers,
commercial banks, trust companies and other nominees in connection with the
offering by Commonwealth Telephone Enterprises, Inc. (the "Company") of
3,678,612 shares of Common Stock, par value $1.00 per share (the "Common
Stock"), of the Company, at a subscription price of $21.25 per share for each
share of Common Stock (the "Subscription Price"), pursuant to transferable
subscription rights (the "Rights") initially distributed to all holders of
record of shares of the Common Stock, and to all holders of record of shares
of the Company's Class B Common Stock, par value $1.00 per share (the "Class B
Stock", and collectively with the Common Stock, the "Company Stock"), as of
the close of business on September 25, 1998 (the "Record Date"). Each Right
also carries the right to "oversubscribe" at the Subscription Price for shares
of Common Stock that are not otherwise purchased pursuant to the initial
exercise of Rights. The Rights are described in the Base Prospectus and the
Prospectus Supplement attached thereto (collectively, the "Prospectus") and
evidenced by a Subscription Certificate registered in your name or the name of
your nominee.
Each beneficial owner of shares of Company Stock registered in
your name or the name of your nominee is entitled to 1 Right for each 5 shares
of Company Stock owned by such beneficial owner.
We are asking you to contact your clients for whom you hold
shares of Company Stock registered in your name or in the name of your nominee
to obtain instructions with respect to the Rights.
Enclosed are copies of the following documents:
1. The Prospectus;
2. A Notice of Guaranteed Delivery for
Subscription Certificates issued by Commonwealth Telephone
Enterprises, Inc.;
3. A return envelope addressed to First Union
National Bank, the Subscription Agent;
4. Nominee Holder Oversubscription Form;
5. Nominee Holder Certification; and
6. Certification and Request for Additional Rights.
Your prompt action is requested. The Rights will expire at
5:00 P.M., New York City time, on October 23, 1998, unless extended (as it may
be extended, the "Expiration Date").
To exercise Rights, properly completed and executed
Subscription Certificates (unless the guaranteed delivery procedures are
complied with) and payment in full for all Rights exercised must be delivered
to the Subscription Agent as indicated in the Prospectus prior to 5:00 P.M.,
New York City time, on the Expiration Date.
Additional copies of the enclosed materials may be obtained
from MacKenzie Partners, Inc., the Information Agent. The Information Agent's
toll-free telephone number is (800) 322-2885.
Very truly yours,
COMMONWEALTH TELEPHONE ENTERPRISES, INC.
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE
YOU OR ANY PERSON AS AN AGENT OF COMMONWEALTH TELEPHONE ENTERPRISES, INC., THE
SUBSCRIPTION AGENT OR ANY OTHER PERSON MAKING OR DEEMED TO BE MAKING OFFERS OF
THE COMMON STOCK ISSUABLE UPON VALID EXERCISE OF THE RIGHTS, OR AUTHORIZE YOU
OR ANY OTHER PERSON TO MAKE ANY STATEMENTS ON BEHALF OF ANY OF THEM WITH
RESPECT TO THE OFFERING EXCEPT FOR STATEMENTS MADE IN THE PROSPECTUS.
EXHIBIT 99.07
NOTICE OF GUARANTEED DELIVERY
for
SUBSCRIPTION CERTIFICATES
issued by
COMMONWEALTH TELEPHONE ENTERPRISES, INC.
This form, or one substantially equivalent hereto, must be used
to exercise Rights pursuant to the Basic Subscription Privilege and the
Oversubscription Privilege pursuant to the Rights Offering described in the
Prospectus Supplement dated September 25, 1998 which supplements the
Prospectus dated September 23, 1998 (collectively, the "Prospectus") of
Commonwealth Telephone Enterprises, Inc., a Pennsylvania corporation (the
"Company"), if a holder of Rights cannot deliver the subscription
certificate(s) evidencing the Rights (the "Subscription Certificate(s)"), to
the Subscription Agent listed below (the "Subscription Agent") at or prior to
5:00 p.m. New York City time on October 23, 1998, unless extended (as it may
be extended, the "Expiration Date"). Such form must be delivered by hand or
sent by facsimile transmission or mail to the Subscription Agent, and must be
received by the Subscription Agent on or prior to the Expiration Date. See
"The Rights Offering--Exercise of Rights" in the Prospectus. Payment of the
Subscription Price of $21.25 per share for each share of the Company's Common
Stock subscribed for upon exercise of such Rights must be received by the
Subscription Agent in the manner specified in the Prospectus at or prior to
5:00 p.m. New York City time on the Expiration Date even if the Subscription
Certificate evidencing such Rights is being delivered pursuant to the
procedure for guaranteed delivery thereof.
<TABLE>
<S> <C> <C>
The Subscription Agent is:
The First Union National Bank
If by Mail: Facsimile Transmission: If by Hand:
First Union National Bank (704) 590-7628 First Union National Bank
Corporate Trust Operations Corporate Trust Operations
1525 West W.T. Harris Blvd - 3C3 1525 West W.T. Harris Blvd - 3C3
Charlotte, NC 28288-1153 Charlotte, NC 28288-1153
If by Overnight Courier:
First Union National Bank
Corporate Trust Operations
1525 West W.T. Harris Blvd - 3C3
Charlotte, NC 28262-1153
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE OTHER THAN AS SET FORTH ABOVE
DOES NOT CONSTITUTE A VALID DELIVERY.
Gentlemen:
The undersigned hereby represents that he or she is the holder
of Subscription Certificate(s) representing Rights and that such
Subscription Certificate(s) cannot be delivered to the Subscription Agent at
or before 5:00 p.m., New York City time on the Expiration Date. Upon the
terms and subject to the conditions set forth in the Prospectus, receipt of
which is hereby acknowledged, the undersigned hereby elects to exercise (i)
the Basic Subscription Privilege to subscribe for one share of Common Stock
per Right with respect to each of Rights represented by such
Subscription Certificate and (ii) the Oversubscription Privilege relating to
each such Right, to the extent that Excess Shares (as defined in the
Prospectus) are available therefor, for an aggregate of up to
Excess Shares (maximum of 1,894,934). The undersigned understands that
payment of the Subscription Price of $21.25 per share for each Common Share
subscribed for pursuant to the Basic Subscription Privilege and the
Oversubscription Privilege must be received by the Subscription Agent at or
before 5:00 p.m., New York City time, on the Expiration Date and represents
that such payment, in the aggregate amount of $ , either (check
appropriate box):
[ ] is delivered herewith or [ ] was delivered separately;
in the manner set forth below (check appropriate box and complete information
relating thereto):
[ ] wire transfer of funds
- name of transferor institution.........................................
- date of transfer.......................................................
- confirmation number (if available).....................................
[ ] money order
- name of maker..........................................................
- date and number of check, draft or money order number..................
- bank on which check is drawn or issuer of money order..................
[ ] uncertified check (Payment by uncertified check will not be deemed to have
been received by the Subscription Agent until such check has cleared.
Holders paying by such means are urged to make payment sufficiently in
advance of the Expiration Date to ensure that such payment clears by such
date.)
[ ] certified check or [ ] bank draft (cashier's check)
Signature(s)..................... Address..............................
................................. .....................................
Name(s).......................... .....................................
................................. Area Code and Tel. No(s).............
Please Type or Print .....................................
Subscription Certificate No(s). (if available)..............................
GUARANTEE OF DELIVERY
(Not to be used for Subscription Certificate signature guarantee)
The undersigned, a member firm of a registered national securities exchange or
of the National Association of Securities Dealers, Inc. or a commercial bank
or trust company having an office or correspondent in the United States or a
bank, stockbroker, savings and loan association or credit union with
membership in an approved signature guarantee medallion program, guarantees
that the undersigned will deliver to the Subscription Agent the certificates
representing the Rights being exercised hereby, with any required signature
guarantees and any other required documents, all within three NASDAQ trading
days after the date hereof.
.................................. Dated:........................., 1998
.................................. .....................................
.................................. (Name of Firm)
(Address)
.................................. .....................................
(Area Code and Telephone Number) (Authorized Signature)
The institution which completes this form must communicate the guarantee to
the Subscription Agent and must deliver the Subscription Certificate(s) to the
Subscription Agent within the time period shown herein. Failure to do so could
result in a financial loss to such institution.
EXHIBIT 99.08
COMMONWEALTH TELEPHONE ENTERPRISES, INC.
RIGHTS OFFERING
____________________
NOMINEE HOLDER OVERSUBSCRIPTION EXERCISE FORM
PLEASE COMPLETE ALL APPLICABLE INFORMATION
By Mail: By Express Mail or Overnight:
First Union National Bank First Union National Bank
Corporate Trust Client Operations Corporate Trust Client Operations
1525 West W.T. Harris Boulevard-3C3 1525 West W.T. Harris Boulevard-3C3
Charlotte, North Carolina 28288-1153 Charlotte, North Carolina 28262-1153
By Hand:
First Union National Bank
Corporate Trust Client Operations
1525 West W.T. Harris Boulevard-3C3
Charlotte, North Carolina 28288-1153
THIS FORM IS TO BE USED ONLY BY NOMINEE HOLDERS TO EXERCISE THE
OVERSUBSCRIPTION PRIVILEGE IN RESPECT OF RIGHTS WITH RESPECT TO WHICH THE BASIC
SUBSCRIPTION PRIVILEGE WAS EXERCISED TO THE FULLEST EXTENT POSSIBLE AND
DELIVERED THROUGH THE FACILITIES OF A COMMON DEPOSITORY. ALL OTHER EXERCISES
OF OVERSUBSCRIPTION PRIVILEGES MUST BE EFFECTED BY THE DELIVERY OF SUBSCRIPTION
CERTIFICATES.
THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING ARE SET FORTH
IN THE COMPANY'S PROSPECTUS DATED SEPTEMBER 23, 1998, AS SUPPLEMENTED BY THE
PROSPECTUS SUPPLEMENT DATED SEPTEMBER 25, 1998, (AS SUPPLEMENTED, THE
"PROSPECTUS") AND ARE INCORPORATED HEREIN BY REFERENCE. COPIES OF THE
PROSPECTUS ARE AVAILABLE UPON REQUEST FROM THE INFORMATION AGENT, MACKENZIE
PARTNERS, INC. AT (800) 322-2885.
THIS FORM OR A NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED
BY THE SUBSCRIPTION AGENT WITH PAYMENT IN FULL BY 5:00 P.M., NEW YORK CITY
TIME, ON OCTOBER 23, 1998, UNLESS EXTENDED (AS IT MAY BE EXTENDED, THE
"EXPIRATION DATE").
1. The undersigned hereby certifies to the Company and the
Subscription Agent that it is a participant in _________________________[Name
of Depository] (the "Depository") and that it has either (1) exercised the
Basic Subscription Privilege in respect of Rights and delivered such exercised
Rights to the Subscription Agent by means of transfer to the Depository
Account of the Company or (ii) delivered to the Subscription Agent a Notice of
Guaranteed Delivery in respect of the exercise of the Basic Subscription
Privilege and will deliver the Rights called for in such Notice of Guaranteed
Delivery to the Subscription Agent by means of transfer to such Depository
Account of the Company.
2. The undersigned hereby exercises the Oversubscription
Privilege to purchase, to the extent available, _______ shares of Common Stock
and certifies to the Company and the Subscription Agent by execution of a
Nominee Holder Certification that such Oversubscription Privilege is being
exercised for the account or accounts of persons (which may include the
undersigned) on whose behalf the Basic Subscription Privilege has been
exercised to the fullest extent possible.
3. The undersigned understands that payment of the Subscription
Price of $21.25 per share for each share of Common Stock subscribed for
pursuant to the Oversubscription Privilege must be received by the
Subscription Agent at or before 5:00 p.m., New York City time, on the
Expiration Date and represents that such payment, in the aggregate amount of
$____________, either (check appropriate box):
[ ] has been or is being delivered to the Subscription Agent pursuant to the
Notice of Guaranteed Delivery referred to above
or
[ ] is being delivered to the Subscription Agent herewith
or
[ ] has been delivered separately to the Subscription Agent; and, in the case
of funds not delivered pursuant to a Notice of Guaranteed Delivery, is or
was delivered in the manner set forth below (check appropriate box and
complete information relating thereto):
[ ] wire transfer of funds
-- name of transferor institution.........................................
-- date of transfer.......................................................
-- confirmation number (if available).....................................
[ ] uncertified check
[ ] certified check
[ ] bank draft (cashier's check)
......................................
Basic Subscription Confirmation Number
......................................
Depository Participant Number
......................................
Name of Depository Participant
By....................................
Name:
Title:
Dated: _______________, 1998
PARTICIPANTS EXERCISING THE OVERSUBSCRIPTION PRIVILEGE PURSUANT HERETO MUST
SEPARATELY SUBMIT A NOMINEE HOLDER CERTIFICATION TO THE SUBSCRIPTION AGENT.
SUCH NOMINEE HOLDER CERTIFICATIONS ARE AVAILABLE FROM THE SUBSCRIPTION AGENT.
EXHIBIT 99.09
CERTIFICATION AND REQUEST FOR ADDITIONAL RIGHTS
To the Subscription Agent:
The undersigned hereby certifies that it is a broker-dealer
registered with the Securities and Exchange Commission, commercial bank or
trust company, securities depository or participant therein, or nominee
therefor, holding of record ___________ shares of Common Stock, par value
$1.00 per share (the "Common Shares"), and _________ shares of Class B Common
Stock, par value $1.00 per share (the "Class B Stock", and collectively with
the Common Stock, the "Company Stock"), of Commonwealth Telephone Enterprises,
Inc. (the "Company") on behalf of __________ beneficial owners as of the close
of business on September 25, 1998, the Record Date for the offering by the
Company of 3,678,612 shares of Common Stock pursuant to transferable
subscription rights (the "Rights") being distributed to record holders of
shares of Company Stock, all as described in a Prospectus dated September 23,
1998, as supplemented by a Prospectus Supplement dated the Record Date (as
supplemented, the "Prospectus"), a copy of which the undersigned has received.
One Right is being distributed for each 5 shares of Company Stock held of
record as of the close of business on the Record Date, and any fractional
Right will be rounded up to the nearest whole number. The undersigned further
certifies that _________ beneficial owners on whose behalf it held, as of the
close of business on the Record Date, _________ shares of Company Stock
registered in the name of the undersigned are each entitled to an additional
Right in accordance with the principle that any fractional Right to which a
beneficial owner would otherwise be entitled should be rounded up to the
nearest whole number. Accordingly, the undersigned requests that, upon
surrender of its Subscription Certificate evidencing _________ Rights, a
Subscription Certificate evidencing _________ Rights (including _________
additional Rights) be issued. The undersigned further certifies that each such
beneficial owner is a bona fide beneficial owner of shares of Company Stock,
that such beneficial ownership is reflected on the undersigned's records and
that all shares of Company Stock which, to the undersigned's knowledge, are
beneficially owned by any such beneficial owner through the undersigned have
been aggregated in calculating the foregoing. The undersigned agrees to
provide the Company or its designee with such additional information as the
Company deems necessary to verify the foregoing.
______________________________
Name of Record Holder
By:___________________________
Name:
Title:
Address:
Telephone Number:
Date:____________________, 1998
EXHIBIT 99.10
COMMONWEALTH TELEPHONE ENTERPRISES, INC.
NOMINEE HOLDER CERTIFICATION
The undersigned, a bank, broker or other nominee holder of
Rights (the "Rights") to purchase shares of Common Stock, par value $1.00 per
share (the "Common Stock"), of Commonwealth Telephone Enterprises, Inc. (the
"Company") pursuant to the rights offering (the "Rights Offering") described
and provided for in the Company's prospectus supplement dated September 25,
1998 which supplements the Company's prospectus dated September 23, 1998 (such
prospectus, as supplemented is hereinafter referred to as the "Prospectus"),
hereby certifies to the Company and to First Union National Bank, as
Subscription Agent for such Rights Offering, that (1) the undersigned has
exercised the Basic Subscription Privilege (as defined in the Prospectus), on
behalf of certain beneficial owners of Rights (which may include the
undersigned) who have also subscribed for the purchase of additional shares of
Common Stock pursuant to the Oversubscription Privilege (as defined in the
Prospectus); (2) the undersigned has listed below for each such beneficial
owner the number of Rights exercised pursuant to the Basic Subscription
Privilege and the corresponding number of shares subscribed for pursuant to
the Oversubscription Privilege (without identifying any such beneficial owner)
and (3) each such beneficial owner's Basic Subscription Privilege has been
exercised to the fullest extent possible:
<TABLE>
<S> <C> <C> <C> <C>
Number of Shares
Subscribed for
Pursuant
to Oversubscription
Number of Rights Privilege
Exercised Pursuant (maximum of Estimate of
to Basic Subscription 1,894,934 per Rights Certificate Soliciting Dealer
Privilege beneficial owner) Number Fee Due(1)
1. ______________________ ______________________ ______________________ ______________________
2. ______________________ ______________________ ______________________ ______________________
3. ______________________ ______________________ ______________________ ______________________
4. ______________________ ______________________ ______________________ ______________________
5. ______________________ ______________________ ______________________ ______________________
6. ______________________ ______________________ ______________________ ______________________
7. ______________________ ______________________ ______________________ ______________________
8. ______________________ ______________________ ______________________ ______________________
9. ______________________ ______________________ ______________________ ______________________
10. ______________________ ______________________ ______________________ ______________________
(Attach additional beneficial owner list if necessary)
</TABLE>
__________
*The Company will pay Soliciting Dealers that have entered into a Soliciting
Dealer Agreement with the Company fees for their soliciting efforts (the
"Soliciting Fees") equal to $0.25 per share of Common Stock for each share of
Common Stock issued pursuant to the exercise of Rights; such Soliciting Fee
with respect to exercised rights shall be paid to the broker-dealer, if any,
designated on the applicable portion of the subscription certificate, provided
that such Soliciting Fee shall not exceed $250 in the case of any person
beneficially purchasing more than an aggregate of 1,000 Common Shares pursuant
to the exercise of Rights. In the event that the Oversubscription Privilege
is not allocated in full, the Estimated Soliciting Dealer Fee will be reduced
accordingly.
__________________________________
Name of Nominee Holder
_________________________________________
Depository Participant Number (if
applicable) __________________________________
Address
_________________________________________
Basic Subscription Confirmation Number(s)
By:_______________________________
Name: (Date)
Title:
Telephone Number:
EXHIBIT 99.11
COMMONWEALTH TELEPHONE ENTERPRISES, INC.
3,678,612 Common Shares
Initially Offered Pursuant to Rights
Distributed to Shareholders of
Commonwealth Telephone Enterprises, Inc.
To Our Clients:
Enclosed for your consideration are a Prospectus, dated
September 23, 1998, supplemented by a Prospectus Supplement dated September
25, 1998 (as supplemented, the "Prospectus") and the "Instructions as to Use of
Commonwealth Telephone Enterprises, Inc. Subscription Certificates" relating
to the offer by Commonwealth Telephone Enterprises, Inc. (the "Company") of
3,678,612 shares of Common Stock, par value $1.00 per share (the "Underlying
Shares"), of the Company, at a subscription price of $21.25 per share for each
Underlying Share, in cash, pursuant to transferable subscription rights (the
"Rights") initially distributed to holders of record of shares of the Company's
Common Stock, par value $1.00 per share (the "Common Stock"), and to holders
of record of shares of its Class B Common Stock, par value $1.00 per share
(the "Class B Stock", and collectively with the Common Stock, the "Company
Stock"), as of the close of business on September 25, 1998 (the "Record Date").
As described in the accompanying Prospectus, you will receive 1
transferable Right for each 5 shares of Company Stock carried by us in your
account as of the Record Date. Each Right will entitle you to subscribe for
one share of Common Stock (the "Basic Subscription Privilege") at the
Subscription Price of $21.25 per share (the "Subscription Price").
If you elect to exercise in full your Basic Subscription
Privilege, you may also subscribe at the Subscription Price for additional
Underlying Shares available as a result of unexercised Rights, if any (the
"Oversubscription Privilege"). If an insufficient number of Underlying Shares
is available to satisfy fully all elections to exercise the Oversubscription
Privilege, the available Underlying Shares will be prorated among holders who
exercise their Oversubscription Privilege based on the respective numbers of
Underlying Shares requested by such holders pursuant to the Oversubscription
Privilege. The maximum number of Underlying Shares for which any beneficial
owner may exercise the Oversubscription Privilege is 1,894,934.
Rights are transferable and holders that wish to sell their
Rights may do so. It is anticipated that the Rights will trade on The NASDAQ
National Market ("NASDAQ") up to and including the close of business on the
Expiration Date.
THE MATERIALS ENCLOSED ARE BEING FORWARDED TO YOU AS THE
BENEFICIAL OWNER OF SHARES OF COMPANY STOCK CARRIED BY US IN YOUR ACCOUNT BUT
NOT REGISTERED IN YOUR NAME. EXERCISES AND SALES OF RIGHTS MAY BE MADE ONLY
BY US AS THE RECORD OWNER AND PURSUANT TO YOUR INSTRUCTIONS. Accordingly, we
request instructions as to whether you wish us to elect to subscribe for any
shares of Common Stock pursuant to the terms and subject to the conditions set
forth in the enclosed Prospectus by exercising Rights to which you are
entitled or to sell such Right. However, we urge you to read the document
carefully before instructing us to exercise or sell Rights.
Your instructions to us should be forwarded as promptly as
possible in order to permit us to exercise or sell Rights on your behalf in
accordance with the provisions of the offering. The offering will expire at
5:00 P.M., New York City time, on October 23, 1998, unless extended by the
Company. Once you have exercised a Right, such exercise may not be revoked
except in certain limited circumstances as provided in the enclosed Prospectus.
If you wish to have us, on your behalf, exercise the Rights for
any shares of Common Stock to which you are entitled, or endeavor to sell such
Rights, please so instruct us by completing, executing and returning to us the
instruction form on the reverse side of this letter.
ANY QUESTIONS OR REQUESTS FOR ASSISTANCE CONCERNING THE
OFFERING SHOULD BE DIRECTED TO MACKENZIE PARTNERS, INC., THE INFORMATION
AGENT, AT THE FOLLOWING TELEPHONE NUMBER: (800) 322-2885.
INSTRUCTIONS
The undersigned acknowledge(s) receipt of your letter and the
enclosed materials referred to therein relating to the offering of shares of
Common Stock, par value $1.00 per share (the "Common Stock"), of Commonwealth
Telephone Enterprises (the "Company").
This will instruct you whether to exercise or sell Rights to
purchase shares of Common Stock distributed with respect to the shares of
Company Stock held by you for the account of the undersigned, pursuant to the
terms and subject to the conditions set forth in the Prospectus and the
related Instructions as to Use of Commonwealth Telephone Enterprises
Subscription Certificates.
Box 1. [ ] Please DO NOT EXERCISE RIGHTS for shares of Common
Stock.
Box 2. [ ] Please EXERCISE RIGHTS for shares of Common Stock
as set forth below.
<TABLE>
<S> <C> <C> <C> <C>
Number of Subscription
Shares Price Payment
Basic Subscription Right: x $21.25 = $_______ (Line 1)
------------------------ -------------
(one Right required for each share subscribed for)
Oversubscription Right: $21.25 = $_______ (Line 2)
------------------------ -------------
(maximum of 1,894,934)
Total Payment Required: = $_______ (Sum of Lines 1
and 2; must
equal total of
amount in Boxes
2a and 2b).
</TABLE>
If Box 2 is marked, mark either or both of Box 2a and 2b:
Box 2a. [ ] Payment in the following amount is enclosed $_____.
Box 2b. [ ] Please deduct payment from the following account
maintained by you as follows:
___________________________ __________________________
Type of Account Account No.
Amount to be deducted: $____________________________
Box 3. [ ] Please ENDEAVOR TO SELL ___________ RIGHTS and
remit the net proceeds to the undersigned.
__________________________________
__________________________________
Signature(s)
Please type or print name(s) below
__________________________________
__________________________________
Date:________________, 1998
