<PAGE>
Filed Under Rule 424(b)(3)
Registration No. 33-62717
SUPPLEMENT DATED NOVEMBER 21, 1995 TO
CONSENT SOLICITATION STATEMENT/PROSPECTUS
DATED OCTOBER 18, 1995 OF
CABLEVISION OF BOSTON LIMITED PARTNERSHIP
AND CABLEVISION SYSTEMS CORPORATION
CABLEVISION OF BOSTON LIMITED PARTNERSHIP
28 TRAVIS STREET
BOSTON, MASSACHUSETTS 02134
This Supplement (this "Supplement") to the Consent Solicitation
Statement/Prospectus dated October 18, 1995 (the "Consent Solicitation
Statement/Prospectus") is being provided to the limited partners (the "Limited
Partners") of Cablevision of Boston Limited Partnership (the "Partnership") to
describe certain developments relating to the pending litigation against the
Partnership, and certain other defendants, described in the Consent Solicitation
Statement/Prospectus under "The Transactions--Certain Litigation." This
Supplement is intended to be read in conjunction with the Consent Solicitation
Statement/Prospectus, which remains in effect in all respects except to the
extent modified hereby. All capitalized terms used and not otherwise defined in
this Supplement have the meanings given to such terms in the Consent
Solicitation Statement/Prospectus.
SETTLEMENT OF PENDING LITIGATION
As described in the Consent Solicitation Statement/Prospectus, on
October 5, 1994, following the filing of preliminary consent solicitation
materials with the Securities and Exchange Commission, the General Partners,
Cablevision, the Partnership and other affiliated entities were named as
defendants in the lawsuit (the "Lawsuit") filed by a Limited Partner on behalf
of a purported class consisting of all Unaffiliated Limited Partners (the
"Class") alleging, among other things, breaches of fiduciary duty against
certain defendants and aiding and abetting breaches of fiduciary duty by other
defendants in connection with the issuance of the Preferred Equity allegedly in
violation of the Partnership Agreement and in connection with the negotiation of
the Merger and Liquidation, among other matters.
On November 20, 1995, a Stipulation of Settlement (the "Stipulation") was
entered into with respect to the Lawsuit. A copy of that Stipulation is being
filed with the Commission as an exhibit to the Partnership's Current Report on
Form 8-K dated November 20, 1995. The following information, insofar as it
relates to matters contained in the Stipulation, is a summary of the material
terms of the Stipulation and is qualified in its entirety by the Stipulation,
which is incorporated herein by reference. Attached hereto and forming a part
hereof is the Notice of Pendency of Action, Class Action Determination, Proposed
Settlement, Settlement Hearing and Right to Appear (the "Notice") relating to
the settlement of the Lawsuit. A hearing before the Superior Court of the
Commonwealth of Massachusetts (the "Court"), which is more fully described in
Section II of the Notice, has been scheduled for 3:00 p.m. on December 6, 1995
in Room 225 in Old Courthouse, Pemberton Square, Boston, Massachusetts 02108 to
consider, among other matters, whether the settlement should be finally
approved.
Subject to the approval of the Court, the settlement provides for the
deposit by Cablevision of $1,250,000 (the "Settlement Amount") into an interest
bearing escrow account. After payment from such account of fees and
disbursements of counsel to the plaintiff (which fees may not exceed 25% of the
Settlement Amount and which disbursements may not exceed $50,000) and escrow
fees and expenses, the balance in the escrow account, which is expected to equal
approximately $238 in cash per Unit (assuming the maximum legal fees and
disbursements are awarded), will be paid to the Unaffiliated Limited Partners.
Payment will be made to Unaffiliated Limited Partners in respect of this
Settlement Amount upon consummation of the Merger, if by then the Court has
entered an Order and Final Judgment, as agreed by the parties, approving the
Stipulation and that Order has become final and nonappealable by virtue of
expiration of all appropriate appeal periods without an appeal being filed, or,
if an appeal is filed, by final affirmance thereof upon appeal, or final
dismissal of all appeals therefrom ("Final Approval"), but the payment to the
Class members will otherwise be made following Final Approval if Final Approval
occurs after consummation of the Merger.
It is a condition to consummation of each of the Incorporation and the
Merger that no action or proceeding be pending that seeks to restrain or enjoin
the consummation of the Transactions, or seeks to recover any damages or obtain
other relief as a result of the Transactions (the "Litigation Condition").
Pendency of the Lawsuit will cause the Litigation Condition to be unsatisfied.
However, the parties to the Merger Agreement have the right to waive the
Litigation Condition. The parties to the Merger Agreement do not currently
intend to waive
<PAGE>
the Litigation Condition but could decide to do so in the future. If the parties
do not waive the Litigation Condition, neither the Incorporation nor the Merger
will occur prior to Final Approval (which, as a result of the statutory appeal
period, will not happen before mid-January of 1996 and, perhaps, later), and
payment of the balance of the Settlement Amount to Unaffiliated Limited Partners
will occur contemporaneously with the distribution of the Cablevision Class A
Common Stock (with an Average Cablevision Stock Price of $10,000 per Unit) in
the Liquidation. If the Litigation Condition is waived, subject to the approval
of each of the Incorporation and the Merger by a Majority of the Limited
Partners and the satisfaction or waiver of the other conditions to each such
Transaction, the Incorporation, the Merger and the Liquidation (including the
distribution of Cablevision Class A Common Stock to the Limited Partners) will
take the place prior to Final Approval, and the payment of the balance of the
Settlement Amount to Unaffiliated Limited Partners will occur as soon as
practicable following Final Approval. If the Merger and Liquidation occur, but
Final Approval never occurs, the balance of the Settlement Amount will not be
paid to Unaffiliated Limited Partners.
The Stipulation may be terminated at the sole election and in the sole
discretion of any of the defendants in the Lawsuit if (i) for any reason either
one or both of the Transactions is not approved by the Unaffiliated Limited
Partners as required by the Merger Agreement or either Transaction is not
consummated as required by the Merger Agreement; (ii) the Merger Agreement is
terminated in accordance with its terms; (iii) if conditional certification of
the Class for settlement purposes only and approval by the Court of the Notice
and the method and manner of distributing the Notice do not occur on or before
November 28, 1995; (iv) Court approval of the Stipulation does not occur on or
before December 21, 1995; or (v) Final Approval does not occur by March 31,
1996. The Class representative, on behalf of the Class, also has the right to
terminate the Stipulation if the Merger Agreement is terminated. If the
Stipulation is terminated, it shall be void and of no further force or effect.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a description of the principal federal income tax
consequences of the proposed settlement. The statements in this discussion are
based upon current provisions of the Code, existing and currently proposed
Regulations under the Code, legislative history of the Code, existing
administrative rulings, practices and announcements of the IRS and judicial
decisions and are subject to the general limitations and considerations relating
to the tax consequences of the Transactions and the Liquidation set forth in the
Consent Solicitation Statement/Prospectus under the heading "Certain Federal
Income Tax Consequences."
For federal income tax purposes, the tax consequences of a settlement are
determined by reference to the claims asserted in the underlying litigation.
Based on the claims asserted in the Lawsuit, the cash settlement payment
received by an Unaffiliated Limited Partner, which is expected to equal
approximately $238 per Unit, should be characterized as capital in nature.
Sullivan & Cromwell, special counsel to Cablevision, and Debevoise & Plimpton,
special counsel to the General Partners, believe that it is more likely than not
that such payment, to the extent it exceeds the Limited Partner's basis in his
or her Unit (which for an Original Holder is expected to be zero), will be long-
term capital gain for an Original Holder in the year the payment is received,
assuming the Unit was held as a capital asset.
EXTENSION OF EXPIRATION DATES
The General Partners have extended the Incorporation Expiration Date to
5:00 p.m. on December 7, 1995 and have extended the Merger Expiration Date to
5:00 p.m. on December 14, 1995. As of the date hereof, the Majority of the
Limited Partners have consented to the Incorporation.
THIS SUPPLEMENT IS INTENDED TO BE READ IN CONJUNCTION WITH THE CONSENT
SOLICITATION STATEMENT/PROSPECTUS, WHICH REMAINS IN EFFECT IN ALL RESPECTS
EXCEPT TO THE EXTENT MODIFIED HEREBY.
The date of this Supplement to the Consent Solicitation Statement/Prospectus is
November 21, 1995.
<PAGE>
COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, SS. SUPERIOR COURT
C.A. NO. 94-5428
- --------------------------------------------x
:
JOEL G. LIPPE,
PLAINTIFF, :
v.
:
CABLEVISION SYSTEMS CORP., CHARLES F.
DOLAN, CABLEVISION OF BOSTON LIMITED :
PARTNERSHIP, CABLEVISION SYSTEMS
BOSTON CORP., CABLEVISION OF :
BROOKLINE LIMITED PARTNERSHIP,
CABLEVISION SYSTEMS BROOKLINE CORP., :
CABLEVISION SYSTEMS SERVICES CORP.,
CABLEVISION FINANCE LIMITED PARTNER- :
SHIP, COB, INC., and CABLEVISION OF
BOSTON, INC., :
DEFENDANTS.
:
- --------------------------------------------x
NOTICE OF PENDENCY OF ACTION, CLASS ACTION
DETERMINATION, PROPOSED SETTLEMENT, SETTLEMENT
HEARING AND RIGHT TO APPEAR
TO: ALL PERSONS WHO OWNED LIMITED PARTNERSHIP UNITS OF CABLEVISION OF
BOSTON LIMITED PARTNERSHIP, BENEFICIALLY OR OF RECORD, ON NOVEMBER 20,
1995 AND WHO ARE NOT AFFILIATED WITH CABLEVISION SYSTEMS CORPORATION.
PLEASE READ THIS NOTICE CAREFULLY. THIS NOTICE RELATES TO A PROPOSED
SETTLEMENT OF THE CLASS ACTION LITIGATION REFERRED TO IN THE CAPTION
AND CONTAINS IMPORTANT INFORMATION REGARDING YOUR RIGHTS. IF THE COURT
APPROVES THE PROPOSED SETTLEMENT, YOU WILL BE FOREVER BARRED FROM
CONTESTING THE FAIRNESS, REASONABLENESS OR ADEQUACY OF THE PROPOSED
SETTLEMENT, AND FROM PURSUING THE SETTLED CLAIMS.
This Notice is given pursuant to an Order of the Suffolk Superior
Court, Commonwealth of Massachusetts, dated November 21, 1995, in the above-
captioned Action and in accordance with Rule 23(d) of the Massachusetts Rules of
Civil Procedure. If you were not the owner of limited partnership units of
Cablevision of Boston Limited Partnership (the "Partnership") held of record by
you on November 20, 1995, you are directed to forward this Notice to the
beneficial owner of such limited partnership units. Additional copies of this
Notice will be made available to you for this purpose upon request directed to
the Partnership.
THIS NOTICE SHOULD NOT BE UNDERSTOOD AS AN EXPRESSION OF ANY
OPINION OF THE COURT AS TO THE MERITS OF ANY CLAIM OR DEFENSE
<PAGE>
BY ANY OF THE PARTIES. IT IS SENT FOR THE SOLE PURPOSE OF INFORMING
YOU OF THE EXISTENCE OF THIS CLASS ACTION AND OF THE HEARING ON A
PROPOSED SETTLEMENT SO THAT YOU MAY MAKE APPROPRIATE DECISIONS AS TO
STEPS YOU MAY WISH TO TAKE IN RELATION TO THIS LITIGATION AS SET FORTH
IN SECTION VIII.
All capitalized terms used in this Notice are defined in Section XI of
this Notice. Any capitalized terms not specifically defined in Section XI shall
have the meaning set forth in the Glossary at pages 162-165 of the Consent
Solicitation Statement/Prospectus, dated October 18, 1995, which was sent to
each Limited Partner by the Partnership on or about October 20, 1995.
I.
THE PARTIES AND DESCRIPTION OF THE LITIGATION
Plaintiff Joel G. Lippe is a Limited Partner of the Partnership. He
instituted a putative class action in Suffolk Superior Court, Commonwealth of
Massachusetts, captioned LIPPE v. CABLEVISION SYSTEMS CORP., ET AL., C.A.
No. 94-5428 (the "Action").
The Defendants in the Action are Cablevision Systems Corporation
("Cablevision"), Charles F. Dolan ("Dolan"), the Partnership, Cablevision
Systems Boston Corporation ("CSBC"), Cablevision of Brookline Limited
Partnership ("Brookline"), Cablevision Systems Brookline Corporation ("CSBrC"),
Cablevision Systems Services Corporation ("CSSC"), Cablevision Finance Limited
Partnership ("Cablevision Finance"), COB, Inc. ("COB") and Cablevision of
Boston, Inc. ("Boston Sub").
The Action asserts claims of breaches of fiduciary duty or aiding and
abetting breaches of fiduciary duty against the Defendants arising out of the
Partnership's issuance of Preferred Equity in the Partnership to Cablevision
Finance and CSSC allegedly in violation of the Partnership Agreement, the
management and operation of the Partnership in other respects, and the
Defendants' negotiation of timing and terms for the Incorporation, Merger and
Liquidation that are allegedly not fair to the Limited Partners. (The
Incorporation, Merger and Liquidation are described in the October 18, 1995
Consent Solicitation that the Partnership sent to the Limited Partners on or
about October 20, 1995.)
The Action seeks, among other things (i) a declaration that the
Defendants have breached their fiduciary duty to the Limited Partners or aided
and abetted such breaches of fiduciary duty; (ii) a declaration that it would be
a breach of fiduciary duty for any Defendant to cause the Partnership to pay
certain Defendants any distributions on the Preferred Equity because the
Preferred Equity was unlawfully issued to certain Defendants; (iii) an order
that the Defendants provide an accounting to the Partnership and Limited
Partners for the Partnership's operations prior to any Liquidation; (iv) a
preliminary and permanent injunction against consummation of the Merger and
Liquidation; (v) rescission of the Merger and Liquidation if they are
consummated or rescissory damages if they cannot be rescinded; and
(vi) compensatory damages.
II.
THE SETTLEMENT HEARING
The purpose of this Notice is to inform the members of the Class (as
more fully described below in Section IV) of: (i) a proposed Settlement of the
Action that will result in settling, releasing, discharging and dismissing with
prejudice, as to each Class member, certain claims and causes of action (as more
fully described below in Section VI); and (ii) a hearing to be held before the
Honorable Maria Lopez, Superior Court Judge of
-2-
<PAGE>
the Suffolk Superior Court of the Commonwealth of Massachusetts in Room 225 in
Old Courthouse, Pemberton Square, Boston, Massachusetts 02108, on December 6,
1995, at 3:00 p.m., or any date and time to which it may be adjourned (the
"Settlement Hearing"), in order to determine:
(a) whether the Stipulation of Settlement (the "Stipulation") and the
terms and conditions of Settlement proposed in the Stipulation (as more
fully described below in Section V), taken as a whole, should be approved
as fair, reasonable and adequate;
(b) whether final judgment should be entered dismissing the Action on
the merits and with prejudice as to all Settled Claims as against the named
plaintiff, Joel G. Lippe, and each member of the Class;
(c) if the Court approves the Settlement and enters such final
judgment, whether an order should be entered awarding to counsel for the
plaintiff in connection with the Action attorneys' fees and disbursements,
which are to be paid out of the funds being paid for settlement and that
otherwise would be available for distribution to the Class (as more fully
described below in Sections V, VII); and
(d) such other matters as the Court may deem appropriate.
III.
BACKGROUND OF THE LITIGATION
1. To assist you in evaluating and exercising your rights in
connection with the Settlement, this Section of the Notice provides background
information on the litigation. Additional and more detailed information is set
forth in the October 18, 1995 Consent Solicitation that was mailed to each
Limited Partner on or about October 20, 1995. If you have not retained your copy
of that document, you may review a copy filed with the Court in accordance with
the instructions set forth in Section X.
2. On June 14, 1994, the Partnership and Cablevision, Cablevision of
Boston, Inc., Charles F. Dolan, Cablevision Systems Boston Corporation,
Cablevision Systems Services Corporation, and Cablevision Finance Limited
Partnership, each of whom was subsequently named a Defendant in the Action,
entered into the Merger Agreement, which contemplated two separate transactions,
the ultimate result of which is the acquisition by Cablevision of substantially
all of the assets and all of the liabilities of the Partnership. The first of
these two transactions, the Incorporation, involves the transfer of
substantially all of the Partnership's assets and all of the Partnership's
liabilities to Cablevision of Boston, Inc., a new corporation, that is a wholly
owned subsidiary of the Partnership. The second of these two transactions, the
Merger, involves the merger of a wholly-owned subsidiary of Cablevision with and
into Cablevision of Boston, Inc., in which the Partnership will receive shares
of Cablevision Class A Common Stock for all of the issued and outstanding stock
of Cablevision of Boston, Inc. After the consummation of the Merger, the
Partnership will then Liquidate and the Cablevision Class A Common Stock
received by the Partnership in the Merger will be distributed to the
Partnership's Partners and the holder of the Partnership's Preferred Equity.
Upon completion of the Incorporation and Merger (collectively, the
"Transactions") and the Liquidation, Cablevision of Boston, Inc. will become a
wholly-owned subsidiary of Cablevision and the Partnership's Limited Partners
will hold stock of Cablevision.
3. On June 15, 1994 and from time to time thereafter as it was
amended in the course of review by the Securities and Exchange Commission
("Commission"), the Partnership filed with the Commission the Preliminary
Consent Solicitation, which, when finalized and delivered to the Limited
Partners, would seek consent from such Limited Partners to the Transactions and
which described, among other things, the Transactions and the Liquidation. The
Preliminary Consent Solicitation was publicly available pursuant to applicable
rules and procedures of the Commission.
-3-
<PAGE>
4. The Preliminary Consent Solicitation stated that consummation of
both the Incorporation and the Merger would result in the Limited Partners
receiving in the Liquidation Cablevision Class A Common Stock with an expected
market value of approximately $10,000 per Unit of limited partnership interest,
which totals approximately $40 million and is 100% of the total of the per Unit
amounts invested by the Limited Partners that are Unaffiliated Limited Partners.
5. The Preliminary Consent Solicitation also explained that
Cablevision Finance, a subsidiary of Cablevision and holder of Preferred Equity
in the Partnership, had agreed solely in connection with the Merger, to a
substantial reduction in its Preferred Equity Interests in order to increase the
amounts distributable to the Limited Partners in the Liquidation. To exemplify
the degree of reduction, based upon financial information as of June 30, 1994,
the Preferred Equity Interests totalled $145.4 million and those Interests would
receive only $50.3 million as a result of the Transactions and the Liquidation.
6. The Preliminary Consent Solicitation also disclosed that, in
considering the Transactions, the General Partners, together with their counsel,
Debevoise & Plimpton, had reviewed the issuance of the Preferred Equity and
that, although the General Partners continue to believe that the Preferred
Equity was validly issued, they concluded, based on such review and the advice
of their counsel, that one or more Limited Partners could bring litigation
challenging the issuance of the Preferred Equity on the grounds that it did not
fully comply with the Partnership Agreement and claiming that the holders of the
Preferred Equity are not entitled to the Full Contractual Rights of the
Preferred Equity. The Preliminary Consent Solicitation further disclosed
(i) that, after analyzing the issues that might be raised in litigation brought
by a Limited Partner and the applicability of various available defenses,
counsel to the General Partners identified litigation outcomes that they believe
represent the range of possible outcomes of such a litigation and assessed the
probability of such outcomes; (ii) that, based on their assessment of the
likelihoods of such outcomes, such counsel advised the General Partners that the
holders of the Preferred Equity would more likely than not be entitled to at
least $80 million if, hypothetically, the validity of the Preferred Equity were
fully adjudicated and the Partnership and Cablevision consummated the Merger and
Liquidation substituting the adjudicated rights of the Preferred Equity for the
amount that Cablevision Finance has agreed to receive in respect of the
Preferred Equity Interests in the Liquidation; and (iii) that, using June 30,
1994 financial information to illustrate this comparison, the $80 million amount
exceeded by approximately $29.7 million the amount actually allocated to the
holders of Preferred Equity in the Liquidation.
7. The Preliminary Consent Solicitation also disclosed that
Cablevision Finance had advised the General Partners that, other than in
connection with the Transactions, it would not agree to any reductions in or
modifications of the Full Contractual Rights of its Preferred Equity and, if
necessary, would pursue all legal remedies to enforce those rights.
8. On or about October 5, 1994, following the filing and availability
to the public of the original and an amended Preliminary Consent Solicitation
containing the disclosures set forth above (with financial disclosures as of
June 30, 1994), plaintiff Joel G. Lippe commenced the Action.
9. Prior to entering into the Merger Agreement and filing the
original Preliminary Consent Solicitation, the General Partners reviewed and
considered the terms and conditions of the Transactions, approved each of the
Transactions and determined to recommend that the Limited Partners approve each
of the Transactions because the General Partners believed that the Transactions
are fair to and in the best interests of the Limited Partners, excluding those
Limited Partners that are Cablevision and officers or directors of Cablevision
("Unaffiliated Limited Partners"). On June 13, 1994, prior to the General
Partners' approval of the Transactions, PaineWebber Incorporated, New York, New
York, the independent financial advisor to the General Partners, delivered its
written opinion to the General Partners that the consideration to be received in
the Liquidation by the Unaffiliated Limited Partners is fair, from a financial
point of view, to such Unaffiliated Limited Partners. This opinion was
subsequently and recently confirmed by PaineWebber Incorporated in a written
opinion, dated October 17, 1995.
-4-
<PAGE>
10. On December 15, 1994, Defendants served answers to the Complaint,
denying all of its material allegations.
11. On October 18, 1995, the Partnership filed with the Commission
the October 18, 1995 Consent Solicitation, amending the Preliminary Consent
Solicitation previously filed by the Partnership and also amending the
registration statement on Form S-4 with respect to the Cablevision Class A
Common Stock to be issued in the Merger, which had originally been filed with
the Commission on September 18, 1995. The October 18, 1995 Consent Solicitation
also set forth, among others, the disclosures and explanations described in
paragraphs 3 - 7 above which had also been set forth in the Preliminary Consent
Solicitation. In addition, the October 18, 1995 Consent Solicitation disclosed
that the Action had been filed.
12. The October 18, 1995 Consent Solicitation also disclosed (i)
that, based on advice of counsel, the General Partners believed that Limited
Partners who consent to the Incorporation or Merger could be, but would not
necessarily be, precluded from challenging the issuance of the Preferred Equity
solely because of that consent; (ii) that Cablevision Finance, the General
Partners and the other Defendants in the Action had indicated that they would
raise the consent as part of the defense to any challenge; and (iii) that the
General Partners believe that the Limited Partners' consent to the Transactions
is a factor that would be considered by the Court in deciding whether the
Limited Partners would be barred from challenging the issuance of the Preferred
Equity.
13. On or about October 20, 1995, the October 18, 1995 Consent
Solicitation was mailed to each Limited Partner of record.
14. Article VII of the Merger Agreement contains certain conditions
to the Incorporation and the Merger. Paragraphs 6.1.8 and 7.1.6 of the Merger
Agreement require, among other things, that no action or proceeding be pending
on the date of the Incorporation or of the Merger that seeks to restrain, enjoin
or otherwise prevent the consummation of the Transactions or to recover any
damages or obtain other relief as a result of such Transactions. Consequently,
unless the Action is dismissed or settled, or the condition is waived by all
necessary parties, the conditions to the Incorporation and the Merger will not
be satisfied.
15. The Merger Agreement may be terminated by its terms after
December 31, 1995, if the Merger has not been consummated by that date. In
addition, as stated in the October 18, 1995 Consent Solicitation, if the
Transactions are not consummated prior to December 31, 1995, the Partnership
will be unable at December 31, 1995 to meet the repayment terms on its bank debt
under its Loan Agreement, which require a substantial loan repayment on
December 31, 1995, and thereafter, and, therefore, will likely be required to
attempt to renegotiate the terms of the Loan Agreement. In order to consummate
the Merger on or before December 31, 1995, when this December 31, 1995 repayment
is due, the Incorporation must be consummated on or prior to December 21, 1995,
in order to insure that the Limited Partners consider the Incorporation
separately from their consideration of the Merger, as is required for the
desired tax treatment of the Transactions.
16. Throughout the period following the commencement of the Action,
counsel for plaintiff Lippe and for Defendants have been engaged in formal and
informal discovery and discussions regarding the merits of the Action, which
have provided counsel for plaintiff Lippe, the proposed Class Counsel, with
substantial information regarding the merits of plaintiff's and the Class's
claims. In addition to their factual investigation, plaintiff Lippe's counsel
have also researched the applicable law, including the likely remedies that
could be achieved, even assuming that the Preferred Equity were found not to
have been properly issued. After taking into consideration the sharp dispute as
to whether the Preferred Equity fully complies with the Partnership Agreement,
the likelihood that, even if the Preferred Equity were found to have been issued
in violation of the Partnership Agreement, the holders of the Preferred Equity
would be entitled to receive an amount exceeding the amount that such holders
have agreed to accept in connection with the Transactions, the likely valuation
of the Partnership, the issue of whether consent to the Transactions would
preclude one or more Unaffiliated Limited Partners from challenging the issuance
of the Preferred Equity, the risks attendant to further litigation, the
substantial benefits
-5-
<PAGE>
obtained through settlement and the interests in insuring that the Unaffiliated
Limited Partners receive the substantial benefits of the Transactions and that
they receive such benefits in a timely fashion, plaintiff and his counsel have
concluded that the terms of the Settlement as set forth herein are fair,
reasonable, adequate and in the best interests of the Class and that the rights
of the members of the Class have been fully protected.
17. Defendants, and each of them, have at all times denied, and
continue to deny, that they have committed any wrongful or unlawful acts or
violations of law of any nature whatsoever in connection with the matters,
transactions and occurrences set forth in the Complaint, in the pleadings and
proceedings in the Action, or any other matter relating to management and
operation of the Partnership, the Transactions and/or the issuance of the
Preferred Equity. Defendants have entered into the Stipulation of Settlement
solely because the proposed Settlement will eliminate the burden, expense and
distraction of further litigation and will finally put to rest the claims of
plaintiff Lippe and the putative Class that were or could have been asserted in
the Action, and will facilitate the prompt consummation of the Transactions.
IV.
CLASS ACTION DETERMINATION
Solely for purposes of this Settlement, the Court has conditionally
certified this Action as a Class Action, pursuant to Rule 23 of the
Massachusetts Rules of Civil Procedure. The proposed Class consists of all
persons who were Limited Partners of the Partnership, beneficially or of record,
on November 20, 1995, the date that the Stipulation of Settlement
("Stipulation") was executed, and who are Unaffiliated Limited Partners (the
"Class"). Plaintiff Joel G. Lippe shall act as representative of the Class
("Class Representative"). Counsel for the Class are Joel G. Lippe's lawyers,
(1) Ronald Litowitz and Richard Speirs, Bernstein Litowitz Berger & Grossmann
LLP, 1285 Avenue of the Americas, New York, New York 10019; (2) Thomas
Weinstock and James Keegan, Bendit Weinstock & Sharbaugh, 80 Main Street, West
Orange, New Jersey 07052; and (3) Thomas G. Shapiro, Shapiro Grace Haber &
Urmy, 75 State Street, Boston, Massachusetts 02109 ("Class Counsel").
V.
THE SETTLEMENT TERMS
Subject to the approval of the Court, the following summarizes the
terms of the Settlement:
1. On or before the earlier of (i) the date on which the Merger is
completed; or (ii) two business days after the date that Approval occurs,
Cablevision shall deposit $1,250,000.00 (the "Settlement Amount") into an
account ("Class Escrow") to be established with The Bank of New York, New York,
New York or such other bank as is approved by Cablevision Counsel and Class
Counsel (the "Escrow Agent").
2. All Escrow Agent fees and other fees, charges, and expenses
associated with the Class Escrow (collectively "Escrow Fees") shall be paid out
of the Class Escrow.
3. If certain conditions, described below, are satisfied, all funds
deposited in the Class Escrow, including the Settlement Amount and all interest
earned on the account, shall be disbursed or distributed as follows:
- Payment shall be made out of the Class Escrow of Escrow Fees
as provided in paragraph 5 of the Stipulation and Class Counsel Fees
and Class Counsel Expenses as provided in paragraph 10 of the
Stipulation and as described more fully below in Section VII and the
remaining balance of the funds in the Class Escrow, including all
interest earned on funds in the Class Escrow (the "Balance"), will be
distributed to members of the Class.
-6-
<PAGE>
- The amount distributed to each member of the Class will be
determined by dividing the Balance by 3725, which is the number of
units held by Unaffiliated Limited Partners, to determine a Per Unit
Balance and then multiplying this Per Unit Balance by the number of
units of limited partnership interests held by each Class member.
- Assuming that Class Counsel are awarded the maximum amount
permitted for Class Counsel Fees and Class Counsel Expenses and
assuming there are no Escrow Fees (which in any event are expected to
be minimal), the Per Unit Balance will be approximately $238.00. For
example, if a Limited Partner acquired one Unit and has not disposed
of any of his interests, due to the subsequent six-for-one split, he
would today own six units and would receive approximately $1428.00 in
the Settlement.
- The costs of distributing the Balance to the Class members
will be paid by Cablevision.
4. Distribution of the Class Escrow to the Class members will be made
only upon the occurrence of one of the following:
- consummation of the Merger, if but only if Final Approval has
occurred prior to consummation of the Merger; or
- Final Approval, if but only if Final Approval occurs after the
consummation of the Merger.
5. The Stipulation may be terminated in certain circumstances. Any
one of the Defendants in its sole discretion may terminate the Stipulation under
the following circumstances:
- if for any reason any one or both of the Transactions is not
approved by the Unaffiliated Limited Partners as required by the
Merger Agreement or, if approved by the Unaffiliated Limited Partners,
is not consummated as required by the Merger Agreement;
- if the Merger Agreement is terminated in accordance with its
terms;
- if conditional certification of the Class for settlement
purposes only and approval by the Court of the Class Notice and the
method and manner of distributing the Class Notice do not occur on or
before November 28, 1995;
- if Approval does not occur on or before December 21, 1995; or
- if Final Approval does not occur on or before March 31, 1996.
The Stipulation may also be terminated by the Class Representative, on behalf of
the Class, if the Merger Agreement is terminated. The Stipulation, if
terminated, is void and of no further force or effect (except for the provisions
of paragraphs 11-12 of the Stipulation relating to the rights of the parties in
the event of termination or failure of Final Approval to occur, and to the
absence of any admission of liability, as more fully set forth in the
Stipulation).
-7-
<PAGE>
VI.
DISMISSAL AND RELEASE OF CLAIMS
If satisfaction of the conditions to payment to Class members,
described more fully in Section V, occurs, the Order and Final Judgment will
provide for the release, discharge and dismissal with prejudice, without the
award of costs to any party except as provided in the Stipulation, of the
following claims that each Class member has or may have:
All claims, rights, causes of action, suits, matters and issues, known
or unknown, that have been or could have been asserted in the Complaint, in the
pleadings and proceedings in the Action, or any other action that could have
been brought in this or any other forum, by the Class Representative, any
Limited Partner, or any putative member of the Class, and any of their
successors or assigns, whether directly, representatively, derivatively,
individually or in any other capacity, against any of the Defendants, or any
party to the Merger Agreement or party to or participant in the Transactions or
Liquidation, their respective present or former officers, directors, employees,
agents, attorneys, stockholders, advisors, investment bankers, representatives,
parents, affiliates, subsidiaries, general and limited partners, heirs,
executors, administrators, trustees, predecessors, successors and assigns, or
against anyone else, in connection with, arising out of, or in any way related
to (i) any of the acts, facts, transactions, occurrences, breaches,
representations or omissions set forth, alleged, embraced or otherwise referred
to in the pleadings and proceedings in the Action, including, but not limited
to, the Preferred Equity, the Transactions, the Liquidation, the Consent Process
and the management and operations of the Partnership or Cablevision of Brookline
Limited Partnership, (ii) the Partnership or Cablevision of Brookline Limited
Partnership or the management or operations of either, and (iii) any other claim
arising out of or in connection with the Partnership for violation of federal,
state or other law, or of the common law, which said Class members, or any of
them, had, now have, or may hereafter have as a member of the Class or as an
individual (the "Settled Claims"). Excluded from the Settled Claims are (a) any
claims relating to any party's alleged failure to comply with the terms and
conditions of this Stipulation and (b) any appraisal rights that a Class member
properly perfects pursuant to Paragraph 1.8 and Annex VI of the Merger
Agreement.
If satisfaction of the conditions to payment to Class members,
described more fully in Section V, occurs, the Order and Final Judgment will
also enjoin each member of the Class and the Class as a whole from instituting,
commencing, prosecuting or continuing any action or other proceeding in any
court or tribunal of this or any other jurisdiction, whether directly,
representatively, derivatively, individually or in any other capacity, against
any person or entity released by the Order and Final Judgment (the "Released
Parties"), or against anyone else, based upon or for the purpose of enforcing
any of the Settled Claims.
VII.
ATTORNEYS' FEES AND DISBURSEMENTS
Class Counsel intend to apply to the Court for an award of fees for
their legal services and out-of-pocket disbursements, including, but not limited
to, fees for experts and consultants, in connection with the Action. The
Stipulation limits the award of such fees ("Class Counsel Fees") and such
disbursements ("Class Counsel Expenses"). Class Counsel Fees may not exceed 25%
of the Settlement Amount, and Class Counsel Expenses may not exceed $50,000.00.
Payment of Class Counsel Fees and Class Counsel Expenses will be made solely
from the Class Escrow and will be contingent upon and made only after
satisfaction of the conditions to payment to Class members, described more fully
in Section V. Payment from the Class Escrow of Class Counsel Fees and Class
Counsel Expenses in accordance with the Stipulation will satisfy any and all
claims against Defendants in the Action for attorneys' fees and expenses.
-8-
<PAGE>
VIII.
RIGHT TO APPEAR
At the Settlement Hearing, any member of the Class who desires to do
so may appear personally or by counsel, provided an appearance is filed and
served as hereinafter set forth, and may show cause, if such member has any, why
the Settlement of the Action should not be approved as fair, reasonable and
adequate, why final judgment should not be entered dismissing the Settled Claims
on the merits and with prejudice to their reassertion by the plaintiff and all
members of the Class as determined by the Court, or why the Court should not
grant an allowance of Class Counsel Fees and/or Class Counsel Expenses for Class
Counsel's services herein and expenses incurred by them; PROVIDED, HOWEVER, THAT
NO MEMBER OF THE CLASS OR ANY OTHER PERSON SHALL BE HEARD OR ENTITLED TO CONTEST
THE APPROVAL OF THE TERMS AND CONDITIONS OF THE SETTLEMENT AND, IF APPROVED, THE
JUDGMENT TO BE ENTERED THEREON AND THE ALLOWANCE OF CLASS COUNSEL FEES AND CLASS
COUNSEL EXPENSES, AND NO PAPERS OR BRIEFS SUBMITTED BY ANY MEMBER OF THE CLASS
OR ANY OTHER PERSON SHALL BE RECEIVED AND CONSIDERED, EXCEPT BY ORDER OF THE
COURT FOR GOOD CAUSE SHOWN, UNLESS, NO LATER THAN TWO (2) DAYS PRIOR TO THE
SETTLEMENT HEARING, COPIES OF (a) A NOTICE OF INTENTION TO APPEAR, (b) A
DETAILED STATEMENT OF SUCH PERSON'S SPECIFIC OBJECTIONS TO ANY MATTER BEFORE THE
COURT, AND (c) THE GROUNDS FOR SUCH OBJECTIONS AND ANY REASONS FOR SUCH PERSON'S
DESIRING TO APPEAR AND TO BE HEARD, AS WELL AS ALL DOCUMENTS AND WRITINGS SUCH
PERSON DESIRES THIS COURT TO CONSIDER, SHALL BE RECEIVED BY THE FOLLOWING
COUNSEL:
Yvonne S. Quinn
SULLIVAN & CROMWELL
125 Broad Street
New York, New York 10004
Ronald Litowitz
BERNSTEIN LITOWITZ BERGER & GROSSMANN LLP
1285 Avenue of the Americas
New York, New York 10019
Robert L. King
DEBEVOISE & PLIMPTON
601 South Figueroa Street
Suite 3700
Los Angeles, California 90017
AND FILED WITH THE SUFFOLK SUPERIOR COURT, COMMONWEALTH OF MASSACHUSETTS, OLD
COURTHOUSE, PEMBERTON SQUARE, BOSTON, MASSACHUSETTS 02108. Unless the Court
otherwise directs, no member of the Class shall be entitled to object to the
Settlement, the judgment to be entered herein, or the certification of the Class
or the award of Class Counsel Fees or Class Counsel Expenses, or otherwise to be
heard, except by serving and filing written objections as described above. Any
person who fails to object in the manner provided above shall be deemed to have
waived such objection and shall forever be barred from making any such objection
in the Action or in any other action or proceeding.
Pending the final determination of whether the Settlement should be
approved, no member of the Class may commence or continue, if commenced, in any
capacity, any action or other proceeding asserting any claim that is a Settled
Claim.
-9-
<PAGE>
The Settlement Hearing may be adjourned by the Court to a date and
time other than December 6, 1995 at 3:00 p.m. without further notice to the
Class other than by announcement at the Settlement Hearing or any adjournment
thereof.
IX.
RELATIONSHIP BETWEEN THE SETTLEMENT
AND THE CONSUMMATION OF THE TRANSACTIONS
As stated in Section III above, the Merger Agreement, pursuant to
which the Transactions are to be consummated, contains a condition to each of
the Transactions that requires on the date either of the Incorporation or of the
Merger that no action or proceeding be pending that seeks to restrain, enjoin or
otherwise prevent the consummation of the Transactions or to recover any damages
or obtain other relief as a result of such Transactions. The Action is such an
action or proceeding. Therefore, unless and until the Action is dismissed or
Final Approval of the Settlement occurs, this condition to the Incorporation and
the Merger will not be satisfied, unless such condition is waived by all
necessary parties. The necessary Final Approval of the Settlement does not occur
until an Order and Final Judgment has been entered in the form agreed upon in
the Stipulation, or as otherwise approved by Class Counsel, Cablevision Counsel
and Partnership Counsel, and becomes final and nonappealable by virtue of
expiration of all appropriate appeal periods without an appeal being filed, or,
if an appeal is filed, by final affirmance thereof upon appeal, or final
dismissal of all appeals therefrom.
X.
SCOPE OF THIS NOTICE
The foregoing description of the Settlement Hearing, the Action, the
terms of the proposed Settlement and other matters described herein does not
purport to be comprehensive. Accordingly, members of the Class are referred to
the documents filed with the Court in the Action, including the Stipulation, and
to the October 18, 1995 Consent Solicitation (which was mailed to all Limited
Partners on or about October 20, 1995). The documents filed in this Action may
be examined by you or your attorney during regular business hours on any
business day at the Office of the Clerk, Suffolk Superior Court, Commonwealth of
Massachusetts, Old Courthouse, Pemberton Square, Boston, Massachusetts 02108.
XI.
DEFINED TERMS
The terms set forth below shall have the indicated meaning and any
capitalized terms not specifically set forth in this section or otherwise
defined in this Notice shall have the meaning set forth in the Glossary at pages
162-165 of the October 18, 1995 Consent Solicitation:
ACTION. The putative class action filed on or about October 5, 1994 by
Plaintiff Joel G. Lippe in the Superior Court for the Commonwealth of
Massachusetts, captioned LIPPE v. CABLEVISION SYSTEMS CORPORATION, ET AL., C.A.
No. 94-5428.
APPROVAL. The entry of an Order and Final Judgment in the Action
substantially in the form of Exhibit C attached to the Stipulation or as
otherwise approved by Class Counsel, Cablevision Counsel and Partnership
Counsel, finally approving the Stipulation.
BALANCE. Balance has the meaning ascribed to it in paragraph 6(b) of
the Stipulation, which is described in Section V above.
-10-
<PAGE>
CABLEVISION. Cablevision Systems Corporation, a Delaware corporation.
CABLEVISION OF BOSTON, INC. The new corporation established as the
Incorporation vehicle and a wholly-owned subsidiary of the Partnership, which is
referred to as "Boston Sub" in the October 18, 1995 Consent Solicitation.
CABLEVISION CLASS A COMMON STOCK. Class A Common Stock, par value
$0.01 per share, of Cablevision.
CABLEVISION COUNSEL. Yvonne S. Quinn and John P. Mead, Sullivan &
Cromwell, 125 Broad Street, New York, New York 10004.
CABLEVISION FINANCE. Cablevision Finance Limited Partnership, a
wholly-owned subsidiary of Cablevision.
CABLEVISION FINANCE FULL CONTRACTUAL RIGHTS. The rights conferred on
Cablevision Finance pursuant to the terms of the instruments relating to the
Preferred Equity held by it, including (i) the right to payment of the full
amounts contributed to the Partnership in respect of its Preferred Equity;
(ii) any unpaid cumulative distributions at the rate of 15% per annum,
compounded semi-annually; (iii) the right to a payment of (i) and (ii) out of
funds legally available for distribution to Partners, prior to any distribution
to Partners; and (iv) the right to receive 20% of all amounts available for
post-Payout distributions.
CLASS. A conditional class for settlement purposes only that consists
of all persons who are Limited Partners, beneficially or of record, on
November 20, 1995 and who are also Unaffiliated Limited Partners.
CLASS COUNSEL. (1) Ronald Litowitz and Richard Speirs, Bernstein
Litowitz Berger & Grossmann LLP, 1285 Avenue of the Americas, New York, New
York 10019; (2) Thomas Weinstock and James Keegan, Bendit Weinstock &
Sharbaugh, 80 Main Street, West Orange, New Jersey 07052; and (3) Thomas
Shapiro, Shapiro Grace Haber & Urmy, 75 State Street, Boston,
Massachusetts 02109.
CLASS COUNSEL EXPENSES. Out-of-pocket disbursements awarded Class
Counsel by the Court pursuant to paragraph 10 of the Stipulation.
CLASS COUNSEL FEES. Fees awarded Class Counsel by the Court pursuant
to paragraph 10 of the Stipulation.
CLASS ESCROW. An escrow account into which the Settlement Amount is to
be paid by Cablevision as provided for in paragraph 5 of the Stipulation.
CLASS NOTICE. This Notice.
CLASS REPRESENTATIVE. Plaintiff Joel G. Lippe.
COMMISSION. The Securities and Exchange Commission.
COMPLAINT. The complaint in the Action.
CONSENT PROCESS. The solicitation of consents to the Incorporation and
Merger including the filing of preliminary and final consent solicitation
materials (including the October 18, 1995 Consent Solicitation) and the
registration, offer and issuance of the Cablevision Class A Common Stock to be
issued in the Merger.
-11-
<PAGE>
COURT. Suffolk Superior Court, Commonwealth of Massachusetts, before
which the Action is pending.
CSBC. Cablevision Systems Boston Corporation, a Massachusetts
corporation wholly-owned by Dolan, and a General Partner of the Partnership.
CSSC. Cablevision Systems Services Corporation, a New York corporation
wholly-owned by Dolan.
CSSC FULL CONTRACTUAL RIGHTS. The rights conferred on CSSC pursuant to
the terms of the instruments relating to the Preferred Equity held by it,
including (i) the right to payment of the full amounts contributed to the
Partnership in respect of its Preferred Equity; (ii) any unpaid cumulative
distributions thereon at the rate of 15% per annum, compounded semi-annually;
and (iii) the right to payment of (i) and (ii) out of funds legally available
for distribution to Partners, prior to any distribution to Partners. The right
to payment of (i) is subordinate to the payment of the full amounts contributed
to the Partnership in respect of Cablevision Finance's Preferred Equity.
DEFENDANTS. All defendants named in the Action including Cablevision
Systems Corporation, Charles F. Dolan, Cablevision of Boston Limited
Partnership, Cablevision Systems Boston Corporation, Cablevision of Brookline
Limited Partnership, Cablevision Systems Brookline Corporation, Cablevision
Systems Services Corporation, Cablevision Finance Limited Partnership, COB, Inc.
and Cablevision of Boston, Inc.
DOLAN. Charles F. Dolan, the managing general partner of the
Partnership, the Chairman of Cablevision and the managing general partner of
Cablevision of Brookline Limited Partnership, a Massachusetts limited
partnership of which 99% is held by the Partnership as its limited partner.
FINAL APPROVAL. Final Approval occurs when an Order and Final Judgment
entered in the Action substantially in the form of Exhibit C attached to the
Stipulation or as otherwise approved by Class Counsel, Cablevision Counsel and
Partnership Counsel finally approving this Stipulation of Settlement becomes
final and nonappealable by virtue of expiration of all appropriate appeal
periods without an appeal being filed, or, if an appeal is filed, by final
affirmance thereof upon appeal, or final dismissal of all appeals therefrom.
FULL CONTRACTUAL RIGHTS. Cablevision Finance Full Contractual Rights
and CSSC Full Contractual Rights.
GENERAL PARTNERS. The two general partners of the Partnership, Dolan
and CSBC.
INCORPORATION. The transfer of substantially all of the assets and all
of the liabilities of the Partnership to Cablevision of Boston, Inc.
LIMITED PARTNERS. The investors holding one or more Units in the
Partnership.
LIQUIDATION. The dissolution and liquidation of the Partnership
immediately after the consummation of the Merger.
MERGER. The merger of a wholly-owned subsidiary of Cablevision, COB,
Inc., with and into Cablevision of Boston, Inc. pursuant to which the
Partnership will receive shares of Cablevision Class A Common Stock in exchange
for shares of capital stock of Cablevision of Boston, Inc.
-12-
<PAGE>
MERGER AGREEMENT. The Acquisition Agreement and Plan of Merger and
Reorganization Relating to Cablevision of Boston Limited Partnership, dated as
of June 14, 1994, among Cablevision, the Partnership and certain other parties,
as amended from time to time.
OCTOBER 18, 1995 CONSENT SOLICITATION. The Consent Solicitation
Statement/Prospectus, dated October 18, 1995, filed with the Commission and
mailed to Limited Partners on or about October 20, 1995.
PARTNERS. The General Partners and the Limited Partners.
PARTNERSHIP. Cablevision of Boston Limited Partnership, a
Massachusetts limited partnership.
PARTNERSHIP AGREEMENT. The Partnership's Articles of Limited
Partnership, as amended from time to time.
PARTNERSHIP COUNSEL. Robert L. King and Daniel Murphy, Debevoise &
Plimpton, 601 South Figueroa Street, Suite 3700, Los Angeles, California 90017.
PER UNIT BALANCE. Per Unit Balance has the meaning ascribed to it in
paragraph 6(b) of the Stipulation, which is described in Section V.
PREFERRED EQUITY. Preferred equity in the Partnership.
PREFERRED EQUITY INTERESTS. The face amount of the Preferred Equity
and the cumulative distributions thereon.
PRELIMINARY APPROVAL. The entry of an Order in the Action
substantially in the form of Exhibit B attached to the Stipulation or otherwise
approved by Class Counsel, Cablevision Counsel and Partnership Counsel.
PRELIMINARY CONSENT SOLICITATION. The Preliminary Consent Solicitation
Statement/Prospectus filed with the Commission on June 15, 1994, as amended from
time to time thereafter.
SETTLED CLAIMS. Settled Claims has the meaning ascribed thereto in
paragraph 1 of the Stipulation, which is also set forth in Section VI.
SETTLEMENT. The settlement and resolution of the Action as among the
Class, on the one hand, and Defendants, on the other hand, and as set forth in
the Stipulation.
SETTLEMENT AMOUNT. The amount of $1,250,000.00 to be paid by
Cablevision as set forth in paragraph 5 of the Stipulation.
SETTLEMENT HEARING. The hearing before the Court on the application
for Approval of the proposed Settlement, and any adjournment thereof.
STIPULATION. The Stipulation of Settlement.
TRANSACTIONS. Collectively, the Incorporation and the Merger.
-13-
<PAGE>
UNAFFILIATED LIMITED PARTNERS. Limited Partners other than Cablevision
and officers and directors of Cablevision.
Dated: Boston, Massachusetts
November 21, 1995
Clerk of the Court
-14-
