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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
June 6, 1997
CABLEVISION SYSTEMS CORPORATION
(Exact Name of Registrant as specified in its charter)
Delaware
(State of Incorporation)
1-9046 11-2776686
(Commission File Number) (IRS Employer
Identification Number)
One Media Crossways, Woodbury, New York 11797
(Address of principal executive offices)
Registrant's telephone number, including area code:
(516) 364-8450
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Item 5. Other Events.
Cablevision Systems Corporation, a Delaware corporation ("CSC"), has
entered in to a Contribution and Merger Agreement, dated as of June 6, 1997 (the
"Contribution and Merger Agreement"), with TCI Communications, Inc., a Delaware
corporation and the principal cable television subsidiary of
Tele-Communications, Inc. ("TCI Communications"), CSC Parent Corporation, a
Delaware corporation wholly owned by CSC ("Parent"), and CSC Merger Corporation,
a Delaware corporation wholly owned by Parent ("Merger Sub"). The Contribution
and Merger Agreement provides for the merger of Merger Sub with and into CSC,
with CSC as the surviving corporation, and the conversion in the merger of
outstanding shares of CSC common stock into like shares of common stock of
Parent and for the contribution by or on behalf of TCI Communications of
corporations (the "Contributed Entities") owning specified cable television
systems located in New Jersey, Long Island and New York's Rockland and
Westchester counties and having outstanding $669,000,000 in indebtedness in
exchange for 12,235,543 shares of Class A Common Stock of Parent, subject to
adjustment in certain events. CSC will remain the obligor for its existing debt
and preferred stock obligations, although by their terms, CSC's Series I
Preferred Shares will become convertible into Series A Common Stock of Parent.
The Contributed Entities had approximately 816,000 subscribers as of March 31,
1997 and are expected to generate approximately $200,000,000 in cash flow in
1997. Following the closing (the "Closing") of the transactions contemplated by
the Contribution and Merger Agreement, Parent will be renamed Cablevision
Systems Corporation.
As a result of the transactions contemplated by the Contribution and
Merger Agreement, existing CSC shareholders will become shareholders of Parent,
which will be a new publicly traded company that will own CSC and, separately,
the Contributed Entities. The Contribution and Merger Agreement permits Parent
immediately to combine the cable operations of CSC and the Contributed
Entities, dependent upon the receipt of a favorable tax ruling or, if such
ruling is not obtained, to effect such combination more than one year after
closing. CSC is optimistic that it will obtain this ruling before Closing,
although there can be no assurance that it will do so. The Contribution and
Merger Agreement also permits CSC to establish its Rainbow programming
operations as a separate subsidiary of Parent, dependent upon receipt of the
tax ruling or, if such ruling is not obtained, more than one year after
Closing. Combination of the Contributed Entities and the CSC cable systems and
any separation of the Rainbow programming subsidiary from CSC is also dependent
upon compliance with CSC's debt covenants and upon the receipt of regulatory
approvals.
The Closing is conditioned, among other things, upon expiration or
termination of the waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, receipt of approvals from federal, state and local
governmental agencies, and approval of CSC shareholders. CSC shareholders
having a majority of the CSC's
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voting power have agreed with TCI Communications in a voting agreement (the
"Voting Agreement") that they will vote to approve the adoption of the
Contribution and Merger Agreement and the issuance of Parent shares to TCI
Communications and against any matter that would compete with or interfere
with such adoption and issuance.
The Contribution and Merger Agreement provides that at the Closing,
Parent, Tele-Communications, Inc., a Delaware corporation and owner of TCI
Communications ("TCI"), and certain holders of Parent's Class B Common Stock
(the "Class B Stockholders") will enter into a Stockholders Agreement (the
"Stockholders Agreement") providing, among other things for: (i) limits on
TCI's ability to buy more than an additional 10% of the Class A Common Stock
of Parent, (ii) limitations on TCI's ability to transfer Class A Common
Stock to any person who after such transfer would beneficially own 10% or
more of the outstanding Parent Class A Common Stock or 5% or more of all the
outstanding Parent common stock, except for transfers of all of TCI's Class A
Common Stock to a single purchaser who agrees to become a party to the
Stockholders Agreement, transfers to certain TCI subsidiaries and transfers
in connection with a bona fide pledge to secure a borrowing, (iii)
consultation rights between Parent, TCI and the Class B Stockholders
regarding sales of Parent or significant Parent assets, sales of Class A
Common Stock owned by TCI and sales of Class B Common Stock owned by the
Class B Stockholders, (iv) certain tag-along and drag-along rights between
TCI and the Class B Stockholders, (v) preemptive rights for TCI on new
issuances of Parent common stock so that TCI may maintain ownership of 33% of
the outstanding Parent common stock, with certain limited exceptions, (vi)
TCI's right to designate two Class B directors, (vii) the right of TCI
director designees to membership on a Parent Board committee to approve
certain transactions with Class B Stockholders and their family members that
will give such designees a veto over such transactions, (viii) TCI's
agreement to vote in proportion with the public Parent Class A stockholders
for the election of the 25% of Parent directors which the Parent Class A
Common Stock is entitled to elect, (ix) Parent's agreement not to effect
acquisition transactions that would cause the debt to cash flow ratio of
Parent (calculated as described in the Stockholders Agreement) to exceed a
specified ratio (initially 8.0 to 1, and declining to 7.5 to 1 after December
31, 1999), and (x) registration rights under the Securities Act of 1933 for
shares of Parent Class A Common Stock owned by TCI.
This Current Report on Form 8-K contains statements that constitute
forward looking information within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements relate to expected 1997 cash
flows for the Contributed Entities and the receipt of a favorable tax ruling
from the Internal Revenue Service. Investors are cautioned that such forward
looking statements are not guarantees of future performance or results and
involve risks and uncertainties, that actual results or developments may differ
materially from the forward looking statements as a result of various factors.
Factors which may cause such differences to occur include but are not limited to
(i) whether expenses of the Contributed Entities increase at a rate faster than
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expected, (ii) the level of growth in the revenues of the Contributed
Entities, (iii) subscriber demand, competition, the cost of products and
industry conditions, (iv) new competitors entering the franchise areas of
the Contributed Entities, and (v) other risks and uncertainties inherent in
the cable television business.
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SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CABLEVISION SYSTEMS CORPORATION
By: /s/ Robert S. Lemle
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Name: Robert S. Lemle
Title: Executive Vice President
and General Counsel
Date: June 9, 1997
